The current high energy prices are not “sustainable” and resolving the deficit in the market will require “long-term vision”, said Fatima Al Nuaimi, chief executive of Adnoc LNG.
Oil and gas prices have soared since the Russian invasion of Ukraine in February.
Brent crude, the benchmark under which two thirds of the world's crude is traded, closed in on an all-time high of $147 a barrel in March and is now hovering at about $93 a barrel.
This is happening as a result of a “simple non availability of resources,” Ms Al Nuaimi told an Adipec panel on Tuesday.
“Neither the producer nor the consumer wants a price that causes [demand] destruction.”
Europe is in the midst of its worst energy crisis after Russia, the region’s biggest natural gas supplier, reduced its exports by about 80 per cent in response to wide-ranging economic sanctions imposed by the EU.
The continent has offset the sharp falls in Russian supplies through LNG imports, as well as alternative pipeline supplies from Norway and elsewhere.
Adnoc LNG, which also exports liquefied petroleum gas and sulphur from its hub in Das Island, is investing in its existing operations to meet global demand.
The company supplies 1 billion standard cubic feet of gas per day to the UAE’s national grid.
“There is a lot of work that has been going on within our existing assets to make sure that we are fit for the new market,” said Ms Al Nuaimi.
“We are making investments to remove all the constraints that could prevent us from accessing the market like the sulphur quality, the size of the ships, the quality of the natural gas, as well as emissions,” she added.
In September, Adnoc signed a deal to supply LNG to German energy company.
Adnoc will deliver the first LNG shipment later this year through a floating import terminal at Brunsbuettel near Hamburg, according to a report from state news agency Wam.
As the global energy crisis deepens and countries scramble to secure reliable energy sources, investments in new LNG infrastructure are set to surge, reaching $42 billion annually in 2024, Rystad Energy said in an August report.
The current strains on gas supply have led to energy shortages in several parts of the developing world that rely on imported gas, notably Pakistan and Bangladesh. Major growth markets for gas such as India and China have meanwhile sharply reduced their LNG imports in 2022.
“We think that natural gas is going to remain as a major transition fuel for at least 4-5 decades from an India perspective,” Akshay Kumar Singh, chief executive of Petronet LNG, said.
India, the world’s third-largest crude oil importer, aims to increase the share of natural gas in its energy mix to 15 per cent by 2030, compared to about 6 per cent currently.
The high LNG prices have led to a 10-15 per cent decline in demand as consumers switch to cheaper fuels, said Singh.
About 80 per cent of India’s LNG imports are on a long-term basis, cushioning the country to a large extent from wild swings in energy markets, said Singh.
However, LNG volumes traded on the spot market — representing about 20 per cent of India’s overall imports — have “almost vanished”, he added.