BAKU, Azerbaijan, December 7. The rush to ensure energy security and elevated energy prices will see more projects achieve final investment decision (FID) in 2023, Trend reports Dec.7 with reference to Fitch Solutions.
“The overall impact will support capital expenditure growth but high interest rates and elevated inflation will erode the effectiveness of capital deployed compared to previous years. Climate targets will hold less weight in light of potential energy disruptions with most countries seeking a balance to the energy mix that will see a reduction in coal in favour of renewables and natural gas infrastructure. A key example of this will be Europe’s diversification away from Russian natural gas imports by pipeline. This shift will require the addition of substantial LNG import facilities both shorter-term floating storage and regassification vessels and long-term onshore import terminals,” reads the latest report from Fitch Solutions.
The company analysts note that the efforts to secure LNG import infrastructure and supply have come at a high financial cost and ensure a high dependence on imports for some time.
“The investment in this new import infrastructure signals to LNG
producers that more supply will be needed in the coming years as a
ready market in Europe along with existing growth in Asia will see
medium-term demand stay high before projects already
under-construction begins to push the markets into oversupply near
mid-decade. However, with global regassification set to also grow
strongly till 2026 the outlook for related natural gas
infrastructure including midstream, domestic consumption and power
generation all are set to expand in 2023.”
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