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Natural Gas Outlook - Year V - Issue 7 - June 2013

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Natural Gas Outlook - Year V - Issue 7 - June 2013

published on 06-11-2013

In this issue:
Forecasts


  • Demand
    In a context of weak demand, consumption is increasingly more volatile; the impact of solar generation in the summer and also the first signs of weakness in low-pressure network demand constitute causes for concern.

  • Supply
    The context for investments is increasingly more difficult: the new OLT regasification terminal should go into service at the beginning of GY13; the LNG market is suffering from the contraction in European demand and from contracts that are still too rigid.

  • Prices
    PSV stable in the summer at the equilibrium levels reached in the second half of 2012, recovering slightly at the start of the next GY. The spread with TTF below 2 €/MWh and under allocation of storage not the cause of pressures on prices.


Key issues


    1. The importance of storage. In the first case of under allocation of storage, connected with limits on flexibility performance, a low seasonal spread, growth in the spot market and a reform which rendered the service less attractive, future gas crises and pressures on prices are not very probable. However, security under peak demand conditions is at risk from a reduction in the supply.

    2. What is the value of import capacity with spot prices aligned?. Notwithstanding the alignment between the average price on the Italian market and prices on the main European hubs, the value of import capacity in the long-term continues to remain positive in probability terms.

    3. New infrastructures




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