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Tuesday, 01 September 20
COVID-19 PUSHES US LNG INTO A TIGHT SPOT - DREWRY
The pandemic-led weak projections for economic growth will derail US LNG exports in full-year 2020 with the country also losing ground in the long term due to major delays in liquefaction projects.
US LNG exports were strong between 2017 and 2019, driven by the shale gas boom, rising demand for natural gas in Asia and higher global LNG prices. The US exported 3.9 million tonnes of LNG in 2016 which increased at a whopping 114% CAGR to 38.2 million tonnes in 2019.
The US is currently the third-largest global LNG exporter with six operational LNG export terminals aggregating 62 mtpa of liquefaction capacity and another 41 mtpa capacity under construction. Brownfiled projects such as Sabine Pass, Corpus Christi, Cameron LNG and Elba Island will reach their full capacities between 2020 and 2027 and greenfield projects such as Golden Pass LNG and Calcasieu Pass will become operational during the same period.
Existing LNG production capacity in the US has been impacted by the pandemic with over 110 LNG cargoes being cancelled by Asian and European customers during June-August due to the low LNG spot price which narrowed the US-Asia and US-Europe price arbitrage. Moreover, major US LNG importers – Japan, South Korea and Taiwan – have seen their LNG demand dwindling, while US-China LNG trade has not been able to pick up as some would have hoped. With projections for LNG spot prices below $5 per MMBtu over the next few years, we expect more cancellations to occur in the coming years making the US a ‘swing LNG producer.’
The ‘second wave’ of LNG liquefaction including mega-LNG projects (such as Driftwood LNG, Port Arthur LNG, Golden Pass, Calcasieu LNG, Plaquemines LNG, Magnolia LNG, Jordan Cove LNG and Rio Grande LNG) constitute over 160 mtpa of planned liquefaction capacity. These projects were initially expected to be operational by 2025, but are currently facing major trouble in securing funding and long-term supply deals required for reaching an FID. Only two projects (Golden Pass and Calcasieu Pass LNG) have attained the FID and have started construction, while over 10 major LNG liquefaction projects which were expected to reach the FID in 2020 have been delayed due to low LNG prices and weak economic growth projections.
The future for these projects looks uncertain as most of them had fixed the all-inclusive selling price for LNG at $8 per MMBtu for Asia ($2 for Henry Hub, $3 for liquefaction, $2-3 transportation) which is highly uncompetitive in the current market. Only a marginal recovery in LNG prices is projected for the next few years which further increases the woes for promoters of the planned projects in securing funding and supply deals. Meanwhile, a major competitor for US LNG, Qatar enjoys a break-even price below $2 per MMBtu as well as proximity to the Asian market. Qatar’s North Field Expansion (NFE) project’s Phase-1 (33 mtpa) and Phase-2 (16 mtpa) are also backed by the government, increasing the probability of their completion and in the process creating more trouble for the planned US projects.
The pandemic has already created severe financial woes for some US projects. For instance, a deal between Driftwood’s promoter Tellurian and India’s Petronet LNG fell through, raising doubts over the proposed 27.6 mtpa project. Although negotiations are still underway, Tellurian faces high competition from Russian and African projects. Shell has also exited the Lake Charles LNG project, increasing the uncertainty of the project for the other participants, while Magnolia LNG’s promoter LNG Ltd has been taken over by another entity after it went bankrupt, delaying the project further.
Some projects like Lake Charles and Rio Grande have gone back to the drawing board and plan to reduce trains to decrease the capex cost while others are cutting workforce and raising loans to keep their projects afloat. Most project developers are hopingfor an easing of US-China tensions and the prospect of securinga share of the rising LNG demand in China, which is projected to grow at over 10% CAGR between 2020 and 2025. However, China’s LNG importers may not be too keen on long-term supply deals with US companies given the current low prices and the uncertainty over US-China trade relations. Ties between China and Qatar are also strengthening with the latter reserving 16 LNG carrier newbuild berths at a Chinese shipyard.
Overall, project delays are expected to hurt the US deeply in the long term while other LNG producers – Qatar, Russia and Mozambique – gain from the narrowing supply-demand gap from 2023 onwards. Qatar has already reserved LNG carrier newbuilding berths at shipyards and has selected a technology partner for the NFE project while Russia’s Arctic LNG-2 is on schedule with added investments made for Arc-7 LNG carriers and large FSUs to keep the Northern Sea Route (NSR) active most of the year.
US LNG woes have had a cascading effect on the LNG shipping market, depressing charter rates. The fall in US-Asia LNG trade has negatively affected shipping demand which, along with cancellations, has increased vessel availability in the market. At present, the fall in charter rates is arrested by a rise in floating storage, but this situation is not sustainable in the long term with LNG prices remaining depressed and over 120 LNG carriers scheduled to be delivered during 2020-21.
An estimated 140 new orders for LNG carriers during 2020-23 would be left hanging if the planned US LNG projects fail to progress. The loss of orders will impact LNG shipyards which have already begun to reel under low orders (only eight vessels were ordered in 1H20). While project-linked ordering from Qatar, Russia and Mozambique will bring some respite the drying up of speculative orders will most certainly be a huge loss for the LNG shipping market as a whole.
To conclude US LNG exports will grow at a slower pace in the coming years as long-term supply deals have already been signed for the under-construction projects. However, stiff competition from other producers amid low LNG prices will impact their share in the Asian market. The fall in US-Asia trade will negatively impact shipping demand and further reduce the number of vessels required for LNG trade. Overall, we expect US LNG exports to be seasonal in the long run with Europe playing a much larger role in the future.
Source: Drewry
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Wednesday, 12 June 24
CHINA ACCOUNTS FOR 16.3% OF AUSTRALIA'S COAL EXPORTS, FOLLOWED BY INDIA 14.4% - BANCHERO COSTA
Global coal trade has really picked up pace in recent months, and is now fully back to pre-Covid levels says Banchero Costa in its latest report.
...
Wednesday, 12 June 24
LNG NEWBUILDING VALUES AT RECORD HIGH: 78 NEWBUILD ORDERS PLACED IN 2024, DOUBLING 2023 - VESON NAUTICAL
The number of LNG newbuilding orders have more than doubled from the same period last year where 34 orders were placed, compared to 78 in the first ...
Monday, 10 June 24
CHINA'S MAY COAL IMPORTS RISE 11% ON LOWER DOMESTIC OUTPUT - REUTERS
China’s imports of coal rose 11% in May from a year earlier, customs data and Reuters records showed on Friday, as lower domestic output this ...
Tuesday, 04 June 24
HOW DO WESTERN SANCTIONS ON RUSSIA IMPACT THE GLOBAL METALS, MINING AND COAL MARKETS - WOOD MACKENZIE
The geopolitical landscape for Russia, as a major supplier of various commodities, has undergone a dramatic transformation since the invasion of Uk ...
Friday, 22 March 24
CASE STUDY: DANGERS OF COAL CARGO - SKULD
Recently, a bulk cargo vessel carrying coal from South Africa to Singapore suffered a fatal accident, resulting in the deaths of three crew members ...
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Showing 21 to 25 news of total 6871 |
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- VISA Power Limited - India
- Bulk Trading Sa - Switzerland
- Orica Australia Pty. Ltd.
- GAC Shipping (India) Pvt Ltd
- Kalimantan Lumbung Energi - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Tamil Nadu electricity Board
- Petrochimia International Co. Ltd.- Taiwan
- Maheswari Brothers Coal Limited - India
- Georgia Ports Authority, United States
- Antam Resourcindo - Indonesia
- The State Trading Corporation of India Ltd
- Bukit Makmur.PT - Indonesia
- Leighton Contractors Pty Ltd - Australia
- International Coal Ventures Pvt Ltd - India
- Siam City Cement - Thailand
- The University of Queensland
- Videocon Industries ltd - India
- White Energy Company Limited
- Energy Development Corp, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Bhushan Steel Limited - India
- South Luzon Thermal Energy Corporation
- London Commodity Brokers - England
- AsiaOL BioFuels Corp., Philippines
- Merrill Lynch Commodities Europe
- Petron Corporation, Philippines
- Interocean Group of Companies - India
- Jindal Steel & Power Ltd - India
- Sical Logistics Limited - India
- Indika Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Straits Asia Resources Limited - Singapore
- Kartika Selabumi Mining - Indonesia
- Agrawal Coal Company - India
- India Bulls Power Limited - India
- Semirara Mining Corp, Philippines
- Altura Mining Limited, Indonesia
- SN Aboitiz Power Inc, Philippines
- New Zealand Coal & Carbon
- Alfred C Toepfer International GmbH - Germany
- Deloitte Consulting - India
- Wilmar Investment Holdings
- Kepco SPC Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Aditya Birla Group - India
- Directorate Of Revenue Intelligence - India
- Indonesian Coal Mining Association
- Attock Cement Pakistan Limited
- Samtan Co., Ltd - South Korea
- Grasim Industreis Ltd - India
- Indogreen Group - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Tata Chemicals Ltd - India
- MS Steel International - UAE
- Eastern Energy - Thailand
- CNBM International Corporation - China
- Banpu Public Company Limited - Thailand
- Australian Coal Association
- Maharashtra Electricity Regulatory Commission - India
- SMC Global Power, Philippines
- Marubeni Corporation - India
- Coalindo Energy - Indonesia
- Parliament of New Zealand
- Aboitiz Power Corporation - Philippines
- Bhatia International Limited - India
- Oldendorff Carriers - Singapore
- Miang Besar Coal Terminal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Sojitz Corporation - Japan
- Kumho Petrochemical, South Korea
- Mjunction Services Limited - India
- Baramulti Group, Indonesia
- Chamber of Mines of South Africa
- Romanian Commodities Exchange
- Economic Council, Georgia
- Dalmia Cement Bharat India
- Toyota Tsusho Corporation, Japan
- Holcim Trading Pte Ltd - Singapore
- The Treasury - Australian Government
- Karbindo Abesyapradhi - Indoneisa
- Mercuria Energy - Indonesia
- Orica Mining Services - Indonesia
- Xindia Steels Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Asam (Persero) Tbk - Indonesia
- Makarim & Taira - Indonesia
- Simpson Spence & Young - Indonesia
- Chettinad Cement Corporation Ltd - India
- Essar Steel Hazira Ltd - India
- Timah Investasi Mineral - Indoneisa
- Ministry of Finance - Indonesia
- Kideco Jaya Agung - Indonesia
- Indian Energy Exchange, India
- Manunggal Multi Energi - Indonesia
- Renaissance Capital - South Africa
- Binh Thuan Hamico - Vietnam
- Riau Bara Harum - Indonesia
- Ministry of Mines - Canada
- Central Java Power - Indonesia
- ICICI Bank Limited - India
- Energy Link Ltd, New Zealand
- Carbofer General Trading SA - India
- Minerals Council of Australia
- Ambuja Cements Ltd - India
- Madhucon Powers Ltd - India
- Parry Sugars Refinery, India
- Eastern Coal Council - USA
- Power Finance Corporation Ltd., India
- Electricity Generating Authority of Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Thiess Contractors Indonesia
- Electricity Authority, New Zealand
- Singapore Mercantile Exchange
- Gujarat Mineral Development Corp Ltd - India
- Global Green Power PLC Corporation, Philippines
- Goldman Sachs - Singapore
- Commonwealth Bank - Australia
- Global Coal Blending Company Limited - Australia
- Kapuas Tunggal Persada - Indonesia
- Kobexindo Tractors - Indoneisa
- Standard Chartered Bank - UAE
- Savvy Resources Ltd - HongKong
- TNB Fuel Sdn Bhd - Malaysia
- Lanco Infratech Ltd - India
- Jaiprakash Power Ventures ltd
- Intertek Mineral Services - Indonesia
- Barasentosa Lestari - Indonesia
- Karaikal Port Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Bharathi Cement Corporation - India
- PowerSource Philippines DevCo
- Uttam Galva Steels Limited - India
- Trasteel International SA, Italy
- Metalloyd Limited - United Kingdom
- ASAPP Information Group - India
- Sarangani Energy Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Indian Oil Corporation Limited
- Wood Mackenzie - Singapore
- GVK Power & Infra Limited - India
- Posco Energy - South Korea
- Billiton Holdings Pty Ltd - Australia
- Salva Resources Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Ind-Barath Power Infra Limited - India
- Iligan Light & Power Inc, Philippines
- Global Business Power Corporation, Philippines
- SMG Consultants - Indonesia
- Central Electricity Authority - India
- Kaltim Prima Coal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- PTC India Limited - India
- Coal and Oil Company - UAE
- Sree Jayajothi Cements Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Therma Luzon, Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Borneo Indobara - Indonesia
- Anglo American - United Kingdom
- Africa Commodities Group - South Africa
- Planning Commission, India
- IHS Mccloskey Coal Group - USA
- Rashtriya Ispat Nigam Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Star Paper Mills Limited - India
- Thai Mozambique Logistica
- Directorate General of MIneral and Coal - Indonesia
- Vizag Seaport Private Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Edison Trading Spa - Italy
- Vedanta Resources Plc - India
- Pendopo Energi Batubara - Indonesia
- CIMB Investment Bank - Malaysia
- OPG Power Generation Pvt Ltd - India
- Medco Energi Mining Internasional
- Ceylon Electricity Board - Sri Lanka
- Cigading International Bulk Terminal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Bhoruka Overseas - Indonesia
- Latin American Coal - Colombia
- Port Waratah Coal Services - Australia
- Bukit Baiduri Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Gujarat Electricity Regulatory Commission - India
- Siam City Cement PLC, Thailand
- Mintek Dendrill Indonesia
- Heidelberg Cement - Germany
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Transport, Egypt
- Larsen & Toubro Limited - India
- Meralco Power Generation, Philippines
- Coastal Gujarat Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Independent Power Producers Association of India
- Rio Tinto Coal - Australia
- Malabar Cements Ltd - India
- Bangladesh Power Developement Board
- Sakthi Sugars Limited - India
- Mercator Lines Limited - India
- San Jose City I Power Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- Cement Manufacturers Association - India
- Australian Commodity Traders Exchange
- McConnell Dowell - Australia
- GMR Energy Limited - India
- Gujarat Sidhee Cement - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sindya Power Generating Company Private Ltd
- Formosa Plastics Group - Taiwan
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