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Gas prices across Europe need to drop by 20% to make the fuel competitive with coal for power generation during hours of peak demand, Vitol's gas head David Gallagher said. At that level it would make economic sense for electricity producers to switch from burning coal to gas.

Reliance Industries, India's biggest company by market capitalisation,  has filed for arbitration this week, claiming the Indian government is restricting it from recovering cost on developing an offshore gas block. The dispute prompted Reliance to curtail gas supplies to Indian power plant operatiors, leaving India with a severe electricity shortage.

International Power (IP), a London-based energy group, has posted a 5% rise in  revenues to €4,257 million in the first quarter driven by strong growth in Asia and Lation America. In an interim management statement, IP said revenue in Asia surged 22% to Eur491 million while revenue in Latin America increase by and 16% to Eur1.021 billion.

Gains for gas demand in the power and industrial sector will offset a decline in gas demand for residential use, Howard Gruenspecht, acting administrator, U.S. Energy Information Administration (EIA) said today. The share of natural gas in the U.S. energy mix is forecast to rise 27% by 2035, from 24% in 2010, according to EIA forecasts.

Ofgem, the U.K. energy regulator, warns Britain might face a gap in power generation capacity as ageing plants are being retired while construction of new nuclear, gas-fired or offshore wind power projects are delayed. "Britain is facing pretty frightening times with regards to spare capacity," Alistair Buchanan, Ofgem CEO said today.

Except for Europe, the global gas-to-power sector is expanding rapidly driven by rising electricity demand in emerging markets. "Even if gas is regulated to death in Europe, the growth of gas-to-power generation will continue outside Europe," Stefan Judisch, chief executive of RWE Supply & Trading said today.

The share of gas-fired power generation is likely to rebound in the mid-term future in line with growing renewable power production. "The key driver for gas demand growth in Europe will come from the power generation sector," Klaus Schäfer, CEO, E.ON Trading & E.ON Ruhrgas forecast today.

Gas does not get to play its rightful role in the European energy mix, Rune Bjornson, senior vice president natural gas, Statoil said today. Adverse economics currently hamper the rise of gas in the energy sector, he said, suggesting "the price of carbon is far too low to incentivise a switch from coal to gas".

China is set to become "the engine of global gas demand" in the coming years, as opportunities for a greater share of gas in power generation arise due to Government concerns about air pollution, Fatih Birol, chief economist at the International Energy Agency (IEA) said today.

The Middle East has seen the highest growth rate globally of dry natural gas consumption, rising from 53 trillion cubic feet (Tcf) to 113 Tcf between 1980 and 2010, according to figures published by the U.S. Energy Information Administration (EIA). A key driver for the rise was the expanding in gas-fired power generation sector in the Gulf region.

Traded natural gas contracts in the U.S. need stay on low levels to motivate electricity producers to continue with coal-to-gas substitution in Powder River Basin coal-burning regions, investment bank Goldman Sachs said.

Investment bank Goldman Sachs said today a 14 pence price rise of NBP gas contracts for delivery between July and end-September is needed to prompt diversions of LNG cargoes from higher-yielding Asian destinations to the U.K. European power producers are advised to hedge forward gas in anticipation of rising prices.

The share of gas-fired power generation in the U.S. is forecast to surge by about 17% in 2012, amid a 10% decline in coal-based power generation, the U.S. Energy Information Administration (EIA) said in its short-term energy and summer fuels outlook.

India's gas shortage has reached alarming levels, undermining the Government's aims to boost the share of gas-to-power production. Operation of three gas-fired plants - with a combined capacity of 1,730 MW - had to be halted in India's National Capital Region (NCR) region due to a lack of gas supply to fuel the plants.

The growth pace of natural gas production in North America is set to slow down this year in reaction to low gas prices in the U.S. "More producers expect the drilling pullback in their dry gas plays to lead to a y/y [year-on-year] drop in their natural gas production," BarCap analyst Shiyang Wang said in a research note.

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