Europe is going to face high gas crunch when the winters set in, there’s need to invest in fossil fuels to overcome the gas crunch this year
The world’s biggest gas traders and producers are meeting in Dubai this week for the Gastech conference — the first major in-person event for the industry since the onset of the coronavirus pandemic.
The conference, running from Sept. 21-23, is happening just as Europe faces a gas crunch, with prices spiking to record levels and analysts warning that some countries could face blackouts when winter sets in.
European Utilities Say Little Can be Done in Short Term (12:30pm)
“Little can be done” about high gas prices for now as remedial steps take months to have any impact, said Didier Holleaux, executive vice president of French energy company Engie SA. “We hope the start of the winter will not be too cold in the northern hemisphere. Otherwise, we are in trouble.”
German utility Uniper SE said that credit risks in the industry are increasing, and more companies may suffer liquidity problems. There’s little sign that Russia is withholding gas supplies to western Europe, said Niek Den Hollander, Uniper’s chief commercial officer.
Russia’s Gazprom PJSC needs to replenish its own stocks for the local market, said Holleaux, which is one reason it can’t boost exports much.
Turkey Says ‘Very Tough’ as Gas Rises (12:00pm UAE)
The rise in gas prices means this year will be “very tough” for importers and Turkey will struggle to buy as much LNG as in 2020, said Deputy Minister of Energy and Natural Resources Alparslan Bayraktar. Demand in the country will be “very high” at 60 billion cubic meters in 2021, he said.
The government is negotiating new gas contracts with Gazprom, he said, adding that they may be hybrid models with pricing linked to oil and gas indexes. It’s also talking to LNG suppliers, he said, without naming them.
Turkey plans to start producing gas from recent finds in the Black Sea in 2023, he said. Those will eventually reduce the country’s imported-gas dependency from 100% to around 75%, he said.
Qatar Says Demand for LNG is Huge (11:50am UAE)
“There is huge demand and we basically have a set capacity,” Qatar’s energy minister, Saad Al-Kaabi, said. The country is the world’s biggest exporter of liquefied natural gas and is investing billions of dollars to increase production, though the project will take years.
“They are queuing up for LNG,” he said. “We have huge demand from all our customers and unfortunately we can’t cater for everyone.”
LNG prices in Asia have spiked almost 50% this month to $27.19 per million British thermal units. That’s the energy-equivalent of around $155 per barrel of oil.
“We don’t want these high prices,” he said. “We don’t think its good for consumer.”
Indonesia to Ramp Up Renewables (11:05am UAE)
Indonesia plans to increase its mix of power generation from renewable energy to 70% by 2040, Energy Minister Arifin Tasrif said. Demand for gas will increase as the world transitions from diesel and coal, he said.
OPEC Says ‘Emotions’ Taking Over (11am UAE)
OPEC Secretary-General Mohammad Barkindo said Europe’s gas crunch underscored that more investment in fossil fuels is needed. Governments must realize the switch to cleaner forms of energy can only happen slowly, he said.
“Emotions have overtaken industry facts,” he said on a panel with energy ministers from Qatar and the UAE. “How do we change this narrative, because we’re losing it? Civil society and climate activists have taken over the space. Activist shareholders have held the industry nearly to ransom.”
The energy ministers of Qatar, the world’s biggest exporter of LNG, and the UAE echoed those sentiments.
“There’s a euphoria around the energy transition that’s forcing companies not to invest,” Qatar’s Saad Al-Kaabi said. “People should not forget that new investments are needed to just keep output sustained. People are now realizing there’s a supply crunch and we haven’t even got into the winter season yet.”
Natural Gas ‘Pivotal’ For UAE’s Future (10:20am)
Natural gas will play a “pivotal” role driving the economy of the United Arab Emirates in the next 50 years, said Sultan Al Jaber, head of Abu Dhabi National Oil Co., which pumps almost all the country’s fossil fuels.
The UAE, particularly the capital of Abu Dhabi, wants to increase its exports of liquefied natural gas and blue hydrogen. The latter fuel, made from natural gas, is seen as pivotal to the global energy transition.
“As the world consolidates its recovery from the Covid-19 pandemic, LNG and broader gas markets globally are tightening, with demand outpacing supply,” Al Jaber said. “Longer-term, the outlook is also robust, driven particularly by markets in Asia. No other fuel source can reliably supply the baseload power to heat and cool homes, drive heavy industry and expand economies, all while keeping emissions at a minimum.”
originally published at World Oil