The GECF, between criticism and recommendations

The GECF (Gas Exporting Countries Forum) warns about artificial interventions in the gas market.

Share:

The GECF (Gas Exporting Countries Forum) warns about artificial interventions in the gas market. They argue that such interventions would exacerbate the market tightness and discourage investment

Doubts and risks

The GECF Ministerial Summit was held in Cairo, Egypt. The final communiqué states that gas markets are undergoing dramatic changes. Participants were skeptical of attempts to change the price discovery and risk management functions of markets.

The GECF also questions politically motivated price caps. At the same time, the European Commission is working with EU member states on potential market intervention measures. These interventions would include gas price cap mechanisms and dynamic pricing corridors.

Price volatility

The price of gas in Europe and Asia is extremely volatile until 2022. Indeed, new records are being set for European gas and conventional LNG reference prices. The TTF price in the Netherlands is at a record high of €319.98/MWh on August 26.

In addition, the JKM LNG spot price reaches the historical price of $84.76/MMBtu in March 2022. However, long-term contractual gas prices would be stable. GECF states that it is the underinvestment since 2015 that accounts for the current imbalance between supply and demand.

Expected investments

This underinvestment is due to low gas prices and the rhetoric of not investing in gas projects. The GECF assures that the tightening of the market should continue in the medium term. The majority of the new projects will not come on line until after 2025.

GECF recommends that more emphasis be placed on gas infrastructure. Population growth, a doubling of the world’s GDP and improved living standards are leading to an increase in the need for gas. Thus, the forum emphasizes the importance of timely investment to ensure market stability.

 

Italian group Eni signs a twenty-year liquefied natural gas supply contract with US-based Venture Global, covering two mn tonnes per year and marking a first for the company from the United States.
The discovery of the Gajajeira field marks a major step for Angola, strengthening its natural gas development strategy and diversifying national energy resources in a context of sector transition.
The Voskhod vessel, under US sanctions, docked at the Arctic LNG 2 plant in Russia, marking the second visit by a sanctioned ship to the site this year, according to maritime tracking data.
Japan has urgently secured several additional cargoes of liquefied natural gas from the United States to avert an imminent electricity supply shortage caused by rapidly declining national reserves expected at the end of July.
The European Commission has unveiled a proposal to prohibit the import of Russian gas into the Union, sparking intense debate on its feasibility, contractual impact and consequences for supply security among several Member States.
CNOOC Limited announces the discovery of a significant oil and gas reservoir in the buried hills of the Beibu Gulf, opening new opportunities for shallow water exploration off the coast of China.
TotalEnergies’ Mozambique LNG gas project is at the centre of a legal challenge in Washington, following the approval of a $4.7 bn loan by the US Exim Bank, amid security concerns and opposition from civil society groups.
Investors are closely watching U.S. midstream companies’ announcements regarding new gas pipeline expansions targeting promising markets in the West and Northeast, beyond traditional regions in Texas and the Southeast.
PPL Corporation and Blackstone Infrastructure announce a strategic partnership to develop new gas-fired power plants to supply electricity to data centers through long-term contracts in Pennsylvania.
Falcon Oil & Gas Ltd announces a new record initial flow test result at the Shenandoah S2-2H ST1 well and the start of its 2025 drilling campaign in the Beetaloo Basin.
Technip Energies has secured a contract to lead preparatory works for a floating liquefied natural gas unit in Africa, confirming its presence in the international gas infrastructure market.
The Slovak government is seeking guarantees from the European Union to secure its supplies as talks continue over ending Russian gas and adopting a new round of sanctions.
ArcLight Capital Partners announces the acquisition of Middletown Energy Center, a combined-cycle natural gas power plant, aimed at meeting the substantial rise in energy demand from data centers and digital infrastructure in Ohio.
The commissioning of LNG Canada, the first major Canadian liquefied natural gas export facility led by Shell, has not yet triggered the anticipated rise in natural gas prices in western Canada, still facing persistent oversupply.
Horizon Petroleum Ltd. is advancing towards the production launch of the Lachowice 7 gas well in Poland, having secured necessary permits and completed preliminary works to commence operations as early as next August.
European Union member states have requested to keep their national strategies for phasing out Russian gas by 2027 confidential, citing security concerns and market disruption risks, according to a document revealed by Reuters.
TotalEnergies becomes a member of PJM Interconnection, expanding its trading capabilities in North America's largest wholesale electricity market. The decision strengthens the company's presence in the United States.
Turkey has connected its gas grid to Syria’s and plans to begin supplying gas for power generation in the coming weeks, according to Turkish Energy Minister Alparslan Bayraktar.
Despite record electricity demand, China sees no significant increase in LNG purchases due to high prices and available alternative supplies.
US natural gas production and consumption are expected to reach record highs in 2025, before slightly declining the following year, according to the latest forecasts from the US Energy Information Administration.