LNG

Qatar’s attempt to revive LNG exports through the Strait of Hormuz is becoming as much a shipping and crewing problem as an energy-supply challenge. In the four weeks after the first Qatari LNG carrier crossed the waterway on September 10, about 20 laden tankers exited Hormuz, though transits volumes still are at roughly one-third of pre-war levels.

European households and industries face at least another year of high gas prices as inventories sit nearly 15% below normal filling levels for October, leaving the EU dependent on scarce LNG cargoes and facing a costly refill campaign next summer.

Glenfarne, lead developer of the Alaska LNG project, claims that liquefying Alaska’s North Slope gas and shipping it to Asia would be at least 65% cheaper than shipping LNG from the US Gulf Coast. Brushing aside criticism over the project’s high cost, Glenfarne told Reuters that the Alaska LNG project itself entails some $1.4 billion per mtpa in delivery costs.

Bangladesh has approved in principle a proposal by China National Energy Engineering & Construction Co (CNEE) to build and operate the country's third floating LNG import terminal, despite the Chinese company's regasification fee being substantially higher than those of existing terminals.

Security costs rather than freight fundamentals are increasingly determining LNG shipping economics. Owners face "between 6 and 10 million dollars for every single shipment" before vessels enter the Strait of Hormuz, simply to secure additional insurance cover, said Tom Beney, Senior Vice President of Ocean Freight at StoneX.

Limited shipbuilding capacity in South Korea and China could slow down a record expansion of global LNG supply. One of the industry’s dependencies – the ability to physically move gas – rests on a supply chain it cannot control and cannot quickly replicate, Ikram Elloumi, director of research at Wood Mackenzie warns.

Vietnam is relying more heavily on thermal coal as heightened security risks around the Strait of Hormuz adds another layer of risk for a market that is still scaling up its regas infrastructure, while the Ministry of Industry and Traded helped secure coal imports for power generation.

The decade of structurally cheap US gas is drawing to a close, with Henry Hub prices forecast to rise towards $5 per MMBtu by 2035 from below $3 per MMBtu, as LNG demand growth tightens domestic balances, Wood Mackenzie said.

Contract flexibility, strong demand and reliable project execution are bolstering credit profiles of US and Canadian LNG producers, Fitch Ratings said. Longer-term credit upside could fade as competition intensifies, build costs rise and demand visibility weakens, leaving producers reliant on tighter capital discipline and low-cost expansions, analysts warn.

Vietnamese authorities in Nghe An province are urging PV Power to accelerate development of the $2.25 billion Quynh Lap LNG-to-power project with a view to bringing the 1,500 MW plant into operation by 2030 – even as imported fuel costs weigh on profitability.