Natural Gas: Qatar’s Energy Ministry forecasts volatile year
Natural gas markets could face volatility for the next several years because there’s still too little supply to meet rising demand, the energy minister of Qatar has said.
“It’s going to be a volatile situation for some time to come,” Saad al-Kaabi said at an Atlantic Council conference in Abu Dhabi.
“We’re bringing a lot of gas to the market, but it’s not enough.”
Next winter may be tough for gas consumers in the northern hemisphere, he said, as they will probably struggle to replenish their stockpiles before then in the absence of flows from Russia.
Gas prices soared after Russia’s attack on Ukraine last February and Moscow cut piped supplies to Europe.
Prices have slumped since the middle of 2022 as economies slowed and Europe ramped up imports of liquefied natural gas, including from Qatar.
Meanwhile, prices remain far above historical averages and could jump again if China’s economic re-opening leads it to increase purchases of gas.
Europe may also have to fill up its reserves over the summer with barely any flows from Russia, its biggest supplier before the Ukraine war.
“High prices are hurting consumers,” al-Kaabi said.
“The biggest challenge we face as producers is demand destruction and there is demand destruction for both gas and oil,” he said.
Qatar is investing around $45 billion to increase its production by almost 60 per cent. But that project won’t be finished until 2027.
Al-Kaabi said Qatar will sign more deals this year with consumers for the new gas. In November, it made multi-year agreements to supply some of it to Germany and China.