• 55 mins India, China, U.S., Complain Of Venezuelan Crude Oil Quality Issues
  • 6 hours Kurdish Kirkuk-Ceyhan Crude Oil Flows Plunge To 225,000 Bpd
  • 10 hours Russia, Saudis Team Up To Boost Fracking Tech
  • 16 hours Conflicting News Spurs Doubt On Aramco IPO
  • 17 hours Exxon Starts Production At New Refinery In Texas
  • 18 hours Iraq Asks BP To Redevelop Kirkuk Oil Fields
  • 2 days Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw
  • 2 days Oil Gains Spur Growth In Canada’s Oil Cities
  • 2 days China To Take 5% Of Rosneft’s Output In New Deal
  • 2 days UAE Oil Giant Seeks Partnership For Possible IPO
  • 2 days Planting Trees Could Cut Emissions As Much As Quitting Oil
  • 2 days VW Fails To Secure Critical Commodity For EVs
  • 2 days Enbridge Pipeline Expansion Finally Approved
  • 2 days Iraqi Forces Seize Control Of North Oil Co Fields In Kirkuk
  • 2 days OPEC Oil Deal Compliance Falls To 86%
  • 2 days U.S. Oil Production To Increase in November As Rig Count Falls
  • 2 days Gazprom Neft Unhappy With OPEC-Russia Production Cut Deal
  • 3 days Disputed Venezuelan Vote Could Lead To More Sanctions, Clashes
  • 3 days EU Urges U.S. Congress To Protect Iran Nuclear Deal
  • 3 days Oil Rig Explosion In Louisiana Leaves 7 Injured, 1 Still Missing
  • 3 days Aramco Says No Plans To Shelve IPO
  • 5 days Trump Passes Iran Nuclear Deal Back to Congress
  • 5 days Texas Shutters More Coal-Fired Plants
  • 6 days Oil Trading Firm Expects Unprecedented U.S. Crude Exports
  • 6 days UK’s FCA Met With Aramco Prior To Proposing Listing Rule Change
  • 6 days Chevron Quits Australian Deepwater Oil Exploration
  • 6 days Europe Braces For End Of Iran Nuclear Deal
  • 6 days Renewable Energy Startup Powering Native American Protest Camp
  • 6 days Husky Energy Set To Restart Pipeline
  • 6 days Russia, Morocco Sign String Of Energy And Military Deals
  • 7 days Norway Looks To Cut Some Of Its Generous Tax Breaks For EVs
  • 7 days China Set To Continue Crude Oil Buying Spree, IEA Says
  • 7 days India Needs Help To Boost Oil Production
  • 7 days Shell Buys One Of Europe’s Largest EV Charging Networks
  • 7 days Oil Throwback: BP Is Bringing Back The Amoco Brand
  • 7 days Libyan Oil Output Covers 25% Of 2017 Budget Needs
  • 7 days District Judge Rules Dakota Access Can Continue Operating
  • 7 days Surprise Oil Inventory Build Shocks Markets
  • 8 days France’s Biggest Listed Bank To Stop Funding Shale, Oil Sands Projects
  • 8 days Syria’s Kurds Aim To Control Oil-Rich Areas
Alt Text

Oil Markets Brace For Another Hurricane

Oil prices drew back this…

Alt Text

How Vulnerable Is The Electrical Grid?

Hurricane Maria knocked out the…

Uncertainty Lingers Over LNG As Chinese Demand Wavers

Uncertainty Lingers Over LNG As Chinese Demand Wavers

Liquefied natural gas (LNG) prices were one of the best performers of the past week. With the Japan-Korea Marker price jumping 17.2 percent in a matter of days — in the wake of a production outage at Russia’s Sakhalin-2 export terminal.

But despite that short-term lift, there’s a lot of worry in the LNG sector these days. Which was enhanced by news late last week that the world’s #3 LNG consumer just saw demand drop for the first time ever.

That big buyer is China. Where a new report from the U.S. Energy Information Administration showed that LNG imports fell 1.1 percent during 2015 — to 2.6 billion cubic feet per day (bcf/d). Related: U.S. Rig Count In Free Fall: Plunges By 48 In One Week

As the chart below shows, that’s the first time China’s LNG imports have fallen since the country started bringing in gas, back in 2006.

Related: In Spite Of Plunging Rig Count, Oil Erases Earlier Gains

Analysts at the EIA blamed the drop on both a general slowdown in the Chinese economy, and lower prices of competing fuels in the country. They noted for example, that many Chinese factories that use LNG can also run on liquefied petroleum gas (LPG) — a commodity that has become notably cheaper than LNG of late.

The new data look to spell trouble for China’s LNG import sector. With EIA pegging the country’s total import re-gasification capacity at 5.4 bcf/d — with another 3.4 bcf/d currently under construction.

That adds up to 8.8 bcf/d. Well above the 2.6 bcf/d of imports that China saw during the past year.

Analysts did note that China’s authorities are trying to spur natural gas consumption. Having lowered industrial prices for the fuel by 28 percent, or $2.95/MMBtu, as of November. Related: Conventional And Vertical Well Analysis

But absent a big rebound in China’s LNG demand, the global sector could be left without one of its key growth engines. Perhaps part of the reason big players have been hesitant on the industry of late — with Shell last week announcing a delay in final approvals for a major LNG export development on the Canadian west coast.

Watch for interim data on Chinese LNG imports in 2016 — to see if lower gas prices are spurring demand. Also for big LNG projects globally having a harder time with funding and construction, as uncertainty lingers over the sector.

Here’s to a change in tempo

By Dave Forest

More Top Reads From Oilprice.com:




Back to homepage


Comments currently closed.

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News