With LNG production, exports and imports proceeding mostly as normal to provide guaranteed gas-fired power and vital fuel for transportation, the latest annual data provided by the world’s leading LNG importers provides a positive vision of the sector’s future on land and at sea.
 |
The annual report just published of the France-based International Group of Liquefied Natural Gas Importers (GIIGNL) gives valuable insights on an annual basis on the development of LNG production and regasification against a background of firm demand for long-term supply contracts.
During last year when final investment decisions were scarce, more than 30 firm LNG supply contracts, mostly medium and long term, were signed. This compared with 43 firm contracts in the previous year.
Taken together that’s 73 contracts over 24 months for LNG production plants, mostly still to be constructed in Africa and the US, or from expansions or existing portfolios.
The Top 10 contracts of 2019 are listed at the end of this commentary.
Among importers, Taiwan continues to punch above its political weight as the fifth-largest Asian importer with 16.66 million tonnes per annum of cargoes imported last year after being overtaken in recent years by mainland China and India.
Our photo shows the Malaysian MISC Group’s 150,200 metres capacity carrier, the “Seri Cemara”.
Taiwan’s volumes are still more than the totals of each of the top European importers, Spain and France, who received just over 15 MTPA each, and the UK with 13.55 MTPA in 2019.
European data
That’s as Europe experienced growth in net LNG imports of 75.6 percent compared with 2018. The European buyers took in 85.9MT, or 37.0MT more than in the previous year. All LNG importing countries in Europe increased their volumes.
On the production front, the glut of supplies came from both the Pacific and Atlantic Basins.
The Pacific Basin remains the largest source of LNG supplies to the global market with 146.7MT, or 41.3 percent of the total global market, followed by the Atlantic Basin (32.2 percent) and the Middle East (26.5 percent).
“Due to the increase in production from Australia, the gap between supply from the Pacific Basin and the Middle East has widened, from 45MT in 2018 to almost 53MT in 2019,” said the GIIGNL in its review.
“The Atlantic Basin was the region contributing the most to incremental volumes (+30MT or almost three quarters of new volumes),” it added.
“With 114.2MT, the Atlantic Basin is now the second-largest source of LNG supply ahead of the Middle East (93.9MT),” noted the report.
However, it was up to Europe to absorbs most of the LNG oversupply, though Asia continued to be the leading importing region with a 69 percent share of global LNG imports, down from 76 percent the previous year.
Asian growth
Asian LNG imports grew by 3.2 percent in 2019 to 246.2MT, rising in all countries except in the established importing nations of Japan, South Korea and Taiwan.
Imports into the neighbours of the US in Latin American, South America and the Caribbean decreased by 8.6 percent (1.5MT), with the total of LNG imports in 2019 reaching 15.7MT, down from 17.2 MT in the previous year.
“Mexico remained the largest LNG importer in the American region, accounting for a total market share of 31 percent, followed by Chile (2.5MT or 15.6 percent),” said the GIIGNL.
“Argentina experienced the largest decline in the region (-1.4MT) because of the increase in domestic gas production,” it added.
LNG imports into the Middle East decreased again in 2019, with deliveries falling by 23.9 percent (-2.2MT).
Jordan experienced a decline by almost half (-1.1MT). In Egypt, the ramp-up of new domestic natural gas field production has allowed for a complete reduction of LNG imports.
Despite the over-supplied market, buyers were still keen to sign long-term and medium-term contracts during the previous 12 months.
Top 10 Contracts
These are the Top 10 LNG supply contracts from the more than 30 firm agreements concluded in 2019 for four years or more and up to 20 years.
- Buyer Total - multiple destinations - Driftwood LNG-Tellurian and Tellurian 1 MTPA of FOB cargoes - 30 years - and 1.5 MTPA FOB - 15 years – start of both 2025.
- Buyer Uniper Global Commodities - multiple destinations - Woodside Energy Trading Singapore – portfolio volumes of 500,000 tonnes per annum (2021-2024) and 1 MTPA (2025-2034)./li>
- Buyer Bharat Petroleum Corp of India – import country India – project Mozambique LNG - volumes 1.0 million tonnes per annum – term 15 years – start-up expected 2025/li>
- Buyer Castle Peak Power C. (Hong Kong) and Honk Kong Electric – from Shell Eastern Trading - portfolio - volumes 1 MTPA-plus Delivered Ex-Ship (DES) from 2022./li>
- Buyer Centrica-Tokyo Gas - multiple destinations - Mozambique LNG – 2.6 MTPA of DES cargoes - term 15 years-plus – start-up after 2024./li>
- Buyer CNOOC Gas and Power Singapore Trading & Marketing - importer China - Mozambique LNG Area 1 1.5 MTPA – term 13 years - expected 2025 or after./li>
- Buyer ExxonMobil, Eni, China National Petroleum Corp., ENH Mozambique , Galp Energia of Portugal and Kogas - multiple destinations - Mozambique Rovuma Venture Mozambique - 15.2 MTPA./li>
- Buyer Korea Gas Corp - importer South Korea - supplier BP US from Freeport LNG or Calcasieu Pass - volumes 1.58 MTPA for 15 years (+3) starting in 2025./li>
- Buyer Polish state oil and gas company (PGNiG) – importer Poland – seller Venture Global US Plaquemines LNG plant – volumes 1.5 MTPA - for 20 years - expected start in 2023./li>
- Buyer Shell North America - multiple destinations - seller NextDecade Corp of US and Rio Grande LNG - volumes 2.0 MTPA of FOB cargoes - term 20 years from 2025./li>
