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Gas market may face physical curtailments for balancing – GECF

Oil&Gas Materials 1 September 2022 14:05 (UTC +04:00)
Gas market may face physical curtailments for balancing – GECF
Laman Zeynalova
Laman Zeynalova
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BAKU, Azerbaijan, September 1. Gas market may face physical curtailments for balancing, said Mohammed Hamel, Secretary General of the Gas Exporting Countries Forum (GECF), Trend reports.

Addressing the G20 Energy Transition Working Group parallel event, he noted that demand shift from gas to oil and coal is underway in many regions and industries.
“Various policy means, such as price caps and subsidies, are used to shield end-users from the effects of high prices. Developing countries, notably in South Asia, face immense difficulties in acquiring LNG cargos, a situation that is creating havoc on their economies and affecting people’s standard of living. The risks in the short-term are skewed to the downside. Unless the world economy plunges into a protracted recession, it is likely that market tightness will continue in the near future, and may even worsen in case of colder than normal weather in the Northern hemisphere, requiring extremely high prices or even physical curtailments to balance the market,” said GECF’s secretary general.

Hamel believes that in the medium-term, gas markets are expected to remain rather tight, despite the increase in investment during the last year and a half. Major gas developments will only come on stream after 2025.

“I thus believe that it is important to draw the lessons from the unfolding energy crisis. The recent developments in the energy scene have brought to the forefront of the energy policy debate the issue of energy security, with its two intertwined and mutually supportive pillars of security of demand and security of supply. These are the two sides of the same coin. The energy policy rethink now underway shall seek a balance between energy security, affordability and sustainability. Reaching such a balance will depend on national circumstances. There is no one-size-fits-all model,” he added.

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