• 8 hours Oil Pares Gains After API Reports Surprise Crude Inventory Build
  • 9 hours Elon Musk Won’t Get Paid Unless Tesla Does “Extraordinarily Well”
  • 9 hours U.S. Regulators Keep Keystone Capacity Capped At 80 Percent
  • 10 hours Trump Signs Off On 30 Percent Tariff On Imported Solar Equipment
  • 12 hours Russian Funds May Invest In Aramco’s IPO To Boost Oil Ties
  • 13 hours IMF Raises Saudi Arabia Growth Outlook On Higher Oil Prices
  • 14 hours China Is World’s Number-2 In LNG Imports
  • 1 day EIA Weekly Inventory Data Due Wednesday, Despite Govt. Shutdown
  • 1 day Oklahoma Rig Explodes, Leaving Five Missing
  • 1 day Lloyd’s Sees No Room For Coal In New Investment Strategy
  • 1 day Gunmen Kidnap Nigerian Oil Workers In Oil-Rich Delta Area
  • 2 days Libya’s NOC Restarts Oil Fields
  • 2 days US Orion To Develop Gas Field In Iraq
  • 4 days U.S. On Track To Unseat Saudi Arabia As No.2 Oil Producer In the World
  • 4 days Senior Interior Dept. Official Says Florida Still On Trump’s Draft Drilling Plan
  • 4 days Schlumberger Optimistic In 2018 For Oilfield Services Businesses
  • 4 days Only 1/3 Of Oil Patch Jobs To Return To Canada After Downturn Ends
  • 4 days Statoil, YPF Finalize Joint Vaca Muerta Development Deal
  • 5 days TransCanada Boasts Long-Term Commitments For Keystone XL
  • 5 days Nigeria Files Suit Against JP Morgan Over Oil Field Sale
  • 5 days Chinese Oil Ships Found Violating UN Sanctions On North Korea
  • 5 days Oil Slick From Iranian Tanker Explosion Is Now The Size Of Paris
  • 5 days Nigeria Approves Petroleum Industry Bill After 17 Long Years
  • 5 days Venezuelan Output Drops To 28-Year Low In 2017
  • 5 days OPEC Revises Up Non-OPEC Production Estimates For 2018
  • 6 days Iraq Ready To Sign Deal With BP For Kirkuk Fields
  • 6 days Kinder Morgan Delays Trans Mountain Launch Again
  • 6 days Shell Inks Another Solar Deal
  • 6 days API Reports Seventh Large Crude Draw In Seven Weeks
  • 6 days Maduro’s Advisors Recommend Selling Petro At Steep 60% Discount
  • 6 days EIA: Shale Oil Output To Rise By 1.8 Million Bpd Through Q1 2019
  • 6 days IEA: Don’t Expect Much Oil From Arctic National Wildlife Refuge Before 2030
  • 6 days Minister Says Norway Must Prepare For Arctic Oil Race With Russia
  • 6 days Eight Years Late—UK Hinkley Point C To Be In Service By 2025
  • 7 days Sunk Iranian Oil Tanker Leave Behind Two Slicks
  • 7 days Saudi Arabia Shuns UBS, BofA As Aramco IPO Coordinators
  • 7 days WCS-WTI Spread Narrows As Exports-By-Rail Pick Up
  • 7 days Norway Grants Record 75 New Offshore Exploration Leases
  • 7 days China’s Growing Appetite For Renewables
  • 7 days Chevron To Resume Drilling In Kurdistan
Alt Text

Gas Wars: The First Energy Conflict In 2018

Territorial disputes over newly discovered…

Alt Text

New Importers Keep LNG Markets Tight

While increased LNG demand from…

Alt Text

Will 1 Billion EVs Crash Gasoline Demand?

Electric vehicle sales are picking…

LNG Glut To Get A Lot Worse This Year

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:




Back to homepage


Leave a comment

Leave a comment




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