I’ve been trying to choose a Friday story in liquefied natural gas (LNG) — where events have been coming fast and furious worldwide.
But this week there was such an explosion of news in the space, I couldn’t pick just one item. Instead, I’m going to run down nine critical happenings that show the breakneck pace at which this key global market is changing.
In China, for instance, where data released Monday showed that LNG imports leapt 12.1 percent during February — to 1.85 million tons. Related: Why We Could See An Oil Price Shock In 2016
Chinese LNG demand is surging. And the country is becoming a rising force in buying around the world — both in terms of supply, and direct interests in LNG projects. A fact that became apparent Wednesday, when it was announced that local natgas supplier ENN Ecological Holdings Co. will buy an 11.7 percent stake in Aussie LNG producer Santos, for $750 million.
Such incoming funds may be a boost for global LNG developers, who are struggling with finance right now — with Woodside Petroleum saying Wednesday that it is delaying the $40 billion Browse LNG export project in Australia, due to market conditions.
The same day, Woodside’s partner in the Browse project — Japan’s Mitsui — said that it is taking a 40 billion yen write-down on the delayed operation. Which (along with write-downs on copper assets) will push Mitsui to its first-ever annual net loss in earnings since the company began reporting in 1947. Related: Uranium Production Costs Fall For The First Time In 5 Years
But even as projects stall, LNG demand is rising — in some unexpected places. Oman, for example, where officials from the country’s LNG industry said on Sunday that they are going to delay 5 percent of their 2016 exports because they need the gas domestically.
Most of Oman’s gas goes to Japan and Korea, so these countries could be looking for alternatives, and Japanese buyer JERA found one Tuesday — when it was announced the firm has signed up to buy 25 percent of the output from the proposed Jordan Cove export facility in Oregon. A major boost to project developer Veresen — that had been looking for export contracts to underpin finances for its in-progress facility.
The Canadian West Coast is another option Asian LNG buyers have looked at. But they’ll have to wait a bit, after the federal government said Monday that it is delaying an approval decision on the proposed Pacific NorthWest LNG export project here. Canada’s feds say they will study for another 90 days before deciding if the project can go. Related: Oil Prices Continue To Tumble As Supply Glut Fears Return
Finally, two big firsts in global natgas shipping. In Iraq — which exported its first-ever cargo of natural gas condensate on Sunday, from an export facility developed by — making this one of the newest suppliers on the global stage.
And finally from the U.S., which landed its first-ever cargo of shale-derived natural gas liquids in Europe on Wednesday — with the cargo traveling from the Marcus Hook export terminal near Philadelphia to a receiving terminal owned by petchem giant Ineos at Rafnes, Norway.
That’s a lot of change, nearly everywhere in the world. Watch for more shakeups, letdowns, and maybe even some melt-ups coming in this space.
Here’s to a number of things on the go,
By Dave Forest
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