LNG

Following President Trump’s turnaround in US LNG export policy, Asian importers are looking for a boost in US production in the coming years.

The views from Asia's key LNG demand centres in Northeast Asia, as well as Southeast Asia wax a result of the US Department of Energy (DoE) announcement on 20^th January that it was ending the LNG export project pause.

Europe may have to buy at least 100 more LNG cargoes this summer to replenish its gas stocks.

The cargoes would be worth around $6 bill at today's prices, and would be needed after a drop in storage levels this winter, due to cold weather and the cessation of Russian supplies.

Venture Global LNG has slashed the valuation it sought from its US initial public offering (IPO) to $65.33 bill, much lower than the initial target of $110 bill.

The revision follows days of marketing to potential investors, who baulked at the company’s high preliminary valuation, according to newswire reports.

Portugal plans to increase LNG purchases from the US and Nigeria, as it aims to end already dwindling supplies from Russia, the country’s Environment Minister, Maria da Graca Carvalho, said on Tuesday.

Portugal imported 49,141 GWh of natural gas in 2024, of which around 96% was LNG, data from electricity and gas grids operator REN showed.

Asia refocuses on US production following the export project pause reprieve

Nigeria accounted for 51% of those LNG deliveries, about 40% came from the US and around 4.4% from Russia.

In 2021, Russia accounted for 15% of Portugal's LNG supply.

"Portugal is now practically independent of Russian gas ... but we want to reduce this figure further by importing more gas from Nigeria and the US," Graca Carvalho told a panel at the World Economic Forum in Davos, according to economic website ECO.

ECO reported that the Minister had urged greater co-operation within the European Union to ensure energy independence and security, saying that Iberia was still an "energy island", as it had "been difficult to build interconnections with France."

As predicted, on day one of his presidency, Donald Trump issued an order to allow the US to resume processing export permit applications for new LNG projects.

This was seen as part of an initiative to raise US energy output and dismantle former President, Joe Biden's climate policies. 

Over the next two years, US natural gas demand is set to grow by more than the supply.

In its January short term forecast, the US Energy Information Administration (EIA) said natural gas supplies, including both production and imports, will rise by 1.4 bill cu ft per day this year, while demand, including domestic consumption and exports, will increase by 3.2 bill cu ft.

Last year’s Australian LNG shipments set a new record of 82 mill tonnes per annum, compared to 81.1 mill tonnes in 2023, and the previous record of 81.3 mill tonnes shipped during 2022, according to figures produced by EnergyQuest.

However, the 2024 revenue of $67.7 bill was less than the record of $90.3 bill set in 2022, and $74.3 bill a year later, primarily due to lower LNG prices, which was countered somewhat by a falling Australian dollar, compared to its US counterpart. 

Last month, the EU recorded its fourth consecutive year-on-year increase in gas consumption, rising by 9% to 40 bill cu m.

This came after seven months of continuous decline, reported the UAE-based Gas Exporting Countries’ Forum (GECF).

The rise was mainly driven by the residential and electricity sectors, influenced by a cold spell and notably lower wind power output.

Similarly, US gas consumption saw a significant y-o-y increase of 5.1%, reaching 93 bill cu m.

In November, 2024, China’s apparent gas demand rose by 1.7% y-o-y to 35.6 bill cu m, driven by increased LNG fuel demand for trucks and higher gas fired power generation.

As for gas production, in December, 2024, the US continued its declining trend to stand at 88.6 bill cu m, representing a 4.1% y-o-y reduction.

This drop reflected the combined effect of the Hurricane season on Gulf of Mexico operations and production cuts in response to low Henry Hub prices.

In November, 2024, Europe’s gas production fell by 2.1% y-o-y to reach 15.9 bill cu m, primarily due to reduced output from Norway and extended maintenance periods.

Gas production in the Asia/Pacific region was estimated to have decreased by 0.2% y-o-y, driven by a slower growth rate in Chinese production (3.7% y-o-y) and a reduction in output from several other major Asian gas producers.

In the upstream sector, GECF members, Mauritania and Senegal, began gas production from their joint Greater Tortue Ahmeyim (GTA) offshore project.

Global LNG imports fall

Looking at gas trades, in December, 2024, global LNG imports fell for the second consecutive month, declining by 0.3% y-o-y to 38.2 mill tonnes.

The decrease was driven by reduced imports in Asia/Pacific and Europe, partly offset by stronger inflows into the LAC and MENA regions.

Asia/Pacific LNG imports saw their only monthly y-o-y drop last year, attributed to mild winter weather, ample storage levels, and higher spot LNG prices.

Europe's LNG imports, although down y-o-y, reached their highest level since January, 2024, while PNG imports slightly increased to reach 13.7 bill cu m.

In terms of infrastructure development, the US Plaquemines LNG facility marked a milestone by exporting its first LNG cargo last month.

Gas stocks were falling in the northern hemisphere regions, driven by increasing heating demand.

The EU recorded a particularly large withdrawal, with the monthly average volume of gas in storage decreasing to 82 bill cu m (79% of the regional capacity), compared with 93 bill cu m a year ago.

Net US withdrawals started by the middle of November, bringing the average gas storage level down to 101 bill cu m (76% of the country’s capacity), almost the same level as a year ago.

In Asia, the combined volume of LNG in storage in Japan and South Korea decreased to 13.8 bill cu m, which is less than the 14.9 bill cu m in storage at the same stage last year.

European gas and LNG spot prices held steady compared to the previous month, while Asian LNG prices experienced a slight increase in December, 2024.

The TTF spot price averaged $13.82 per MMBtu, while the average NEA spot LNG price averaged $14.21 per MMBtu, up by 1% month-on-month. In the US, the Henry Hub spot price averaged $3.01 per MMBtu, increasing significantly by 38% m-o-m.

Looking ahead, weather conditions are expected to remain a critical factor influencing spot prices, with any cold snaps likely to exert additional upward pressure, the GECF concluded.

India's LNG imports are set to rise this year in the range of between 4% to 10%.

This forecast reflected robust local consumption, resilient economic growth and policy development, although tempered by international fuel prices amid supportive global demand-supply fundamentals, industry sources and analysts said.