Natural Gas Outlook - Year II - Issue 2 – September 2010

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Natural Gas Outlook - Year II - Issue 2 – September 2010

published on 09-28-2010

In this issue:
ref forecasts

  • Demand
    The thermal year 2009 shows, according to REF estimates, a relevant increase (+6.2%) in comparison to GY08, thanks to the contribution of all consumption sectors and of the generation sector in particular. Based on the macroeconomic hypothesis of a growing Industrial Production index until April 2010, followed by a slowdown in the remaining months of the year, REF forecasts an overall gas demand around 81.6 Bcm, stemming from a stabilization of the industrial gas demand and, in an average winter scenario, a slight decrease in the consumptions from the distribution grids.

  • Supply
    Despite the increase in the average daily import capacity up to 331 Mcm, the Italian import capacity has been burdened by a mudflow occurred along the Transitgas pipeline, which has been closed since August and will be subject to an extraordinary restore operation until at least November or December 2010. The national gas system seems however safe, in the absence of any further interruption. GIPSSY forecasts suggest however, as a conseguence of the Transitgas accident, an increase of the import market shares of ENI in particular, which, agains stable market shares of the other main players, could lead to a slight decrease in the smallest players’ contribution to the national gas import.

  • Wholesale prices
    REF forecasts for the upcoming GY10 see a PSV spot price around 26.6 €c/cm and a gas release 2007 around 31.5 €c/cm. The gap between spot and indexed formulas is therefore stable, in response to slowly recovering oil prices on one side, and stable gas demand on the other side. Even the closure of the Transitgas pipeline, which contributes to a slight increase in spot prices, seems unable to determine relevant price spike.

Key issues

    1. Power generation demand forecast scenario
    2. Gas exporting countries: Algeria’s policy faces the global crisis
    3. The new gas storage decree
    4. New infrastructures

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