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Repsol warns that a "gas vs. gas" competition scenario is looming

The president of the Spanish firm Repsol, Antonio Brufau, warned today that a scenario is approaching in which the different types of gas will compete with each other and their prices will no longer be indexed to oil, as is currently the case.

La Paz, Nov 22 (EFE) .- The president of the Spanish firm Repsol, Antonio Brufau, warned today that a scenario is approaching in which different types of gas will compete with each other and their prices will no longer be indexed to oil, as is currently the case.

The Spanish executive referred to the issue by participating in the international seminar of business leaders oil companies that took place in Santa Cruz (Bolivia), within the Fourth Forum of Gas Exporting Countries (FPEG).

"The clauses that we traditionally have, for example, links to oil or petroleum products are disappearing, and what is more in vogue and that is seen as more classic in the future is the gas-to-gas competition ", He maintained.

He asserted that the formulas that are applied today in the contracts by which the price of gas is indexed to the international costs of other energies, such as oil, are going to change and they will be linked directly with the gas of one region against another.

Brufau said that this will be one of the medium and long term changes that will occur in the market of gas, a hydrocarbon that "is the energy of the 21st century".

These changes have begun to take place driven by a series of factors, one of them the shale gas industry or not. conventional, which currently represents 20% of production, "but whether we like it or not, will have a greater weight in the coming years," he said.

According to Brufau, another factor that has begun to impact the gas market is the outcrop "with a lot of violence" of liquefied natural gas (LNG), which is transported compressed in tankers, because in the Today, the "great discoveries are far from the markets."

"LNG, which until today represented one third of all gas that transits the world, in 2040 can represent up to 60%, because gas pipelines are no longer being built, "he said.

The consequence of the advance of LNG is the" commoditization "of prices, that is, that" it will gain and have more influence that is able to compete with lower costs, "added the businessman.

For his part, the vice president of Bolivia, Alvaro Garcia Linera, reflected on the" high cost environmental "that supposes the production of shale gas and oil, with consequences for the health of those who live in the areas" affected by this predatory form of extraction of hydrocarbons ".

The Bolivian vice president noted that until now the gas industry was accustomed to having" regionalized "costs, unlike oil, which has a price homogeneous on a planetary scale.

"But this presence of LNG is leading to an increasing uniformalization of the price of gas, that will be new, it can be given in five, ten, fifteen or twenty years, but there is no doubt that this is the future and the main gas competitor must be gas, "said García Linera.

In this scenario, companies will have to "know how to adapt to this new characteristic of the gas market," he added.

The authority said that Bolivia will continue to sell its gas through gas pipelines, although he said that the country must become an LNG exporter in the medium term.

The seminar was also attended by the Venezuelan Minister of Petroleum, Eulogio del Pino; International Energy, Sun Xiansheng, and senior executives of companies such as Gazprom, Shell, PAE and Sonatrach.

The event was held on the second day of the FPEG, which will conclude this Friday with the meeting of heads of state.

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