Quarterly Gas Review – Issue 10
In this latest OIES Gas Quarterly our objective is to continue our review of the impact of COVID 19 on global gas markets by examining various key indicators and also by updating our global gas model and extending the range of our forecasts to 2025. We start, as usual, with a look at various price indicators which demonstrate what we believe are some key market trends and then present four key-note articles. The first updates our analysis of the storage situation in Europe and the impact of LNG flows. It notes that storage injections have slowed recently and LNG imports in June have also declined sharply, and concludes that these outcomes relate to some extent to more robust gas demand in Europe than had been expected but has mainly been caused by LNG shut-ins that have reduced supply. The second reviews physical flows of Russian gas, a key balancing source of gas supply in Europe, via various transit routes in the first half of 2020. It notes the overall decline in Russian exports which occurred in January and then discusses the changing balance of export routes following the new transit agreement with Ukraine and the ending of the long-term arrangement with Poland. The third article updates our forecasts for global gas supply and demand, with a focus on the LNG market, in the wake of the COVID 19 crisis and extends the analysis to 2025. Its overall conclusion is that global gas demand can rebound to 2019 levels in 2021, but that it will be 2025 before the full impact of the COVID 19 crisis has unwound as it will take five years before our previous pre-COVID base case forecasts can be met. Finally, we return to the theme of Russian gas exports and look at Gazprom’s developing Asian plans, which were the focus of the company’s recent AGM.