LNG

Oct 4 (LNGJ) - Russian natural gas company Gazprom said its gas production decreased by 17.1 percent to 313.3 billion cubic metres in the first nine months of 2022 compared with the same period last year. Gas exports to the European Union and other nations outside of the states of the former Soviet Union dropped by 40.4 percent, or 58.9 Bcm, to 86.9 Bcm during the period.

   “Also notable is the level of reserves observed at Ukraine's underground gas storage, which as of October 1 contained 14 Bcm of gas out of the 19 Bcm required to be in stock by winter,” said Gazprom.

A leak of natural gas from the blocked Russian Nord Stream II link to Germany that was never brought on line but was fully primed to start up has led Denmark to advise Baltic Sea shipping not to come within 5 kilometres of the pipeline.

Gazprom said the booking for the transit of Russian natural gas via Ukraine remained at the same level of previous days on the third day of the Nord Stream 1 pipeline maintenance shutdown as more LNG cargoes head for the European Union to partially offset the lower gas volumes.

Gazprom, the Russian pipeline natural gas supplier in competition to LNG, said it produced slightly more gas in January 2022 than last year, though supplies to Western Europe dropped more than 40 percent during the month compared with January 2021.

Russian natural gas pipeline giant Gazprom, a competitor in Europe and now China to LNG, has approved its four-year programme for the reconstruction and re-equiping of gas production and transmission facilities amid long-standing distribution problems such as ownerless gas facilities and non-payment for supplies in areas like the North Caucasus.

The US and China were the two main centres of the growth in natural gas, though the demand expansion in these two markets slowed down compared with the previous years in a context of weakening economic growth, according to a new report from France on LNG and pipeline gas.

While the US and China accounted for 31 percent and 27 percent respectively of the global increase slower economic growth last year and Chinese policy changes and a milder inter added to the oversupply and lower prices.

The report from Cedigaz, an international association created in 1961 by a group of international gas companies and the French Institute of Petroleum, said the main factor behind growth was the switching from coal and oil to natural gas in the power and industry sectors,.

“This was prompted by the competitiveness of natural gas thanks to a growing abundant low-cost supply. This was notably the case in the US and Europe,” said the Cedigaz report.

“Thus, natural gas has remained the main beneficiary of the energy demand growth to the detriment of coal in particular, causing its share in the energy mix to expand further,” it added.

Global natural gas consumption reached 3,948 Billion cubic metres last year, an increase of 2.3 percent from the previous 12 months when the US and China also led the market.

“However, the expansion of natural gas demand in these two markets slowed down compared to the previous years in a context of weakening economic growth,” stated Cedigaz.

“This slowdown also resulted from weather factors as well as the relaxation of Chinese policy on coal-to-gas switching,” it added.

Cedigaz data showed demand was also strong in the European Union (up 2.4 percent), Asia-Oceania (Australia, India), North Africa (Algeria), the Middle East (Iran) and OECD Americas (Canada, Chile).

That’s as natural gas demand declined in the Russia and Ukraine, mainly as a result of a mild winter.

“The growth in natural gas demand slowed from 5 percent in 2018 to 2.3 percent in 2019, returning to the average annual growth rate observed since the start of the century,” said Cedigaz.

Global marketed gas production pursued its rapid expansion, up 3.5 percent to 4,001 Bcm in 2019, corresponding to an annual incremental volume of 136 Bcm.

“Almost 40 percent of the global gas supply growth was dedicated to LNG exports, the remaining volume was consumed domestically,” said Cedigaz.

“The US alone explained around two-thirds of the global increase. US dry gas production growth (up 10 percent) was, in part, driven by a growth of associated gas from oil fields and by new gas pipeline capacity,” the report explained.

“Other significant increments were provided by Australia, China, Russia and Egypt,” it added.

That’s European gas production (Norway included) fell by 7 percent, resulting in a growing external dependence.

Cedigaz data showed that International gas trade (net flows) grew at a robust rate of 3.8 percent to 992 Bcm in 2019.

This growth can be only attributed to the surge of LNG supply (up 12.6 percent), which more than offset a significant reduction in pipeline flows (down 4.3 percent).

“This development reflects the growing abundance of highly competitive LNG supply which gained ground over pipeline gas, especially in the EU, which absorbed most of the extra global LNG supply (50 Bcm out of a global increment of 52.5 Bcm), acting as a balancing market for the LNG business,” stated the report.

“US gas production continued to increase at a much faster rate than consumption, thereby creating a large surplus destined for exports. In 2019, the US entered the rankings of the top-10 exporters to become the fifth largest natural gas exporter worldwide,” it added.

On the prices front, spot gas prices fell abruptly in 2019 as global supply capacity growth outpaced demand growth, resulting in massive storage injections.

“Spot prices on the Asian and European markets plunged by more than 40 percent compared to 2018, resulting in a decoupling between oil-indexed and spot prices,” it added.

“New pricing and trading patterns have reshaped the global gas market, which increasingly relies on spot-priced and flexible gas supply,” said Cedigaz.

Jan 6 (LNGJ) - The Bulgarian natural gas network firm, Bulgartransgaz, said Russian company Gazprom had started European gas deliveries via the new TurkStream pipeline to Turkey, providing more competition for LNG. The capacity flows are about 3 billion cubic metres of gas to Bulgaria via TurkStream, replacing a route that formerly passed through Ukraine and Romania.

   “Russian gas deliveries not only for us but also for Greece and North Macedonia are being carried through the new entry point,” said Bulgartransgaz Chief Executive Vladimir Malinov.

   Gazprom is building TurkStream in two pipelines, each with an annual capacity of 15.75 Bcm. The first pipeline is aimed at supplying Turkey and the second would run further from Bulgaria to Serbia and Hungary. The Bulgarians said they hoped to be able to make shipments to Serbia by May 2020 and complete the whole section by year-end.