Gas prices are difficult to break, and gas consumption continues to improve

In summary, it is expected that the global gas supply and demand pattern will remain tight in 2021-2023. According to estimates, the supply of natural gas in 2021-2023 will be short of 89, 301 and 52.7 billion cubic meters, respectively. In addition, seasonal supply and demand contradictions and geopolitical uncertainties may still make the supply and demand of natural gas in some regions appear very tight.

At the same time, in September 2021, the United States Climate Center issued a "La Nina" re-emergence warning, and the probability of "La Nina" phenomenon increased from 70% to 70% to 80%. At the October press conference, China's meteorological Bureau also said that it is expected that the cold water will further strengthen in the next three months (October-December) and enter a "La Nina" state. In 2021, the probability of "La Nina" phenomenon is high, and "La Nina" phenomenon is likely to cause a major cold wave in the Pacific Ocean and usher in a cold winter on both sides of the Pacific Ocean. In the case of cold winter, China, the United States and other countries that use natural gas for winter heating will remain strong natural gas demand in the fourth quarter.

In the context of energy transition, carbon awareness and environmental awareness will promote the increase of natural gas demand in the long term. Natural gas is the only clean and low-carbon energy among the three traditional fossil energy sources. Compared with coal, oil and other energy sources, natural gas has the advantages of safe use, high calorific value and clean. During combustion, natural gas produces very few substances harmful to human health, such as sulfur dioxide, and produces only about 40 percent of the carbon dioxide of coal. Due to the tidal characteristics of new energy generation and the substantial increase in installed capacity of renewable energy, the peak-valley difference of power grid load is getting larger and larger, and stable and flexible gas-powered power plants are needed to adjust the load peak and valley. Therefore, natural gas will become an excellent transition energy from traditional fossil energy to new energy.

Under the pressure of more and more stringent environmental regulations, the change of countries and regions seeking to "coal to gas" will also become a trend. According to BP's 2020 Statistical Review of World Energy, global natural gas generation in 2019 was 6,297.9 TWH, up 3.5% year-on-year; It accounted for 23.3% of the world's total power generation, an increase of 0.5 percentage points year-on-year. In addition, in all types of power generation, natural gas power generation ranks second, only lower than coal power; In terms of growth rate, the growth rate of natural gas power generation also ranks second, second only to new energy power generation. Regionally, natural gas generated 1,700 terawatt hours of electricity in the United States in 2019, an increase of 7.7%. Natural gas generation in Europe increased by 5.2% to 768 TWH. China's natural gas generation was 236.5 TWH, up 9.7% year on year.

From the global gas supply side, according to the "Gas Analysis and Outlook 2021-2024" released by the International Energy Agency and the "2021 Edition of the Middle East and North Africa Energy Investment Outlook" released by the Arab Petroleum Investment Company, the future global gas supply is almost entirely from large conventional assets that are already under development. It is mainly distributed in the United States, Russia and the Middle East. U.S. natural gas production is expected to rise, with overseas demand being the main driver. According to oilfield services company Baker Hughes, the number of shale gas RIGS has risen from less than 70 at the start of the epidemic to more than 100 by early September 2021. Stimulated by the current high natural gas prices and increased overseas demand in the future, we expect more RIGS to re-enter the natural gas market, driving continued growth in natural gas production.

In addition, the report's data shows that countries in the Middle East and North Africa remain relatively cautious about gas development projects, with a total of $75 billion in gas investment committed in 2021-2025, a decrease of $9.5 billion compared to the forecast. Many large projects, including Qatar's northern oil field expansion project, will not be completed until 2024, so the short-term increase in gas supply in the Middle East is expected to be limited. The increase in Russian production is mainly due to the development of new projects in gas fields, in addition to the Bovanenkovo gas field, which will increase its capacity to 115 BCM/year, the Kharasavey field is expected to come online in 2023, with a capacity of 32 BCM/year. If the political problems of Nord Stream 2 are eased, Russia's ability to supply gas to Europe will be further enhanced. We predict that the global natural gas supply will increase slowly in 2021-2023, and we will calculate the gas production in the main gas producing regions. According to the calculation results, the global natural gas supply in 2021-2023 will reach 39,686, 40,417 and 41,117.2 billion cubic meters, respectively. Year-on-year increases of 2.98%, 1.84% and 1.87% respectively.