2022 is a watershed year for the gas and LNG sectors

In an era of significant turning points, 2022 may be the most important one yet for the gas, LNG, and wider energy sector.

Energy firms already had their plate full with the global energy transition, and the anticipated rise in global gas demand, as the world recovered from the COVID-19 pandemic. Now, the Russian invasion of Ukraine has added a further dimension to the energy agenda, heightening the global supply crisis, injecting further pricing volatility, and forcing the industry to shift focus once more. With all these issues in play, this year looks set to be a crunch point for the natural gas, LNG, hydrogen, and low carbon solutions industries.

The Ukraine crisis has upturned longstanding assumptions around gas supplies. Europe has long had a strong dependence on Russian gas, which accounts for some 40% of its total supply. Prior to the crisis, that relationship looked set to continue, with the Nord Stream 2 pipeline mooted to come online later this year. Now, not only is Nord Stream 2 expected to stay dormant, but in response to the crisis, the EU has unveiled a strategy that will see it reduce its reliance on Russian gas by two-thirds before 2030. The US and UK, with less exposure to Russian supplies, have pledged to reduce – and, in the case of the US, ban outright – the import of Russian hydrocarbons to their respective markets by the end of the year.

This momentous policy change suddenly places supply issues at the heart of Europe’s energy agenda, as consumers feel the pinch of surging prices. Policymakers and industry leaders are debating who will fill Russia’s shoes and meet Europe’s urgent gas needs.

Already, debate across the industry is underway on how to increase the supply of traditional energy sources, while ensuring a just transition to net zero. New energy sources, including renewables, cannot be switched on overnight. So as the world faces a potential supply shortage, it is widely expected that there may be a short-term ramp up of production from energy producers who might otherwise have been expected to begin gradually reducing their output. This will mean increases not only in domestic production, but new supply agreements that could radically reshape global energy markets.

New agreements may well require the construction of new infrastructure, both to enable the export of gas to non-producing markets, as well as to those who can no longer be serviced by Nord Stream 1 or 2. These efforts are in turn complicated by record-high price volatility impacting upon long-term investment decisions.

How quickly the sector can navigate this complex web of challenges will be key to determining the extent of the supply crisis.

Every day brings a new headline with profound implications for the natural gas and LNG sector.?More than ever before, this year’s Gastech 2022, will be the major event for the global gas industry.

Taking place from the 5th-8th September 2022, in Milan, more than 400 energy ministers and CEOs of the energy industry’s biggest players will speak across over 135 conference sessions at Gastech.

With panels and events on everything from power and utilities to the role of hydrogen in the global energy mix, Gastech will be an opportunity for the industry to address the ‘how to’ question of the biggest shifts, challenges, and opportunities facing the energy sector in a generation.

To register to attend Gastech 2022, visit www.gastechevent.com/conferences/conference/