The United States' presence in the expected near-term strengthening of the global liquefied natural gas (LNG) market and Europe's key role on the marginal demand side are likely to be game-changers over the next five years, according to a report released Monday by Societe Generale research analysts.

"The global LNG market is at the beginning of a very strong supply growth phase," said analyst Breanne Dougherty in the report, which predicts both Europe and the United States will play "critical roles" over a five-year transition period for global LNG.

The report cites both opportunities and challenges accompanying the transition, with the fundamentals favoring players in U.S. and European markets.

With the possibility for a growing price relationship on the margin between U.S. and European LNG, the report noted that when combined with other "inherent characteristics of the two markets," there could be unique opportunities and possible challenges for portfolio aggregators holding exposure to U.S. LNG export capacity.

"Europe is expected to emerge as the marginal LNG demand market, and the United States will hold the role of marginal/swing supplier," Dougherty wrote. Both the U.S. and European markets are "very liquid, very vulnerable to weather volatility," while holding elasticity tied to the power generation mix, and they "behave independently from one another."

The Societe Generale report predicts both supply volume and diversity growth in the immediate years ahead, noting that the 2% annual growth in liquefaction capacity 2010-15 is expected to accelerate up to 10% annually in the 2016-20 period.

Stressing the importance of diversity, the report noted that the addition of the United States last year as a global supplier "introduced not just an entirely new supply region, but also an entirely new supply type -- nondedicated 'untrapped' resource -- to the global LNG supply mix."

The entrance of U.S. LNG into the global market incorporated very liquid Henry Hub prices into the LNG price point mix that can lead to more flexible types of contracts and a more "firm foundation" for the growth of a flexible global LNG spot market.

"The United States is expected to see the greatest rate of LNG supply capacity growth of all regions through the medium-term horizon," said Dougherty, calling the addition of the U.S. supplies "an inarguable game changer for the market."

On the demand side, the analyst envisions Europe being the most important LNG import region over the next few years compared to Asia not on sheer volumes but by virtue of the region's proclivity for weather-driven volatility, responsiveness to coal displacement, and potential for pipeline disruptions.

"Europe, due to its liquidity, diversified supply stack and storage capacity, will be the best positioned, potentially the only positioned LNG demand market with the ability to move with the ebbs and flows of global market shifts," Dougherty wrote.

Europe has become increasingly more competitive as an LNG destination in recent years as pricing has moved away from oil to more gas-on-gas competition, according to the report. In 2005, oil-indexing represented 78% of Europe's price power, while in 2015 that had dropped to 30%.

The report notes that in addition to declines in indigenous production in Europe, LNG imports also will displace some Netherlands and Russia imports, although Russian imports last year represented 24% of Europe's gas supply and the rise of the U.S. dollar against the rouble further improves Russia's energy export economic advantage into Europe.

"We don't see Russia as having to do too much export management in the near-term to keep U.S. LNG flows into Europe at bay, but of course, both the Europe and U.S. markets are known for their volatility...anything can happen."