LNG

The arbitrage for flexible US LNG cargoes heading to Asia is open with spreads between the Japan Korea Marker (JKM) and the Dutch TTF widening, as the tepid recovery of Qatari and UAE LNG exports is unlikely to outpace rebounding Asian demand.

Venture Global’s average liquefaction fee surged 69% in the second quarter to an average $6.45 per million British thermal units, up from $3.82/MMBtu in the first quarter, as higher LNG prices lifted returns on commissioning cargoes and short-term sales, the company said in a regulatory filing.

Australia’s Woodside Energy is struggling to market volumes from its planned Louisiana LNG terminal, as its higher liquefaction fees put the 16.5 mtpa project at a disadvantage to US rivals.

Shell-led LNG Canada has substantially ramped up production and exports to Asia. In the first 11 days of March, the plant loaded five cargoes with a sixth cargo getting ready to set sail today.

Spot gas prices at Canada’s AECO hub in Alberta have plunged recently turned negative as production overruns collide with technical issues at the country’s first LNG export facility. Train 1 at LNG Canada struggles to scale up operation, creating a gas supply overhang in British Columbia.

Woodfibre LNG, a joint venture of Pacific Energy and Enbridge, is going full steam on Canada’s first net-zero liquefaction terminal. First pipe rack modules arrived at the site near Squamish, BC.

Black & Veatch (B&V) will use Baker Hughes’ LM9000 gas turbine and compression technology as part of a standard module capable to produce up to 2 mtpa of LNG. The intention is to utilize PRICO technology to produce up to 2 mtpa of LNG per train.

Air Products, the world’s leading supplier of liquefaction processing equipment for LNG plants around the world, has also emerged as the main global producer of hydrogen with new contracts just awarded from the US National Aeronautics and Space Administration to match others from nations like oil producer Saudi Arabia.

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.

Cheniere Energy has said it is conducting previously scheduled turnarounds on Trains 3 and 4 at the Sabine Pass LNG export terminal in Louisiana, as part of its maintenance plan for the facility.