Israel’s gas producer Delek Drilling expects domestic natural gas demand to decline by roughly 5-9% through 2021, Kallanish Energy reports.
The company said in a report last week that the Covid-19 crisis has started affecting its sales from the Leviathan and Tamar reservoirs from mid-March.
“Delek estimates that insofar as the Covid-19 crisis endures and the slowdown in the global economy continues, it will continue to adversely affect the demand for and prices of energy products,” the firm said.
The producer expects its net revenues from the offshore fields to drop by 10-20% this year, and by around 5-15% in 2021. It also sees gas exports under long-term contracts falling to minimum binding quantities.
The forecasts were made under “certain assumptions,” but Delek highlighted it’s currently difficult to assess the impact of the pandemic on the demand and sales from its fields. That’s because “as of the date of this report, the scope and duration of the Covid-19 crisis cannot be estimated,” it said.
On Friday, the company provided an investor update by Moody’s Investors Service, which said there’s a “likelihood of gas oversupply in Israel because of increasing competition from other gas fields in the region … as well as lower demand due to the coronavirus crisis.”
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