LNG macro analysis, page-2015

There’s a healthy queue of companies heavily reliant upon the Chinese to help sanction their projects;

The Chinese Government has to give authority to their state owned companies when allowed to move from negotiations to completion with US projects. 3 GV responses referencing this notion;

Sydney Morning Herald report, Jun 27 2018 - Greg Vesey, its chief executive, said: " We were in a meeting with a potential customer, who said they weren't going to make a move until “ it has been clarified what is happening with these tariffs."

Bloomberg report, Jun 27 2018 - Trump administration’s trade dispute with China is delaying one US company’s bid to sign long-term natural gas export deals. The developer is in “advanced” discussions to sign 20-year deals for its US$4.35 billion (RM17.4 billion) Magnolia LNG export project in Louisiana, but a number of parties have indicated they’re waiting to see how the tensions shake out before making final decisions, Vesey said in an interview in Washington on Monday.“ We’re kind of sitting back and waiting for this whole tariff and trade war thing to settle down,” for potential buyers, he said. “ Has that affected the timing of their decision? Absolutely.” Still, negotiations are ongoing for Magnolia. China and other Asian buyers may contract 50% to 70% of the proposed terminal’s capacity, with the ability to export eight million tonnes per year of LNG, he said.


China to see gas demand surge in 2019

Reuters is reporting that China’s natural gas demand is expected to grow by 14% in 2019.

This forecast comes as the Chinese government continues to make a significant push to increase gas consumption, and move away from coal.

Industry sources have stated this effort will require the importation of huge quantities of LNG, however it has been suggested that this spike in demand will not be enough to completely absorb the latest glut of supply.

According to the chairwoman of Beijing Gas Group, Li Yalan, China’s gas demand in 2019 will grow by 30 billion m³ to 40 billion m³.

The National Development and Reform Commission (NDRC) has said this growth represents as much as a 14% increase in China’s total gas consumption in 2018 (280 billion m³). The country’s consumption growth from 2017 to 2018 was 18%.


China gas demand to surge in 2019, but maybe not enough to sop up LNG glut

China’s natural gas demand is set to grow by 14 percent in 2019 amid a huge government push to spur consumption of the fuel, a senior industry executive said, requiring the nation to import huge amounts of liquefied natural gas (LNG).

Yet even China’s booming consumption may not soak up a large glut of LNG that has emerged across Asia and dragged spot prices for the fuel down by 60 percent over the past half-year.

China’s gas demand will expand by 30 billion to 40 billion cubic meters (bcm) this year, said Li Yalan, chairwoman of Beijing Gas Group, main supplier to the Chinese capital, in an interview on Friday.

That would be an increase of as much as 14 percent from the 280 bcm of gas China consumed in 2018, according to data from the state economic planner, the National Development and Reform Commission (NDRC). It would also be slower than China’s 2018 demand surge of 18 percent.

The rising gas demand is a result of China’s ongoing policy to move households and industry from coal to gas, as well as economic stimulus that includes a value-added tax cut from April 1 and which is aimed at supporting industry growth.

Li said Beijing, one of the world’s biggest gas-burning cities, consumed a record 18.5 bcm of gas last year, up 14 percent from 2017.

“The broad direction is not going to change, which is to restructure the energy mix by increasing the share of natural gas,” Li told Reuters.

“What China needs to do is to connect the gas supplies with the demand nicely to ensure a smooth switch.”

Better state planning to ensure grid connections and to encourage energy companies to boost imports in advance helped China’s gas market, the world’s third-largest, to expand by a record 43 bcm last year, Li said.

The expansion came after a supply crunch over an unusually cold winter of 2017/18 as suppliers struggled to meet a demand surge that followed a policy to move millions of households to gas from coal.

“This year we’ll likely see the market growing between 30 and 40 bcm, which is a normal range,” said Li.

Although China’s domestic gas production is also rising fast, its 2018 growth of 7.5 percent cannot fully keep up with the nation’s expanding consumption.

www.lngindustry.com/liquid-natural-gas/08042019/china-to-see-gas-demand-surge-in-2019/


Eight key trends

Jenny Kelly, Gastech, UK, introduces the eight industry trends that will impact gas in the future energy landscape.

The next half century will perhaps present the world with its greatest and most challenging dilemma: how to provide a rapidly-expanding population with the affordable energy it needs, whilst reducing greenhouse gas (GHG) emissions to acceptable international legal limits and preventing hugely disruptive climate change.

By 2050, it is still estimated, even by the most optimistic forecasters, that renewable energy sources (including solar, wind and tidal) will still account for less than half of all required energy demand across all sectors.

Shifts from carbon-intensive fuels to cleaner, more efficient fuels are already occurring at an industrial scale, but primary fuel sources will still have a significant role to play as demand growth outpaces shifts from black to green energy. As the most abundant, yet lowest-carbon form of fossil fuel, natural gas is providing pragmatic solutions to policymakers seeking to deliver both climate change commitments and affordable, abundant energy to their people.

Given that energy consumption is set to expand by at least 25% by 2040, the natural gas and LNG industries are teetering on the threshold of an exciting new era of popularity. No single energy source can meet this rising level of consumption and the ‘dash for gas’ is set to continue as policymakers and end-users seek cleaner energy solutions to satisfy demand.

Natural gas will need to find its place in this ‘new energy reality’ and, while there is much to be positive about in terms of gas demand forecasts, it will be environmental policy decisions that dictate just how positive a demand trajectory we are likely to see.

Renewables growth will continue to place further pressure on the gas sector, but declines in the use of coal and oil as fuels will boost gas as the cleaner fossil fuel substitute.

We are also likely to see a continued and sustained growth in the demand for gas – particularly LNG – across Asia, which is still regarded as the most significant long-term growth market for gas to 2050.

Demands may remain fairly static or even decline in Europe, but global gas and LNG trading will continue to grow and flourish, ensuring that gas will play a significant and potentially-leading role in supplying the world’s energy needs in a post-2040 landscape.

www.lngindustry.com/liquid-natural-gas/08042019/eight-key-trends/

Increase in European gas prices raises Asian LNG prices

According to Reuters, an increase in European gas prices has raised Asian LNG spot prices for the first time since December.

Post-increase, spot prices for LNG cargo deliveries to Asia in May are now estimated to be US$4.50 per million Btu (a US$0.10 rise).

This rise in Asian spot prices has been attributed to an increase in gas prices in the UK and the Netherlands, in response to a decline in supply via pipeline from Norway.

www.lngindustry.com/liquid-natural-gas/08042019/increase-in-european-gas-prices-raises-asian-lng-prices/