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The Industry Advisory Panel meets in Warsaw

On 23 March 2017 the Industry Advisory Panel (IAP) of the Energy Charter held its 39th meeting in Warsaw, Poland. The meeting was hosted by Gas Transmission Operator GAZ-SYSTEM and was followed by a study visit to the LNG terminal in Świnoujście, Poland on 24 March. IAP session on LNG was attended by over 70 participants from the energy sector and governments. 

The main theme of the event was:

“Pathways to Develop Flexible and Liquid LNG Market - Role of LNG in the global energy future”

The participants discussed future trends in the LNG sector. It was expected that demand for natural gas will grow. Michał Kurtyka, the Polish Deputy Minister for Energy predicted: “LNG will be fastest growing fossil fuel in the 21st century – the age of gas”. LNG will be growing much faster than pipeline gas trade and by 2035 will account for around half of all globally traded gas. The high expectations for the growth of LNG trade and the wish to diversify gas supplies are reflected in the construction of new liquefaction and regasification capacity worldwide, which has more than doubled over the past five years. Rapid development of LNG not only contributes to energy security but also transforms the international gas market into a more flexible, integrated and liquid one, as is proven by more flexibility in the recent LNG contracts. Some questioned whether, under current pricing circumstances, investment in LNG supply would be sustained.

The Secretary General Dr. Urban Rusnák pointed out that, except for the maritime transport of it, LNG is covered by the investment protection provisions in the Energy Charter Treaty. Already some important LNG exporting and importing countries like Australia, Russia, Norway, Japan, Turkey and the EU are signatories of the Treaty. Given the current developments in the LNG value chain, he noted that for Energy Charter observer states a full country membership of the Energy Charter Treaty would favor their investment climate.

This IAP meeting also addressed fundamental questions and challenges for the LNG industry which are: well designed energy policies, establishment of efficient gas markets, incentives for LNG supply and demand, under and oversupply of LNG, flexibility of LNG contracts, increase of LNG trading volumes, insufficient fixed infrastructure to transport re-gasified gas, lack of regulatory frameworks that facilitates infrastructure and market development, proper LNG price mechanisms and LNG infrastructure maintenance.

The Industry Advisory Panel validated the membership requests of EUSTREAM, which became the IAP’s 58 member.

The Industry Advisory Panel is the expert consultative body to the Energy Charter Conference, providing policy advice from energy companies, international business associations and financial institutions on energy investment and the functioning of energy markets. The Panel includes members from all sectors of the energy industry and from a wide range of signatory and observer countries to the Energy Charter Treaty. The Chairman of the Panel is Mr Howard Chase, Director of Government Affairs at Dow Europe. Mr Xie Qiuye, President of the China’s Electric Power Planning & Engineering Institute (EPPEI), is a regional Chair for Asia.