Natural Gas Market - Page 17

International Gas Prices – September 4 , 2015

Posted in International Gas Prices, Natural Gas Market, Natural Gas Prices on

NBP: summer prices moderate, without sharp drops

NBP & coal priceThis summer, the average NBP price did not decline to the same extent as last year. In July, it even found itself under slight pressure: at €21.2/MWh ($6.8/MBtu), it was 2% higher than in June and 30% higher than in June of last year. During August, the price saw a fairly marked downtrend, hitting a low of €17.2/MWh on August 24 before rallying. The first September quotations, progressing due to sustained demand, were in the neighborhood of €18.9/MWh ($6.2/MBtu). These moderate values helped make natural gas more competitive in the electricity sector compared to coal, a phenomenon fostered since April by the increase in carbon tax support, now fixed at £18/TCO2 (about €24/TCO2). The result has been a fairly notable increase in gas consumption in this sector: 18% more in June on an annualized basis, as opposed to a 24% decrease for coal over the same period.

Storm warning in the U.S. oil & gas sector

Posted in Analysis, Country Report, Natural Gas Market, Press release on

The new CEDIGAZ report, U.S. Natural Gas Update and Outlook*, analyzes the consequences of the oil price decline on the U.S. oil and gas sector as well as the implications for production and hydrocarbon prices.

The oil price decline has left American producers in a situation like that of 2009 following the collapse of the Henry Hub gas prices. At the time, shale gas production was growing fast but demand was depressed due to the effects of the subprime mortgage crisis. Producers reacted by redirecting their investments towards liquid-rich deposits (containing oil or natural gas liquids) and were thus able to benefit from the oil price recovery. This strategic reorientation did not penalize gas production, which continued to grow, thanks to the gases associated with oil production which, in recent years, have been responsible for almost all growth in gas production. Today, more than 50% of the shale gas produced in the United States comes from liquid-rich deposits. Consequently, any decrease in liquids production occurring in reaction to falling oil prices is bound to have major repercussions on domestic gas production.

Long-Term Pipeline Supply Contracts in Europe dominated by Russia

Posted in Long Term Contracts, Natural Gas Market, Supply contracts by pipelines on

The recently disclosed update of Cedigaz’ database on Long-Term Pipeline Supply Contracts in Europe shows limited contractual activity during the past 12 months. Since the database’s last update in June 2014, only 3 new contracts, all with UK buyers, have been identified by Cedigaz for a total volume of 6.56 bcm/yr. with durations ranging from 6 to 10 years. This contrasts with the 18.3 bcm/yr. contracted or renewed in 2013, including 10 bcm/yr. of Shah Deniz contracts and the extension for 4 years (until the end of 2017) of the 6.2 bcm/yr. between Gazprom and Panrusgaz (Hungary).

Contracts in force in Europe[1]

At the beginning of 2015, Cedigaz’s database lists 110 contracts in force in Europe representing 410 bcm/yr. (including intra-European contracts), of which 60 contracts (263 bcm/yr.) with countries outside Europe (Algeria, Azerbaidjan, Iran, Libya and Russia), 25 contracts with Norway for a total 87 bcm/yr. and 25 contracts (61 bcm/yr.) with other countries inside Europe (mainly Dutch contracts).