As China strives to rekindle its economy, after strict lockdowns in January and February to contain the coronavirus, energy demand slowly recovers. Beijing lowered gas prices for industrial users, but Wood Mackenzies deems it’s insufficient to stir a lost-demand recovery and new coal-to-gas switching.
Australia-listed LNG Ltd, developer of U.S. Magnolia liquefaction plant, faces a financial crunch as a takeover bid by a Singaporean investor has been pushed back to mid-April. Magnolia LNG hence postponed shipment of the first cargo to the Bac Lieu power plant in Vietnam’s Mekong Delta.
Polish utility PGE is adding two gas-fired units, powered by GE’s 9HA.01 gas turbines, to its Dolna Odra power plant. By adding flexible combined-cycle units, PGE gradually converts the 1,832 MW coal-fired plant into a cleaner-burning facility to meet regional emission standards.
Excess LNG supplies from the U.S. and diverted cargoes from Asia Pacific are heading for Europe, swelling gas storage and putting more downward pressure on prices as demand from industry and power generation stays subdued. IHS Markit says Europe's imports could swell to equal the monthly offtake of South Korea and Japan combined.
Stockpiles of domestic U.S. gas production will reach an all-time high in 2020, as drilling companies keep producing record volumes even though the coronavirus crippled domestic demand. Exporting excess LNG is not easy as Europe is in lockdown, but the first US LNG cargo for more than a year is heading for the Chinese port of Tianjin.
Five Singaporean and two Japanese companies have joint forces to utilize hydrogen as a green energy source in Singapore. Sembcorb, Chiyoda and Mitsubishi, among others, committed to develop novel technologies related to the import, transportation and storage of hydrogen.
The Russian President Vladimir Putin has instructed Gazprom to proceed to the pre-investment phase for the ‘Power of Siberia 2’ pipeline. Supplies via this route may total up to 50 billion cubic meters per year (bcm/y), with the gas set to be brought to western China.
Travel bans, imposed in the United States to contain the coronavirus, have halted commissioning works on energy storage facilities, delayed grid connections and threatens to undermine project economics. Wood Mackenzie expects 31% less behind-the-meter energy storage units will be installed in the U.S. this year.
Rapidly falling oil prices since March 18, when Saudi Arabia started to flood the market, have pulled down seasonal gas and wholesale power prices in the UK. According to Cornwall Insights, Brent crude oil prices plunged over 60% so far in 2020, with seasonal gas and power contracts shedding 32.7% and 21.1%, respectively.
Shutdowns are lifted in China and South Korea, allowing battery supply chains to ramp back up while rivals in Europe and North America are in lockdown. Electric vehicle sales stayed strong through February, according to Wood Mackenzie, and China’s labour force is returning, expected to be at 70% in March and over 90% in April.
Halts in production and collapsing sales have hit Germany’s carmakers at a crucial time of transitioning to electric vehicles. Sales of e-cars are projected to fall by at least 20% this year, impacting electricity demand, while bailouts for manufacturers and suppliers could cost billions of Euros.
French industrial company Eranove is fast-tracking the development of the 390 MW Atinkou combined-cycle power plant in Ivory Coast, having just taken financial close after receiving €303 million in debt financing. Total cost of the CCGT is €404 million, developers disclosed.