Natural Gas Outlook - Year I - Issue 0 – November 2009

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Natural Gas Outlook - Year I - Issue 0 – November 2009

published on 11-04-2009

In this issue:
ref forecasts

  • Demand
    Structural factors, such as the delay in the recovery of macroeconomic variables and the reduction in thermoelectric consumption, prevent the expectation of an upturn in natural gas demand. Demand above 80 Bcm is expected only in case of cold winter, thanks to electricity import reductions.

  • Supply
    No tensions on the supply side are expected in the near future: the average load factor of import infrastructures will fall to 59% while the probability of being forced to withdraw strategic storage is less then 10%.

  • Wholesale prices
    Despite the price increase with respect to September lows, REF models forecast an year-on-year decrease of spot prices at PSV, but they could spread out in a range of 8/9 €c/cm depending on oil prices and winter temperatures.

  • Market
    Expected 40% contractual capacity excess will not necessarily lead to the charging of TOP penalties. Despite an increase in the number of shippers, the wholesale market remains highly concentrated, but market equilibrium is going to change deeply. ENI competitors have now enough imported gas to fulfill their power plants’ needs and to serve their own customers, while Law 99/09 will impact the retail market, setting auctions at province level for distribution concessions and opening the way for the entrance of the electricity Single Buyer in the natural gas market.

Key issues

    1. M&A activities in the gas sector
    2. Demand slump and oil indexation
    3. LNG and the world market
    4. New infrastructures
    5. REF models for demand and price forecasting

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