LNG

Pakistan likely to curtail LNG imports in the short-term but efforts are underway to maintain foreign direct investment in the local energy sector by opening up domestic gas distribution channels.

Since 2015, Pakistan has become one of the fastest growing LNG markets as the country has pushed to ramp up its LNG import capacity to alleviate chronic energy shortages that have led to a decade of electricity blackouts. Regulatory challenges did not deter investors and the country now boasts two LNG import terminals (FSRUs) near Karachi.

World’s largest LNG producer takes bold steps towards regaining market dominance currently at risk from Australia and the United States

New Reserves at North Dome Gas Field

Lower Asian demand in September and October partially responsible for excess LNG flows into Europe but threat of delay to Nord Stream 2 pipeline probably also factored

The rise of US LNG means LNG markets are flush with new supply whilst the prevailing ‘tolling’ model for US LNG means traders can profit from cheaper North American gas but face significant downside risk if demand growth slows.

YPF’s launch as an LNG exporter went to plan with the Tango FLNG barge at near capacity

YPF’s Tango FLNG barge moored at the port of LPG fractionator Mega – a joint venture consisting of YPF, United States chemicals major Dow and Brazil’s state-controlled petrochemical champion Petrobras – has exported its first LNG cargo aboard the LNG carrier Excalibur in the late evening hours of Friday last week. YPF has maintained throughout that formal trading will commence in 3Q 2019 despite various reports a cargo had already been shipped in June this year. The company’s LNG export last week thus marks the passing of a milestone in Argentina’s strategy to reverse the flow of the expensive fuel.

The roster of North Asian LNG importers has seen their demand for the fuel drop by 7.68mmt (-4.7%) in the period January to October compared to the same period last year, our LNG Market Tracker shows. The region includes the world’s three largest imports – Japan, China, South Korea – and Taiwan.

Growth in 1H 2019 almost stagnated

Previous reports suggested future ship-to-ship transfers close to Murmansk, but Yamal LNG seems still in the process of sorting winter STS location

The ice-free, deep-water port Honningsvåg on Magerøya Island in Norway close to the Russian border became witness to 123 ship-to-ship (STS) LNG transfers amounting to c. 8.2mmt between November 2018 and June 2019. Today, the first Yamal vessel since July has anchored at one of Honningsvåg’s STS sites.

Portfolio-based US exports particularly affected by longer journey times

Departed without destination

Offtakes have tripled in the first 42 weeks year-on-year

British LNG demand has seen a dramatic increase compared to 2018 and 2017 as the country reached a preliminary offtake peak of 3.9mln m3 in April. For the remainder of October this year, we are expecting another four cargoes aboard the Lijmiliya, the Bu Samra – both scheduled do dock at South Hook LNG – as well as the Umm Slal and the Megara, which are headed for the Isle of Grain.

Growth in Pakistan tempers change driven by Egypt

Whilst the overall number of cargoes delivered by Sunday midnight is looking to remain stable week-on-week as well as year-on-year, the actual volumes delivered will lag behind both those of the previous week (7.6%) and year-on-year (-14.3%), our LNG Market Tracker data for this week to Sunday indicates.

The key to that development is found in Egypt.

According to today’s vessel schedule, the end of this week will have seen 82 cargo liftings amounting to 5.78mmt, representing a 0.64mmt (12%) an increase week-on-week.