The liquefied pure gas (LNG) terminal at the Yangshan Deepwater Port in Shanghai, China, on Saturday, Oct. 9, 2021.
Qilai Shen | Bloomberg | Getty Photographs
Winter hasn’t even arrived, however gas prices have already soared to record highs in Europe and Asia on provide issues, whereas several energy suppliers in the U.K. have collapsed.
Pure gas provide is about to rise incrementally in the coming years, earlier than leaping in 2025, analysts advised CNBC.
However analysts are divided on whether or not demand will proceed to outstrip provide in years to come.
The present gas crisis will possible repeat itself once more, mentioned Richard Gorry, managing director of JBC Energy Asia.
“This shall be a crisis that’s reoccurring over the subsequent three or 4 years — just because we do not have quite a lot of new pure gas provide coming into the market in that interval,” he advised CNBC’s “Capital Connection” in mid-October.
“By 2025, the state of affairs might change, however I believe we positively have a few years the place we’re going to be high energy prices,” he mentioned.
However James Whistler, global head of energy derivatives at shipbroking agency Simpson Spence Younger, mentioned he does not anticipate prices to stay high past this winter.
“Are we going to be in an energy crisis perpetually for the subsequent three years? Completely not,” he advised CNBC’s “Street Signs Asia” on Wednesday.
“This can be a short-term problem … come March or April subsequent yr, we’ll see way more affordable prices beginning to come by means of once more,” he mentioned.
Gas demand is rising “fairly quickly” as nations try to shift away from coal and oil, to cleaner energies, Gorry advised CNBC once more this week. Meaning the world does not have sufficient gas, and the market shall be very tight for the subsequent three years, he added.
Pure gas is much less polluting than different conventional fuels.
Whereas he predicted that the present crisis will move round February or March, the market will possible tighten once more when subsequent yr’s winter season approaches and demand rises.
Even when a scarcity of gas does not lead to one other energy crisis, it may trigger the world to fall again on coal and oil, mentioned Gavin Thompson, Asia Pacific vice chairman of energy at Wooden Mackenzie.
In a bid to meet its electrical energy wants, the U.K. fired up an old coal power plant in September.
Thompson expects gas to “characteristic prominently” in the gradual transfer towards a cleaner energy combine. Nevertheless, he mentioned producers are involved about the long-term way forward for gas, and could also be underinvesting in provide.
If producers do not make investments sufficient, consumers might flip again to conventional fuels, he warned.
“That is a giant danger as a result of … slowing the tempo of the energy transition will make 2030 targets, 2050 targets actually, actually tough to meet,” he mentioned.
Different analysts predict that gas provide in the coming years shall be in a position to meet demand.
Anthony Yuen, head of energy technique at Citi Analysis, mentioned gas provide is “getting higher.” He famous that main liquefied pure gas export terminals are coming on-line and manufacturing is about to improve in Europe, Russia and China.
LNG export services cool pure gas down right into a liquid state in order that it may be transported on ships to locations that can’t obtain the gas by pipeline.
The crunch this yr was a results of a “confluence of things” — from low hydro power generation in Latin America to “very robust” demand for energy, he mentioned.
He mentioned the interval of “actually high prices” may doubtlessly trigger a slowdown in demand progress, and questioned the place demand would develop rapidly sufficient to outpace provide.
Nonetheless, he did not fully rule out a repeat of the energy crisis.
“By no means say by no means,” he advised CNBC over a video name. “It partly relies upon on [the] climate. However then, when you issue in a lot of provide and demand components, the state of affairs most likely shall be a lot better.”
Prices will possible development decrease after this winter, after which come down “way more” in 2025 when a lot of LNG export terminals come on-line, Yuen mentioned.
— CNBC’s Sam Meredith and Chloe Taylor contributed to this report.
Are high energy prices here to keep? Analysts weigh in on the global gas crisis Source link Are high energy prices here to keep? Analysts weigh in on the global gas crisis