LNG

Norway’s Equinor, an LNG supplier to the European Union and which has enabled some of the replacement of pipeline natural gas to Europe in the 18 months, reported a drop in second-quarter profits and revenues even as delivered volumes increased amid LNG and gas terminal incidents and shutdowns.

The past 12 months have been the most turbulent and testing year ever for the energy industry, in particular the natural gas sector and the markets, according to the International Gas Union President Li Yalan.

The IGU President also noted in the December issue of the IGU’s monthly publication that there had also been hard times in many other sectors of the economy and for populations in general.

“The global energy crisis continues and energy markets are rocked by conflict, high and volatile prices, low supply and demand destruction,” stated Li, who was nominated as head of the IGU from the Beijing Gas Group.

“Energy consumers are directly exposed to the energy crisis, with people struggling to pay their bills due to high energy cost,” she said.

“Many had to turn down their heat this winter, several regions have had to endure power shortages and others are walking through darker streets or working remotely to conserve energy,” she added.

Coal use

“Many factories were forced to stop producing, or close down faced with unaffordable energy and deficiency in raw materials. To navigate through the crisis, many countries had to prioritize energy security over energy transition as a result we see a growing number of countries adding coal-power capacity, and increased use of coal - the
most emitting fossil fuel - all across the world, rich and developing alike,” she explained.

The IGU President emphasized that there was an upside as there were positive signals that investments were increasing for natural gas projects and for renewables and that these trends needed to continue for the global energy balance to be restored.

“As we wrap up this year and reflect on its many stresses, I hope that a key lesson that can be learned from it is that energy systems cannot be changed overnight,” noted Li.

“In the recent years leading up to this crisis, energy security became forgotten and long-term planning for secure and reliable supply was seemingly forgotten with it,” she explained.

“This crisis reminds us that energy security should be brought back in balance with economic and environmental policy considerations,” Li declared.

LI added that it was imperative that the world arrives at a “real plan” for an achievable transition toward a clean, secure and affordable energy system.

“Most importantly, it will require an honest dialogue between all key players, including the gas industry,” she said.

Europe’s benchmark natural gas and LNG cargo prices lost some ground on the week but were still over $39 per MMBtu higher than last summer before the Russian gas supply crisis and remained $12 per MMBtu ahead of North Asia spot cargo valuations as liftings from global liquefaction and export plants increased.