Gas prices can fluctuate wildly back and forth for years to come because there will be too little supply to meet all demand for a long time. Saad al-Kaabi, the energy minister of Qatar, made this prediction during a conference in the neighbouring United Arab Emirates.
“We bring a lot of gas to the market, but it is not enough.”
According to Al-Kaabi, especially next winter may be difficult for gas users in the northern hemisphere, such as in European countries. He thinks they will have a hard time replenishing gas supplies without Russian gas, which will drive up prices.
Although Qatar has made deals with several European countries, it will have limited capacity to supply gas in the near future. Nevertheless, the Gulf state is one of the largest gas suppliers in the world and will increase its capacity in the coming years. For example, a project will be completed in 2027 that will enable Qatar to produce 60 percent more gas than it does now.
In the coming years, countries in Europe and Asia will continue to compete to purchase liquefied natural gas (LNG). Last summer, when Europe accelerated its efforts to replenish supplies, gas prices were more than ten times higher than the long-term average. And in the meantime, the gas flow from Russia has decreased further, partly because European countries no longer want to buy Russian gas because that country invades Ukraine.
The high prices are also a problem for Qatar and other gas-producing countries. Because of these high prices, consumers and companies are looking for alternatives to gas. For example, more is being invested in hydrogen, which is seen as a possible clean replacement. Al-Kaabi calls this “demand destruction” and says it is one of the biggest challenges. “We are seeing demand destruction in both oil and gas.”
Still, Al-Kaabi and his colleague Suhail al-Mazrouei of the United Arab Emirates agree that fossil fuels are far from gone. “Gas will be needed for a long time to come,” said Al-Mazrouei. Al-Kaabi even believes that gas is future-proof. “It is not a transition fuel but a target fuel” within the energy transition, he thinks.
