LNG

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.

Woodside Energy, the operator of the North West Shelf and Pluto liquefied natural gas LNG plants in Western Australia, reported a plunge in third-quarter revenues as LNG prices dropped from the record levels of last year though increased by 6 percent from the previous three months of 2023 as Woodside also suffered a regulatory setback on the Scarborough gas project.

Japanese monthly LNG imports dropped by 5.4 percent year-on-year as costs increased by more than 50 percent and with the number of shipments from Asian nations and Australia rising as deliveries from other regions fell.

The November 2022 LNG shipments to Japan’s network of 37 terminals amounted to 5.55MT, or 82 cargoes, compared with 5.86MT, or 87 shipments, in November 2021, according to preliminary trade data from the Finance Ministry.

The deliveries last month were, however, higher than those in the previous month of October 2022 when they were 5.08MT.

Those October shipments had been higher by 9.9 percent than the October 2021 deliveries received.

The costs of the November LNG cargoes increased by 52 percent year-on-year to 750.52 billion yen ($5.48Bln) compared with the November 2021 costs of 494.77Bln yen ($3.61Bln), the Ministry data showed.

For the past six months, Japan has seen a record trade deficit for each month, as rising energy and raw material costs have pressured the economy.

While LNG imports fell in November deliveries of thermal coal for power generation also plummeted by 18.5 percent to 8.58MT.

The top eight suppliers of LNG to Japan have most recently been Australia with more than one-third of deliveries, Malaysia, Qatar, Russia, the US, Brunei and Papua New Guinea.

Cargo sources

The November shipments from Russia’s Sakhalin Island plant in the Far East fell 14.4 percent to 446,000 tonnes while deliveries from the US dropped by 52.2 percent versus November 2021 to 191,000 tonnes.

Shipments of LNG from Asia in November increased by 5 percent to 1.62MT.

The Ministry data also showed that Middle East deliveries were the biggest fallers by 54.2 percent to 484,000 tonnes.

The balance of imports and the biggest portion in November 2021 came from Australia with minor additions from African nations and the spot market.

That segment of the imports was well up at 2.81MT compared with 2.34MT in November 2021, though was less than the October 2022 combined import figure of 3.03MT.

Japan has also lagged in increasing nuclear power into the energy mix in 2022.

Since the Fukushima disaster, only 10 reactors have been given the go-ahead to go back into operation compared with the 54 that were online in 2011 and which supplied around 30 percent of Japan’s energy needs.

A further 21 reactors have been decommissioned since 2011 and will never be re-started. 

Japanese liquefied natural gas imports declined last month by 0.4 percent after three successive increases and year-on-year costs more than doubled as volumes increased from Asia and Australia.

Shipments of LNG to Japan’s network of 37 terminals amounted to 6.16 million tonnes in July 2022, or 92 cargoes, compared with 6.19MT, or 91 cargoes, in July 2021, according to the preliminary trade figures from the Japanese Ministry of Finance.

Japan had imported 5.80MT in June 2022 compared with 5.70MT in the same month of 2021.

The nation’s LNG costs in July 2022 amounted to 773.1 billion yen ($5.65Bln), a more that 124 percent increase compared with the 344.99 Bln yen ($2.52Bln) paid in June 2021.

Weaker yen

The effect on Japan’s balance of payments was severe in June as the Japanese yen dropped to a 24-year low against the dollar, though it recovered in late July and August, though dollar-based commodities like energy are still more expensive when converted back into yen.

Japan’s 2021 LNG cargo deliveries had been less than those of China for the first time and came to 74.31MT, down 0.2 percent on 2020 and 4.62MT less that the Chinese total for 2021.

Japanese thermal coal shipments also fell in July to 9.36MT, down by 4.1 percent from July 2021.

The price of thermal coal deliveries jumped higher to 408.46Bln yen ($2.98Bln), up 262.4 percent from July 2021.

During July the volumes of delivered LNG increased from Asia and Australia compared with last year.

Shipments of LNG to Japan in July increased by 19.6 percent to 1.73MT from Asian countries like Malaysia and Indonesia.

Middle East cargo deliveries from nations like Qatar were down by 54.7 percent last month to 401,000 tonnes.

Deliveries from the US increased by 8.9 percent from July 2021 to 665,000 tonnes.

This was higher than the 562,000 imported in July from the Russian LNG plant on Sakhalin Island, which were down 26.1 percent from July 2021.

The balance of LNG imports in July 2022 came from Australia, African nations and the spot market.

That segment of the imports was higher at 2.80MT compared with the 2.48MT logged in July 2021.

Nuclear

As of the start of July 2022, 10 nuclear reactors at six power stations have been given the go-ahead to restart in Japan but only four reactors were in operation.

Several Japanese Prefectures have agreed to restart the reactors, though were awaiting the implementation of safety measures and the completion of other construction work.

Before the Fukushima disaster in 2011, 54 nuclear reactors were in operation in Japan, supplying about 30 percent of the country’s electric power.

The 10 reactors with start-up approvals are at the following six power stations: Ōi, Takahama, and Mihama (Kansai Electric), Genkai and Sendai (Kyushu Electric) and Ikata (Shikoku Electric).

These plants based in western Japan all use pressurized water reactors, which are different from the boiling water reactors at the Fukushima plant than exploded after an earthquake and tsunami.

Asian LNG imports generally declined in the first half of 2022 with rising gas prices curbing demand in the Japanese and South Korean electricity sectors, while a combination of high spot prices and ongoing Covid-19 lockdowns reduced gas consumption in China.

Taiwan will vote in a referendum on December 18 on whether to move the nation’s third liquefied natural gas terminal, currently under construction at Taoyuan, to another location or to accept a government plan to extend the LNG carrier jetty slightly further out to sea away from a sensitive reef area.

Taiwan’s Minister of Economic Affairs Wang Mei-hua said a balanced approach was required for energy and LNG imports to advance the economy.

Wang urged voters to reject the relocation, and said that the present plans for the terminal, one-third of which has already been built, would not affect an algae reef near the coast.

Wang made her defence of the project in a televised forum on November 13 when the cases for and against were put forward.

Taiwan is still Asia’s fifth-largest LNG importer after North Asia’s top three of Japan, China and South Korea and with India in fourth place.

The Taiwanese are constructing the third LNG terminal to meet increasing demand after imports rose 6 percent last year to 17.75 million tonnes.

Taiwan in July 2021 signed a new LNG supply agreement with QatarEnergy for 1.25 million tonnes per annum of cargoes as the Taiwanese prepare to use more of the fuel. It is additionally increasing LNG shipments from  the US.

Under the Taiwan expansion plans, the national energy company, CPC Corp., is developing the Taoyuan terminal in the district of Datan Borough for local needs and a gas-fired power plant there.

Completion

The first phase of the Taoyuan terminal construction should be completed by 2023. A second expansion phase is also proposed.

The first expansion of Taiwan’s existing Tai-Chung LNG terminal was also completed at the end of 2019.

Further work is planned, including the addition of another berth and associated tanks, to be carried out in two phases.

The 1.8 MTPA expansion project at Taiwan’s second existing terminal, the Yung-An facility, including three new storage tanks and related regasification facilities, is expected to be completed by the end of 2026.

Minister Wang said that the LNG project was an important part of the country's power supply infrastructure, which can achieve the goals of protecting the algae reef in the area, ensuring stable power supply and cutting air pollution.

“The government’s revised project is to push the LNG terminal 450 metres away to 1.2 kilometres from the coast may not be perfect, but it is the best solution for protecting the environment,” stated Wang.

The LNG plant referendum was achieved by environmentalist groups brought together into the “Rescue Datan Algae Reefs Alliance”. They managed to collect more than 700,000 signatures by March 2021 to have the LNG terminal issue put on the ballot on December 18.

Taiwanese voters will be deciding on three issues in the referendum, the LNG terminal, the re-activation of a moth-balled fourth nuclear power plant and the quality standards of imported pork.

Oct 19 (LNGJ) - Global LNG shipments are continuing to point at North Asia amid continued elevated spot prices of around $34 per million British thermal units for the Japan-Korea Marker.

   The 154,950 cubic metres capacity carrier “Asia Vision” is scheduled to deliver a cargo on October 22 to the Zhoushan import terminal in China’s eastern Zheijang province from the Gorgon plant on Barrow Island in Western Australia. Among scores of other LNG vessels that have lifted cargos for Asia, the 261,980 cubic metres capacity vessel Q-Max carrier “Al Dafna” is scheduled to discharge a Ras Laffan cargo on October 31 at the Pyeongtaek import terminal in South Korea.

Sovcomflot said a keel-laying ceremony was held at the Zvezda Shipbuilding yard in Russia’s Far East for a new Arctic liquefied natural gas vessel ordered by the Russian tanker and LNG carrier fleet owner.

Russian fleet owner Sovcomflot and Sakhalin Energy, operator of the LNG plant in the Russian Far East, signed long-term time-charter contracts for two existing LNG-powered tankers, which will be re-fuelled at the liquefaction and export plant.

The liquefied natural gas market continued to display seasonally high prices for shipments to China, Japan and South Korea as cargo liftings stayed above 100, while European benchmark LNG values slipped after previously hitting 2021 highs.