Available Exclusively to NGW Subscribers:
Volume 3, Issue 1 - January/February, 2021
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LNG Condensed brings you independent analysis of the LNG world's rapidly evolving markets.
Covering the length of the LNG value chain and the breadth of this global industry, it will inform, provoke and enrich your decision making. Published monthly, LNG Condensed provides original content on industry developments by the leading editorial team from Natural Gas World.
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In this Issue:
Editorial: Challenges and opportunities in 2021
Methane emissions and LNG bunkering will be key areas for the LNG industry in 2021, once it has absorbed the roller coaster ride of spot pricing in 2020, which saw record lows in March/April turn to unprecedented highs at the end of the year.
Boom! LNG spot prices rocket to record levels
Just when you thought it was safe to go back in the water, severe cold across much of northern Asia has boosted short-term LNG demand, sending spot prices for LNG and LNG carriers skyrocketing. However, this represents a temporary period of volatility, exposing limitations in the LNG supply chain’s ability to respond to peak demand events, with markets likely to settle towards the end of the first quarter. The LNG market will remain over-supplied in 2021, but the rebalancing process will gain pace in 2022 as higher demand emerges from post-pandemic Asia.
Covid-19 has taken its toll, but LNG market optimism remains
The LNG market has been hard hit by the Covid-19 pandemic, and, while 2020 saw a single fi nal investment decision made on new liquefaction capacity -- in stark contrast to the 70mn mt/yr capacity approved in 2019 -- longterm optimism about Asian demand growth remains strong. Companies have pulled back from new projects, delays have been experienced at those under construction, and some have been reduced in scale, but most major projects, particularly those that will bring new countries into the ranks of producers, continue to move forward.
Indian LNG faces Quandary
LNG’s rollercoaster journey over the past year has been nowhere more apparent than in the highly price-sensitive Indian market. The government’s enthusiastic embrace of LNG imports at the time of very low spot prices has been thrown into disarray by the recent switch to historically high prices, with the mayhem caused by the Covid-19 pandemic unsurprisingly aff ecting developments along the way.
Country Focus: Interest remains high in Egypt’s gas sector
While the Covid-19 pandemic may have slowed gas operations worldwide, Egypt remains a hive of activity. Over the last 12 months, major new operators have bought into the sector or enlarged their positions, gas production continues to rise, a deal has been reached to increase imports of Israeli gas, and Egypt’s second LNG plant is slated to resume operations in the fi rst quarter of this year, following an eight-year hiatus.
Project Spotlight: Abadi LNG
Indonesia’s gas production fell to 56.4bn m3 (5,461mn ft3/day) in 2020, according to data released by the country’s upstream regulator SKKMigas January 4, a sharp reduction from the 67.5bn m3 recorded for 2019 by the 2020 edition of BP’s Statistical Review of World Energy. Declining gas output continues to aff ect the amount of gas available for export, both by pipeline to Malaysia and Singapore, and as LNG as Indonesia continues to consume more of its own LNG production itself.
Technology: LNG-electric vessels set to move centre stage
Increasingly stringent pollution standards look set to propel LNG-electric hybrid ships into the mainstream, off ering large nitrogen and sulphur oxide (NOX and SOX) emissions reductions and reduced carbon emissions, as a result of combining LNG use with improved fuel effi ciency.