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GECF ministers warn against gas price caps
4:26 CAT | 26 Oct 2022
The 24th Ministerial Meeting of the Gas Exporting Countries Forum (GECF) underlined its deep concern regarding the attempts to alter the natural gas prices and risk management functions of markets, and to impose politically-driven price caps.
The meeting, held in Cairo, noted that while gas hubs experience extreme volatility, long-term gas contract prices are more stable and predictable and underlined that such artificial intervention in market functioning can only aggravate market tightness, discourage investment, and be detrimental to producers and consumers alike.
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The meeting observed that underinvestment since 2015 on the back of very low gas prices and misguided calls to stop investing in natural gas projects resulted in supply-demand imbalance, which has been exacerbated by geopolitical tensions and as Europe became the preferred destination for LNG cargos to compensate for reduced pipeline flows. Market tightness is expected to continue in the medium-term, as the majority of new projects will come on stream only after 2025.
The GECF was held on October 25 with Tarek El Molla, Minister of Petroleum and Mineral Resources of Egypt, chairing the meeting in his capacity as President of the GECF Ministerial Meeting for 2022.
The meeting was attended by the energy ministers and top officials from Members Algeria, Bolivia, Egypt, Equatorial Guinea, Iran, Qatar, Russia, Trinidad and Tobago, and Venezuela, as well as from Observers Angola, Azerbaijan, Iraq, Malaysia, Mozambique, and the UAE.
The minister in charge of energy of Papua New Guinea attended the meeting as a guest, as well as a high-level official from Mauritania.
His Excellency Abdel Fattah El Sisi, President of the Arab Republic of #Egypt gave an audience today to the #Energy Ministers of the #GECF Member Countries participating in the 24th Ministerial Meeting of the Forum.
Ministerial Statement ➡️🔗https://t.co/MnBsRAF4HG pic.twitter.com/vEyJqelK0h
— Gas Exporting Countries Forum (@GECF_News) October 25, 2022
The meeting listened to a presentation on the global gas outlook, which projects that natural gas share in the energy mix will increase from 23 per cent today to 26 per cent in 2050, underpinned by population growth, doubling of world GDP, improved standards of living, and policies and technology aimed at improving air quality and mitigating climate change.
The meeting reaffirmed that natural gas, the cleanest burning hydrocarbon, will play a pivotal role in sustainable development and in a just and inclusive energy transition. It constitutes a key lever to meet the UN Sustainable Development Goals (SDG) and the Paris Agreement’s long-term objectives.
The Ministerial Meeting emphasised the GECF objective of supporting the permanent sovereignty of its member countries over their natural resources and their ability to independently plan and manage the sustainable, efficient, and environmentally conscious development, use, and conservation of natural gas resources for the benefit of their people, including through cooperation with neighbouring countries without restrictions.
El Molla said: “We are convening at a critical time when global efforts are dedicated towards achieving the energy trilemma for security, sustainability and affordability. As the cleanest hydrocarbon fuel, natural gas is seen as the perfect solution that strikes the right balance, and will continue to play a key role in the future energy mix. Egypt is eager to work closely with all GECF members to develop applicable and realistic initiatives that ensure both energy security and a just energy transition pathway.”
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The meeting expressed its support for the African countries in their fight for alleviating energy poverty, in particular through unhindered access to financial resources as well as improved energy security with the view to bring prosperity to their people. It called for cooperation, consistent with UN SDG 7, and the overarching principle of common but differentiated responsibilities in the Paris Agreement, to ensure sufficient investments and financing in all segments of the value chain on the African continent, as well as to provide balanced risk sharing between producers and consumers in order for natural gas to support the least developed and developing countries in their fight to improve food security and alleviate energy poverty to ensure just and inclusive energy transition that leaves no one behind.
The meeting congratulated Egypt for holding this year the UN Climate Conference, COP 27, and expressed its hope and support for the great success of this important Conference and noted that COP 28 will also be organised in a GECF member country, the United Arab Emirates. COP 27 and COP 28 present a great opportunity to make a case for gas in the energy transition as well as to meet UN Sustainable Development Goals, and in particular in Africa’s development.
It considered the Management Report presented by Mohamed Hamel, Secretary General, and adopted the financial report for 2021, the budget for 2023. It listened to presentations on the Forum’s flagship publications, the Global Gas Outlook, the Annual Short-Term Gas Market Report and the Annual Statistical Bulletin.
The meeting was pleased to adopt the second edition of the Long Term Strategy of the Forum, which will be publicly available.
With the view of promoting the international outreach of the GECF, the Meeting welcomed and approved the new Procedure of New Members, Observer Members, and Dialogue Partners.
It also noted, with satisfaction, the progress made by the Gas Research Institute as well as the planned signing of the Host Government Agreement on 8 November 2022 in Algiers. It reiterated the importance of expanding cooperation in natural gas technologies such as carbon capture and storage, gas flaring and methane emissions reduction and gas in the transportation sector, and exploring new areas to leverage the advantages of natural gas for hydrogen production and other new gases.
The ministers recorded their satisfaction with the progress made by the People’s Democratic Republic of Algeria in the preparations for the 7th GECF Summit of Heads of State and Government, to be held in Algiers in November 2023.
The ministerial meeting appointed Gabriel Mbaga Obiang Lima, Minister of Mines and Hydrocarbons of the Republic of Equatorial Guinea, as President of the Ministerial Meeting for 2023, and Saad bin Sherida Al-Kaabi, Minister of State for Energy Affairs of the State of Qatar and President and CEO of QatarEnergy, as Alternate President for the same period.
Furthermore, the ministerial meeting appointed Dmitry Semyonov from the Russian Federation as the Executive Board Chairman for 2023, and Alaa Adel Hagar from the Arab Republic of Egypt as the Alternate Chairman of the Executive Board for the same period.
The 25th GECF Ministerial Meeting will convene in Malabo, Equatorial Guinea in October 2023.
The ministers and heads of delegation expressed their appreciation for His Excellency Abdel Fattah El Sisi, President of the Arab Republic of Egypt. They also extended their sincere gratitude to El Molla for leading and navigating the GECF under Egypt’s 2022 Presidency, and finally for the Government and the people of Egypt for their warm hospitality and excellent arrangements.
Source: TradeArabia News Service
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