Gas Demand Slump, Medgaz Threaten Spanish LNG Appetite

摘要

The buoyant Spanish market that has done so much to keep global LNG trading afloat in recent years is threatening to sink under the weight of a recession-induced drop in gas demand and, by midyear, new supply from the 8 billion cubic meter per year Medgaz pipeline running directly under the Mediterranean from Algeria to Spain. Even if Algerian state Sonatrach initially runs Medgaz at well below capacity so as not to further erode prices — as many expect — the Spanish market could be chronically oversupplied and have a diminished appetite for LNG until additional interconnections with France are established three or more years down the road.