LNG

PV Gas, part of PetroVietnam, has agreed with state utility Vietnam Electricity (EVN) to deliver LNG from Vung Ang regas terminal to the Quang Trach II power project. Unit II had been a 1.2 GW coal-fired power plant repurposed into an LNG-fuelled unit – in line with Vietnam’s 8^th national power development plan.

Construction of an onshore LNG import terminal at Brunsbüttel is more expensive than expected, forcing Germany to support it with another €200 million in federal funding – on top of the €740 million initially committed. Broadcaster NDR reports total costs now surpass €1,5 billion, instead of €1.3 billion, with private investors having to shoulder most of the overrun.  

November gas future contract at Henry Hub soared to $2.932/MMBtu after hurricane Helene made landfall with a windspeed of 140mph in Florida’s Big Bend region. Though LNG infrastructure was not impacted, offshore gas production in the US Gulf of Mexico (GOM) fell by nearly 10 bcf as developers took precautions.

Asian buyers are returning to the market despite elevated regional LNG prices due to the partial outage of Inpex-operated Ichthys LNG in Australia and Malaysia’s Bintulu LNG. At least one Japanese utility secured a prompt delivery in end-September – at a premium to JKM prices – to fulfil power requirements created by a warm summer and autumn so far.

Front-month price at the TTF, Europe’s most liquid gas trading hub, is recalibrating after a bid from Egypt’s EGAS for 20 LNG cargoes for October-December delivery had tightened supply. With the EGAS tender fully awarded – at a premium to the TTF – the market is now less tense and October gas futures were last seen trading below $11.26/MMBtu.

Prices of delivered LNG into North-East Asia, the world’s premium gas market, are converging for oil-linked contracts and those indexed to the US Henry Hub. Most of recent term oil-linked deals for cargoes shipped to Asia have been in the 12.0%-12.5% DES range, while volumes available earlier from post-FID projects are attracting a premium.

Long-term LNG contracting is off to a strong start as Middle East sellers take advantage of the 'Biden Pause' on US project permitting. Over 58 mtpa of sales and purchase agreements (SPA) were contracted from January through September 2024, compared with over 94 mtpa of new LNG SPAs and HOAs signed last year.

Forecasts for Egypt’s LNG imports have been revised higher by the London-based consultancy Energy Aspects, lowering Europe’s availability to import the super-chilled fuel and burn it to generate electricity this autumn. Analysts are bullish on TTF winter prices, calling them “slightly undervalued” as they started to rebound towards €39/MWh.

As the Department of Energy (DOE) issued the first LNG export permit to non-FTA countries following a month-long pause, analysts forecast North America’s LNG export capacity could double by 2028 – if projects under construction begin operations as planned. The DOE just granted a permit to New Fortress Energy’s floating liquefaction plant offshore Altamira.

NFE had to delay shipment of the first cargo in July but subsequently exported several LNG cargoes from Altamira to countries with a free trade agreement (FTA) in place. Now, NFE has been authorized to also export LNG to countries that have no free trade agreement with the United States, which include all EU member states as well as Japan and India, among others. The permit is expected to boost Altamira’s exports to up to 1.4 million metric tons through to August 2029, a potential 3% rise.

Commenting on the recent permit for NFE’s Altamira LNG export terminal, assistant DOE secretary or the Office of Fossil Energy and Carbon Management, Brad Crabtree, noted: “These re-exports can diversify global LNG supplies and improve energy security for U.S. allies and trading partners.”

Despite this positive development, it needs to be said that NFE initially requested for their export term to last until the end of 2050 – twenty years longer than what they were granted by the regulator. This term will be re-evaluated in time, allowing NFE to file for an extension after a minimum of two years.

What’s in the making

North America’s total LNG export capacity is on track to more than double from 11.4 billion cubic feet per day (Bcf/d) last year to 24.4 Bcf/d in 2028. Over the coming four years, EIA analysts estimate LNG export capacity will grow by 0.8 Bcf/d in Mexico, 2.5 Bcf/d in Canada, and 9.7 Bcf/d in the United States from a total of 10 new projects that are currently under construction in these three countries.

Five US projects, with 9.7 Bcf/d capacity combined, that are currently under construction include Plaquemines (Phase I and Phase II), Corpus Christi Stage III, Golden Pass, Rio Grande Phase I, and Port Arthur Phase I. Developers expect to produce the first LNG from Plaquemines LNG and Corpus Christi LNG Stage III and ship first cargoes from these projects by the end of 2024.

In Canada, three projects with 2.5 Bcf/d capacity combined are in the making in British Columbia on Canada’s west coast – all supplied with natural gas from western Canada. Developers of the massive 1.8 Bcf/d LNG Canada plan to export a first cargo from Train 1 in the summer 2025. The 0.3 Bcf/d Woodfibre LNG terminal targets aims for a 2027 start-up while the 0.4 Bcf/d Cedar FLNG project reached a final investment decision (FID) in June 2024 and expects to start LNG exports in 2028.

Peninsula, the leading global independent marine energy supplier founded to fill a gap in the Gibraltar market for bunkering services and benefitting from the assistance of a refinery across the bay in Algeciras in Spain, has fixed its first Biofuel deal for one of the world’s largest shipping companies from China.