WoodMac predicts six global gas trends for 2022
Wood Mackenzie, global energy consultancy, has recently released a report highlighting the six trends predicted for the gas and LNG sector in 2022.
WoodMac aims to empower its clientele to make strategic decisions, as a trusted source of commercial intelligence for the natural resources sector.
1. Gas prices are forecast to be bumpy, stating the key determinant as Nord Stream 2.
“The commissioning of Nord Stream 2 might well be the only option to refill storage and avoid a repeat of the last year’s winter crisis,” the report reads.
The current levels of exports from Russia and European storage inventories are suggested to reach below 15 billion cubic metres by the end of March, which will be a record low.
2. Oil-indexation levels are expected to rise.
2022 may be a big turning point for LNG oil-indexed contrasts with the potential of reaching 12 per cent on a weighted average basis.
“We expect LNG contracting activity to remain strong in 2022. Chinese buyers are again expected to lead the way and account for most of new long-term contracts signed,” said Vice President Valery Chow.
3. High momentum behind new LNG projects.
There is anticipated to be 79 million tonnes per annum of additional LNG to take final investment decision over the next two years.
4. An industry shift from offsetting carbon emissions to producing material carbon reductions.
5. Global gas demand will remain resilient in the short term.
The role of gas in the current energy transition will experience pressure as prices continue to stay high.
6. The consideration of gas as a transitional investment in the EU taxonomy.
“Gas prices will need to come down to accommodate increased investments in gas use. And investments in gas infrastructure remain firmly outside the scope to classify for green credentials, let alone investments in supply. The road for gas to establish its role in the energy transition globally remains uncertain.”