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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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Monday, 24 June 24
PHILIPPINES COAL SUPPLY ENOUGH UNTIL 2030 - PHILSTAR GLOBAL
The country’s existing coal-fired power plants are sufficient to ensure enough base load capacity in the next six years, Energy Secretary Rap ...
Friday, 14 June 24
NEXTDECADE, SAUDI ARAMCO SIGN 20-YEAR LNG SUPPLY DEAL - REUTERS
U.S. liquefied natural gas (LNG) provider NextDecade has signed a non-binding agreement with Saudi Aramco 2222.SE to supply 1.2 million tonnes per ...
Friday, 14 June 24
NEWBUILDING PRICES CLIMB 3% TO HIGHEST LEVEL IN 16 YEARS - NIELS RASMUSSEN
“Since the start of the year, newbuilding prices have risen 3% to their highest level since 2008. Compared to their most recent low in late 2 ...
Friday, 14 June 24
INDIA TARGETS HIGHER DOMESTIC COAL PRODUCTION, REDUCED IMPORTS: GOVT - REUTERS
India wants to reduce coal imports and increase domestic production, federal coal minister G. Kishan Reddy said on Thursday.
The cou ...
Thursday, 13 June 24
US LNG TO ASIA FOR POWER GENERATION EXPECTED TO CUT EMISSIONS VERSUS COAL - RYSTAD ENERGY
The value-chain emissions of liquified natural gas (LNG) are lower on average than for coal-fired power generation, even when the fuel is shipp ...
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- Deloitte Consulting - India
- Tamil Nadu electricity Board
- ICICI Bank Limited - India
- Sinarmas Energy and Mining - Indonesia
- Independent Power Producers Association of India
- Bhatia International Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Straits Asia Resources Limited - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Planning Commission, India
- Lanco Infratech Ltd - India
- PTC India Limited - India
- Sojitz Corporation - Japan
- PNOC Exploration Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Georgia Ports Authority, United States
- Oldendorff Carriers - Singapore
- Sindya Power Generating Company Private Ltd
- Semirara Mining and Power Corporation, Philippines
- Makarim & Taira - Indonesia
- European Bulk Services B.V. - Netherlands
- Sree Jayajothi Cements Limited - India
- Minerals Council of Australia
- Samtan Co., Ltd - South Korea
- Toyota Tsusho Corporation, Japan
- Tata Chemicals Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Sical Logistics Limited - India
- Uttam Galva Steels Limited - India
- Merrill Lynch Commodities Europe
- Mercuria Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Posco Energy - South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- Chamber of Mines of South Africa
- Port Waratah Coal Services - Australia
- Attock Cement Pakistan Limited
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Riau Bara Harum - Indonesia
- Vizag Seaport Private Limited - India
- Alfred C Toepfer International GmbH - Germany
- Offshore Bulk Terminal Pte Ltd, Singapore
- IEA Clean Coal Centre - UK
- Medco Energi Mining Internasional
- CIMB Investment Bank - Malaysia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Edison Trading Spa - Italy
- SMG Consultants - Indonesia
- Rio Tinto Coal - Australia
- Latin American Coal - Colombia
- Iligan Light & Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Wilmar Investment Holdings
- Interocean Group of Companies - India
- Romanian Commodities Exchange
- Gujarat Mineral Development Corp Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Indian Energy Exchange, India
- The University of Queensland
- Therma Luzon, Inc, Philippines
- Renaissance Capital - South Africa
- GVK Power & Infra Limited - India
- Jaiprakash Power Ventures ltd
- Baramulti Group, Indonesia
- Indogreen Group - Indonesia
- San Jose City I Power Corp, Philippines
- Meralco Power Generation, Philippines
- Salva Resources Pvt Ltd - India
- Anglo American - United Kingdom
- Indo Tambangraya Megah - Indonesia
- Mintek Dendrill Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Larsen & Toubro Limited - India
- Eastern Energy - Thailand
- Globalindo Alam Lestari - Indonesia
- CNBM International Corporation - China
- Aditya Birla Group - India
- Bukit Makmur.PT - Indonesia
- Banpu Public Company Limited - Thailand
- Leighton Contractors Pty Ltd - Australia
- Miang Besar Coal Terminal - Indonesia
- Siam City Cement - Thailand
- New Zealand Coal & Carbon
- AsiaOL BioFuels Corp., Philippines
- Ambuja Cements Ltd - India
- Electricity Generating Authority of Thailand
- Karbindo Abesyapradhi - Indoneisa
- Pendopo Energi Batubara - Indonesia
- Sakthi Sugars Limited - India
- Manunggal Multi Energi - Indonesia
- Kumho Petrochemical, South Korea
- Heidelberg Cement - Germany
- Ind-Barath Power Infra Limited - India
- London Commodity Brokers - England
- Cigading International Bulk Terminal - Indonesia
- Ministry of Finance - Indonesia
- Madhucon Powers Ltd - India
- Ministry of Mines - Canada
- The Treasury - Australian Government
- Bangladesh Power Developement Board
- Economic Council, Georgia
- Thai Mozambique Logistica
- Asmin Koalindo Tuhup - Indonesia
- LBH Netherlands Bv - Netherlands
- Videocon Industries ltd - India
- ASAPP Information Group - India
- Kalimantan Lumbung Energi - Indonesia
- Commonwealth Bank - Australia
- Ministry of Transport, Egypt
- TNB Fuel Sdn Bhd - Malaysia
- Holcim Trading Pte Ltd - Singapore
- Bhushan Steel Limited - India
- Rashtriya Ispat Nigam Limited - India
- GAC Shipping (India) Pvt Ltd
- GMR Energy Limited - India
- Orica Australia Pty. Ltd.
- Central Electricity Authority - India
- Parliament of New Zealand
- Gujarat Sidhee Cement - India
- Kartika Selabumi Mining - Indonesia
- Aboitiz Power Corporation - Philippines
- PowerSource Philippines DevCo
- White Energy Company Limited
- Antam Resourcindo - Indonesia
- Mercator Lines Limited - India
- Standard Chartered Bank - UAE
- Maheswari Brothers Coal Limited - India
- International Coal Ventures Pvt Ltd - India
- McConnell Dowell - Australia
- Chettinad Cement Corporation Ltd - India
- Indian Oil Corporation Limited
- Kepco SPC Power Corporation, Philippines
- Orica Mining Services - Indonesia
- Grasim Industreis Ltd - India
- Power Finance Corporation Ltd., India
- Siam City Cement PLC, Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coal and Oil Company - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indika Energy - Indonesia
- Energy Link Ltd, New Zealand
- Kideco Jaya Agung - Indonesia
- Australian Commodity Traders Exchange
- PetroVietnam Power Coal Import and Supply Company
- Vijayanagar Sugar Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Thiess Contractors Indonesia
- Borneo Indobara - Indonesia
- SN Aboitiz Power Inc, Philippines
- Bulk Trading Sa - Switzerland
- TeaM Sual Corporation - Philippines
- Coastal Gujarat Power Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Global Green Power PLC Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Kaltim Prima Coal - Indonesia
- Binh Thuan Hamico - Vietnam
- Kobexindo Tractors - Indoneisa
- IHS Mccloskey Coal Group - USA
- Central Java Power - Indonesia
- Price Waterhouse Coopers - Russia
- The State Trading Corporation of India Ltd
- Trasteel International SA, Italy
- Simpson Spence & Young - Indonesia
- Sarangani Energy Corporation, Philippines
- Petron Corporation, Philippines
- Star Paper Mills Limited - India
- OPG Power Generation Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Xindia Steels Limited - India
- Karaikal Port Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Electricity Authority, New Zealand
- Singapore Mercantile Exchange
- Bharathi Cement Corporation - India
- Eastern Coal Council - USA
- Dalmia Cement Bharat India
- Vedanta Resources Plc - India
- Barasentosa Lestari - Indonesia
- Essar Steel Hazira Ltd - India
- India Bulls Power Limited - India
- Krishnapatnam Port Company Ltd. - India
- Indonesian Coal Mining Association
- Bukit Baiduri Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Mjunction Services Limited - India
- Carbofer General Trading SA - India
- Agrawal Coal Company - India
- Parry Sugars Refinery, India
- Altura Mining Limited, Indonesia
- Global Business Power Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Formosa Plastics Group - Taiwan
- Malabar Cements Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Marubeni Corporation - India
- Metalloyd Limited - United Kingdom
- Kohat Cement Company Ltd. - Pakistan
- Intertek Mineral Services - Indonesia
- Wood Mackenzie - Singapore
- Energy Development Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Billiton Holdings Pty Ltd - Australia
- VISA Power Limited - India
- Directorate Of Revenue Intelligence - India
- Australian Coal Association
- Bayan Resources Tbk. - Indonesia
- Goldman Sachs - Singapore
- Global Coal Blending Company Limited - Australia
- Coalindo Energy - Indonesia
- Cement Manufacturers Association - India
- Neyveli Lignite Corporation Ltd, - India
- SMC Global Power, Philippines
- Africa Commodities Group - South Africa
- South Luzon Thermal Energy Corporation
- MS Steel International - UAE
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