While gas markets are currently well supplied, the transformation of natural gas markets from regional systems to more globalized and interdependent markets is creating new security challenges, according to the International Energy Agency’s latest assessment of global gas security.
The IEA’s second
Global Gas Security Review analyzes recent gas balancing issues and risks with related policy developments linked to security of supply – including the stressed situations in natural gas and power markets experienced by several southern Europe countries in the winter of 2016-2017; the diplomatic tensions between Qatar and some of its neighboring countries; and the supply risks posed by recent hurricanes on the United States energy system.
The report details how importing countries in mature and well-interconnected markets can still experience unexpected shocks that put strong pressure on the market. Even in the current low-price environment, suppliers are still exposed to low-probability but high-impact events that could have potentially serious consequences for global gas supplies.
“As recent events demonstrated, the security of natural gas supplies cannot be taken for granted even with the current low price environment and oversupplied market,” said
Fatih Birol, the IEA’s executive director. “From cold spells in southern Europe, to hurricanes in the Gulf of Mexico, to diplomatic tensions among Gulf countries, energy security is impossible to ignore.”
The IEA published its first review of global gas security last year to identify and analyse critical elements of the market, such as physical production flexibility of the LNG infrastructure, and flexibility in contractual arrangements. This year’s edition updates these metrics and shows a continuing improvement in supply availability and contractual flexibility, which are expected to grow in the near future, along with diversification of market participants.
LNG contract flexibility appears as an important determinant of the resiliency of the global gas system. The report’s updated analysis of new signed contracts shows clear evidence of contractual structures becoming less rigid, a trend evidenced by the growing share of flexible destination contracts, as well as the decrease in contracts’ average duration.
The report also looks at how contract flexibility will develop over the next five years. Looking forward, the pool of legacy export contracts with fixed destination and long duration can be expected to shrink as these expire, and be replaced by more flexible contracts. The development of US exports emerges as a major source of additional contractual flexibility. Global portfolio players would play an increasing role and provide additional flexibility from their currently open selling positions.
To improve the risk assessment of importing countries, the report also introduces a new typology of LNG buyers as a tool to measure market exposure, and related security of supply issues. This typology also suggests a way to measure future LNG market evolution.
Chinese shipyard Hudong-Zhonghua Shipbuilding delivered the Pan Asia LNG carrier the first of four vessels set to transport liquefied natural gas from the QCLNG project in Australia to China.
The 174,000-cbm vessel is built for joint investors, CNOOC Energy Technology & Services Limited, Teekay, BW Group and China LNG Shipping.
The vessel completed sea trials in June this year with the naming ceremony taking place at the end of September.
The three remaining LNG carriers, Pan Americas, Pan Europe and Pan Africa, currently under construction at the shipyard are scheduled for delivery by 2019.
CNOOC that owns a 50 percent equity stake in QCLNG’s Train 1 has a deal in place for the supply of 3.6 mtpa for a period of 20 years.
All four vessels will operate under 20-year time-charter deals with Methane Services Limited, a former unit of BG Group, now part of Shell.
Mitsui O.S.K. Lines of Japan has last week taken the delivery of the world’s largest floating storage and regasification unit (FSRU).
To remind, the MOL FSRU Challenger has been officially named in a recent
ceremony at the Okpo shipyard of Daewoo Shipbuilding & Marine Engineering in South Korea.
The vessel is the first FSRU that Japan’s MOL has built independently and will own and operate.
MOL FSRU Challenger has been delivered to its owner on October 10, MOL LNG Transport (Europe) Ltd, a unit of the Japanese shipowner that will manage the vessel said in a brief statement via its social media channels.
MOL said previously that the FSRU will provide storage and regasification services to a project in Turkey after delivery during October with operation expected to start within 2017.
The FSRU has an LNG storage capacity of 263,000 cubic meters and has re-shipment and gas transfer capabilities. The unit will have a regas discharge capacity of 540 million cubic meters per day.
Its specifications allow for the re-export of LNG and supply of LNG to neighboring regions where the vessel is located.
South Korean shipyard Samsung Heavy Industries, on Thursday received an order to build a floating storage and regasification unit (FSRU) for a consortium of Marubeni, Sojitz, and Pertamina.
The order for the FSRU with a 170,000 cubic meter storage capacity has been valued at 250 billion South Korean won ($220.9 million), SHI said in its statement.
The unit will feature Samsung Heavy’s in-house developed glycol LNG regasification system unveiled to shipowners in September.
Speaking of the order, a Samsung Heavy Industries representative said the showcase of the new LNG regasification system led to its application.
https://www.lngworldnews.com/
