High gas prices not sustainable: Equinor

Record high natural gas prices in Europe are currently generating strong profits for Norway's Equinor but they are not sustainable, a company executive said on February 1.

"Such volatility is generally not good," Ahmed Osman, a business development manager for Equinor in the Middle East, said at a webinar hosted by the Gas Exporting Countries Forum. "We need a price that is good for both producers and consumers."

Equinor saw its adjusted earnings surge to $9.77bn in the third quarter of 2021 on the back of high gas prices, up from only $780mn a year earlier. And the company is projecting even stronger results for the fourth quarter, which it will release on February 9, as well as into this year.

But soaring gas prices encourage power generators to shift back to coal, despite the higher carbon tax imposed on that fuel, he said.

Equinor is investing in a number of blue and green hydrogen ventures in Norway and elsewhere as part of its transition towards lower-carbon energy. Osman noted that green hydrogen, produced via electrolysis, was still twice the cost of blue hydrogen, derived from methane via steam reforming. 

"So the question remains who will pay for this extra cost," he said.