At the 2023 seminar, there were a lot of concerns regarding the capacity of European gas companies to sign new long-term contracts to secure additional supplies in the wake of the energy crisis. Such concerns seem to have eased this year. Has this changed?
After the crisis, some companies have taken different strategies. Some of them secured a very large share of new long-term deals and still want to rely on long-term contracts. Others in Europe, particularly the ones that burnt their fingers in this crisis, are far more reluctant to sign new long-term contracts because they have been under pressure from their shareholders to avoid being dependent on new long-term deals which made their life difficult in the wake of the war. Therefore, they will tend to rely far more on spot markets, even if they know that in times of severe crisis, they may face difficulties.
We do see more diverging strategies amongst companies, and that’s perhaps one of the lessons drawn from the past year. This very much depends on the kind of risk that companies’ shareholders are prepared to accept.
Another key factor depends on the location of your customers and where you are based as a supplier. Clearly, if you are close to a node of the network, you can import from very different places and diversify your supply under your long-term contract. In other places, you may have difficulties in finding a diversity of sellers willing to propose long-term contracts.
