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Gas prices are no longer sustainable, says Algerian energy minister

Oil&Gas Materials 23 July 2020 11:45
Gas prices are no longer sustainable, says Algerian energy minister

BAKU, Azerbaijan, July 23

By Leman Zeynalova – Trend:

Prices for gas are now at a level that is no longer sustainable, said newly-appointed Algerian Minister of Energy Abdelmadjid Attar, Trend reports citing the Gas Exporters Countries Forum (GECF).

“The current pandemic has had a dramatic effect on lives, the economy, and energy markets. For gas, difficulties have accumulated since more than two years with over-investment in LNG facilities. The pandemic has exacerbated the crisis and the prices are now at a level that is no longer sustainable. I believe that the GECF should take this crisis as an opportunity to change and to become more useful for the interest of its members,” Attar said during a meeting with GECF Secretary-General Yuriy Sentyurin.

“I remember when I was the CEO of Sonatrach, the same question kept coming back: why are gas exporting countries not cooperating like oil exporting countries. Well, part of the answer then was that most of the gas outside of the US was sold under long-term contracts with price indexed to oil, and destination clauses, and take-or-pay provision. Since then the gas market has dramatically evolved. There is more diversity of exporters. LNG trade has expanded, linking together regional gas markets, and there is a multiplicity of contractual arrangements from oil index based to hybrid contracts,” he said

The minister also provided the Secretariat with valuable suggestions based on his vision of the future of the natural gas industry.

Both parties discussed the preparatory work for the forthcoming 22nd Ministerial Meeting, to be hosted by Algeria on 12 November 2020. Algeria will also be the host of the 7th GECF Summit of Heads of State and Government in 2023, as announced at the 5th GECF Summit in Equatorial Guinea.

Sentyurin, for his part, said that Algeria is one of the founding Member Countries and a pillar of the GECF family.

“It’s a tall order to name the ways and means Algeria has contributed to the Forum’s development. Now, we are looking forward to navigating the changes in market realities, and look beyond current moment under your able leadership as the GECF Ministerial Meeting President,” he added.

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Follow the author on Twitter: @Lyaman_Zeyn

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