Recently, natural gas futures have risen sharply again! On April 13, natural gas futures rose 5.33%! Just now, around 8 o'clock, natural gas futures rose 0.77%.
Although the recent A-share natural gas sector does not make money, but the future natural gas price rally may continue, and due to the large difference in natural gas prices in Europe and the United States, bringing international trade opportunities, the current point of time focuses on the domestic natural gas leading companies!
In the first quarter, the Reuters CRB index, which reflects international commodity prices, rose by nearly 30%. Among them, driven by rising prices, the import value of commodities such as natural gas on the mainland in the first quarter showed double-digit growth year-on-year.
External sources indicate that the German energy regulator, the Federal Network Authority, is concerned about Germany's current low natural gas reserves. The director of the bureau, Mueller, said in an interview with the media on the 13th local time that if the energy embargo is immediately imposed on Russia at present, only relying on existing natural gas reserves and recently purchased liquefied natural gas, Germany can only maintain its energy supply until the end of summer and early autumn, "and then our natural gas reserves will be completely exhausted, which is not the situation we hope to see before the start of the next winter."
■ How has the price of natural gas risen?
European natural gas prices have experienced a sharp rise since 2021, with the highest price of Dutch TTF and London NBP natural gas futures exceeding $70/MMBtu (about 21,876.4 yuan/ ton) in 2021. As of April 7, 2022, the Dutch TTF price was $33.34/MMBtu (about 10,419.42 yuan/ton), up 396.87% year-on-year; the London NBP price was $30.53/MMBtu (about 9541.24 yuan/ton), up 363.28% year-on-year. The Dutch TTF and London NBP prices reached 5.2 times and 4.8 times that of Henry Hub respectively, and the european gas price difference with the US gas price is large, bringing international gas trade opportunities.
■ Why do natural gas prices continue to rise?
Since 2021, European natural gas prices have experienced many rises: the continuous rise in European natural gas prices from the beginning of 2021 to the beginning of October is mainly affected by extreme weather, the extension of winter time and the continuous drought and high temperature in summer, and at the same time, due to the relatively poor wind resources in Europe in 2021, renewable energy power generation is less than expected, driving the demand for natural gas power generation exceeds expectations; since November 2021, natural gas prices have continued to break through new highs, mainly due to the suspension of important gas pipelines from Russia to Europe, superimposed on the impact of the Russian-Ukrainian event The strong demand for natural gas replenishment stocks in Europe has led to a further increase in gas prices.
■ The importance of natural gas in energy consumption?
With the continuous promotion of the "carbon neutrality" policy, the proportion of natural gas as a bridge for energy transformation in Europe's energy structure has steadily increased. According to BP data, European natural gas consumption accounted for 25.25% of total energy consumption in 2020, an increase of 1.37 percentage points year-on-year, while oil and coal consumption fell by 2.48 and 1.16 percentage points respectively. Although renewable energy has developed rapidly, due to the volatility and intermittent nature of their power generation, natural gas is still irreplaceable as a clean, efficient, stable and low-carbon energy source. From the perspective of downstream natural gas consumption structure, Europe's natural gas demand is mainly concentrated in industry and residential, which account for more than 70% of the total natural gas consumption in Europe.
■ The main source of natural gas supply in Europe?
The main producers of natural gas in Europe are Norway, the United Kingdom and the Netherlands, of which the North Sea oil field is the most core source of natural gas in Europe, but after years of oil and gas exploitation, many natural gas fields in the North Sea have faced depletion, and in recent years, European natural gas production has continued to decline, mainly relying on imports, and Russia is the largest source of natural gas imports in Europe. According to BP data, Russia's pipeline gas accounted for more than 50% of Europe's total natural gas imports; imported LNG accounted for about 35%, mainly from the United States and Qatar.
■ How much impact will the disruption of russian pipeline gas have on gas supply?
In March 2022, Russia announced that it would pay for natural gas in rubles for "non-friendly countries and regions" of Russia, otherwise it would stop gas supply, and the maximum gas transmission capacity of russia's seven gas pipelines to Europe is currently 265 billion square meters, and the supply of russian pipeline gas in 2020 is 167.7 billion square meters. If a European country refuses to pay in rubles and causes Russia to cut off gas supply to Europe, it may lead to a gas shortage of more than 160 billion cubic meters in Europe. While the U.S. has pledged to export at least an additional 15 billion cubic meters of LNG to the EU in 2022, it has not been able to fill the European gas gap.
■ What difficulties will Europe face if it increases LNG imports?
If Europe makes up for the decline in Russian pipeline gas imports by means of LNG imports, it will still face a series of difficulties: 1) Europe must increase LNG receiving capacity, and the construction of LNG terminals still needs time to solve the short-term natural gas gap; 2) most of the US LNG exports have been distributed in a long-term manner when the project is put into operation, and Europe needs to purchase US LNG incremental gas in the short term through spot procurement; 3) The intensity of natural gas extraction investment in the context of the new crown epidemic and carbon neutrality has declined. Finding a large number of alternative gas sources in Europe is difficult.
■Investment Advice:
The impact of the Russian-Ukrainian event and the influence of supply and demand factors under the influence of European natural gas prices continue to rise, due to the current international situation is still unclear, superimposed European natural gas stocks are still at a low level, the future rise in natural gas prices may continue, and due to the large difference in natural gas prices between Europe and the United States, bringing international trade opportunities, the current point of time focuses on the domestic natural gas leading company [ENN shares] and other companies.
For example, ENN shares have a complete industrial chain of upstream, middle and lower reaches of natural gas, diversified upstream gas supply sources, midstream plans to acquire 90% of the equity of Zhoushan LNG receiving station, and the national layout of downstream urban combustion business. At present, the company has accumulated a large number of high-quality industrial customers over the decades, actively expanding into the field of integrated energy services, and further contributing positively to the company's performance. At the same time, the company has long been laid out in the international natural gas market through LNG receiving stations, and is expected to benefit from the opportunities in the field of international natural gas trade in the context of European natural gas price increases.
■ Risk Warning: The risk of continuous rise in natural gas prices, geopolitical risks, and the risk that policy promotion is not expected
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