Natural Gas Outlook - Year III - Issue 4 – November 2011

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Natural Gas Outlook - Year III - Issue 4 – November 2011

published on 11-08-2011

In this issue:
ref forecasts

  • Demand
    The forecast for Italian demand for natural gas in GY11 is around 81 Bcm, basically unchanged compared to the previous gas year (+0.5%), the result of a deterioration in the economic situation. The only sector of demand to grow compared to GY10 is that of thermoelectric power, which, however, is still performing turbulently with preliminary figures for GY10 lower than expected. On the other hand, a fall (-3.8%) in gas demand in quantitative terms from major industrial companies is forecast, while demand from the distribution network will be basically flat (-0.4%). The greatest factor of variability in the demand estimate is linked to electricity market variables underlying power plant consumption.

  • Supply
    Important factors on the supply side are: the reopening of the Greenstream pipeline in October 2011, although with reduced capacity for the first few months, the steps forward which have been taken with formalities for new pipeline projects and the news concerning LNG infrastructures: the Falconara and Porto Empedocle terminals completed the authorisation processes. The realization of the OLT Offshore is getting closer and good prospects for progress are expected for projects connected with the “storage decree”.

  • Prices
    REF forecasts are for growth in prices in GY11 for all scenarios with respect to the average in GY10, mainly as a consequence of the impact of rises in oil prices recorded in the gas year just ended. This growth nevertheless weakens and reverses over the summer for all scenarios, partly as a result of the normal seasonal fall in demand. Average prices on the PSV for the gas year are 37.1 €cent/cm in the High Scenario, which combines the high scenario for Brent oil with the high demand scenario, 32.4 €cent/cm in the Reference Scenario and 30.4 €cent/cm in the Low Scenario.

Key issues

    1. Boom in the renegotiation of contracts for international gas supplies
    2. Producer countries: Russia
    3. New infrastructures

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