BAKU, Azerbaijan, Nov.18
By Leman Zeynalova – Trend:
Renewables will limit gas producers' ability to win the market share of coal and nuclear assets, Trend reports with reference to Fitch Ratings.
The agency believes that natural gas has better prospects than other fossil fuels over the following decades, in view of energy transition and its lower emissions.
“We expect gas to complement renewables in the European energy mix. Yet expanding renewables will limit gas producers' ability to win the market share of coal and nuclear assets that are being gradually phased out in Europe. Gazprom's efforts to increase vertical integration into gas processing and petrochemicals will also support the company's profile. We estimate that recently commissioned Amur Gas Processing Plant
will add up to USD1 billion to EBITDA when it reaches full capacity by 2025,” reads the latest Fitch report.
The current record-high spot prices are driven by extreme weather conditions
this year, low gas inventories in storage, strong demand in Asia, recovering demand in Europe and insufficient additional supplies, according to the rating agency.
“Spot Title Transfer Facility (TTF) averaged USD30.9/thousand cubic feet (mcf) in October 2021. European storage inventories are significantly below the levels of end-August 2019 and 2020, despite Gazprom's near-record gas export volumes in January-October 2021 (up by 10.4 percent, exports to non-former Soviet Union countries). We expect some of these challenges to spill over into 2022, supporting gas prices, but we also expect weather conditions to normalize and Gazprom to increase its exports slightly,” the report says.
Follow the author on Twitter: @Lyaman_Zeyn