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Wednesday, 05 September 18
ASIAN DEMAND COULD CREATE DEFICIT IN GLOBAL LNG MARKET - FITCH RATINGS
 Growing gas demand from Asia, particularly from China, could swing the liquefied natural gas (LNG) market into a deficit by 2022-2025, Fitch Ratings says.
Market expectations of oversupply and weak gas prices have curtailed new investment activity in the sector in the past two years. Limited capacity additions beyond 2020 should be positive for spot prices, especially in Asia and Europe. This will benefit LNG projects with significant uncontracted volumes and those linked to gas spot prices.
An unprecedented wave of new projects becoming operational in 2016-2019 has not resulted in, and is unlikely to result in a material surplus in the LNG market in the medium term. Additional LNG volumes continue to find a home across a diverse array of countries and new buyers, and under more flexible contracts.
Funding for new LNG capacity is often structured as non-recourse project finance and is dependent on sponsors’ ability to secure long-term offtake agreements, which buyers have been less willing to sign in anticipation of larger volumes of uncontracted LNG coming to the market. Therefore, sponsors may need to commit a higher equity contribution to get funding for LNG projects, which will continue to delay final investment decisions (FIDs) for some time. A typical timeframe for a new LNG project to become operational following the FID is four to five years. Due to limited new FIDs very few new projects will come on stream in the early 2020s. FIDs in the next one to two years are likely to be limited to projects with lower capital and operating costs given constraints on the funding side.
We expect gas demand to continue its robust growth in the coming years, mostly driven by Asian markets that account for two-thirds of overall LNG demand. This is due a combination of healthy power demand growth in the region, natural gas being the fossil fuel of choice in pursuit of curbing air pollution, and the backlash against nuclear energy. Japan is currently the largest LNG importer, but China is catching up quickly and becoming the major market for LNG.
The LNG market could shift into deficit by 2022-2025. Gas pricing is therefore likely to improve in the major importer markets, benefiting LNG projects relying on spot and hub pricing and entities with significant LNG trading portfolios. We also expect oil companies to gradually return to their earlier LNG ambitions. This includes oil majors, like Shell, BP and Total, most of which emphasise the growing role of gas in the global energy mix.
The LNG market is still in its formative stage. Pricing mechanisms, contract terms and financing structures continue to evolve. Long-term oil-linked contracts are giving way to increased trading activity, which represented around a quarter of all new contracts in 2017, according to IGU World Gas LNG Report, compared to just 1% in 2012. New large LNG projects still rely on long-term contracts in order to secure financing. However, elsewhere contracts are becoming shorter, and the quality of counterparties is declining. Contract prices are increasingly de-linked from oil pricing with a growing focus on spot and hub-based gas pricing.
Fitch-rated rated LNG projects will not be significantly affected by the trend towards increasing commoditisation. In the US, rated projects, such as Cameron LNG and Sabine Pass, benefit from robust contractual frameworks that provide mitigation to completion risks and often employ tolling or tolling-like arrangements that protect cash flows from volume and price risks. RasGas in Qatar mostly relies on long-term oil-linked contracts.
Source: Fitch Ratings
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Friday, 06 September 24
REBOUND IN OIL DEMAND COULD LIFT MARKET IN LATTER HALF OF 2024 - BIMCO
Supply/demand
Based on a strong second half demand, the supply/balance is forecast to strengthen in 2024 but weaken slightly in 2025 as n ...
Friday, 06 September 24
GLOBAL SEABORNE LNG TRADE HAS CONTINUED TO INCREASE LAST YEAR - BANCHERO COSTA
Global seaborne LNG trade has continued to increase last year, helped also by the events in Ukraine which forced Europe to diversify away from Russ ...
Wednesday, 28 August 24
SEABORNE COAL IMPORTS INTO INDIA INCREASED BY +9.9% Y-O-Y TO 146.6 MLN T - BANCHERO COSTA
Global coal trade has really picked up pace over the past year, and is now fully back to pre-Covid levels said Banchero Costa Research in its lates ...
Tuesday, 06 August 24
EXERCISE CAUTION WITH AMMONIA SWITCH - BALTIC EXCHANGE
A new study from the Massachusetts Institute of Technology (MIT) has thrown a spanner into the plan to transition ships from diesel fuel to ammonia ...
Friday, 02 August 24
ENERGY MARKET DEVELOPMENTS: COAL AND NATURAL GAS PRICES REACH RECORD HIGHS - WORLD BANK
The recent surge in natural gas and coal prices has been so swift that the main benchmarks were roughly three times higher in 2022Q2 compared to a ...
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- India Bulls Power Limited - India
- Kartika Selabumi Mining - Indonesia
- Essar Steel Hazira Ltd - India
- London Commodity Brokers - England
- Jindal Steel & Power Ltd - India
- Attock Cement Pakistan Limited
- Bulk Trading Sa - Switzerland
- Bhushan Steel Limited - India
- Eastern Coal Council - USA
- Aditya Birla Group - India
- Renaissance Capital - South Africa
- Global Business Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Indian Energy Exchange, India
- Kepco SPC Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Larsen & Toubro Limited - India
- Bharathi Cement Corporation - India
- GN Power Mariveles Coal Plant, Philippines
- Romanian Commodities Exchange
- Barasentosa Lestari - Indonesia
- Price Waterhouse Coopers - Russia
- Indian Oil Corporation Limited
- International Coal Ventures Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Minerals Council of Australia
- Videocon Industries ltd - India
- Metalloyd Limited - United Kingdom
- Edison Trading Spa - Italy
- Iligan Light & Power Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Global Green Power PLC Corporation, Philippines
- Madhucon Powers Ltd - India
- Meralco Power Generation, Philippines
- Karaikal Port Pvt Ltd - India
- Siam City Cement - Thailand
- Kobexindo Tractors - Indoneisa
- Central Java Power - Indonesia
- Simpson Spence & Young - Indonesia
- Meenaskhi Energy Private Limited - India
- Miang Besar Coal Terminal - Indonesia
- Bangladesh Power Developement Board
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- IHS Mccloskey Coal Group - USA
- Ambuja Cements Ltd - India
- Vizag Seaport Private Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Marubeni Corporation - India
- Bhoruka Overseas - Indonesia
- Sinarmas Energy and Mining - Indonesia
- SMC Global Power, Philippines
- Planning Commission, India
- Cigading International Bulk Terminal - Indonesia
- LBH Netherlands Bv - Netherlands
- Siam City Cement PLC, Thailand
- Formosa Plastics Group - Taiwan
- Agrawal Coal Company - India
- European Bulk Services B.V. - Netherlands
- Indogreen Group - Indonesia
- Port Waratah Coal Services - Australia
- Straits Asia Resources Limited - Singapore
- Jaiprakash Power Ventures ltd
- Electricity Generating Authority of Thailand
- IEA Clean Coal Centre - UK
- CNBM International Corporation - China
- Interocean Group of Companies - India
- Xindia Steels Limited - India
- Pendopo Energi Batubara - Indonesia
- Coalindo Energy - Indonesia
- SMG Consultants - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Jorong Barutama Greston.PT - Indonesia
- Anglo American - United Kingdom
- Indo Tambangraya Megah - Indonesia
- South Luzon Thermal Energy Corporation
- Commonwealth Bank - Australia
- Wilmar Investment Holdings
- Global Coal Blending Company Limited - Australia
- Indonesian Coal Mining Association
- Maheswari Brothers Coal Limited - India
- Singapore Mercantile Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- SN Aboitiz Power Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Sindya Power Generating Company Private Ltd
- Billiton Holdings Pty Ltd - Australia
- Oldendorff Carriers - Singapore
- Semirara Mining and Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Energy Link Ltd, New Zealand
- Ministry of Transport, Egypt
- Sakthi Sugars Limited - India
- Parry Sugars Refinery, India
- Bukit Asam (Persero) Tbk - Indonesia
- Uttam Galva Steels Limited - India
- Kaltim Prima Coal - Indonesia
- Chamber of Mines of South Africa
- Eastern Energy - Thailand
- Globalindo Alam Lestari - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Borneo Indobara - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Antam Resourcindo - Indonesia
- Orica Australia Pty. Ltd.
- Baramulti Group, Indonesia
- Posco Energy - South Korea
- Cement Manufacturers Association - India
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Mines - Canada
- Kapuas Tunggal Persada - Indonesia
- Electricity Authority, New Zealand
- Aboitiz Power Corporation - Philippines
- Savvy Resources Ltd - HongKong
- Australian Commodity Traders Exchange
- Mercator Lines Limited - India
- Ind-Barath Power Infra Limited - India
- Sical Logistics Limited - India
- Riau Bara Harum - Indonesia
- Rio Tinto Coal - Australia
- Salva Resources Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Gujarat Sidhee Cement - India
- Power Finance Corporation Ltd., India
- Mjunction Services Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Trasteel International SA, Italy
- Australian Coal Association
- GVK Power & Infra Limited - India
- Carbofer General Trading SA - India
- Directorate Of Revenue Intelligence - India
- TeaM Sual Corporation - Philippines
- Indika Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Bukit Makmur.PT - Indonesia
- Merrill Lynch Commodities Europe
- Tata Chemicals Ltd - India
- Samtan Co., Ltd - South Korea
- Mercuria Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Heidelberg Cement - Germany
- Africa Commodities Group - South Africa
- Sarangani Energy Corporation, Philippines
- MS Steel International - UAE
- Bhatia International Limited - India
- Bayan Resources Tbk. - Indonesia
- Therma Luzon, Inc, Philippines
- PTC India Limited - India
- Rashtriya Ispat Nigam Limited - India
- Parliament of New Zealand
- Malabar Cements Ltd - India
- Georgia Ports Authority, United States
- Lanco Infratech Ltd - India
- Standard Chartered Bank - UAE
- PNOC Exploration Corporation - Philippines
- Coastal Gujarat Power Limited - India
- Goldman Sachs - Singapore
- Holcim Trading Pte Ltd - Singapore
- Deloitte Consulting - India
- OPG Power Generation Pvt Ltd - India
- Ministry of Finance - Indonesia
- Grasim Industreis Ltd - India
- Independent Power Producers Association of India
- Chettinad Cement Corporation Ltd - India
- Thai Mozambique Logistica
- ICICI Bank Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Directorate General of MIneral and Coal - Indonesia
- New Zealand Coal & Carbon
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kideco Jaya Agung - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Latin American Coal - Colombia
- ASAPP Information Group - India
- Mintek Dendrill Indonesia
- Sree Jayajothi Cements Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Baiduri Energy - Indonesia
- Energy Development Corp, Philippines
- Intertek Mineral Services - Indonesia
- PowerSource Philippines DevCo
- White Energy Company Limited
- Altura Mining Limited, Indonesia
- Orica Mining Services - Indonesia
- Vedanta Resources Plc - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Star Paper Mills Limited - India
- Tamil Nadu electricity Board
- CIMB Investment Bank - Malaysia
- Neyveli Lignite Corporation Ltd, - India
- Kalimantan Lumbung Energi - Indonesia
- Semirara Mining Corp, Philippines
- VISA Power Limited - India
- Banpu Public Company Limited - Thailand
- San Jose City I Power Corp, Philippines
- Sojitz Corporation - Japan
- McConnell Dowell - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Economic Council, Georgia
- The Treasury - Australian Government
- GMR Energy Limited - India
- Krishnapatnam Port Company Ltd. - India
- Central Electricity Authority - India
- Petron Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Binh Thuan Hamico - Vietnam
- Timah Investasi Mineral - Indoneisa
- Wood Mackenzie - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- The State Trading Corporation of India Ltd
- Makarim & Taira - Indonesia
- Thiess Contractors Indonesia
- Coal and Oil Company - UAE
- The University of Queensland
- Kumho Petrochemical, South Korea
- Dalmia Cement Bharat India
- Medco Energi Mining Internasional
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