Current gas prices – matter of supply and demand, says Eurogas president

Oil&Gas Materials 25 November 2021 15:12 (UTC +04:00)

BAKU, Azerbaijan, Nov.25

By Leman Zeynalova – Trend:

In fact, as far as the prices are concerned, it's really a matter of supply and demand, Eurogas President and Executive Vice President of ENGIE, Didier Holleaux told Trend.

“On the supply side, we must recognize that there have been a number of different incidents on the upstream part of our industry. So, the production of natural gas, the liquefaction of natural gas. We have had technical incidents in Norway, in Peru, in Algeria, today in the US. There have been extended maintenance during Summer 2021 because of the pandemic. Maintenance in 2020 was limited and therefore maintenance has been postponed to Summer 21. And that explains why on the offer side, on the supply side, natural gas was more scarce than usual,” he explained.

Holleaux pointed out that on the demand side, there has been an increase of demand for at least four main reasons.

“One is the economic recovery post- pandemic. The second one is the increased demand in Asia, and particularly in China, because China is converting some of their coal fired plants to gas fired. And that's good news for the climate. A third reason is that in some countries which are normally relying on hydraulic power, drought has led them to use gas fired power plants instead. That's the case for Brazil, that's the case for Turkey. And the last one, which is not the least, is that because the winter last year was very cold, particularly at the end of the winter, so the gas storages were empty in the Northern Hemisphere, and we need to replenish them. So, when you see such impact on demand and supply, it's not surprising that the prices went up,” added the Eurogas president.


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