Gas prices can fluctuate wildly back and forth for years to come because there will be too little supply to meet all demand for a long time to come. Saad al-Kaabi, Qatar’s energy minister, made this prediction during a conference in the neighboring United Arab Emirates. “We bring a lot of gas to market, but it’s not enough.”
According to Al-Kaabi, especially the upcoming winter could be difficult for gas consumers in the northern hemisphere, such as European countries. They will have a hard time replenishing gas supplies without Russian gas and that will drive up prices, he thinks.
Agreements with Europe
While Qatar has agreements with a number of European countries, it will have limited capacity to supply gas in the foreseeable future. The Gulf state is one of the world’s largest gas suppliers and will increase its capacity in the coming years. In 2027, a project will be completed that will allow Qatar to produce 60 percent more gas than at present.
In the coming years, countries in Europe and Asia will therefore continue to compete for the purchase of liquefied natural gas (LNG). Last summer, when Europe accelerated its efforts to replenish supplies, gas prices were more than ten times higher than the long-term average. And in the meantime the flow of gas from Russia has further decreased, also because European countries no longer want to buy Russian gas due to that country’s invasion of Ukraine.
Problem
High prices are also a problem for Qatar and other gas-producing countries. Due to these high prices, consumers and businesses are looking for alternatives to gas. For example, more is being invested in hydrogen, seen as a possible clean substitute. Al-Kaabi calls this “demand destruction” and says it is one of the biggest challenges. “We are seeing demand destruction for both oil and gas.”
However, Al-Kaabi and his colleague Suhail al-Mazrouei from the UAE agree that fossil fuels are far from exhausted. “Gas will be needed for a long time to come,” says Al-Mazrouei. Al-Kaabi even believes gas is future-proof. “It’s not a transition fuel but a target fuel” within the energy transition, he thinks.
Source: BNR
Sharon Rock is an author and journalist who writes for 24 News Globe. She has a passion for learning about different cultures and understanding the complexities of the world. With a talent for explaining complex global issues in an accessible and engaging way, Sharon has become a respected voice in the field of world news journalism.
