• 4 minutes China 2019 - Orwell was 35 years out
  • 7 minutes Wonders of US Shale: US Shale Benefits: The U.S. leads global petroleum and natural gas production with record growth in 2018
  • 11 minutes Trump will capitulate on the trade war
  • 14 minutes Glory to Hong Kong
  • 34 mins China's Blueprint For Global Power
  • 3 hours Boring! See Ya Clowns, And Have Fun In Germany
  • 3 mins Bloomberg: shale slowing. Third wave of shale coming.
  • 22 mins ABC of Brexit, economy wise, where to find sites, links to articles ?
  • 8 hours Crazy Stories From Round The World
  • 2 hours Yesterday Angela Merkel stopped Trump technology war on China – the moral of the story is do not eavesdrop on ladies with high ethical standards
  • 3 hours 5 Tweets That Change The World?
  • 6 hours the future
  • 2 hours USA Carried Out Secret Cyber Strike On Iran In Wake Of Saudi Oil Attack
  • 8 hours Climate Protesters Blocking Roads etc...
  • 2 hours Spain Is On The Edge...Clashes Between Catalonia And "Madrid"
  • 3 hours Leftists crying to make oil patch illegal friendly: 'Broken system' starves U.S. oil boom of immigrant workers: CONGRESS DO YOUR JOBS INSTEAD OF PANDERING!
Alt Text

Canada’s Natural Gas Crisis Is Being Ignored

While Canadian crude has been…

Alt Text

US Gas Prices Slump Despite Soaring Demand

The switch from coal to…

Alt Text

A New Trend In Natural Gas: Just-In-Time Supply

Just-in-time supply of natural gas…

Charles Kennedy

Charles Kennedy

Charles is a writer for Oilprice.com

More Info

Premium Content

LNG Glut To Get A Lot Worse This Year

Another LNG train is up and running in Australia, adding to the growing abundance of capacity.

BG Group announced that its second LNG train at its Queensland Curtis LNG (QCLNG) facility in northeastern Australia is now up and running. When the facility ramps up and reaches its highest production level – expected in mid-2016 – it will be able to ship 8 million tonnes of LNG per year (mtpa), or the equivalent of ten ships per month.

The $20 billion LNG project is not the only one expected to come online this year. Santos is planning on starting up its GLNG facility later this year, a unique project that will turn natural gas from coal seams into LNG. Santos is joined by its partners Petronas, Total, and KOGAS. GLNG will have the capacity to ship 7.8 mtpa of LNG. Origin Energy, another LNG producer, is expected to bring its Australia Pacific facility online this year as well, another coal seam gas project. Related: Dodging The Export Ban: U.S Condensates Export Flourishes

But the long list of projects nearing completion will only add more capacity to a marketplace that is relatively well-supplied. Spot LNG cargoes in Asia have seen their prices fall precipitously over the past year. The collapse in oil prices has contributed to weaker LNG pricing, as LNG prices are often linked to the price of crude oil. However, soft demand in Asia for LNG has also tempered prices. China, although expected to be a major consumer of LNG over the longer-term, has disappointed producers. Related: Noose Tightening On Coal Industry

Lower prices could cut into revenues of LNG suppliers, who built their facilities on the assumption that prices would be higher. With that said, however, LNG export facilities are planned for decades of operation, so short-term price weakness won’t necessarily alter long-term returns on investment.

Nevertheless, with a wave of LNG export capacity hitting the market this year – with even more slated to begin over the next two to three years – LNG prices may stay weak for some time. Related: The Next Fracking Boom May Be Closer Than You Think

There are a few variables to watch out for, which could have a major effect on prices. The extent to which Japan returns to nuclear power, which would slash gas imports, could cut into demand. China’s stock market turmoil could offer an even more dangerous downside risk. And of course, the movement of oil prices will also affect the trajectory of LNG spot cargoes.

By Charles Kennedy of Oilprice.com

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage



Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play