Market to be tight until 2025, say gas exporters
CAIRO, Oct 26, (Agencies): The leader of the coalition of gas-exporting countries said Tuesday the group expects demand for the fuel to far outstrip supply until 2025 amid a global energy crisis sparked by the war in Ukraine.
Secretary General of the Gas Exporting Countries Forum Mohamed Hamel, of Algeria, said at the group’s meeting in Cairo that although investment was increasing in natural gas production the countries didn’t expect to have new sources of supply online for another three years.
“We believe that this market tightness will continue to be with us until probably 2025 or 2026 when the new projects that are being developed will come on-stream,” he said in a press conference Tuesday attended by energy ministers from some of the coalition’s members.
Natural gas prices have skyrocketed worldwide following the Russian invasion of Ukraine early this year. Amid sanctions imposed on Russia’s energy sector, much of European Union, which formerly depended on Russia for 40% of its supply, has struggled find alternatives.
Russia has reduced or cut off natural gas supplies to 13 EU member nations as European governments bolster their support for Ukraine in the form of weapons, money, aid and economic sanctions on Moscow. The potential for shortages has led to surging gas and electricity prices that could climb higher as demand peaks during the cold months.
Russia’s Minister of Energy Nikolai Shulginov attended the Cairo meeting but did not make any public statements.
Increase
Egypt’s minister of petroleum and mineral resources Tarek el-Molla, meanwhile, said the country was endeavoring to increase its capacity to export liquefied natural gas amid the current worldwide need. Earlier this year, Egypt and the EU announced a deal that would see the North African country liquefy natural gas extracted by Israel.
The Qatar-based coalition’s meeting comes just weeks after an OPEC decision to cut production drew criticism from world leaders.
Energy ministers cut production by a larger-than-expected 2 million barrels per day starting in November after an early October gathering for their first face-to-face meeting at the Vienna headquarters of the OPEC oil cartel since the start of the COVID-19 pandemic.
Meanwhilt, the Gas Exporting Countries Forum (GECF) expressed Tuesday deep concern over attempts of changing the mechanism of pricing natural gas and imposing maximum limits of prices politically motivated.
This came in a statement issued by the 24th ministerial meeting of the forum held in Cairo under leadership of Egypt and participation of energy ministers and senior officials of member states.
The statement said that these interferences in market performance might increase suffocation and foil investment as well as harm both consumers and producers. It added that the meeting noticed that the lack of investment since 2015 due to the decline in natural gas prices and misleading calls to stop investing in gas projects resulted in an imbalance in supply and demand that exacerbated geopolitical tensions.
As a result, Europe has become the preferred destination for LNG shipments to compensate the quantities reduced into pipelines, it made clear.
It is expected that suffocation would continue at the market for the medium run, it said, stressing that the GECF’s aims of backing the full sovereign of the member states on their natural resources.
The statement underlined the importance of cooperation and coordination between member states and support for a clear and frank dialogue amongst producers, consumers and all relevant parties so as to ensure security of both supply and demand, transparency, fairness and openness in gas markets.