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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, 02 August 24
COAL MARKET DEVELOPMENTS: FALLING PRICES AMID RECORD-HIGH OUTPUT - WORLD BANK
Coal prices inched up in May (m/m) following an 8 percent decline in 2024Q1. The Australian and South African benchmarks have plummeted more ...
Friday, 26 July 24
FUELEU MARITME IS COMING. IS YOUR CHARTERPARTY READY? - GARD
With less than six months to implementation of FuelEU Maritime in EU and EEA trades, there has been little published advice regarding how to alloca ...
Thursday, 04 July 24
INDIA'S COAL PRODUCTION RISES 14% IN JUNE - PTI
The country’s coal production rose by 14.49% to 84.63 million tonne (MT) in June. The country’s coal output was 73.92 MT in June last f ...
Tuesday, 02 July 24
NTPC CAPTIVE COAL OUTPUT GROWS 15% IN Q1; DESPATCH RISES 17%
State-owned NTPC on Monday reported a 15 per cent year-on-year increase in the production of coal from captives mines to 9.862 metric million tonne ...
Friday, 28 June 24
KOSPO INVITED BIDS FOR 400,000 MT OF MINIMUM 4000 NCV COAL FOR FIVE YEARS
Korea Southern Power Co., Ltd. (KOSPO), is inviting bids for total 400,000 MT of Low Calorific Value Coal for 5 years starting from July 2024 until ...
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- Independent Power Producers Association of India
- The Treasury - Australian Government
- Mercuria Energy - Indonesia
- Kumho Petrochemical, South Korea
- Altura Mining Limited, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Uttam Galva Steels Limited - India
- Jaiprakash Power Ventures ltd
- Bayan Resources Tbk. - Indonesia
- Edison Trading Spa - Italy
- Kobexindo Tractors - Indoneisa
- Bangladesh Power Developement Board
- Siam City Cement - Thailand
- The University of Queensland
- Australian Commodity Traders Exchange
- Central Electricity Authority - India
- Coalindo Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Rio Tinto Coal - Australia
- South Luzon Thermal Energy Corporation
- Georgia Ports Authority, United States
- Maheswari Brothers Coal Limited - India
- Indian Oil Corporation Limited
- India Bulls Power Limited - India
- Sakthi Sugars Limited - India
- Ministry of Mines - Canada
- White Energy Company Limited
- Planning Commission, India
- Aditya Birla Group - India
- Tamil Nadu electricity Board
- Sarangani Energy Corporation, Philippines
- Ambuja Cements Ltd - India
- Sical Logistics Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Baiduri Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Antam Resourcindo - Indonesia
- Thai Mozambique Logistica
- GN Power Mariveles Coal Plant, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Bulk Trading Sa - Switzerland
- Videocon Industries ltd - India
- IEA Clean Coal Centre - UK
- Siam City Cement PLC, Thailand
- Metalloyd Limited - United Kingdom
- Bhatia International Limited - India
- Makarim & Taira - Indonesia
- MS Steel International - UAE
- Karaikal Port Pvt Ltd - India
- Vedanta Resources Plc - India
- Rashtriya Ispat Nigam Limited - India
- McConnell Dowell - Australia
- Singapore Mercantile Exchange
- CNBM International Corporation - China
- TeaM Sual Corporation - Philippines
- Lanco Infratech Ltd - India
- Riau Bara Harum - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Krishnapatnam Port Company Ltd. - India
- Meralco Power Generation, Philippines
- Samtan Co., Ltd - South Korea
- Cigading International Bulk Terminal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Commonwealth Bank - Australia
- Directorate General of MIneral and Coal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- VISA Power Limited - India
- Chamber of Mines of South Africa
- Savvy Resources Ltd - HongKong
- Sinarmas Energy and Mining - Indonesia
- Agrawal Coal Company - India
- Manunggal Multi Energi - Indonesia
- Chettinad Cement Corporation Ltd - India
- Attock Cement Pakistan Limited
- Kohat Cement Company Ltd. - Pakistan
- Tata Chemicals Ltd - India
- Thiess Contractors Indonesia
- Therma Luzon, Inc, Philippines
- Coal and Oil Company - UAE
- Eastern Coal Council - USA
- Romanian Commodities Exchange
- Ceylon Electricity Board - Sri Lanka
- Jindal Steel & Power Ltd - India
- Salva Resources Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Straits Asia Resources Limited - Singapore
- Interocean Group of Companies - India
- Renaissance Capital - South Africa
- Deloitte Consulting - India
- CIMB Investment Bank - Malaysia
- Ministry of Finance - Indonesia
- Price Waterhouse Coopers - Russia
- Kaltim Prima Coal - Indonesia
- Indonesian Coal Mining Association
- Petrochimia International Co. Ltd.- Taiwan
- Neyveli Lignite Corporation Ltd, - India
- SMC Global Power, Philippines
- PowerSource Philippines DevCo
- Mjunction Services Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Wood Mackenzie - Singapore
- Kapuas Tunggal Persada - Indonesia
- Mintek Dendrill Indonesia
- AsiaOL BioFuels Corp., Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Binh Thuan Hamico - Vietnam
- Africa Commodities Group - South Africa
- Posco Energy - South Korea
- Star Paper Mills Limited - India
- Carbofer General Trading SA - India
- Port Waratah Coal Services - Australia
- ICICI Bank Limited - India
- Directorate Of Revenue Intelligence - India
- Kideco Jaya Agung - Indonesia
- Oldendorff Carriers - Singapore
- Ministry of Transport, Egypt
- Ind-Barath Power Infra Limited - India
- Anglo American - United Kingdom
- PTC India Limited - India
- Kartika Selabumi Mining - Indonesia
- GVK Power & Infra Limited - India
- Orica Australia Pty. Ltd.
- Semirara Mining Corp, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Power Finance Corporation Ltd., India
- Simpson Spence & Young - Indonesia
- Globalindo Alam Lestari - Indonesia
- Toyota Tsusho Corporation, Japan
- Timah Investasi Mineral - Indoneisa
- Eastern Energy - Thailand
- Pendopo Energi Batubara - Indonesia
- Goldman Sachs - Singapore
- Trasteel International SA, Italy
- Cement Manufacturers Association - India
- Sindya Power Generating Company Private Ltd
- Karbindo Abesyapradhi - Indoneisa
- Bhoruka Overseas - Indonesia
- Bhushan Steel Limited - India
- Mercator Lines Limited - India
- Parliament of New Zealand
- Electricity Generating Authority of Thailand
- GAC Shipping (India) Pvt Ltd
- Energy Link Ltd, New Zealand
- San Jose City I Power Corp, Philippines
- Xindia Steels Limited - India
- Larsen & Toubro Limited - India
- New Zealand Coal & Carbon
- Barasentosa Lestari - Indonesia
- Global Coal Blending Company Limited - Australia
- Minerals Council of Australia
- Indian Energy Exchange, India
- Orica Mining Services - Indonesia
- Electricity Authority, New Zealand
- GMR Energy Limited - India
- SMG Consultants - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Latin American Coal - Colombia
- Holcim Trading Pte Ltd - Singapore
- LBH Netherlands Bv - Netherlands
- Bukit Makmur.PT - Indonesia
- Australian Coal Association
- Indika Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indogreen Group - Indonesia
- Coastal Gujarat Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Parry Sugars Refinery, India
- Standard Chartered Bank - UAE
- Intertek Mineral Services - Indonesia
- PNOC Exploration Corporation - Philippines
- Sojitz Corporation - Japan
- Medco Energi Mining Internasional
- Sree Jayajothi Cements Limited - India
- Energy Development Corp, Philippines
- Petron Corporation, Philippines
- Bharathi Cement Corporation - India
- Borneo Indobara - Indonesia
- Baramulti Group, Indonesia
- Meenaskhi Energy Private Limited - India
- Kepco SPC Power Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Malabar Cements Ltd - India
- Gujarat Sidhee Cement - India
- Formosa Plastics Group - Taiwan
- OPG Power Generation Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Banpu Public Company Limited - Thailand
- Indo Tambangraya Megah - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Jorong Barutama Greston.PT - Indonesia
- Madhucon Powers Ltd - India
- Marubeni Corporation - India
- Dalmia Cement Bharat India
- Wilmar Investment Holdings
- Essar Steel Hazira Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- London Commodity Brokers - England
- SN Aboitiz Power Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Central Java Power - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- IHS Mccloskey Coal Group - USA
- Pipit Mutiara Jaya. PT, Indonesia
- ASAPP Information Group - India
- Gujarat Mineral Development Corp Ltd - India
- Heidelberg Cement - Germany
- Merrill Lynch Commodities Europe
- European Bulk Services B.V. - Netherlands
- Vizag Seaport Private Limited - India
- Economic Council, Georgia
- Grasim Industreis Ltd - India
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