Recently, top officials of major gas producing countries met in Bolivia to weigh how to shore up prices that have been hammered by expanding supplies of the fuel that are giving global buyers greater sway over purchase and contract terms.
The Gas Exporting Countries Forum (GECF), made up of the world’s biggest gas exporters including the big hitters Russia, Qatar and Iran, holds around 60 per cent of the world’s proven gas reserves. They are aspiring to be the OPEC for natural gas suppliers with the power to manage markets through supply intervention, but the group has insisted its role is to promote gas and encourage cooperation.
READ ALSO: Nigeria’s natural gas vehicle age nears as petrol stations upgrade facilities
Gas prices have stabilized over the last year, after plunging more than 80 per cent in the prior decade. However, prices remain under pressure due to growing supplies of shale gas and more competition from liquefied natural gas (LNG).
“We have to defend our resource, which is gas, and we need to work together so that in the future, gas will be as valuable as oil,” Gabriel Obiang Lima, Equatorial Guinea’s Mines and Energy Minister said. GECF countries increasingly are competing with exports from and prices set in the United States, which is on track to become the world’s third-largest exporter of LNG after Qatar and Australia.
The GECF has pledged to “develop and implement coordinated policies and actions among GECF member countries to promote the long-term gas contracts necessary for financing gas projects” in addition to stick with the pursuance of oil-linked pricing. It said it would “pursue equitable risk-sharing approach to the issue of gas pricing mechanism with the linkage to crude oil and its products to ensure a fair gas price.”
READ ALSO: ‘We will deepen natural gas utilisation in the country through policy advocacy’
It also emphasized the importance of gas in the global energy mix and in building climate-resilient economies in line with the Paris Agreement. Other declarations include promoting policies and regulations that facilitate gas trans-border trade, promoting the use of gas in transport and industry, strengthening the GECF as a platform to plan, coordinate positions and advance both the profile and the cause of the Forum in the global energy context, promoting and develop effective channels of dialogue between producers and consumers of gas.
Global consumption of natural gas grew about 1.5 per cent in 2016 to some 3.54 trillion cubic meters (TCM) driven by unconventional gas production, according to BP Plc’s statistical review. At least 25 countries are now capable of receiving LNG supplies and new regasification plants are expected to start operating in the coming months, giving buyers greater flexibility and increasing competition among suppliers.
FRANK UZUEGBUNAM
