The energy market is changing, Canada is coming
A Russia-Ukraine war is changing almost all calculations of global politics and economy. Russia’s energy is at the heart of Western sanctions. As everyone knows, Russia is one of the largest oil and gas exporters in the world. 40 percent of Europe’s gas comes from Russia. Their factories are powered by this gas, and there is no alternative to gas to keep their homes warm in winter. So Europe is in serious danger with the embargo on Russian energy. Oil and gas prices have increased in the international market.
The UK is the worst at the moment. It is feared that many people will fall under the grip of fuel poverty due to the abnormal increase in oil and gas prices in the country. The situation will worsen in the coming winter. Then the annual fuel cost of the family in that country can stand at 4 thousand pounds. In this situation, the low income people of the country are suffering.
Now it is being talked about, can Europe continue without Russian gas? It seems impossible to answer this question in one word. Because, without creating alternative sources, Europe is not possible, needless to say. However, those who move around the world in various ways, they decided not to take Russian gas without thinking about it, this is probably not right either.
In this reality, European countries are turning to LNG or liquefied natural gas. So naturally the price of LNG is increasing. Besides, the demand for LNG will increase in the local market of the Middle East in the next few years. For this reason, huge investments are being made to increase the production of natural gas in the Middle East, the world’s top region for extracting fuel oil.
Qatar leads the Middle East in the LNG export market. Compared to that, other countries rich in energy resources in the region were far behind in the gas market. Now that scenario is changing. Saudi Arabia and the United Arab Emirates, the two dominant members of the OPEC alliance, have undertaken major projects to increase gas production. On the other hand, Oman, a member of the OPEC Plus alliance, is exploring new gas fields and trying to increase production in older ones. This effort to increase investment comes from the plan to increase exports.
The European Union is looking for alternative sources of gas to reduce its dependence on Russian energy. As part of this, gas traders in the region are desperate to find enough sources of LNG or liquefied natural gas before next summer. Europe’s frenzy to find alternatives to Russia for LNG carriers, experts say, doesn’t seem to be ending any time soon. A new LNG carrier takes years to build. Also, no one realized that Europe would suddenly become the largest buyer of US liquefied gas within months. So the gap that has already emerged between global energy demand and supply, may deepen in the near future.
In this reality, due to the purchase of more LNG from the spot market, the price has increased significantly. Bangladesh has stopped buying LNG from the spot market, mainly because of this reason. LNG-buying countries are turning to long-term contracts to ensure gas supplies. Through this they want to get rid of the unstable price of LNG spot market.
Analysts believe that conventional European buyers of LNG will not buy from the spot market now. Also will not renew current contracts with Russian LNG sellers. As a result, they (from the Middle East and other sources) will turn to long-term contracts. Major producing countries in the Middle East are interested in long-term contracts to sell oil and gas; They want to play a bigger role in global LNG exports by the end of this decade if the market is strong.
Qatar has undertaken the world’s largest expansion project to meet the demand of the international LNG market. Other Gulf countries are also investing heavily in LNG infrastructure to produce and export gas. They are not only targeting the export market; They also want to reduce oil burning to meet their domestic electricity needs. The plan is that they will be able to export the crude oil or crude oil that will be saved if the amount of gas in that place increases for power generation.
The rise of Canada
Canada is one of the top six natural gas producing countries in the world. At the top is not Russia, but the United States. Russia is second. However, it is easy to get European gas from Russia due to geographical proximity and historical reasons. It has been happening for so long. But in this changing reality of the war, Canada’s name is also coming to the fore. They are now ready to cooperate with Europe’s strategic allies. Canadian Prime Minister Justin Trudeau himself told Al-Jazeera that Canada is in talks with Germany about LNG exports. He said, “In the short term, we will increase the capacity to increase global gas supply, that is, we will find a way to export LNG directly to Europe.”
But the task is not so easy, Justin Trudeau knows that. Initially, investment should be made in the construction of LNG infrastructure. There are many problems. “LNG conversion plants are typically located close to the source,” Trudeau said. The problem is, to export LNG to Germany we have to build factories on the east coast. And our gas factories are in Western Canada.
However, Justin Trudeau does not think the task is impossible. He said, “We already have some infrastructure on the east coast. We are also trying to figure out how to do the most work. What we can do at the moment is release our gas to the world market, then Germany and Europe from other sources