Business

Demand, Supply and Price Trends: African Energy Chamber (AEC) Investigating Global Gas Trends in Outlook Q1 2022

The global natural gas market is in a state of volatility and transformation as post-COVID-19 demand trends, rising geopolitical tensions among major producers, and energy transition pressures impact supply, demand and prices. By 2022, the African Energy Chamber (AEC) (www.EnergyChamber.org) – through Outlook Q1 2022, State of African Energy – expects natural gas to take on a more prominent role in the global energy chain, with African markets exploding in a flurry of investment and development.

On the short-term global reference price front, the short-term forward curve shows continued high prices and volatility due to low storage and supply concerns in Europe which is expected to exert a global price influence on the Dutch Title Transfer Facility (TTF) through most of 2022. Price forecast the AEC average for 2022 is $16.7 per million British Thermal Units (MMBtu) for TTF and $18.6/MMBtu for Asian spot prices. The outlook expects the US to be shielded from international turmoil, with better production prospects for 2022 keeping Henry Hub prices around $3.5/MMBtu.

In addition, regarding the near-term growth of global natural gas supply, gas demand and gas production have grown consistently over the last decade, representing a trend that is expected to continue as global decarbonization efforts intensify. Despite the delay in the supply of Liquefied Natural Gas (LNG), the long-term outlook for TTF and Asian LNG prices has improved and the peak in gas prices is expected to occur in 2025. When new projects start operating in 2027, gas prices will see some downward pressure. lower.

Moreover, the prospects for LNG supply and demand are quite strong. In particular, supply vs demand levels of 2022 – 2023 indicate that there is sufficient LNG supply to meet demand, as new projects start operating in 2022 such as the Floating Coral LNG in Mozambique, Tangguh Train 3 in Indonesia and Calcasieu Pass in the US During this time , LNG demand is expected to grow at a healthy CAGR of 5%. Apart from the start of major LNG projects including Arctic LNG 2, Golden Pass, Nigeria LNG Train 7 and the North Qatar field expansion project, the supply deficit is expected from 2024 onwards. This is mainly driven by the strong demand generated from gas-fired power generation as increasing environmental pressures hinder coal-fired power generation.

“As per our report, the outlook for natural gas, and in particular LNG, remains strong. Representing the fuel of the future, and a cleaner and more widely available resource, the demand for gas will explode. Therefore, it is imperative to increase investment in new and existing gas projects, globally and in Africa. To meet demand and ensure price volatility is maintained, significant capital injections are required,” said Grace Orife, Member of the Board of the African Energy Chamber.

Meanwhile, on the gas supply side of Africa, Algeria, Egypt, and Nigeria are in the top three natural gas producers in 2022, which contribute more than 80% of the total natural gas flow from Africa. In Algeria, we see the gas sector as requiring more investment and new major gas discoveries. In the medium term, we expect gas exports to fall below 30 Bcm by 2025 as more gas needs to be diverted to the domestic market. On the other hand, Egypt became a net exporter in the second half of the last decade as major discoveries like Zohr started pouring in. Other projects such as Atoll, Nooros and West Nile Delta also contributed to the increase in supply. However, the lack of new discoveries coupled with the ever-increasing demand for gas poses a challenge as domestic consumption will exceed supply next year. Meanwhile, in Nigeria, 2021 volume saw a low of 1450 billion cubic feet. 2022 production is expected to see a healthy recovery to around 1780 billion cubic feet. Existing production projects and projects under development are expected to ensure supply growth until around 2025. After this, production fields are expected to experience a sharp decline going forward and supply is highly dependent on currently undeveloped discoveries and any brownfield investment in new projects. existing projects that might increase production.

While global and African gas demand will grow significantly in 2022 and beyond, a significant level of investment is still required if supply is to be maintained and new discoveries developed. Representing the continent’s premier energy event, and the meeting place of a number of high-level industry executives from African and international markets, African Energy Week (AEW) 2022 – AEC’s annual event – ​​has put natural gas at the center of the discussion. Backed by data produced by the AEC, AEW 2022 is committed to ensuring Africa’s gas potential is realized, and that the continent is established as a major and competitive gas economy.

For more information and market-based data on the global energy landscape and Africa in 2022, email Amina Williams at [email protected] or visit www.EnergyChamber.org today!

Distributed by the APO Group on behalf of the African Energy Chamber.

This Press Release has been issued by APO. Content is not monitored by the Business Africa editorial team and is not content that has been vetted or validated by our editorial team, evidence readers or fact checkers. The publisher is fully responsible for the contents of this announcement.

Demand, Supply and Price Trends: African Energy Chamber (AEC) Investigating Global Gas Trends in Outlook Q1 2022

Source link Demand, Supply and Price Trends: African Energy Chamber (AEC) Investigating Global Gas Trends in Outlook Q1 2022

Back to top button