GECF discusses gas marketing strategies
As demand for natural gas soars around the world, the evolving marketing trends that can ideally position the gas industry for future global energy mix was the theme of a workshop organised by the Gas Exporting Countries Forum (GECF).
The virtual workshop, entitled ‘Gas Marketing Strategies amidst New Market Conditions’, was opened by HE Eng. Mohamed Hamel, Secretary General of the GECF, who outlined the marketing strategies of the gas suppliers in response to the structural changes impacting the gas industry.
“Over the past decade, the growing share of LNG in the international trade of natural gas, increasing number of suppliers and higher availability of spot cargoes resulted in higher competition among gas and LNG suppliers, especially in a buyer’s market environment.”
“These developments have given LNG buyers more leverage at the negotiation table, to push for more flexibility, different pricing mechanisms, shorter-term contracts and lower oil-indexed slopes,” added HE Hamel.
The welcoming remarks were followed by a presentation by the event organiser, GECF’s Gas Market Analysis Department (GMAD), which framed the broader market conditions, the changing contractual frameworks, and the crucial issue of investment.
The subject of pricing formulas was tackled by Mr Claudio Giannoti, CEO, WorldEnergy, Switzerland who advanced approaches that could become attractive to buyers in the near future and enable longer-term contracts.
“What is long-term gas in this new, volatile environment? Because, obviously if the gas industry has to survive and thrive and expand its offer it can not be caught in a paradox of gas being absolutely necessary for the next foreseeable future, but at the same time being displaced by other policies.”
“There is clearly a golden opportunity for vertical integrations vis-à-vis long-term consumers, if not long-term contracts,” added Mr Giannoti.
Sharing the perspective of gas sellers and that of the GECF Member Countries, Ms Mitzi St. Rose, Manager – Energy Marketing and Trading Division at the National Gas Company, Trinidad and Tobago, provided an overview on optimisation of gas trade, arbitrage opportunities, and expanded trade routes as well as the variation in spot, short- and long-term agreements.
“We see the market going to expand to third-party trading portfolio. Another way forward is the potential for partnerships; certainly with other state organisations as well as traders and downstream players for collaborations.”
“Trinidad and Tobago is keen on taking more control of our LNG exports in a more hands on manner to ensure that that value comes back to the country,” added Ms St. Rose.
The final intervention of the workshop came from Mr Francisco de la Flor, Director, Enagas SA, Spain, who provided a view on gas market strategies in the European context, which boasts up to 23 large-scale LNG regasification terminals. He also covered the European decarbonisation package as well as the REPowerEU plan, launched in May 2022.
“LNG import infrastructure has a role in future decarbonisation of EU in most pathways,” maintained Mr de la Flor.
The workshop was followed by a closed discussion among Member Countries participants.