the price of natural gas in the world lately decreased through certain factors which are temporary and in the long run they will grow. This opinion was expressed by the representative of the Chinese service company Xinjiang Beiken Energy Engineering Co Ltd (XBEE) Amir Kilani during the round table "What prevents gas independence of Ukraine" in mid-November in Kiev.
Kilani recalled that according to leading analysts, gas prices are falling because the European warm winters, which started in 2014, growth in supply of American liquefied natural gas (LNG) and the refusal of major players - Russia and Norway - to reduce the volume of gas production (because of the reluctance to lose market share). However, in his opinion, this situation cannot be permanent.
"Why the American became more LNG on the European market? This is due to the trade war between China and the United States. In 2018, China imposed duties on U.S. LNG. China is its main consumer. Accordingly, the released volumes were sent to Europe. But if a trade war with China would cease, LNG will go back to China, because it is more long-term, dynamic and attractive market," explained Manager Beiken.
According to him, also exaggerated the factor of high reserves in European underground gas storages (UGS): with the annual gas consumption of the EU of 470 billion cubic meters of reserves of about 100 billion won't last very long.
Thus, according to Kilani, the rejection of its own gas production due to the decrease in the price of the resource, which is observed recently in Ukraine - a bad strategy.
Recall that in July 2019, the NJSC "Naftogaz of Ukraine" has introduced a new strategy of gas production, according to which all financial efforts will be directed to the intensification of production on efficient mines, while successful completion of the programme will be measured not in cubic meters produced, and the financial results of the company.