“We have to do something quick. Supply issues will be resolved by mid-2022″
By Teddy Nwanunobi (with agency report)
The Nigerian National Petroleum Corporation (NNPC) has projected that the supply crisis affecting the natural gas market may push oil prices up by $10 a barrel.
This was revealed by the Group Managing Director (GMD) of the Corporation, Malam Mele Kyari, in an interview with Bloomberg Television, who stated that the crude oil price may rise by $10 per barrel within the next three to six months.
Kyari explained that an increase in crude oil price on the fact that the gas supply crisis will make energy consumers to shift from gas to other fuels.
“You wouldn’t be very wrong if you said (that) you’d see an additional $10 on a barrel,” Kyari quipped in Dubai, United Arab Emirates (UAE).
Valuechain reports that Kyari is attending a three-day Gastech 2021 – a major conference for the gas and hydrogen industries.
The annual event, which commenced on Tuesday, September 21, will end on Thursday, September 23.
Brent crude traded above $75 on Wednesday, having increased about 45 per cent this year.
He stated further that demand may climb by one million barrels a day, or slightly more than one per cent of global consumption.
Gas prices have surged this month in Europe and Asia to the equivalent of around $155 per barrel of oil, partly because shortages of coal and wind power have forced governments to ramp up gas purchases to run their electricity plants.
Gas prices will, probably, remain at record levels of around $25 per million British thermal units for months, and, perhaps, go even higher.
He said that Nigeria was facing problems with maintaining exports of liquefied natural gas (LNG), adding that there will be “slippages” with the Nigerian LNG cargoes in 2022, and possibly this year, too, because of shortages at local gas fields.
“We have to do something quick. Supply issues will be resolved by mid-2022,” Kyari added.
Nigeria was the world’s sixth-biggest LNG exporter last year, shipping almost 22 million metric tons (MMT), according to data compiled by Bloomberg.
He stated that much of the problem with global supplies is down to fossil fuel projects, having stalled, as activists and investors urge companies to accelerate a switch to cleaner energy.
His comments echoed the sentiments of the Organisation of Petroleum Exporting Countries (OPEC)’s top officials and the energy ministers of Qatar and the UAE – all of whom said on Tuesday that the crisis showed the need for more investments in oil and gas.