Steam coming out of the LNG shipping market. With rapid growth in the trading of spot and short term LNG cargoes, fluctuations in spot shipping charter rates are having an increasingly important impact on the pricing and flow of LNG.
The LNG shipping market has evolved rapidly over the last decade, driven by growth in global liquefaction capacity. But the order and delivery of LNG vessels has been quite cyclical in nature. Shipping charter rates are the largest component of the cost of moving LNG around the globe. Break even charter rates are estimated to be around 60,000 $/day. But recent years have seen some wild swings in spot charter rates above and below this level. Charter rates fell as low as 25,000 $/day at the depth of the financial crisis before recovering to 160,000 $/day post-Fukushima. LNG shipping – the basics The fleet The global LNG fleet consists of around 380 vessels. For the Qataris, size is everything. The fundamental drivers.
Natural-Gas-Liquid Derivatives. Much as with propylene, the reduction in butadiene production has exacerbated an already tight market in the U.S.
Dating back to World War II, butadiene was produced on purpose through dehydrogenation. However, with the growth in the global chemical industry, byproduct “crude C4” streams containing butylenes and butadiene increased. From these streams, butadiene could be extracted to supply the U.S. market. Currently, all U.S. butadiene producers are operating extraction units to remove butadiene from crude C4 feedstock. With the market short of domestic C4s, prices have spiked to more than $4,000 per ton, a level that has encouraged imports of finished butadiene and crude C4s. Volatility is alive and well in the LNG spot market. A rapid expansion in Australian, African and US liquefaction capacity may drive global gas price convergence later this decade.
But the global gas market in 2013 is still dominated by the pronounced inter-regional price divergence that has been a feature of the last two years. Since the Fukushima disaster, the average price of LNG delivered in Asia has been at a structural premium to prices in Europe, adjusted for the transport cost differential. However this average Asian price premium masks some substantial swings in Asian LNG spot pricing which are impacting the pricing and flow of gas into Europe. One of the key themes of this blog has been the increasing influence of the global LNG market on European gas pricing dynamics. 1225-PDF.pdf (Objet application/pdf) Www.oxfordenergy.org/wpcms/wp-content/uploads/2012/10/NG-68.pdf. Le GNL met les voiles … Cependant, à l’heure où de nombreux terminaux méthaniers sortent de terre sur les côtes européennes, l’industrie GNL doute et doit faire face à de nombreux imprévus.
L’Asie structure le marché du GNL Le marché mondial du GNL est réparti sur trois principales zones : le bassin pacifique, le bassin atlantique et le Moyen-Orient. Le bassin pacifique (Inde inclue) s’accapare les deux tiers de la demande mondiale en GNL, l’Europe le tiers restant. Le Moyen-Orient est une zone principalement exportatrice. La production mondiale est assurée pour plus de la moitié par le Qatar, la Malaisie, l’Indonésie et l’Australie. (cliquer pour agrandir) Le poids du GNL en Asie s’explique facilement d’une part, par la situation insulaire (ou simili-insulaire) des gros consommateurs que sont le Japon et la Corée du Sud et d’autre part, par la présence côtière des principales poches de consommations de gaz des pays comme la Chine et l’Inde. Le bouleversement des flux de GNL en 2011 Sia Conseil. LNG Tanker Attempts First Winter Arctic Crossing - Energy TribuneEnergy Tribune. From BBC By Matt McGrath A large tanker carrying liquified natural gas (LNG) is set to become the first ship of its type to sail across the Arctic.
The carrier, Ob River, left Norway in November and has sailed north of Russia on its way to Japan. The specially equipped tanker is due to arrive in early December and will shave 20 days off the journey. The owners say that changing climate conditions and a volatile gas market make the Arctic transit profitable. Long-term preparation Built in 2007 with a strengthened hull, the Ob River can carry up to 150,000 cubic metres of gas. The ship, with an international crew of 40, has been chartered from its Greek owners Dynagas by the Russian Gazprom energy giant.
“It’s an extraordinarily interesting adventure,” Tony Lauritzen, commercial director at Dynagas, told BBC News. Gas Tanker Completes Arctic Sea Journey. US LNG export contracts: a European buyer’s perspective. The US has 12 regasification terminals (a combined 196 bcma of import capacity) that currently stand largely idle.
These terminals are testament to the pace of the unconventional gas revolution that has turned the US gas supply/demand balance on its head. In the space of half a decade, the US has been transformed from a large prospective importer of gas to an even larger prospective exporter. In a scramble to evolve with the market, US terminal developers such as Cheniere and Freeport are looking to convert their recently built regas terminals into liquefaction facilities. Nera_lng_report.pdf (Objet application/pdf) Thoughts on a Long-Awaited Natural Gas Exports Study. Earlier today, the Department of Energy released a long-awaited (and long-delayed) study on the macroeconomic impacts of liquefied natural gas (LNG) exports.
The study, prepared by the consultants NERA, is the most in depth look at the economics of LNG exports published to date. That means it’s long, and will take a while to digest. Here are a few quick observations and context. I’ll write another post later on differences between the NERA results and what I reported in my own LNG exports study earlier this year. The study reaffirms that allowing exports would be good for U.S. economic growth. Shell May Delay Australian Arrow LNG Plan to 2014 - Energy TribuneEnergy Tribune. From Bloomberg News Royal Dutch Shell Plc (RDSA), the world’s biggest liquefied natural gas supplier, may delay until 2014 a decision on its Arrow LNG venture that’s forecast to cost $20 billion amid rising expenses for energy projects in Australia.
“We are in preparation of a potential final investment decision of that project somewhere in the 2013/14 time frame,” Chief Executive Officer Peter Voser said in Beijing today. Costs for LNG plants are surging in Australia as it moves to challenge Qatar as the world’s biggest exporter of the fuel amid rising demand in Asia. Arrow Energy Ltd., owned by Shell and PetroChina Co. (857), said in March that it planned to decide in late 2013 whether to develop the LNG export project on Queensland state’s Curtis Island. Developing a LNG portfolio valuation capability. With global liquefaction capacity set to double over the next decade and Europe becoming increasingly import dependent, many European energy companies are focusing on LNG portfolio growth.
The LNG supply chain is characterised by complex physical and contractual flexibility as we have set out previously. This makes analysing LNG portfolio value a challenging task. Japan Drives Fledgling Asian LNG Spot Market - Energy TribuneEnergy Tribune. Last week the Xinhua News Agency reported that China launched its first spot market for natural gas on the Shanghai Petroleum Exchange on July 2 to cope with peak summer electricity use.
However, China’s natural gas exchange is only seasonal and aims to more efficiently allocate natural gas resources and meet rising demand in the summer. Contrary to China’s seasonal exchange is the Asian LNG spot market that is becoming a dominant force in the region. Lngfaq.pdf (Objet application/pdf) Changing Outlook for LNG.pdf (Objet application/pdf)
Bu-0911-3.pdf (Objet application/pdf) NG5-TheDevelopmentofAGlobalLNGMarketIsItLikelyIfSoWhen-JamesJensen-2004.pdf (Objet application/pdf) Todays-LNG-market-dynamics-May10.pdf (Objet application/pdf) Liquefied_Natural_Gas_Markets_04_20_2012.pdf (Objet application/pdf) Gas_pricing_europe.pdf (Objet application/pdf)