LNG

The Australian Government said the nation’s LNG export revenues are expected to decline from A$72 billion (US$47Bln) in the current fiscal year to just under A$45Bln by 2028-2029 as volumes flow in a tight market, though prices will ease in real terms towards the end of the decade.

CERAWeek, the five-day conference taking place in Houston and attended by around 5,500 delegates including leading LNG sector executives as well as politicians and officials, had a successful start discussing the “turbulent” world and energy markets and with one of the first speakers stressing that the energy transition must be an orderly process.

French energy major TotalEnergies is considering the 2023 restart date of the onshore liquefied natural gas project in Mozambique based on a visit by executives to the southeast African nation, which is already enjoying the economic benefits of the start-up of the Coral South floating export venture in the southern part of the Rovuma Basin.

The company chairman and chief executive, Patrick Pouyanné, is expected to be among the party planning to travel to Cabo Delgado province where the project is located.

The Mozambican authorities said they were looking forward to welcoming TotalEnergies executives to the country as usual as they work on relaunching the $20 billion venture.

If the TotalEnergies LNG project goes ahead it would help increase Mozambique’s gross domestic product by around $67 billion, according to economists.

The TotalEnergies LNG project is located on the Afungi Peninsula and will use natural gas from the Rovuma Basin Area 1 licence to produce LNG to be transported worldwide.

The onshore Mozambique LNG project has been hindered by insecurity in the region for the last couple of years.

Construction of the plant had to be halted on April 26, 2021, when TotalEnergies declared “force majeure” because of attacks north of the plant location by an Islamist extremist group.

Project delays

TotalEnergies had already delayed first LNG production at the liquefaction plant by two years to 2026.

Since the halt to the onshore project a separate floating LNG plant has come on stream offshore Mozambique.

Italian energy company Eni brought the “Coral-Sul FLNG” production vessel on stream at the end of 2022 and the first cargo was shipped in mid-November 2022.

Eni, as upstream operator of the separate Area 4 licence resources, has started the project with liquefaction capacity of 3.4 million tonnes per annum.

The TotalEnergies-run project onshore has the potential to produce round 20 MTPA of LNG.

A third development, the Rovuma LNG project, may also recover momentum in 2023 for the Area 4 licence group to produce a further 15 MTPA per annum from their resources,

However, analysts said that the shareholders in Rovuma LNG, including the US major ExxonMobil, are unlikely to take a final investment decision on the venture until the TotalEnergies project advances in the next year.

The France-based International Group of Liquefied Natural Gas Importers (GIIGNL) has issued its annual report with key export and import statistics and noted that 2022 would see a ‘‘paradigm shift” in the market with government and institutions getting involved after the Russian invasion of Ukraine.

“Price volatility was exacerbated in February 2022 by the Russia-Ukraine conflict, and the current European energy crisis proves to be a stark reminder of LNG’s vital role in ensuring energy security and economic stability,” said Jean Abiteboul, GIIGNL President in his introduction to the report.

“Governments and public institutions are becoming increasingly involved in the LNG business, and we will monitor the consequences of this paradigm shift over the course of the coming year,” he added.

Global regasification capacity rose last year by 46 million tonnes per annum to reach 993 MTPA as four new large-scale terminals were brought in operation in Brazil, Croatia, Indonesia and Kuwait and five expansion programmes were completed, four of which are in China and one in Japan.

“At least six new markets have started or are scheduled to join the sector as importers in 2022, including Ghana, Hong Kong, El Salvador, the Philippines, Senegal and Vietnam,” said the report.

“In the meantime, LNG production has been struggling to keep pace with demand, which sent spot LNG prices upwards,” it added.

The GIIGLN constitutes a forum for exchange of information and experience among its 90 members and they handle more than 90 percent of LNG imports worldwide.

The membership the GIIGLN comes from 27 countries and the body also aims to share experiences to enhance safety, reliability, efficiency and sustainability of LNG import activities and in particular the operation of regasification terminals.

Keeping pace

“During 2021, LNG imports returned to robust growth, reaching 372.3 million tonnes, a 4.5 percent increase over 2020. Asia remained the main demand center for LNG, growing by 7.1 percent,” it said.

The report added that LNG production has been struggling to keep pace with demand, which sent spot LNG prices upwards.

“While 7.4 MTPA of new capacity came onstream, 5 MTPA of which in the United States, global LNG exports were affected by unscheduled maintenance and shortfalls in feed gas,” the report added.

“Increased output from the US, Egypt, Malaysia and Russia was partly offset by lower exports from Angola, Indonesia, Nigeria, Norway, Peru and Trinidad,” said the GIIGNL.

The report said that in 2021, two important final investment decisions were taken for the North Field East expansion project in Qatar, which will add 33 MTPA of liquefaction capacity from 2025, and Pluto LNG Train 2 in Australia for 5 MTPA.

“By 2025, more than 120 MTPA of new liquefaction capacity will progressively come online, which should partly relieve tensions in the LNG market,” stated the report.

With 68 new vessels delivered during 2021, the report confirmed that the LNG fleet reached 700 vessels, including 48 floating storage and regasification units (FSRUs) and 31 LNG bunkering vessels, representing a 9 percent increase in cargo capacity.

“Freight rates remained very strong throughout the year and the order book at year-end was remarkably high, with 196 units to be delivered by 2025,” said the report.

National Grid plc of the UK said annual operating profits from the Isle of Grain LNG import terminal in Kent, the largest in Europe, rose by 5 percent with only 30 percent capacity utilization, while its large investments in US operations were offset by regulatory setbacks.