LNG

Demand for liquefied natural gas worldwide is forecast to hit 700 million tonnes by 2040 and Asia is expected to drive nearly 75 percent of this growth as Asian domestic gas production declines and LNG imports are used to tackle air quality concerns, according to the fifth Royal Dutch Shell annual outlook on LNG.

“For instance, China’s heavy-duty transport sector consumed nearly 13 million tonnes of LNG in 2020, almost doubling from 2018, to serve the fast-growing fleet of well over 500,000 LNG-fuelled trucks and buses,” the Shell report noted.

“LNG-fuelled shipping is also growing, with the number of vessels expected to more than double and global LNG bunkering vessels set to reach a total of 45 ships by 2023,” it said.

As demand grows, a supply-demand gap is expected to open in the middle of the current decade with less new production coming on-stream than previously projected.

“Just 3MT in new LNG production capacity was announced in 2020, down from an expected 60MT,” added the report.

Shell explained that because of the net-zero emissions targets companies are having to make, the LNG industry will need to innovate at every stage of the value chain to lower greenhouse-gas counts.

The Anglo-Dutch company noted that over the past year LNG prices hit a record low early in 2020 but ended the 12-month period at a six-year high as demand in parts of Asia recovered and winter buying increased against tightened supply.

“LNG provided flexible energy which the world needed during the Covid-19 pandemic, demonstrating its resilience and ability to power people’s lives in these unprecedented times,” said Maarten Wetselaar, Director at Shell for Integrated Gas, Renewables and Energy Solutions.

“Around the world countries and companies, including Shell, are adopting net-zero emissions targets and seeking to create lower-carbon energy systems,” he added.

“As the cleanest-burning fossil fuel, natural gas and LNG have a central role to play in delivering the energy the world needs and helping power progress towards these targets,” stated Wetselaar.

LNG trade increased to 360MT in 2020 and despite the “unprecedented volatility” caused by the Covid-19 pandemic the industry is moving towards a period of expansion.

China and India led the recovery in demand for LNG following the outbreak of the pandemic with both countries increasing their LNG imports by 11 percent.

“Demand in Europe, alongside flexible US supply, helped to balance the global LNG market in the first half of 2020,” said the report.

“However, supply outages in other supply basins, structural constraints and extreme weather later in the year resulted in higher prices,” it added.

The southeast Asian nation of Myanmar has entered the LNG business with the delivery of two LNG cargoes from Malaysian state energy company Petronas, destined for the port of Yangon for a Chinese-owned power joint venture.

The Southeast Asian nation of Myanmar is making progress in constructing a liquefied natural gas import terminal to support a regional power plant project backed by a Chinese company.

Indian liquefied natural gas terminal developer H-Energy and Kakinada Seaports signed an agreement for an LNG regasification and reloading terminal to be sited at Kakinada port in Andhra Pradesh, which would be only the second such facility on the East Coast of India.

Kakinada Seaports controls the concession for the Kakinada Deep Water Port under an agreement with the government of Andhra Pradesh.

“H-Energy shall develop an LNG hub at the Kakinada Port catering to the needs of domestic customers in the state of Andhra Pradesh and shall supply LNG through small LNG vessels to H-energy’s proposed Kukrahati LNG terminal in the state of West Bengal and neighboring countries like Bangladesh and Myanmar,” explained H-Energy.

Darshan Hiranandani, Chief Executive of H-Energy, said the company was excited to partner with Kakinada Seaports for this East Coast project.

“We believe that Kakinada with its existing breakwater and deep draft combined with its close proximity to various natural gas pipelines makes this an efficient and successful project for our customers, our partners, and ourselves,” said the CEO.

“The PSA along with its associated agreements envisages a long-term association between the two organizations contributing towards India’s growth story, especially, the vision of the Government to promote a gas-based clean economy," he added.

Depending on the timing, the Kakinada terminal could be only the second on the East Coast of India after the start-up in March 2019 of the first facility at Kamarajar Port in Tamil Nadu.

The Kamarajar terminal is owned by Indian Oil Corp., the refining and fuel marketing company, and has 5 MTPA of import capacity and two tanks each with storage of 180,000 cubic metres.

The Hiranandani group also has plans to deploy a floating storage and regasification import project at Jaigarh port, south of Mumbai, by the end of 2019.

The H-Energy subsidiary will operate the Jaigarh terminal with annual capacity of 4 MTPA of LNG and with re-loading capabilities.

H-Energy has explained that the FSRU charter to H-Energy is for a period of five years and the ship will arrive at the LNG jetty at Jaigarh just before the start-up.

Most of the onshore infrastructure work has almost been completed by Engineers India Ltd, a project construction company.

H-Energy said the West Coast facility would be of great benefit to Maharashtra state in western India by providing clean fuel for transportation and for city-gas use.

When operational, the regasified LNG will be supplied to customers through the pipeline connected to national gas grids at the city of Dabhol.

The facility would be the fifth LNG import terminal located near Mumbai, with three of them located at Hazira, Dahej and Dabhol for use by importers Shell, Petronet LNG and Gas Authority of India respectively.

A fourth is mechanically completed at Mundra. It is owned by Gujarat State Petroleum and the Adani Group, though has yet to be fully commissioned.

H-Energy also recently signed a cooperation accord with Russian company Novatek, operator of the Yamal LNG plant in Siberia and developer of the Arctic LNG II project.

Novatek said the memorandum of understanding envisaged cooperation in LNG supplies to India on a long-term basis, joint investment in future LNG terminals of H-Energy and in Russian LNG projects.

The Hiranandani conglomerate and Novatek said they also planned to establish a joint venture to market LNG and natural gas to end-customers in India, Bangladesh and other markets.

Myanmar is expected to begin importing liquefied natural gas by 2020 using floating storage and regasification units to supply three gas-fired power plants already under development.

May 2 (LNGJ) - French energy company Total has started production from the Badamyar natural gas project in the South-East Asian nation of Myanmar. It is located 220 kilometres offshore from the port of Yangon and will enable an extension of the Yadana gas field and its 8 billion cubic metres per year production plateau beyond 2020. “Completed on schedule and with costs 20 percent below budget, this second start-up by Total in 2017 demonstrates our capacity to effectively implement cost reduction programs,” said Arnaud Breuillac, President and Exploration and Production at Total. “This project underscores Total’s commitment to develop gas projects to provide Myanmar and Thailand with affordable, reliable and clean energy to support economic growth over the coming years,” added Breuillac.

The Myanmar government is planning an international tender during the second quarter for the Asian nation to acquire its first LNG import facility in the form of a floating storage and regasification unit.