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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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- IHS Mccloskey Coal Group - USA
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Intertek Mineral Services - Indonesia
- Jindal Steel & Power Ltd - India
- Pendopo Energi Batubara - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- PTC India Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Anglo American - United Kingdom
- Thiess Contractors Indonesia
- Orica Australia Pty. Ltd.
- ICICI Bank Limited - India
- CNBM International Corporation - China
- Directorate General of MIneral and Coal - Indonesia
- Siam City Cement - Thailand
- Lanco Infratech Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Merrill Lynch Commodities Europe
- IEA Clean Coal Centre - UK
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Dalmia Cement Bharat India
- Australian Commodity Traders Exchange
- Larsen & Toubro Limited - India
- Manunggal Multi Energi - Indonesia
- Meralco Power Generation, Philippines
- Indika Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Petron Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Attock Cement Pakistan Limited
- Rashtriya Ispat Nigam Limited - India
- London Commodity Brokers - England
- Bukit Baiduri Energy - Indonesia
- Romanian Commodities Exchange
- Kalimantan Lumbung Energi - Indonesia
- Georgia Ports Authority, United States
- Meenaskhi Energy Private Limited - India
- Central Java Power - Indonesia
- Gujarat Sidhee Cement - India
- Indian Oil Corporation Limited
- The Treasury - Australian Government
- Alfred C Toepfer International GmbH - Germany
- Cement Manufacturers Association - India
- Power Finance Corporation Ltd., India
- Aditya Birla Group - India
- ASAPP Information Group - India
- Tamil Nadu electricity Board
- Leighton Contractors Pty Ltd - Australia
- Mjunction Services Limited - India
- Timah Investasi Mineral - Indoneisa
- McConnell Dowell - Australia
- Simpson Spence & Young - Indonesia
- Carbofer General Trading SA - India
- Therma Luzon, Inc, Philippines
- Bhushan Steel Limited - India
- Aboitiz Power Corporation - Philippines
- Banpu Public Company Limited - Thailand
- Parry Sugars Refinery, India
- GMR Energy Limited - India
- Riau Bara Harum - Indonesia
- Coal and Oil Company - UAE
- Coastal Gujarat Power Limited - India
- Makarim & Taira - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Borneo Indobara - Indonesia
- Rio Tinto Coal - Australia
- LBH Netherlands Bv - Netherlands
- San Jose City I Power Corp, Philippines
- Medco Energi Mining Internasional
- New Zealand Coal & Carbon
- International Coal Ventures Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Antam Resourcindo - Indonesia
- Salva Resources Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Marubeni Corporation - India
- Essar Steel Hazira Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Xindia Steels Limited - India
- Agrawal Coal Company - India
- Petrochimia International Co. Ltd.- Taiwan
- Energy Development Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Electricity Generating Authority of Thailand
- VISA Power Limited - India
- Bukit Makmur.PT - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Madhucon Powers Ltd - India
- Independent Power Producers Association of India
- Binh Thuan Hamico - Vietnam
- Vijayanagar Sugar Pvt Ltd - India
- Eastern Coal Council - USA
- Kartika Selabumi Mining - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Electricity Regulatory Commission - India
- TeaM Sual Corporation - Philippines
- Krishnapatnam Port Company Ltd. - India
- Straits Asia Resources Limited - Singapore
- Semirara Mining and Power Corporation, Philippines
- The University of Queensland
- Sakthi Sugars Limited - India
- Baramulti Group, Indonesia
- PowerSource Philippines DevCo
- Parliament of New Zealand
- Sical Logistics Limited - India
- Karaikal Port Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Wilmar Investment Holdings
- Latin American Coal - Colombia
- South Luzon Thermal Energy Corporation
- Vizag Seaport Private Limited - India
- Oldendorff Carriers - Singapore
- Savvy Resources Ltd - HongKong
- Asmin Koalindo Tuhup - Indonesia
- PNOC Exploration Corporation - Philippines
- Mintek Dendrill Indonesia
- Ceylon Electricity Board - Sri Lanka
- SMC Global Power, Philippines
- Kideco Jaya Agung - Indonesia
- India Bulls Power Limited - India
- Iligan Light & Power Inc, Philippines
- Star Paper Mills Limited - India
- Uttam Galva Steels Limited - India
- White Energy Company Limited
- Billiton Holdings Pty Ltd - Australia
- Jaiprakash Power Ventures ltd
- Orica Mining Services - Indonesia
- Price Waterhouse Coopers - Russia
- Bhatia International Limited - India
- Ministry of Finance - Indonesia
- Edison Trading Spa - Italy
- Kepco SPC Power Corporation, Philippines
- MS Steel International - UAE
- Deloitte Consulting - India
- Siam City Cement PLC, Thailand
- Australian Coal Association
- Kumho Petrochemical, South Korea
- Planning Commission, India
- Neyveli Lignite Corporation Ltd, - India
- Port Waratah Coal Services - Australia
- Economic Council, Georgia
- Malabar Cements Ltd - India
- Chettinad Cement Corporation Ltd - India
- Goldman Sachs - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Singapore Mercantile Exchange
- Renaissance Capital - South Africa
- Coalindo Energy - Indonesia
- Indonesian Coal Mining Association
- The State Trading Corporation of India Ltd
- European Bulk Services B.V. - Netherlands
- Formosa Plastics Group - Taiwan
- SMG Consultants - Indonesia
- Metalloyd Limited - United Kingdom
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bharathi Cement Corporation - India
- Samtan Co., Ltd - South Korea
- Ind-Barath Power Infra Limited - India
- OPG Power Generation Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Bulk Trading Sa - Switzerland
- Cigading International Bulk Terminal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- SN Aboitiz Power Inc, Philippines
- Ministry of Transport, Egypt
- Central Electricity Authority - India
- Kaltim Prima Coal - Indonesia
- Sojitz Corporation - Japan
- Standard Chartered Bank - UAE
- Global Green Power PLC Corporation, Philippines
- Tata Chemicals Ltd - India
- Mercuria Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Bhoruka Overseas - Indonesia
- GAC Shipping (India) Pvt Ltd
- Indogreen Group - Indonesia
- Grasim Industreis Ltd - India
- Videocon Industries ltd - India
- Holcim Trading Pte Ltd - Singapore
- Electricity Authority, New Zealand
- Ministry of Mines - Canada
- Semirara Mining Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- GVK Power & Infra Limited - India
- Chamber of Mines of South Africa
- Trasteel International SA, Italy
- Heidelberg Cement - Germany
- Minerals Council of Australia
- GN Power Mariveles Coal Plant, Philippines
- Sarangani Energy Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Indian Energy Exchange, India
- Energy Link Ltd, New Zealand
- Bangladesh Power Developement Board
- Barasentosa Lestari - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Vedanta Resources Plc - India
- Global Coal Blending Company Limited - Australia
- Ambuja Cements Ltd - India
- Commonwealth Bank - Australia
- Posco Energy - South Korea
- Globalindo Alam Lestari - Indonesia
- Sindya Power Generating Company Private Ltd
- Wood Mackenzie - Singapore
- Toyota Tsusho Corporation, Japan
- Mercator Lines Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Altura Mining Limited, Indonesia
- Thai Mozambique Logistica
- Global Business Power Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Eastern Energy - Thailand
- Kobexindo Tractors - Indoneisa
- Africa Commodities Group - South Africa
- Interocean Group of Companies - India
- Directorate Of Revenue Intelligence - India
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