Qatar Expanding Capacity Despite Low Gas Prices

European LNG prices rose 1.3% on Friday to EUR 23.49 but are down sharply this month by 22.3% bringing them to levels seen in May 2021, when Russia began to withhold some pipeline flows. Low prices are making gas a cheaper form of energy which may increase its usage, including in Asia. European storage remains high at around 65%.

• Qatar has said that it is has discovered 250 tcf more gas in its north field which it will develop before 2030. It is also looking to sign more contracts with Asia and Europe. The nation believes that gas demand will rise as the population grows and the economy recovers, especially in Asia. While the IEA believes gas demand will peak in 2030.
• Germany’s LNG terminal on the Baltic Sea island of Rügen had a trial run on the weekend. The opening of the facility is part of rebuilding energy security post Russia’s invasion of Ukraine.
• US natural gas fell sharply on Friday by 8.7% to be down almost 25% in February to date. Forecasts showed that the start of March should be warmer, particularly from the Midwest to the East according to the Commodity Weather Group. Supplies remain robust with storage 22.3% above the 5-year average and some producers have begun to reduce output as a result. Gas production at the end of last week was still 3.3% higher than a year ago.
• Asian gas prices are down almost 20% this month but there is more interest in the market as a result from China, India and Thailand.