Thursday, 14 October 2021 15:58

Gas to Power – October 15. 2021

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Wednesday, 13 October 2021 15:32

LNG Shipping News - 14 October 2021

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Thursday, 14 October 2021 06:00

Climate change discussions hot up

Climate change policies will continue to be an ever-growing topic of discussion in the oil & gas (O&G) industry over the next five to 10 years.

Thursday, 14 October 2021 06:00

Russia steps on the gas

Russia plans to increase its LNG production to 140 mill tonnes annually by 2035.

Thursday, 14 October 2021 06:00

More carbon neutral cargoes reported

PETRONAS LNG is to deliver three carbon neutral LNG cargoes to China’s Shenergy Group

Thursday, 14 October 2021 06:00

China’s future gas demand to increase

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In the first half of this year, China’s gas demand saw a 16% year-on-year increase.

This was led by strong power and industrial demand, Miaoru Huang, Wood Mackenzie’s Research Director, APAC Gas & LNG, said.

Under performing hydropower in southwest China, tight coal supply coupled with high coal prices across the country, and high summer temperatures, all supported gas-fired power generation.

Export-led economic growth and domestic consumption recovery benefited overall energy demand, including natural gas.

So far, China’s gas demand has exceeded expectations and it is now expected that its gas demand will increase by 13%, or 42 bill cu m, year-on-year in 2021.

Huang said that demand is expected to grow by 5.5% a year on average between 2020 and 2030. Post-2030, growth will decelerate but by 2050, China’s gas demand could reach around 660 bill cu m.

To meet its rising demand, China has been boosting domestic production, de-bottlenecking infrastructure, diversifying import sources and introducing market-oriented reforms.

Gas storage facilities and flexible supply sources like LNG will be key for peak shaving. By 2050, RCH demand could account for 40% of total gas demand.

China has also been boosting its domestic production of natural gas to meet demand. In the Long term, integrated renewables and storage projects will pose the ultimate threat to gas power, Huang said.

The transport sector makes up the remaining segment, and its gas demand will mostly come from from LNG-fuelled heavy-duty trucks.

China’s national oil companies (NOCs) have discovered 6.85 trill cu m of natural gas resources in the past decade, some 45% of total incremental resources since the the country was founded as it is today.

LNG imports

Growing gas demand will call on more imports to bridge the gap between demand and domestic production. The country is already the world’s largest gas importer. In 2020, pipeline gas imports totalled 48 bill cu m, while LNG imports stood at 93 bill.

In the first half of this year, China overtook Japan as the world’s largest LNG importer, and Huang expected China’s full year LNG imports to also exceed that of Japan.

Despite higher flows of pipeline imports, LNG will be crucial to meeting China’s gas ambitions. Until storage capacity develops sufficiently, LNG is more flexible than pipeline gas to counter demand and production uncertainty.

In southern China, which is far away from onshore gas-producing basins, LNG will serve both base and peak demand. In northern China, LNG will remain an important peaking source. Huang forecast that LNG demand will increase from 67 mill tonnes in 2020 to 112 mill by 2030 in the base case.

China has pledged to reach carbon neutrality by 2060. To achieve that ambition requires a tectonic shift in its energy mix, technology and metals supply chains.

In the net zero scenario, all hydrocarbons would need to be reduced. Yet, Huang said that the consultancy saw gas demand being more resilient than coal and oil demand.

Before 2030, gas demand growth will be largely intact compared with the base case. Post-2030, gas demand is expected to plateau and a gradual decline begins.

Nevertheless, gas demand in 2050 will be higher than current levels, especially as gas can contribute to China’s transition to net zero in hard-to-de-carbonise sectors and through the form of blue hydrogen, she concluded. 

Thursday, 14 October 2021 06:00

Sinopec to build third receiving terminal

China's Sinopec Corp has won state approval for a third major gas receiving terminal.

Teekay LNG is set to be taken over by a large US-based investment vehicle.

On 23 September, the Sovcomflot (SCF) managed Arc4 LNGC/FSRU ‘Marshal Vasilevskiy’, loaded a cargo of Yamal LNG and transited the Northern Sea Route (NSR).

Thursday, 14 October 2021 06:00

Støhle to quit Höegh

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On 9th October, 2021, Höegh LNG group President & CEO, Sveinung Støhle is to resign from the company in order to pursue an alternative career opportunity based outside Norway, believed to be with the Angelicoussis Group.

Støhle will remain in his position until 1st November, 2021.

The Board has started the process to find his successor and has appointed Thor Jørgen Guttormsen as interim President & CEO from the beginning of November.

Meanwhile, Höegh LNG Partners has agreed with its lenders to defer the maturity date of the commercial tranche of its ’PGN FSRU Lampung’ debt facility.

This will give it more time to conclude a refinancing package, the company explained.

The lenders have agreed to defer the maturity date to 14th January, 2022 from 29th September, 2021.

Subject to commitment letters and a term sheet for a refinancing of the commercial tranche being in place by 29th December, 2021, the maturity date will automatically be further deferred to 29th March, 2022.

The commercial tranche will continue to be amortised at its current rate and there will be a gradual step-up in the interest margin with up to 235 basis points increase.

No dividends

As a condition for the deferred maturity date, no shareholder loans may be repaid and no dividends may be paid to the Partnership by the subsidiary borrowing under the Lampung Facility, PT Hoegh LNG Lampung.

And as a result, no cash flow from the ’PGN FSRU Lampung’ will be available for the Partnership prior to the deferred maturity date. However, this limitation does not prohibit the Partnership from paying the current distributions to preferred and common unitholders, the company said.

The export credit tranche of the Lampung facility matures in 2026, but may be called if the commercial tranche is not refinanced at its maturity date and in accordance with its terms. This clause continues to apply for the deferred maturity date.

The Partnership said that it was considering various options and expects that the terms of any refinancing are likely to be less favourable than the terms of the existing facility and the refinancing that was originally agreed and may potentially be dilutive to unitholders, depending on the refinancing structure that will be adopted.

Despite the previously announced notice of arbitration served by the charterer on 2nd August, 2021, both parties have continued to perform their respective obligations under the lease and maintenance agreement for the FSRU.

In the event that the Partnership is unable to refinance the Lampung facility, or if the outcome of the dispute is unfavourable, it could have a material adverse impact on its business, results of operations, financial condition and ability to pay distributions to unitholders, Höegh warned.