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Wednesday, 12 September 18
IS LNG POISED FOR A NEW GROWTH CYCLE? - WOOD MACKENZIE
 Gas needs to work for its long-term sustainability. But the mood music is upbeat. Just 18 months ago the LNG market was depressed, anticipating an extended period of oversupply. Things haven’t played out quite like that, and prices have staged a strong recovery.
The market may not be out of the woods yet, as supply builds up next year potentially putting some downward pressure on prices. But the outlook beyond is bullish, with 65 mmtpa of new supply needed to meet growing demand by 2025 – that’s 20 mmtpa more than we forecast a year ago.
How have things turned round so quickly?
Demand has been firmer. Low prices drew buyers into the market after Asian LNG prices fell 75% from the 2013 peak of US$17/mmbtu to US$4/mmbtu by 2016. China began a buying spree that hasn’t stopped, spurred by the Government’s initiative to improve air quality in its cities. The Paris Agreement of 2015 has hardened energy policy – European governments are accelerating a shift away from coal to the benefit of renewables as well as gas. A new and diverse breed of countries has joined the traditional LNG buyers, among them Pakistan, Bangladesh, Colombia, Jamaica and Panama. LNG has gone global in the downturn.
Europe emerges as key growth target for LNG suppliers
Delayed production startup at some new LNG projects has also diminished the feared oversupply. Future gas supply in Europe will be structurally reduced by the decline of Groningen. The Dutch field, a pillar of continental supply for over 50 years, is beset by earthquakes. Volumes will be cut to minimal levels in the early 2020s and cease in 2030. With Russian pipelines maxed out, even with modest demand growth Europe has emerged as a key growth target for LNG suppliers. The loss of Groningen alone accounts for half of the 20 mmtpa increase in our forecast 2025 supply gap.
As global LNG players gather in Barcelona for the big Gastech Conference September 17-20, things look brighter. Yet major challenges lie ahead for the industry, these three among them.
1. Bringing competitive new supply to market
Projects are jockeying for position including Mozambique Areas 1 (Anadarko) and 4 (Eni/ExxonMobil), Arctic LNG 2 (NOVATEK/Total), LNG Canada (Shell/Petronas), Qatar expansions (Qatargas) and a plethora of US sites. 2019 may be the biggest year ever for LNG project sanctions; 100 mmtpa of new capacity could reach FID in the next three years.
Project delivery and managing spend of up to US$200bn will be big tests following the difficulties of the last cycle. And with buyers unwilling to commit to long term contracts for all their needs, sellers have to take on more risk. The ‘new economics’ of LNG projects favours big, financially strong players – large resource holders, major portfolio players and, possibly, traders.
2. The inexorable rise of US supply democratising the LNG market
A fringe player a few years ago, US LNG will vie with Qatar to be the world’s biggest supplier by the mid-2020s. Cheap Permian and Marcellus gas create a competitive advantage versus many conventional projects. Some LNG contracts are already marketed as distinctly Henry Hub, influencing oil-linked LNG pricing. In time a quarter of all cargoes on the high seas will be Henry Hub-derived, FOB with no destination clauses. This will dramatically increase liquidity in LNG trading and the effect on global LNG pricing will be profound.
Gas hubs in the US and Europe have evolved over the decades to accommodate gas/oil competition and arbitrage between spark spreads and dark spreads. So too will Henry Hub be duly absorbed into the global pricing mix in European hubs and Asia. A global LNG marker price will emerge with Henry Hub a key determinant.
3. The need for sustained gas advocacy
Gas is presently winning market share from coal. But intensifying policy on energy efficiency, methane and carbon emissions, the growth of renewables, development of battery storage and new energy technologies all pose a threat. Gas cannot rest on its laurels as a bridging fuel for the energy transition. The industry needs to keep pressing the case for gas as the low carbon intensity option, and continue to build new markets by ensuring security of supply at a competitive cost.
Source: Wood Mackenzie
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Monday, 01 October 18
A NO-DEAL BREXIT WILL UNDOUBTEDLY HAVE CONSEQUENCES FOR IMPORTERS AND EXPORTERS - KATE JONES, THE BALTIC BRIEFING
If you live in the UK, you might be finding it difficult to get away from the Brexit debate. “Hard Brexit”, “soft Brexit”, ...
Friday, 28 September 18
INDONESIA 2018 COAL OUTPUT TARGET NOW AROUND 507 MLN T - ENERGY MINISTRY : REUTERS
Indonesia has increased its 2018 coal production target to around 507 million tonnes from a previous target of 485 million tonnes, the Energy Minis ...
Friday, 28 September 18
FITCH RATINGS: METALLURGICAL COAL MINERS MAY CURB COSTS AS PRICES SLIP
Strong cost inflation in the global metallurgical coal sector suggests that miners may focus on cost controls as prices decline from their current ...
Wednesday, 26 September 18
IS YOUR CHARTER PARTY READY FOR 2020? - METTE KRONHOLM FRAENDE, BIMCO
As the deadline for the IMO’s global low-sulphur fuel requirements fast approaches, it is necessary to carefully check the bunker clauses in ...
Wednesday, 26 September 18
SHIPPING MARKET INSIGHT - GEORGE ILIOPOULOS
Despite the fact that the dry bulk SnP market saw an admittedly busy summer season, there is a noticeable slowdown in activity during the past thre ...
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- SMG Consultants - Indonesia
- Bayan Resources Tbk. - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Kobexindo Tractors - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- Heidelberg Cement - Germany
- Mercator Lines Limited - India
- MS Steel International - UAE
- Coal and Oil Company - UAE
- ASAPP Information Group - India
- Bulk Trading Sa - Switzerland
- Ministry of Finance - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Manunggal Multi Energi - Indonesia
- Chettinad Cement Corporation Ltd - India
- Semirara Mining Corp, Philippines
- Coastal Gujarat Power Limited - India
- Bhatia International Limited - India
- Thai Mozambique Logistica
- Tamil Nadu electricity Board
- Lanco Infratech Ltd - India
- Orica Australia Pty. Ltd.
- Georgia Ports Authority, United States
- Ambuja Cements Ltd - India
- ICICI Bank Limited - India
- Sindya Power Generating Company Private Ltd
- Bukit Makmur.PT - Indonesia
- Economic Council, Georgia
- Commonwealth Bank - Australia
- Siam City Cement PLC, Thailand
- PowerSource Philippines DevCo
- Meenaskhi Energy Private Limited - India
- Sojitz Corporation - Japan
- Pipit Mutiara Jaya. PT, Indonesia
- Antam Resourcindo - Indonesia
- Eastern Coal Council - USA
- Barasentosa Lestari - Indonesia
- Australian Commodity Traders Exchange
- IEA Clean Coal Centre - UK
- Kapuas Tunggal Persada - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- SN Aboitiz Power Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Xindia Steels Limited - India
- Formosa Plastics Group - Taiwan
- Gujarat Electricity Regulatory Commission - India
- VISA Power Limited - India
- Siam City Cement - Thailand
- Vizag Seaport Private Limited - India
- Directorate General of MIneral and Coal - Indonesia
- TeaM Sual Corporation - Philippines
- Baramulti Group, Indonesia
- Kaltim Prima Coal - Indonesia
- Karaikal Port Pvt Ltd - India
- India Bulls Power Limited - India
- Africa Commodities Group - South Africa
- Makarim & Taira - Indonesia
- Central Java Power - Indonesia
- Oldendorff Carriers - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Aditya Birla Group - India
- Australian Coal Association
- SMC Global Power, Philippines
- Indonesian Coal Mining Association
- Krishnapatnam Port Company Ltd. - India
- Gujarat Sidhee Cement - India
- Billiton Holdings Pty Ltd - Australia
- Kideco Jaya Agung - Indonesia
- Salva Resources Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Indian Energy Exchange, India
- Orica Mining Services - Indonesia
- Electricity Generating Authority of Thailand
- Anglo American - United Kingdom
- Cigading International Bulk Terminal - Indonesia
- Kumho Petrochemical, South Korea
- Renaissance Capital - South Africa
- Madhucon Powers Ltd - India
- Borneo Indobara - Indonesia
- Kartika Selabumi Mining - Indonesia
- Romanian Commodities Exchange
- Jorong Barutama Greston.PT - Indonesia
- Agrawal Coal Company - India
- Deloitte Consulting - India
- Ministry of Transport, Egypt
- Global Green Power PLC Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Indian Oil Corporation Limited
- Wilmar Investment Holdings
- Intertek Mineral Services - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Attock Cement Pakistan Limited
- Port Waratah Coal Services - Australia
- Carbofer General Trading SA - India
- Iligan Light & Power Inc, Philippines
- Bhushan Steel Limited - India
- London Commodity Brokers - England
- McConnell Dowell - Australia
- Sarangani Energy Corporation, Philippines
- Star Paper Mills Limited - India
- Eastern Energy - Thailand
- CIMB Investment Bank - Malaysia
- The University of Queensland
- Miang Besar Coal Terminal - Indonesia
- Mintek Dendrill Indonesia
- Energy Development Corp, Philippines
- GMR Energy Limited - India
- San Jose City I Power Corp, Philippines
- LBH Netherlands Bv - Netherlands
- PetroVietnam Power Coal Import and Supply Company
- Meralco Power Generation, Philippines
- Sakthi Sugars Limited - India
- Bharathi Cement Corporation - India
- Electricity Authority, New Zealand
- Therma Luzon, Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Toyota Tsusho Corporation, Japan
- Malabar Cements Ltd - India
- IHS Mccloskey Coal Group - USA
- Metalloyd Limited - United Kingdom
- Chamber of Mines of South Africa
- Energy Link Ltd, New Zealand
- Cement Manufacturers Association - India
- Indika Energy - Indonesia
- Rio Tinto Coal - Australia
- AsiaOL BioFuels Corp., Philippines
- Leighton Contractors Pty Ltd - Australia
- PTC India Limited - India
- Ministry of Mines - Canada
- Altura Mining Limited, Indonesia
- Banpu Public Company Limited - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Trasteel International SA, Italy
- Bukit Baiduri Energy - Indonesia
- Posco Energy - South Korea
- Bahari Cakrawala Sebuku - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Globalindo Alam Lestari - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Aboitiz Power Corporation - Philippines
- Jindal Steel & Power Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Samtan Co., Ltd - South Korea
- Global Business Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Indogreen Group - Indonesia
- Petron Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Marubeni Corporation - India
- Riau Bara Harum - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Uttam Galva Steels Limited - India
- CNBM International Corporation - China
- Binh Thuan Hamico - Vietnam
- Mjunction Services Limited - India
- Indo Tambangraya Megah - Indonesia
- Edison Trading Spa - Italy
- Singapore Mercantile Exchange
- Kepco SPC Power Corporation, Philippines
- Planning Commission, India
- GAC Shipping (India) Pvt Ltd
- Dalmia Cement Bharat India
- Tata Chemicals Ltd - India
- Power Finance Corporation Ltd., India
- Medco Energi Mining Internasional
- Gujarat Mineral Development Corp Ltd - India
- Standard Chartered Bank - UAE
- TNB Fuel Sdn Bhd - Malaysia
- Savvy Resources Ltd - HongKong
- Asia Pacific Energy Resources Ventures Inc, Philippines
- The Treasury - Australian Government
- Minerals Council of Australia
- Wood Mackenzie - Singapore
- Mercuria Energy - Indonesia
- GVK Power & Infra Limited - India
- Independent Power Producers Association of India
- Essar Steel Hazira Ltd - India
- Vedanta Resources Plc - India
- Jaiprakash Power Ventures ltd
- White Energy Company Limited
- Goldman Sachs - Singapore
- Parry Sugars Refinery, India
- Directorate Of Revenue Intelligence - India
- Grasim Industreis Ltd - India
- Coalindo Energy - Indonesia
- Parliament of New Zealand
- Bangladesh Power Developement Board
- Straits Asia Resources Limited - Singapore
- European Bulk Services B.V. - Netherlands
- Global Coal Blending Company Limited - Australia
- Sical Logistics Limited - India
- The State Trading Corporation of India Ltd
- Central Electricity Authority - India
- Timah Investasi Mineral - Indoneisa
- Maheswari Brothers Coal Limited - India
- Thiess Contractors Indonesia
- Videocon Industries ltd - India
- Latin American Coal - Colombia
- New Zealand Coal & Carbon
- GN Power Mariveles Coal Plant, Philippines
- South Luzon Thermal Energy Corporation
- Simpson Spence & Young - Indonesia
- Bhoruka Overseas - Indonesia
- Pendopo Energi Batubara - Indonesia
- Interocean Group of Companies - India
- Kohat Cement Company Ltd. - Pakistan
- Larsen & Toubro Limited - India
- Price Waterhouse Coopers - Russia
- Neyveli Lignite Corporation Ltd, - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ind-Barath Power Infra Limited - India
- Merrill Lynch Commodities Europe
- Asmin Koalindo Tuhup - Indonesia
- International Coal Ventures Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
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