In its latest Africa Energy Outlook 2021 released earlier this week, the African Energy Chamber forecasts increased gas monetisation across the continent on the back of decarbonisation and industrialisation drive.
The AEC said it had found that while not insulated to COVID-19, gas markets “have been less exposed than that of oil” to the shocks of 2020, because the transportation industry has been the most affected by the COVID-19 pandemic and is more oil-demanding than gas.
The global gas market was nevertheless already facing a glut of liquefied natural gas before COVID-19, resulting in even more depressed prices as the pandemic’s impact on demand started to manifest in the spring of 2020.
As a result, key reference prices in Europe, North America and Asia all have experienced negative pressure since the start of 2020.
Looking forward, the AEC’s expectations for the global gas market fundamentals are to remain loose through 2021 on the back of weak COVID-19-induced demand and continued high supply of LNG before prices tighten significantly as LNG demand growth will outpace liquefaction capacity due to more delays in project sanctioning.
