LNG

The European Commission, after many delays in imposing updated sanctions on Russia over the Ukraine invasion has now banned from its ports LNG tankers of the Russian Sovcomflot shipping line, while also convening on June 25 the first meeting of the Conference on Accession of Ukraine to the European Union.

April 18 (LNGJ) - Chinese LNG imports totalled 19.78 million tonnes in the first three months of 2024, up 20.8 percent from the same three months of 2023, according to data from the Chinese General Administration of Customs. China imported 6.65MT of LNG in March alone, up 25.1 percent from March 2023. China’s main LNG suppliers to its network of 25 import terminals are Australia, Qatar, Malaysia, Indonesia and the Yamal plant in Arctic Russia.

   China’s oil and gas companies also increased production by 2.3 percent and 5.2 percent from January to March to 53.48MT and 63.2 billion cubic metres respectively. China’s daily average of oil and gas production in March reached 593,000 tonnes and 700 million cubic metres. Russia is the leading energy exporter to China, which purchased 107MT of oil from the Russians last year, up 24 percent, and 8MT of LNG. Gas supplies to China via the “Power of Siberia” pipeline have increased to a record 22.7 Bcm.

March 8 (LNGJ) - China National Offshore Oil Corp. (CNOOC), one of the largest Chinese LNG players, said it made a discovery at Kaiping South in deepwater of the eastern South China Sea, which adds over a 100 million tons of oil equivalent proved in-place volumes. “The well tested to produce an average of 7,680 barrels of crude oil and 0.52 million cubic feet of natural gas per day,” said CNOOC.

   “The discovery fully demonstrates the broad prospects for exploration in the deepwater South China Sea and further expands the resource base for the company's high-quality development,” explained Zhou Xinhuai, CNOOC Chief Executive and President. “In recent years, CNOOC has achieved remarkable breakthroughs in oil and gas exploration in the eastern South China Sea, building a new growth pole for offshore oil and gas production,” added Zhou.

Chinese liquefied natural gas imports increased by over 28 percent last month, though the recovery in cargo deliveries may not be enough to recapture the No. 1 global LNG importer position in 2023 that was ceded to Japan in 2022.

European and Asian natural gas market prices declined in the past week but North Asia spot cargo values fell at a faster rate as Atlantic and Pacific Basin competition increased and the shipping charter market tried to reorganize for a change of season.

Gaztransport and Technigaz (GTT), the French LNG storage technology company, has completed the construction of two full containment tanks for the new Nangang LNG import terminal being constructed by the parent company of Beijing Gas Group at Tianjin port in northeast China.

GTT’s order was received from its partner company, China Huanqiu Contracting and Engineering Co. (HQCEC), for the design of eight very large storage tanks each with a capacity of 220,000 cubic metres.

“They are the world's largest onshore LNG storage tanks incorporating the GST® membrane containment technology,” said GTT.

The Paris-based company said the construction schedule remained on track despite the constraints imposed by the Covid-19 pandemic.

GTT added that the two onshore tanks were now entering the commissioning phase and would be operational in the first half of 2023.

The new Tianjin-Nangang project comprises three phases and will be the the third facility to serve the northeast Chinese port supplying the gas needs of Beijing.

The existing facilities currently include the Tianjin North onshore terminal operated by China Petroleum and Chemical Corp. (Sinopec) and had included a separate floating facility when required.

Huge project

“The construction of these first two onshore tanks marks an important milestone for BGG's LNG terminal in Tianjin,” said Philippe Berterottière, Chairman and Chief Executive of GTT Group.

“These tanks are the first of eight planned for the site and are already the largest onshore tanks in the world equipped with our GST® technology. We thank BGG and the Chinese government for their trust and wish HQCEC every success for this new terminal,” he declared.

GTT said its technology offered many advantages compared with a traditional onshore LNG tank.

This includes safer storage management through integrated monitoring and greater storage capacity for the same footprint.

“This milestone is the reward of five years of assessment, preparation, engineering and actual construction,” said Li Yalan, who is Chairwoman of the Beijing Gas unit of parent company Beijing Entreprises Group.

“We are proud to have evolved this emerging technology into a promising solution for many projects around the world,” added Li, whose is also the current President of the International Gas Union.

“Thanks to this world first, these containment membrane tanks are on their way to becoming the state-of-the-art in LNG storage. We have been impressed by the dedication and passion of GTT and HQCEC to make this world-first a success,” she stated.

Japanese liquefied natural gas imports dropped almost 9 percent in December as the nation formally ceded the No. 1 spot to China as the top LNG importer for 2021, while Japan’s LNG shipments from the US jumped nearly 50 percent.

Hong Kong Electric, the former British colony’s main power company, said the first LNG import project in the territory now administered by China, including the world’s largest floating storage and regasification unit, will start operations in mid-2022.

China National Petroleum Corp. (CNPC), the dominant Chinese LNG and pipeline natural gas project company, said that along with other Chinese energy majors it was making preparations for freezing temperatures forecast to hit northern Chinese provinces, including the capital Beijing, in the weeks ahead.

Global pricing agency Platts said the Japan-Korea Marker (JKM) price for liquefied natural gas assessed by the US firm rose to a record high of $20.705 per million British thermal units

Asian spot LNG prices are riding at six-year highs, as a cold spell in some countries in North Asia prompted record imports into the region.

While Platts reported the temporary record $20.705 trading level, though the February settled prices were still generally at around $15.550 per MMBtu.

The March price was at $9.550 per MMBtu and April was quoted at $6.500 per MMBtu.

Analysts said demand from Japan has pushed up North Asia spot cargo prices.

Jera Co. Inc., Japan’s biggest power generator and the world’s largest buyer of LNG, as well as other Japanese electricity and gas companies, are competing with LNG buyers in China and South Korea to secure supplies.

Platts said that the situation also meant that fewer cargoes were coming to Europe than is usual for this time of year.

The UK National Balancing Point benchmark gas price had been firm over the past week though has now fallen under $7.00 per MMBtu.

The NBP was last at $6.95 per million British thermal units while the continental European Dutch Title Transfer facility (TTF) price was lower at the equivalent of $6.35 per MMBtu.

“A major demand stimulus for the recent price increase was the cold snap across northeast Asia which has boosted gas consumption and accelerated drastic inventory draw-down in Japan, South Korea and China,” explained Platts.

“On the supply-side, production issues in countries such as Malaysia have depleted availability and led to delayed or deferred deliveries of LNG, as well as reduced volumes stipulated under long-term contracts,” it added.

US Gulf Coast LNG prices were lower. The February derivative contracts for FOB cargoes has declined to $5113 per MMBtu from
$6.400 per MMBtu.

The March price also fell back on the week to $4.883 per MMBtu from $5.929 per MMBtu. The April GCL price was from $4.532 per MMBtu.

Additionally, there have been shipping traffic constraints in the Panama Canal, meaning vessels carrying shipments from the US Gulf Coast have experienced longer shipping times into the Pacific region.

“This has meant more cargoes are expected in Asia in the later weeks of February or in March,” stated Platts.

Platts said it forecast a drop in Asia-Pacific demand through the first quarter. Even if some supply outages continue through March, prices were likely to decline.