Page 12 - GLNG Week 47 2020

GLNG COMMENTARY GLNG

exports. This is primarily because of the nature His Venezuelan counterpart, Tareck El
of the gas market. Gas is mostly sold via pipeline Aissami, was more overt, calling for the GECF
directly from a supplier to a consumer, making to develop “the political will to take far more
the market fairly regionalised and pricing inflex- decisive actions to control the gas market and
ible. The market for oil is far more international. obtain fair benefits for gas producing countries.”
As a result of a surge in LNG trade over recent The group must establish “mechanisms of
years, however, the gas market has grown more effective interaction to maximise revenues of
global in nature. Suppliers have access to many member countries by balancing and stabilising
more buyers and vice versa, and the duration of markets,” he said.
supply contracts has also been steadily short- GECF Secretary General Yury Sentyurin
ening. There has also been a move away from has also spoken in favour of closer co-opera-
oil-indexed prices to hub rates, and restric- tion, saying in June that he considered OPEC a
tive destination clauses are being phased out. “model” for GECF’s activities.
All these trends have made the market more “Maybe not, it’s high time that the gas and oil
competitive. industry implements the knowledge and solu-
It is unclear whether the mechanisms Shulg- tions of the oil industry. To use the best practices
inov was referring to could involve co-ordinat- demonstrated by your community,” he said.
ing supply in the manner of OPEC. But officials
from a number of other GECF have also called Resistance
for the group to do more to manage the market. The obstacle to OPEC-style joint action is likely Any restrictions
Algerian Energy Minister Abdelmadjid Attar to be Qatar, the biggest LNG exporter in the
noted on November 11 that there was currently world, which has dismissed talks of co-ordinat- on production
no means for sovereign countries to co-operate ing global gas supply in the past. The Gulf state would also
and bring about greater stability in the gas mar- claims to have the lowest production costs in
ket, unlike their oil-producing counterparts. the world, meaning it is better able to withstand interfere with
“This is maybe an opportunity to explore weak prices and has less incentive to form a sup-
through innovative thinking, possibilities for ply pact. Qatar’s ambitious
such [co-operation] to be put in place for the Any restrictions on production would also
benefit of exporters, consumers and the indus- interfere with Qatar’s ambitious LNG expansion LNG expansion
try,” Attar said. plans. Qatar is looking to raise its liquefaction plans.
Nigerian Energy Minister Timipre Sylva capacity by 33mn tonnes per year by the mid-
meanwhile suggested that GECF could become 2020s to 110mn tpy, and then to 126mn tpy
a “balancing factor” in the market. towards the end of the decade.
“With 71% of the global gas reserves in the Qatar Energy Minister Saad al-Kaabi made
hands of GECF members we believe that acting no reference to closer co-operation in his open-
together, the GECF can become a force for good ing remarks to the meeting. Instead, he only said
and a balancing factor in the gas business,” he the group should continue advocating for gas
said. “Nigeria would want to see more dialogue “to the best of our ability.”
and more collaboration among member coun- “We are charged as a forum to enhance gas
tries, gas consumers and regional and interna- business around the world and try to promote
tional organisations.” gas,” he said.™

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