LNG

The BP 2024 Energy Outlook said that liquefied natural gas demand would grow robustly in the near term, driven by increasing needs in emerging economies in Asia as well as in the regional economic powerhouse China.

European natural gas and LNG prices dropped by another 9.5 percent on the week as gas storage levels were high in Europe and energy demand in North Asia was seen gaining to underpin the Japan-Korea Marker price for spot cargoes.

TechnipFMC has sold 17.6 million shares in Technip Energies, one of the world’s leading liquefied natural gas engineering companies, to Dutch firm HAL Investments.

The sale price of the shares was set at €11.15 ($13.20) per share, yielding total gross proceeds of €196.2 million.

HAL, which has a varied portfolio of international investments and is listed on the Euronext Exchange in Amsterdam, has agreed to a lock-up of 180 days for its shares in Technip Energies.

Upon completion of the sale, representing about 9.9 percent of the issued and outstanding share capital of Technip Energies, TechnipFMC is still left with a direct stake of around 12.3 percent of the shares in Technip Energies.

TechnipFMC completed a spin-off of Technip Energies in February 2021.

Technip Energies is now pursuing its own path as one of the leading LNG engineering companies with current LNG export projects in nations such as Russia, Mexico and Mozambique.

The spin-off reversed the 2017 merger of Technip of France and FMC Technologies of the US, a transaction valued at the time at $20Bln as it created TechnipFMC as a fully-integrated subsea and onshore provider and Technip Energies as a stand-alone company with the old Technip heritage.

Its portfolio also includes the construction of the world’s largest liquefaction Trains in Qatar with 7.8 MTPA of capacity.

In its most recent projects the Technip Energies division of the former TechnipFMC entity constructed Yamal LNG in Russia’s northern Siberia region with Japanese partners Chiyoda Corp. and JGC Corp.

It has also been contracted for Arctic LNG II by the same operator of Yamal, Russia’s Novatek, and is being partnered by Italy’s Saipem and Russian firm NIPIGas, a subsidiary of the Gazprom Neft Group, to construct a plant with almost 20 MTPA of output from three Trains.

Technip Energies, which is currently completing the Coral South FLNG project offshore Mozambique, was also awarded the Costa Azul export plant contract in Mexico by Sempra Energy.

Novatek Chief Executive Leonid Mikhelson said after meeting Russian President Vladimir Putin in Moscow that all three liquefaction Trains at the Arctic LNG II plant were scheduled to come on stream in a two-year time span from 2023.

The Japanese Finance Ministry has provided official confirmation that liquefied natural gas imports dropped in 2019 with only Australian and US and spot cargo numbers improving, while in December LNG shipments declined as thermal coal imports surged.

The International Energy Agency says the massive expansion of natural gas production is having wide-ranging effects on the global liquefied natural gas balance by underpinning major investments in new liquefaction capacity despite low gas prices in both Europe and Asia.

North America is to drive capacity growth in the global LNG liquefaction industry from planned and announced projects between 2019 and 2023.

This will contribute around 73% of global growth by 2023, according to GlobalData, in a report entitled ‘Global LNG Liquefaction Industry Outlook to 2023 – Capacity and Capital Expenditure Outlook with Details of All Operating and Planned Liquefaction Terminals’. 

The report reveals that North America is expected to have a newbuild liquefaction capacity of 243 mill tonnes per annum by 2023. Already announced projects account for most of the newbuild capacity in the region.

Soorya Tejomoortula, Oil and Gas Analyst at GlobalData, said: “North America is expected to add 26 newbuild LNG liquefaction terminals during the outlook period. Among these, Rio Grande is the largest newbuild liquefaction terminal, which is expected to start operations in 2023 with a capacity of 27 mill tonnes per annum.”

Following North America, GlobalData said that the Middle East was the second highest region in terms of global LNG liquefaction capacity growth.

This region will add newbuild liquefaction capacity of 32 mill tonnes per annum by 2023. Qatar’s LNG terminal expansion project was the only announced terminal in the Middle East and thus accounted for entire capacity growth by 2023.

The Former Soviet Union (FSU) stands third with newbuild LNG liquefaction capacity of 29 mill tonnes per annum during the period under review. Russia accounts for all the capacity growth in this region with four projects, the report said.

The International Group of LNG Importers, involving 83 companies, has held a meeting in the Japanese city of Fukuoka and issued a statement on the future role of LNG as a clean and flexible solution for a responsible energy future.

Japanese LNG and energy procurement company Jera Co. Inc., formed by Tokyo Electric Power Co. and Chubu Electric, has signed a binding agreement with French firm EDF Trading Ltd to form an LNG and trading joint venture.

Asia and Europe together account for the vast majority of future liquefied natural gas demand by 2040 and how these markets develop will have an important bearing on global LNG trade, according to the 2018 BP Energy Outlook.