LNG

Italian energy company Eni and Sharjah National Oil Corp. in the LNG exporting and importing nation of the United Arab Emirates have started production start-up at the Mahani natural gas field in the emirate of Sharjah.

The World Bank said the six members of the Gulf Cooperation Council, including LNG exporters Qatar, Oman and the United Arab Emirates are bouncing back to positive growth from the double blow of Covid-19 and the energy slump, showing the economic resilience of oil and gas.

Abu Dhabi National Oil Co. (Adnoc) has signed two-year LNG supply agreements with BP of the UK and French major Total for the majority of its production through the first quarter of 2022 after scaling back its supplies to Japan.

Japanese liquefied natural gas imports dropped for the sixth months out of the past seven as the nation received fewer shipments from the Middle East and Asia leading to a drop in its energy spending bill on fuels such as LNG and coal.

Shipments of LNG to Japan fell 13.1 percent in May to 5.56 million tonnes compared with 6.40MT in May 2018, according to preliminary figures from the Ministry of Finance.

Imports of the fuel had edged 0.3 percent higher in April to 5.62MT from 5.60Mt in April 2018 after dropping for the previous five straight months.

Imports of thermal coal, a competitor to LNG, also declined by 9.40 percent in May to 7.95MT.

Seven of Japan's nuclear power plants, which numbered 54 on line before the Fukushima disaster in 2011, were operating in May versus nine in the previous month.

The April 2019 rise in LNG deliveries to Japan had been the first since October 2018 when 6.53MT was received, a 6.5 rise on the previous October.

Even during the peak winter months from November 2018 through February 2019, imports dropped as the Japanese followed fuel-saving measures and the government encouraged a drop in costly LNG imports, with coal-fired power often filling the gap.

The cost of the May 2019 cargoes came to 302.17 billion yen ($2.79Bln), a decrease of 13.7 percent from the 350.33Bln yen ($3.23Bln) the cargoes cost in the same month a year ago.

For balance of payments purposes, Japan has been trying for several years to bring LNG import costs under control.

The Ministry’s data for May showed a plunge in imports from the Middle East region for a second successive month to their lowest level since around 2005.

The May 2019 shipments from countries like Qatar, the United Arab Emirates and Oman totaled 793,000 tonnes, down 44.8 percent on May 2018 and less than the 945,000 tonnes received in April 2019.

Analysts said the fall suggests continued plant maintenance work in the region at a time when there was also an outage of the Qatar-UAE Dolphin Energy natural gas pipeline.

The last time monthly shipments from the Middle East dropped under the 1MT level was in 2005 when they regularly totaled between 950,000 to 970,000 tonnes in the second quarter of the year.

Asian LNG shipments cargo deliveries also edged lower by 3.2 percent to 1.37MT from nations such as Malaysia and Indonesia, Papua New Guinea and Brunei.

US volumes received also dropped to 130,000 tonnes versus 138,000 tonnes in April 2019, the equivalent of two large cargoes, while one delivery was received in the same month a year ago.

Monthly Russian shipments from the Sakhalin Island plant in the Far East amounted to 534,000 tonnes, a rise of 12.2 percent versus the same month in 2018.

The balance of imports from Australia, African nations and the spot market amounted to 2.73MT, higher than the 2.66MT imported in April 2019.

Japanese LNG imports had declined by 0.9 percent in 2018. The 2018 imports amounted to 82.85MT versus 83.63MT received in 2017.

Japan’s 2018 import bill was 20.8 percent higher than in 2017 at 4,730Bln yen ($43.14Bln). The Japanese had paid 19.3 percent more in 2017 compared with the previous year with an LNG bill of 3,915Bln yen ($35.58Bln).