Oct 23 – Since early 2017, China’s gas imports totalled 51 Bcm, a 20% increase, over the same period, according to Gazprom. The Russian gas export monopoly sees “great potential” for deepening its cooperation with Chinese imports, both in terms of pipeline gas and LNG from its Sakhalin venture.
In the face of oversupplied global gas markets and rising LNG trade, the International Energy Agency (IEA) has voiced concerns that the transformation from regional to more flexible, interdependent gas markets is creating new security challenges. In the short-term, global portfolio players are expected to provide the needed additional flexibility from their currently open selling positions.
As the world’s No.1 gas importer, Japan has launched a $10 billion financing initiative in a bid to play a leading role in the development of infrastructure – notably small-scale regasification plants and power stations – across Southeast Asia. Launching the initiative at an industry conference in Tokyo today, trade and industry minister Hiroshige Seko is combining diplomacy with a soft-sales approach for Japanese technology.
Electrifying remote Indonesian islands through ships, or barges, that generated electricity using LNG, is at the centre of a research plan supported by the governments of Indonesia and Japan. Tokyo hopes to export the new technology to other island nations in Asia Pacific.
Low global LNG prices have improved the economics in China to generate electricity from natural gas instead of coal, and the subsequent surge in imports also increased the number of landed cargoes from the United States. According to the US-China Economic and Security Review Commission, the worth of US LNG exports in Jan-July 2017 exceeded $139 million, already 2% more than the 2016 total.
Encouraged by a seismic survey of Atlantic coast acreage, Argentina has announced it will auction offshore oil and gas exploration rights near its northeastern sea border next year. The energy ministry hopes the subsalt basin off Brazil continues south which could lead to discovery of attractive conventional fields that help reverse Argentina’s energy deficit.
Rising exports of “abundant US natural gas” is estimated to support up to 452,000 new jobs and give a $73 billion boost to the economy by 2040 – at a “minimal impact on the natural gas prices,” according to a study by the American Petroleum Institute (API). The resource base is now seen as “larger, less expensive and more price responsive,“ API Chief Strategy Officer Marty Durbin commented.
CEOs of the three gas liquefaction and export facilities near Gladstone in Queensland, Australia, have struck a deal with Prime Minister Malcolm Turnbull, promising to fill the expected shortfall and address any additional needs by offering gas on “secure and affordable” to domestic customers.
Ineos Group, the operator of Scotland’s Grangemouth oil refinery, has condemned a decision to ban shale extraction in Scotland saying the government “turned its back on a potential manufacturing and jobs renaissance.” Operations director Tom Pickering warned Scottland will miss out on an estimated 3,100 jobs – and “it will be England that reaps the benefits.”
Integrating North America’s abundant shale gas resources into global markets keeps prices subdued: NBP averaged at $10/mmBtu in 2011-14 and by 2016 lost more than half of its value, hovering around $4.63/mmBtu. According to Societe Generale analysis, natural gas is now in a unique position to help regions transition away from coal- and oil-fuelled power generation.