The latest LNG industry news
In 2016, global LNG trade reached 263.6 MT, compared with 245.2 MT in 2015 (+18.4 MT). LNG now accounts for 30% of international gas trade vs 25% in 2000.
Opportunistic buying behaviour will likely ensure more competitive pricing and flexibility terms in sale and purchase agreements. However, and notwithstanding that the LNG market is in fact commoditising, the nature of the industry is still such that short-term gains can easily be undone by long-term short-sightedness.
The SGX LNG Index Group (“Sling”) is a series of indices created by Energy Market Company (“EMC”) and Singapore Exchange (“SGX”) to reflect the price of spot LNG cargoes at selected locations.
The growth of ‘LNG-to-power’, by which we mean the use of regasified LNG as a feedstock fuel for power generation, is largely attributable to a combination of economic, political and technical factors. Importantly, a number of integrated LNG-to-power projects under development are opting to utilise FSU or FSRU technology.
Portugal has a small internal market for consuming natural gas (we consume around 4-5 billions of cubic meters per year, roughly 1% of the European Union’s yearly consumption). However, our maritime geostrategic position and port infrastructure opens amazing possibilities for the country to become a vibrant trading LNG hub and a “service station” for future LNG vessels.
Due to the low oil price, weaker economic growth and structural change in overall energy intensity in the economy, China’s LNG demand dropped slightly in 2015, the first time since 2006. But we still believe there is huge potential for LNG demand growth in China considering its economic scale and population.
The LNG oversupply situation looks set to be sustained for longer and at a greater magnitude than previously thought likely
“I think of where we are today it’s actually surprisingly a reasonably balanced market, with supply and demand looking in balance this year.” Watch the interview with Andy Flower, Independent Consultant, Flower LNG
“In this current buyer market situation the Greenfield project is struggling to come online into the market. Because as you may be aware, low coal price means reducing the gas flow for the produce and oversupply capacity in the market means a low price.” Watch the Djohardi Angga Kusumah, Senior Vice-President Gas & Power, Pertamina here.
“At the moment there is a lot of LNG supply coming on the market. The market is more a buyers market. It’s expected to remain the same for some years.” Watch the interview with Geoffroy Hureau, Secretary General, Cedigaz here.
“There are 2 main lines of challenges. First is the whole low commitment to low carbon economy and that has a significant impact on the gas industry in general. But also, of course, on LNG. There is also an issue that has been raised about the sustainability of gas production that goes then in to […]
“I think if we start creating systematic shifts in demand then the global LNG business has a very promising future. At the moment there is a lot of gas swirling around and not enough demand so the pressure on us is demand creation above all else.” Watch the Philip Lambert, CEO, Lambert Energy Advisory interview […]
“If you look at even the last 3-4 years, the number of new entrants to the LNG industry and the number of new buyers, the number of new countries that are becoming involved.” Watch the full interview with Richard Nelson, Partner, King & Spalding here.
” I think the main issue now is that we’re really in a transition phase in this industry. The economic crisis has put a lot of pressure on pricing.” Watch the interview with Patrick Janssens, Vice President, Global Gas Solutions, ABS here.
“What we’re seeing this year and probably carrying forward in the next couple of years is that there is a change of landscape, especially on the buyers side.” Watch the full interview with Li Yao, CEO, SIA Energy here.
“The industry is clearly entering a period of evolution. We have growing supply. We have growing flexibility. We have growing liquidity; fragmentation of the LNG supply chain. We have diversification of markets; diversification of pricing. So it’s an exciting time to be in the LNG industry.” Watch the interview with Andrew Walker, VP Strategy, Cheniere […]
“In Jordan, 2 years ago, we didn’t have any percentage from renewable energy on our energy consumption. Nowadays if you’re talking about 2016, we have 5-6% from renewable energy.” Watch the interview with Amani Al Azzam, Secretary General, Ministry of Energy & Mineral Resources, Jordan here.
“The LNG industry is on the verge of a big revolution. It’s an opportunity for us now to capture the new demand that we known exists in many existing markets but also many new markets. “ Watch the interview with Martin Houston, Co-Founder, Tellurian Investments here.
“By 2020 we will have almost doubled production since 2013. The good thing is that it’s going to be very positive but there are questions due to the low oil price environment. The question is what is going to happen from 2020 onwards.” Watch the interview with Debbie Turner, Director, SSY Gas here.
“I would love to see many more countries move away from coal and oil for energy production and go towards LNG.” Watch the interview with David Colson, Commercial Vice-President, GTT here.
“The LNG industry has been growing numerous times over by expanding markets. Ultimately that’s the next step we need to take again.” Watch the Steven Miles & Jason Bennett, Baker Botts LLP interview here.
“The business environment is certainly much better than people predicted this time last year. There’s been a lot of new supply which a lot of people forecast but we’ve seen a really strong demand response as well.” Watch the interview with Steve Hill, Executive Vice President for Gas & Energy Marketing & Trading, Shell […]
“I think for next year the flood of US LNG should materialise. It was already predicted for this year but it was a little bit delayed. What the industry has to do to cope with that is to create new demand and further reduce the costs.” Watch the interview with Stefaan Adriaens, Commercial Manager, Gate terminal […]
“We had an opportunity at the time when we were designing a new ship to choose a new fuel. We know that there are new regulations coming and we really wanted to be able to future proof our vessel.” Click here to watch the interview with Tom Strang, VP, Maritime Affairs, Carnival Corp & PLC
“I think the industry is quite exciting right now. I think supply and demand is changing. I think the United States is going to play a very important role going forward.” Watch the Kathleen Eisbreener, Chairman & CEO at NextDecade interview here.
View the 2016 CWC World LNG Summit Post Event Summary. Including: Summit Highlights Companies Attending Delegate Snapshot
23 January 2017, London, Singapore: Tullett Prebon, one of the world’s leading interdealer brokers, is collaborating with Singapore Exchange (SGX) to develop a spot pricing index for the Middle East and Indian liquefied natural gas markets (LNG) to enhance price discovery and risk management in the region. Following industry consultation, the new index will provide […]
Buying and selling LNG is set to become more standardised in the next few years as greater volumes are shipped by an ever-widening pool of market players, executives from some of the world’s largest LNG-trading companies said at the CWC World LNG Summit last week.
LNG has a huge opportunity to become a key shipping fuel because of its abundant supply, environmental advantages and relatively stable price, experts in the gas and shipping industries have said.
Declining domestic demand is pushing Japanese and South Korean LNG buyers towards short-term and more flexible contracts, but these alone cannot support new export projects.
The sheer size of new shale discoveries in West Texas means producers could pay customers to take associated gas output and still make a profit from the oil production, according to an executive at LNG project developer NextDecade.
Senior executives from BP and Shell are optimistic about the future of global gas and LNG demand, as well as the industry’s ability to manage the new wave of demand growth.
Surplus product is encouraging sellers to consider diversifying into the floating regasification, small-scale and marine bunkering to boost demand
Martin Houston and Charif Souki’s new LNG-producing company Tellurian Investments is set to go public next month and quadruple its staff in 2017.
A small commissioning cargo has been lined up for a new LNG floating storage unit (FSU) in Malta.
Malaysian state producer also looking to make a move into
floating regasification and LNG bunkering
In this last edition of the year, we look back on key features of 2016 and how they may shape our future business.
Our LNG Distributed Production Solutions are designed to condition and liquefy natural gas and/or biogas right at the source.
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You’re speaking on ‘The Big Discussion’ on the future of gas at the CWC World LNG Summit in Barcelona this December, how do you see the role of gas in a low-carbon global economy? The trend towards a low carbon economy may have become an irreversible trend due to the convergence of factors including a) […]
As a global leader in LNG transportation, Nakilat has adopted the latest green technologies on-board to enhance operational efficiency and operate in an environmentally-responsible manner.
It is widely accepted that the world will be oversupplied with LNG for the rest of this decade. Overly-bullish expectations of Asian demand have not materialized and the approval of many new projects in the US and Australia have exacerbated this temporary glut.
We are seeing the emergence of ‘new’ LNG markets across South and South East Asia: Pakistan, Bangladesh, Sri Lanka, Myanmar, Philippines to name just a few. Other countries such as Singapore, Malaysia, Thailand, Indonesia have recently begun importing LNG through existing regasification terminal facilities, but are now looking to expand or develop new terminals.
In the short term, competition among contractors is one of the biggest factors in reducing costs but we know that won’t last forever.
Bargain Basement LNG Drive Import Boom. Low LNG prices have derailed plans for new liquefaction plants, but have triggered a boom in import plans. As global LNG industry leaders prepare to meet at the CWC World LNG Summit in Barcelona on December 12-15, Newbase takes a look at the key issues facing the sector. This […]
Deregulation is likely to have limited impact on long-term LNG demand. However, deregulation is creating uncertainty for the gas aggregators in the short-to-medium term, in relation to the market share they can secure. This will negatively impact investment decisions, which will have a knock-on effect of dampening demand growth.
Managing Director, Head of LNG, Origination & Structuring, EMEA – Bank of America Merrill Lynch
The LNG supply is growing fast. Australian projects are coming onstream, and the US Gulf of Mexico – which has the ambition of becoming one of the main LNG exporters worldwide – exported its first LNG earlier in 2016.
The flexibility of gas generation to support the renewables development and the environmental advantages of gas versus coal and oil are not being deployed successfully. Part of the problem has to do with the recent high prices of LNG as the linkage to oil caused the cost to skyrocket when went up in price.
Small scale has the potential to be a significant source of new demand in coming years. Applications such as
bunkering, motor fuels and small scale generation all have the potential to increase demand for LNG.
Sellers are being challenged to differentiate themselves in terms of offering flexibility, credit and pricing options for new projects and emerging buyers.
Shell’s Chris Johnson takes a look at the ‘new normal’ in the LNG industry, and what challenges and solutions there are in reducing LNG supply costs.
Looking at BG Group’s unique LNG portfolio model, Steve discusses where he thinks the LNG industry is heading over the next five years, and what are the enablers driving growth.
Discussing the emerging markets that will be front runners for North Americas LNG, Kathleen predicts what factors will allow more US LNG projects to take FID pre 2020 and what she sees US LNG FOB and tolling models looking like in the future.
Pertamina’s VP LNG tells us all about Indonesia’s projects and what role gas plays in the country’s energy mix now and in the near future.
Steven talks us through LNG sale, purchasing and tolling agreements, as well as the opportunities and challenges presented by anticipated oversupply in the market.
© The CWC Group 2017