Quarterly Gas Review – Issue 15

In the latest OIES Quarterly Gas Review, we focus on short-term gas pricing developments discussing the very sharp rise in wholesale gas prices in recent months. With continued strong demand in Asia and Central and South America, alongside seemingly constrained supply, LNG available for Europe was limited. Moreover, in light of production issues, even higher pipeline imports seen from North Africa and the Caspian regions were unable to offset lower Russian volumes, compared to pre-Covid levels in 2019. The current very high prices would seem to incorporate a significant ‘fear’ premium of another cold winter, and with storage levels in Europe struggling to get back to acceptable levels, the prospect of real gas shortages looms large.

In the second and third sections of the report, we take a more detailed look at two specific factors which are impacting the global gas market. Firstly, Katja Yafimava looks at when Nord Stream 2 might be fully approved and gas volumes might start to flow, possibly alleviating supply constraints. Secondly, Leda Gomes discusses the reasons for the rise in LNG imports by Central and South America, which have further tightened the LNG market.