Natural Gas Daily: October 22nd, 2020
Global gas production capacity will most probably exceed demand next year again, which will mean more shut-in of LNG plants globally, according to a new report by the Oxford Institute of Energy Studies.
- This year has seen Europe take less Russian and Norwegian pipeline gas, which was withheld as deliveries of LNG amid the Covid-19 demand slump trashed the hub market price.
- There have been shut-ins at pretty much all the plants around the world, with the exception of the lowest-cost producer Qatar, the report's author Mike Fulwood told NGW, although not below the offtakers' take-or-pay levels. And even Qatar did some cargo diverting.
In recent days there have been two all-stock merger and acquisition (M&A) deals proposed, for a combined $14bn+ in the US Permian Basin. They follow two earlier this year; and the $38bn Occidental-Anadarko megadeal back in 2019.
- ConocoPhillips announced on October 19 it would buy US shale producer Concho Resources in an all-stock transaction worth $9.7bn that marks the largest US oil deal since the pandemic began.
- Pioneer Natural Resources will buy fellow Permian basin producer Parsley Energy for $4.5bn in stock, the companies announced on October 20.
The French government blocked Engie last month from signing a 20-year deal worth potentially $7bn with US LNG exporter NextDecade over concerns that US shale gas is too dirty, Politico reported on October 21, citing sources.
- The gas in question will come from NextDecade's planned Rio Grande terminal in Texas. NextDecade had hoped to reach a final investment decision on the phased, 27mn metric ton/year project this year, but has delayed the move until 2021.
NextDecade recently announced it would seek to bring down expected CO2 emissions at Rio Grande by 90% using carbon, capture and storage technology and other processes, and explore options to deal with the remaining 10%.
India’s LNG imports in September came in at 2.97bn m3 (2.1mn metric tons), up 6.2% yr/yr, according to the data published by the Indian oil and gas ministry's Petroleum Planning and Analysis Cell (PPAC) on October 21. The imports were unchanged month on month.
- With domestic gas production remaining sluggish, India’s dependence on imported LNG continues to be high.