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Monday, 28 September 20
NEW LNG PROJECTS - ALL DRESSED UP AND NO PLACE TO GO - WOOD MACKENZIE
 It was meant to be another boom year. After a record 70 mmtpa of new LNG capacity was sanctioned in 2019, at least as much capacity was lined up for final approval this year and next. Instead of a feast of new projects, there’s a famine.
Developers, cash-strapped by the collapse in oil and gas prices, have pushed back on capital-intensive pre-FID LNG projects. Massimo Di-Odoardo, Global Head of Gas Analysis, identifies three other factors.
First, the outlook for LNG demand. We are bullish, anticipating LNG demand doubles over the next 20 years, driven by Asia’s economic growth and increasing penetration – particularly where policy supports gas over coal. Our view isn’t dissimilar to Shell’s that the LNG market grows at four times the rate of oil demand in that period.
Our base case forecasts global LNG demand grows by over 50% from 370 mmtpa in 2020 to 550 mmtpa by 2030. Allowing for projects already under development, there’s a supply gap of 102 mmtpa to be met by pre-FID projects which need to be onstream by the end of this decade.
But there are risks to our demand view. Gas demand has held up relatively well through the Covid-19 downturn, certainly compared with oil. The pace and shape of economic recovery though is far from clear and so, too, LNG demand growth in the next few years. Longer term, intensifying interest from policy makers and investors in new technologies, including green hydrogen and CCUS, casts doubt on the sustainability of demand growth.
Second, the rising influence of spot LNG prices on project economics. The traditional oil price-linked contracts and firm offtake agreements that have supported the financing of new projects are fading into history. Many projects today rely on equity lifting, with joint venture partners taking the LNG into their own portfolios. The attraction is flexible volumes that can be sold to any buyer and capture the best price.
But it also means rising exposure to spot LNG prices. Japan spot LNG prices have ranged from over US$11/mmbtu in 2018 to as low as US$2.10/mmbtu early this year, underlining the volatility and risk in running an open spot gas position.
Third, scrutiny of carbon intensity. ESG has leapt to the top of the agenda for LNG producers and buyers alike. LNG’s track record on emissions isn’t good. Inert gases including CO2 must be removed before liquefaction and typically are vented into the atmosphere. Liquefaction itself is energy intense, usually fuelled by produced gas.
In future, carbon footprint will be one factor determining how attractive an LNG project is to developers and buyers, and will influence the price it can command. New projects will have to be squeaky clean: developers will seek to electrify the liquefaction process (renewables where possible) and capture waste gases. Project economics will also be affected by carbon price assumptions.
Which pre-FID projects will fill the 102-mmtpa supply gap in 2030? First up are the mega-trains of Qatar’s low unit cost North Field East, which should be sanctioned in the coming months. This project on its own will absorb 32 mmtpa, negating the need for new supply from other sources until the late 2020s and pushing out FIDs for projects elsewhere by two to three years. Qatar believes it has another 16 mmtpa up its sleeve at North Field South that it could also develop.
So contestable demand for the rest is 70 mmtpa at best in 2030. A dozen or more projects from PNG, Australia, Mozambique, West Africa, Russia and North America, with combined capacity of more than 150 mmtpa, will be vying for their share.
The costs of integrated projects are discounted at 12%. Segmented projects – at 10% discount rate for LNG plant, 15% discount rate for upstream. Taxes are included. US Upstream assumption = 115% X Henry Hub (US$3.29/mmbtu – equivalent to average of long term H1 2020 Henry Hub forecast between 2026 and 2035) *The reference prices indicated by company logos indicate the long term prices used by companies for the purposes of valuing their assets. Assumed to be in Real terms (2020) from 2023.
How can prospective developers gain a better understanding to help support their big decisions? Wood Mackenzie’s new Global Gas Model Next Generation allows investors to analyse global gas market fundamentals and price formation; how LNG cash cost economics, coal-to-gas switching and shipping costs shape price differentials between the US, Europe and Asia markets; and how the cost stack for pre-FID projects evolves over time to meet any particular demand scenario. The model provides a framework to understand a project’s profitability under current market uncertainties.
We’ll be discussing LNG market dynamics, the investment outlook and lifecycle emissions for LNG projects at our Energy Summit (6 to 8 October 2020).
Source: Wood Mackenzie
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Friday, 04 September 20
KOMIPO INVITED BIDS FOR AUSTRALIAN MIN 5,700 NCV COAL FOR NOVEMBER
COALspot.com: Korea Midland Power Co. Ltd, has issued an International tender for 260,000 MT Min.5,700 kcal/kg NCV coal November, 2020 loading. Acc ...
Thursday, 03 September 20
BRINGING SERVICES OF FTCCI CLOSER TO THE EXPORTERS AT GMR AIR CARGO COMPLEX AT SHAMSHABAD
Press Release: “FTCCI Trade Facilitation Services at your doorstep now” says J.S. Chandrashekar, IRS., Principal Commissioner of Custom ...
Thursday, 03 September 20
CHINA'S BENCHMARK POWER COAL PRICE REMAINS FLAT - XINHUA
China’s benchmark power coal price remained flat during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
Wednesday, 02 September 20
COAL PRODUCTION FALLS 7% IN APR-AUG; OFF TAKE DIPS 13.4% - FINANCIAL EXPRESS
In the month of August coal off take also increased 9.3% y-o-y to 44.34 MT as compared with 40.57 MT in the same period last year.
C ...
Wednesday, 02 September 20
MARKET INSIGHT - INTERMODAL
The imminent global shift towards eco-friendliness has caused divide among the shipping community because there is no outlined, clear-cut way via w ...
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- Energy Development Corp, Philippines
- Bangladesh Power Developement Board
- Kumho Petrochemical, South Korea
- Siam City Cement PLC, Thailand
- Gujarat Electricity Regulatory Commission - India
- Global Coal Blending Company Limited - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- CNBM International Corporation - China
- Gujarat Mineral Development Corp Ltd - India
- Trasteel International SA, Italy
- Semirara Mining and Power Corporation, Philippines
- Dalmia Cement Bharat India
- Antam Resourcindo - Indonesia
- Medco Energi Mining Internasional
- Larsen & Toubro Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Toyota Tsusho Corporation, Japan
- GMR Energy Limited - India
- Bhushan Steel Limited - India
- Lanco Infratech Ltd - India
- Bhatia International Limited - India
- Global Business Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- TNB Fuel Sdn Bhd - Malaysia
- Banpu Public Company Limited - Thailand
- Madhucon Powers Ltd - India
- McConnell Dowell - Australia
- Mercator Lines Limited - India
- Ind-Barath Power Infra Limited - India
- ASAPP Information Group - India
- London Commodity Brokers - England
- European Bulk Services B.V. - Netherlands
- Australian Commodity Traders Exchange
- Wilmar Investment Holdings
- Kohat Cement Company Ltd. - Pakistan
- Miang Besar Coal Terminal - Indonesia
- Independent Power Producers Association of India
- Bukit Asam (Persero) Tbk - Indonesia
- Kaltim Prima Coal - Indonesia
- Baramulti Group, Indonesia
- Ministry of Mines - Canada
- Central Electricity Authority - India
- Kepco SPC Power Corporation, Philippines
- Thiess Contractors Indonesia
- Posco Energy - South Korea
- Globalindo Alam Lestari - Indonesia
- Essar Steel Hazira Ltd - India
- International Coal Ventures Pvt Ltd - India
- Heidelberg Cement - Germany
- Kideco Jaya Agung - Indonesia
- Cement Manufacturers Association - India
- Minerals Council of Australia
- Manunggal Multi Energi - Indonesia
- Semirara Mining Corp, Philippines
- Cigading International Bulk Terminal - Indonesia
- Australian Coal Association
- South Luzon Thermal Energy Corporation
- Bharathi Cement Corporation - India
- Renaissance Capital - South Africa
- Indonesian Coal Mining Association
- Xindia Steels Limited - India
- Sojitz Corporation - Japan
- Power Finance Corporation Ltd., India
- Planning Commission, India
- Aboitiz Power Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Price Waterhouse Coopers - Russia
- CIMB Investment Bank - Malaysia
- Pipit Mutiara Jaya. PT, Indonesia
- OPG Power Generation Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Riau Bara Harum - Indonesia
- Indo Tambangraya Megah - Indonesia
- New Zealand Coal & Carbon
- Samtan Co., Ltd - South Korea
- Port Waratah Coal Services - Australia
- Simpson Spence & Young - Indonesia
- Mercuria Energy - Indonesia
- Mjunction Services Limited - India
- VISA Power Limited - India
- Intertek Mineral Services - Indonesia
- India Bulls Power Limited - India
- Karaikal Port Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Videocon Industries ltd - India
- PowerSource Philippines DevCo
- Kartika Selabumi Mining - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Parliament of New Zealand
- Carbofer General Trading SA - India
- Chamber of Mines of South Africa
- Indika Energy - Indonesia
- Indogreen Group - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sical Logistics Limited - India
- PTC India Limited - India
- Merrill Lynch Commodities Europe
- Bukit Baiduri Energy - Indonesia
- Romanian Commodities Exchange
- Kobexindo Tractors - Indoneisa
- SMG Consultants - Indonesia
- Petron Corporation, Philippines
- MS Steel International - UAE
- Sinarmas Energy and Mining - Indonesia
- San Jose City I Power Corp, Philippines
- The Treasury - Australian Government
- Anglo American - United Kingdom
- Directorate General of MIneral and Coal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Billiton Holdings Pty Ltd - Australia
- Vedanta Resources Plc - India
- Bukit Makmur.PT - Indonesia
- Metalloyd Limited - United Kingdom
- Savvy Resources Ltd - HongKong
- IEA Clean Coal Centre - UK
- Timah Investasi Mineral - Indoneisa
- The University of Queensland
- Aditya Birla Group - India
- Coalindo Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Global Green Power PLC Corporation, Philippines
- Tamil Nadu electricity Board
- Eastern Coal Council - USA
- Attock Cement Pakistan Limited
- Sree Jayajothi Cements Limited - India
- Goldman Sachs - Singapore
- Tata Chemicals Ltd - India
- Oldendorff Carriers - Singapore
- White Energy Company Limited
- ICICI Bank Limited - India
- Sakthi Sugars Limited - India
- TeaM Sual Corporation - Philippines
- Chettinad Cement Corporation Ltd - India
- Deloitte Consulting - India
- Sindya Power Generating Company Private Ltd
- Salva Resources Pvt Ltd - India
- Edison Trading Spa - Italy
- Bhoruka Overseas - Indonesia
- Vizag Seaport Private Limited - India
- Ceylon Electricity Board - Sri Lanka
- Maheswari Brothers Coal Limited - India
- Rashtriya Ispat Nigam Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Finance - Indonesia
- Bayan Resources Tbk. - Indonesia
- Therma Luzon, Inc, Philippines
- Energy Link Ltd, New Zealand
- Malabar Cements Ltd - India
- Orica Australia Pty. Ltd.
- Ambuja Cements Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Uttam Galva Steels Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Borneo Indobara - Indonesia
- IHS Mccloskey Coal Group - USA
- GAC Shipping (India) Pvt Ltd
- GVK Power & Infra Limited - India
- Directorate Of Revenue Intelligence - India
- Bulk Trading Sa - Switzerland
- Indian Oil Corporation Limited
- SMC Global Power, Philippines
- Electricity Authority, New Zealand
- Central Java Power - Indonesia
- Economic Council, Georgia
- Coal and Oil Company - UAE
- AsiaOL BioFuels Corp., Philippines
- Grasim Industreis Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Jindal Steel & Power Ltd - India
- Georgia Ports Authority, United States
- Coastal Gujarat Power Limited - India
- Barasentosa Lestari - Indonesia
- Marubeni Corporation - India
- Ministry of Transport, Egypt
- Singapore Mercantile Exchange
- Pendopo Energi Batubara - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- PNOC Exploration Corporation - Philippines
- The State Trading Corporation of India Ltd
- SN Aboitiz Power Inc, Philippines
- Mintek Dendrill Indonesia
- Meralco Power Generation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Iligan Light & Power Inc, Philippines
- Latin American Coal - Colombia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Neyveli Lignite Corporation Ltd, - India
- Holcim Trading Pte Ltd - Singapore
- Gujarat Sidhee Cement - India
- Electricity Generating Authority of Thailand
- Agrawal Coal Company - India
- Eastern Energy - Thailand
- Indian Energy Exchange, India
- Bahari Cakrawala Sebuku - Indonesia
- Africa Commodities Group - South Africa
- Straits Asia Resources Limited - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Orica Mining Services - Indonesia
- Parry Sugars Refinery, India
- Rio Tinto Coal - Australia
- Siam City Cement - Thailand
- Formosa Plastics Group - Taiwan
- Makarim & Taira - Indonesia
- Wood Mackenzie - Singapore
- Standard Chartered Bank - UAE
- Star Paper Mills Limited - India
- Commonwealth Bank - Australia
- Asmin Koalindo Tuhup - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Interocean Group of Companies - India
- Jaiprakash Power Ventures ltd
- Thai Mozambique Logistica
- Altura Mining Limited, Indonesia
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