PIRA Energy Group has said that rules are going to be written on long term energy contracts. In the US there was a report of gas withdrawal and in Europe demand grew among lower prices and plentiful supply.
LNG
- Many long term contracts need to be signed this year in order to finance future supply.
- Sellers options are limited, however more quantitative easing and low risk borrowing keep more players in the game.
- Buyers options appear to be limitless.
- The distancing of sellers and borrowers is creating uncertainty in the long term balances.
- Due to lower prices and a more competitive position in the fuels market, PIRA has increased its gas demand growth projection for this year.
- Increases are led by modest recovery in industrial use and a more competitive position for gas relative to coal.
- The addition of higher stock injections, as well as the above, means a relatively positive story on the demand side for gas for the first time since 2010.
- The major problem for spot sellers is that contract gas nominations by Russian buyers are going to grow and grow in Q2 and 3.
- Sohar based industries have asked the Omani government to consider the recent doubling of natural gas price in a phased manner over a fiver year period.
- The government doubled natural gas prices with effect from this month and an annual increase of 3% thereafter.
- 15 major consumers of natural gas in Sohar’s industrial are affected by the increase.
Europe
Oman
Edited from press release by Claira Lloyd