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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, 28 June 24
INDIAN POWER STATIONS STOCKED WITH BUMPER COAL SUPPLY AS TRANSPORT WOES EASE - BUSINESS STANDARD
Even as power demand has touched a historic high of 250 gigawatts (Gw) amid sweltering heat this June, India’s power stations are stocked wit ...
Friday, 28 June 24
INDIA'S CY23 COAL USE LARGER THAN NORTH AMERICA, EUROPE COMBINED - THE HINDU
For the first time, India’s coal consumption surpassed that of North America and Europe combined in the calendar year 2023, said Energy Insti ...
Monday, 24 June 24
PLN'S FINANCIAL SUSTAINABILITY RESTS ON ACCELERATED COAL RETIREMENT AND RENEWABLES DEPLOYMENT - MUTYA YUSTIKA
On 28 May 2024, Indonesia’s national electricity utility, PT Perusahaan Listrik Negara (PLN), released its financial report for 2023. Althoug ...
Monday, 24 June 24
INDIA'S COAL-BASED POWER DEMAND AT ALL-TIME HIGH, GOVERNMENT SAYS - REUTERS
India’s demand for coal-based power has risen by 7.3% this fiscal year to an all-time high, the government said in a statement on Wednesday.
...
Monday, 24 June 24
CHINA'S COAL INDUSTRY TURNS GREENER THROUGH INNOVATIVE APPROACHES - PEOPLE'S DAILY
At an opencast mine operated by Inner Mongolia Pingzhuang Coal Group Co. Ltd., a subsidiary of CHN Energy Investment Group (CHN Energy), a 14-meter ...
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Showing 11 to 15 news of total 6871 |
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- GAC Shipping (India) Pvt Ltd
- Central Java Power - Indonesia
- Semirara Mining Corp, Philippines
- Maheswari Brothers Coal Limited - India
- White Energy Company Limited
- Iligan Light & Power Inc, Philippines
- Minerals Council of Australia
- Indo Tambangraya Megah - Indonesia
- Bangladesh Power Developement Board
- Global Business Power Corporation, Philippines
- Oldendorff Carriers - Singapore
- Eastern Coal Council - USA
- The State Trading Corporation of India Ltd
- Meenaskhi Energy Private Limited - India
- Kartika Selabumi Mining - Indonesia
- Bukit Baiduri Energy - Indonesia
- Coalindo Energy - Indonesia
- Marubeni Corporation - India
- Manunggal Multi Energi - Indonesia
- Electricity Generating Authority of Thailand
- Economic Council, Georgia
- South Luzon Thermal Energy Corporation
- Jaiprakash Power Ventures ltd
- Mercuria Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Deloitte Consulting - India
- PetroVietnam Power Coal Import and Supply Company
- Kepco SPC Power Corporation, Philippines
- Madhucon Powers Ltd - India
- McConnell Dowell - Australia
- Formosa Plastics Group - Taiwan
- IEA Clean Coal Centre - UK
- Krishnapatnam Port Company Ltd. - India
- Rashtriya Ispat Nigam Limited - India
- SN Aboitiz Power Inc, Philippines
- Coastal Gujarat Power Limited - India
- Aboitiz Power Corporation - Philippines
- Wood Mackenzie - Singapore
- Australian Coal Association
- Orica Australia Pty. Ltd.
- Mintek Dendrill Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Timah Investasi Mineral - Indoneisa
- Wilmar Investment Holdings
- Global Green Power PLC Corporation, Philippines
- Edison Trading Spa - Italy
- Kumho Petrochemical, South Korea
- Bhatia International Limited - India
- Xindia Steels Limited - India
- Therma Luzon, Inc, Philippines
- Borneo Indobara - Indonesia
- The University of Queensland
- Merrill Lynch Commodities Europe
- Gujarat Sidhee Cement - India
- TeaM Sual Corporation - Philippines
- Energy Link Ltd, New Zealand
- Samtan Co., Ltd - South Korea
- Alfred C Toepfer International GmbH - Germany
- Chettinad Cement Corporation Ltd - India
- Baramulti Group, Indonesia
- Ministry of Mines - Canada
- Independent Power Producers Association of India
- Globalindo Alam Lestari - Indonesia
- Siam City Cement - Thailand
- Banpu Public Company Limited - Thailand
- Tata Chemicals Ltd - India
- Lanco Infratech Ltd - India
- Cement Manufacturers Association - India
- Sindya Power Generating Company Private Ltd
- Dalmia Cement Bharat India
- Energy Development Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Heidelberg Cement - Germany
- Bukit Makmur.PT - Indonesia
- Vizag Seaport Private Limited - India
- PTC India Limited - India
- Gujarat Electricity Regulatory Commission - India
- The Treasury - Australian Government
- Medco Energi Mining Internasional
- Simpson Spence & Young - Indonesia
- Orica Mining Services - Indonesia
- IHS Mccloskey Coal Group - USA
- Coal and Oil Company - UAE
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Africa Commodities Group - South Africa
- Interocean Group of Companies - India
- Star Paper Mills Limited - India
- Sojitz Corporation - Japan
- Directorate Of Revenue Intelligence - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- ASAPP Information Group - India
- ICICI Bank Limited - India
- Carbofer General Trading SA - India
- CNBM International Corporation - China
- AsiaOL BioFuels Corp., Philippines
- Salva Resources Pvt Ltd - India
- Indika Energy - Indonesia
- Power Finance Corporation Ltd., India
- Mercator Lines Limited - India
- Kaltim Prima Coal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Sree Jayajothi Cements Limited - India
- Sical Logistics Limited - India
- New Zealand Coal & Carbon
- Port Waratah Coal Services - Australia
- Straits Asia Resources Limited - Singapore
- Grasim Industreis Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Goldman Sachs - Singapore
- Toyota Tsusho Corporation, Japan
- Anglo American - United Kingdom
- Thai Mozambique Logistica
- Georgia Ports Authority, United States
- San Jose City I Power Corp, Philippines
- Binh Thuan Hamico - Vietnam
- Parry Sugars Refinery, India
- CIMB Investment Bank - Malaysia
- SMG Consultants - Indonesia
- Indian Energy Exchange, India
- Jindal Steel & Power Ltd - India
- Vedanta Resources Plc - India
- GN Power Mariveles Coal Plant, Philippines
- Attock Cement Pakistan Limited
- PNOC Exploration Corporation - Philippines
- Standard Chartered Bank - UAE
- Leighton Contractors Pty Ltd - Australia
- Global Coal Blending Company Limited - Australia
- Ceylon Electricity Board - Sri Lanka
- Sarangani Energy Corporation, Philippines
- Electricity Authority, New Zealand
- Bayan Resources Tbk. - Indonesia
- India Bulls Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Rio Tinto Coal - Australia
- VISA Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- PowerSource Philippines DevCo
- Uttam Galva Steels Limited - India
- Indian Oil Corporation Limited
- Kalimantan Lumbung Energi - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Billiton Holdings Pty Ltd - Australia
- SMC Global Power, Philippines
- Kideco Jaya Agung - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Cigading International Bulk Terminal - Indonesia
- Indonesian Coal Mining Association
- Indogreen Group - Indonesia
- OPG Power Generation Pvt Ltd - India
- Thiess Contractors Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Renaissance Capital - South Africa
- Bharathi Cement Corporation - India
- GVK Power & Infra Limited - India
- Tamil Nadu electricity Board
- Ministry of Finance - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Central Electricity Authority - India
- Essar Steel Hazira Ltd - India
- Parliament of New Zealand
- Commonwealth Bank - Australia
- Riau Bara Harum - Indonesia
- Pendopo Energi Batubara - Indonesia
- London Commodity Brokers - England
- Mjunction Services Limited - India
- Aditya Birla Group - India
- Sinarmas Energy and Mining - Indonesia
- International Coal Ventures Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Price Waterhouse Coopers - Russia
- Pipit Mutiara Jaya. PT, Indonesia
- Altura Mining Limited, Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Petron Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Trasteel International SA, Italy
- Larsen & Toubro Limited - India
- Singapore Mercantile Exchange
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- European Bulk Services B.V. - Netherlands
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Agrawal Coal Company - India
- Australian Commodity Traders Exchange
- Videocon Industries ltd - India
- Siam City Cement PLC, Thailand
- Metalloyd Limited - United Kingdom
- Bukit Asam (Persero) Tbk - Indonesia
- Planning Commission, India
- Romanian Commodities Exchange
- Chamber of Mines of South Africa
- Meralco Power Generation, Philippines
- Malabar Cements Ltd - India
- Eastern Energy - Thailand
- Latin American Coal - Colombia
- Bhushan Steel Limited - India
- Bhoruka Overseas - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Ambuja Cements Ltd - India
- Barasentosa Lestari - Indonesia
- GMR Energy Limited - India
- Karaikal Port Pvt Ltd - India
- Posco Energy - South Korea
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Mineral Development Corp Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- MS Steel International - UAE
- Bulk Trading Sa - Switzerland
- Kobexindo Tractors - Indoneisa
- Ministry of Transport, Egypt
- Antam Resourcindo - Indonesia
- LBH Netherlands Bv - Netherlands
- Makarim & Taira - Indonesia
- Sakthi Sugars Limited - India
- Intertek Mineral Services - Indonesia
- Directorate General of MIneral and Coal - Indonesia
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