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Tuesday, 01 September 20
COVID-19 PUSHES US LNG INTO A TIGHT SPOT - DREWRY
The pandemic-led weak projections for economic growth will derail US LNG exports in full-year 2020 with the country also losing ground in the long term due to major delays in liquefaction projects.
US LNG exports were strong between 2017 and 2019, driven by the shale gas boom, rising demand for natural gas in Asia and higher global LNG prices. The US exported 3.9 million tonnes of LNG in 2016 which increased at a whopping 114% CAGR to 38.2 million tonnes in 2019.
The US is currently the third-largest global LNG exporter with six operational LNG export terminals aggregating 62 mtpa of liquefaction capacity and another 41 mtpa capacity under construction. Brownfiled projects such as Sabine Pass, Corpus Christi, Cameron LNG and Elba Island will reach their full capacities between 2020 and 2027 and greenfield projects such as Golden Pass LNG and Calcasieu Pass will become operational during the same period.
Existing LNG production capacity in the US has been impacted by the pandemic with over 110 LNG cargoes being cancelled by Asian and European customers during June-August due to the low LNG spot price which narrowed the US-Asia and US-Europe price arbitrage. Moreover, major US LNG importers – Japan, South Korea and Taiwan – have seen their LNG demand dwindling, while US-China LNG trade has not been able to pick up as some would have hoped. With projections for LNG spot prices below $5 per MMBtu over the next few years, we expect more cancellations to occur in the coming years making the US a ‘swing LNG producer.’
The ‘second wave’ of LNG liquefaction including mega-LNG projects (such as Driftwood LNG, Port Arthur LNG, Golden Pass, Calcasieu LNG, Plaquemines LNG, Magnolia LNG, Jordan Cove LNG and Rio Grande LNG) constitute over 160 mtpa of planned liquefaction capacity. These projects were initially expected to be operational by 2025, but are currently facing major trouble in securing funding and long-term supply deals required for reaching an FID. Only two projects (Golden Pass and Calcasieu Pass LNG) have attained the FID and have started construction, while over 10 major LNG liquefaction projects which were expected to reach the FID in 2020 have been delayed due to low LNG prices and weak economic growth projections.
The future for these projects looks uncertain as most of them had fixed the all-inclusive selling price for LNG at $8 per MMBtu for Asia ($2 for Henry Hub, $3 for liquefaction, $2-3 transportation) which is highly uncompetitive in the current market. Only a marginal recovery in LNG prices is projected for the next few years which further increases the woes for promoters of the planned projects in securing funding and supply deals. Meanwhile, a major competitor for US LNG, Qatar enjoys a break-even price below $2 per MMBtu as well as proximity to the Asian market. Qatar’s North Field Expansion (NFE) project’s Phase-1 (33 mtpa) and Phase-2 (16 mtpa) are also backed by the government, increasing the probability of their completion and in the process creating more trouble for the planned US projects.
The pandemic has already created severe financial woes for some US projects. For instance, a deal between Driftwood’s promoter Tellurian and India’s Petronet LNG fell through, raising doubts over the proposed 27.6 mtpa project. Although negotiations are still underway, Tellurian faces high competition from Russian and African projects. Shell has also exited the Lake Charles LNG project, increasing the uncertainty of the project for the other participants, while Magnolia LNG’s promoter LNG Ltd has been taken over by another entity after it went bankrupt, delaying the project further.
Some projects like Lake Charles and Rio Grande have gone back to the drawing board and plan to reduce trains to decrease the capex cost while others are cutting workforce and raising loans to keep their projects afloat. Most project developers are hopingfor an easing of US-China tensions and the prospect of securinga share of the rising LNG demand in China, which is projected to grow at over 10% CAGR between 2020 and 2025. However, China’s LNG importers may not be too keen on long-term supply deals with US companies given the current low prices and the uncertainty over US-China trade relations. Ties between China and Qatar are also strengthening with the latter reserving 16 LNG carrier newbuild berths at a Chinese shipyard.
Overall, project delays are expected to hurt the US deeply in the long term while other LNG producers – Qatar, Russia and Mozambique – gain from the narrowing supply-demand gap from 2023 onwards. Qatar has already reserved LNG carrier newbuilding berths at shipyards and has selected a technology partner for the NFE project while Russia’s Arctic LNG-2 is on schedule with added investments made for Arc-7 LNG carriers and large FSUs to keep the Northern Sea Route (NSR) active most of the year.
US LNG woes have had a cascading effect on the LNG shipping market, depressing charter rates. The fall in US-Asia LNG trade has negatively affected shipping demand which, along with cancellations, has increased vessel availability in the market. At present, the fall in charter rates is arrested by a rise in floating storage, but this situation is not sustainable in the long term with LNG prices remaining depressed and over 120 LNG carriers scheduled to be delivered during 2020-21.
An estimated 140 new orders for LNG carriers during 2020-23 would be left hanging if the planned US LNG projects fail to progress. The loss of orders will impact LNG shipyards which have already begun to reel under low orders (only eight vessels were ordered in 1H20). While project-linked ordering from Qatar, Russia and Mozambique will bring some respite the drying up of speculative orders will most certainly be a huge loss for the LNG shipping market as a whole.
To conclude US LNG exports will grow at a slower pace in the coming years as long-term supply deals have already been signed for the under-construction projects. However, stiff competition from other producers amid low LNG prices will impact their share in the Asian market. The fall in US-Asia trade will negatively impact shipping demand and further reduce the number of vessels required for LNG trade. Overall, we expect US LNG exports to be seasonal in the long run with Europe playing a much larger role in the future.
Source: Drewry
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Tuesday, 23 May 23
INDIA: COAL OUTPUT UP 8.9%, SUPPLY RISES 11.7% IN APRIL - FINANCIAL EXPRESS
India’s coal production jumped 8.85% to 73.14 million tonne (MT) in April 2023 and the total coal despatch during the month went up 11.66% to ...
Tuesday, 23 May 23
CHINA COAL OUTPUT UP 4.5 PCT IN APRIL - XINHUA
China’s raw coal output posted stable expansion in April, official data showed.
The country produced 380 million tonnes of raw ...
Saturday, 20 May 23
NON-OPEC OIL SUPPLY DEVELOPMENT - OPEC
In 2022, non-OPEC supply is estimated to have increased by 1.9 mb/d y-o-y. Out of this, US liquids production increased by 1.2 mb/d, mainly on the ...
Saturday, 20 May 23
GLOBAL COAL TRADE HAS REALLY PICKED UP PACE IN RECENT MONTHS, NOW FULLY BACK TO PRE-COVID LEVELS - BANCHERO COSTA
Global coal trade has really picked up pace in recent months, and is now fully back to pre-Covid levels. In Jan-Apr 2023, total global seaborne coa ...
Saturday, 20 May 23
MARKET INSIGHT - INTERMODAL
India is one of the world's largest coal producers and one of the world's largest importers of coal. The country uses coal mainly for power ...
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Showing 101 to 105 news of total 6871 |
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- Coalindo Energy - Indonesia
- Baramulti Group, Indonesia
- GAC Shipping (India) Pvt Ltd
- Karaikal Port Pvt Ltd - India
- Global Business Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Oldendorff Carriers - Singapore
- Planning Commission, India
- Port Waratah Coal Services - Australia
- Coastal Gujarat Power Limited - India
- Maheswari Brothers Coal Limited - India
- Sree Jayajothi Cements Limited - India
- Kepco SPC Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- Uttam Galva Steels Limited - India
- Ind-Barath Power Infra Limited - India
- Global Coal Blending Company Limited - Australia
- Eastern Coal Council - USA
- SMC Global Power, Philippines
- The Treasury - Australian Government
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Goldman Sachs - Singapore
- Bhushan Steel Limited - India
- Central Electricity Authority - India
- GN Power Mariveles Coal Plant, Philippines
- Mercuria Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Alfred C Toepfer International GmbH - Germany
- GMR Energy Limited - India
- Merrill Lynch Commodities Europe
- Intertek Mineral Services - Indonesia
- Toyota Tsusho Corporation, Japan
- Latin American Coal - Colombia
- New Zealand Coal & Carbon
- Africa Commodities Group - South Africa
- Independent Power Producers Association of India
- Krishnapatnam Port Company Ltd. - India
- Grasim Industreis Ltd - India
- Sojitz Corporation - Japan
- Wood Mackenzie - Singapore
- Aboitiz Power Corporation - Philippines
- Ministry of Transport, Egypt
- Ambuja Cements Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- ICICI Bank Limited - India
- Heidelberg Cement - Germany
- Wilmar Investment Holdings
- PetroVietnam Power Coal Import and Supply Company
- Billiton Holdings Pty Ltd - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Romanian Commodities Exchange
- Mintek Dendrill Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Australian Commodity Traders Exchange
- CIMB Investment Bank - Malaysia
- Bharathi Cement Corporation - India
- Ministry of Finance - Indonesia
- Marubeni Corporation - India
- Attock Cement Pakistan Limited
- Jaiprakash Power Ventures ltd
- Bukit Makmur.PT - Indonesia
- Edison Trading Spa - Italy
- Xindia Steels Limited - India
- Medco Energi Mining Internasional
- Renaissance Capital - South Africa
- Salva Resources Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Bhatia International Limited - India
- Miang Besar Coal Terminal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Aditya Birla Group - India
- Antam Resourcindo - Indonesia
- Star Paper Mills Limited - India
- Price Waterhouse Coopers - Russia
- VISA Power Limited - India
- Bulk Trading Sa - Switzerland
- Simpson Spence & Young - Indonesia
- Formosa Plastics Group - Taiwan
- The University of Queensland
- Larsen & Toubro Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Meenaskhi Energy Private Limited - India
- Standard Chartered Bank - UAE
- Kartika Selabumi Mining - Indonesia
- Madhucon Powers Ltd - India
- Pendopo Energi Batubara - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Trasteel International SA, Italy
- India Bulls Power Limited - India
- Petron Corporation, Philippines
- CNBM International Corporation - China
- Sinarmas Energy and Mining - Indonesia
- Manunggal Multi Energi - Indonesia
- Interocean Group of Companies - India
- Rashtriya Ispat Nigam Limited - India
- Riau Bara Harum - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- Rio Tinto Coal - Australia
- Vizag Seaport Private Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- TeaM Sual Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- Kapuas Tunggal Persada - Indonesia
- ASAPP Information Group - India
- IEA Clean Coal Centre - UK
- Posco Energy - South Korea
- Straits Asia Resources Limited - Singapore
- Parry Sugars Refinery, India
- Binh Thuan Hamico - Vietnam
- International Coal Ventures Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Kobexindo Tractors - Indoneisa
- Makarim & Taira - Indonesia
- Energy Development Corp, Philippines
- Timah Investasi Mineral - Indoneisa
- Parliament of New Zealand
- Lanco Infratech Ltd - India
- Anglo American - United Kingdom
- PTC India Limited - India
- Bukit Baiduri Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Semirara Mining Corp, Philippines
- Cement Manufacturers Association - India
- Kumho Petrochemical, South Korea
- Jindal Steel & Power Ltd - India
- Ministry of Mines - Canada
- Gujarat Mineral Development Corp Ltd - India
- Sical Logistics Limited - India
- Chamber of Mines of South Africa
- Sarangani Energy Corporation, Philippines
- Gujarat Sidhee Cement - India
- Kohat Cement Company Ltd. - Pakistan
- Meralco Power Generation, Philippines
- Indonesian Coal Mining Association
- Dalmia Cement Bharat India
- Indian Oil Corporation Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sakthi Sugars Limited - India
- Banpu Public Company Limited - Thailand
- Deloitte Consulting - India
- TNB Fuel Sdn Bhd - Malaysia
- Petrochimia International Co. Ltd.- Taiwan
- Bayan Resources Tbk. - Indonesia
- Samtan Co., Ltd - South Korea
- Orica Australia Pty. Ltd.
- Central Java Power - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Agrawal Coal Company - India
- Videocon Industries ltd - India
- White Energy Company Limited
- MS Steel International - UAE
- Tamil Nadu electricity Board
- Thiess Contractors Indonesia
- Iligan Light & Power Inc, Philippines
- South Luzon Thermal Energy Corporation
- SN Aboitiz Power Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Coal and Oil Company - UAE
- Malabar Cements Ltd - India
- Vedanta Resources Plc - India
- Thai Mozambique Logistica
- Indian Energy Exchange, India
- GVK Power & Infra Limited - India
- Mercator Lines Limited - India
- Electricity Authority, New Zealand
- Directorate General of MIneral and Coal - Indonesia
- Bhoruka Overseas - Indonesia
- Economic Council, Georgia
- Power Finance Corporation Ltd., India
- Cigading International Bulk Terminal - Indonesia
- Therma Luzon, Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indogreen Group - Indonesia
- Kideco Jaya Agung - Indonesia
- Altura Mining Limited, Indonesia
- SMG Consultants - Indonesia
- Bangladesh Power Developement Board
- Mjunction Services Limited - India
- Indo Tambangraya Megah - Indonesia
- Energy Link Ltd, New Zealand
- Kaltim Prima Coal - Indonesia
- Borneo Indobara - Indonesia
- Minerals Council of Australia
- Commonwealth Bank - Australia
- PowerSource Philippines DevCo
- Carbofer General Trading SA - India
- Indika Energy - Indonesia
- London Commodity Brokers - England
- Eastern Energy - Thailand
- Singapore Mercantile Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Orica Mining Services - Indonesia
- Savvy Resources Ltd - HongKong
- Siam City Cement PLC, Thailand
- PNOC Exploration Corporation - Philippines
- Essar Steel Hazira Ltd - India
- Georgia Ports Authority, United States
- Holcim Trading Pte Ltd - Singapore
- Barasentosa Lestari - Indonesia
- Metalloyd Limited - United Kingdom
- OPG Power Generation Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Siam City Cement - Thailand
- Global Green Power PLC Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Electricity Generating Authority of Thailand
- Australian Coal Association
- McConnell Dowell - Australia
- Sindya Power Generating Company Private Ltd
- Tata Chemicals Ltd - India
- San Jose City I Power Corp, Philippines
- Leighton Contractors Pty Ltd - Australia
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