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Spot prices spiral in Asia He added: “This has never been more impor-
The global oversupply of LNG and the destruc- tant – particularly as we begin our recovery from
tion of Asian demand amid the coronavirus the impact of the COVID-19 pandemic. This is
(COVID-19) pandemic have sent spot prices why the Australian government believes a gas-
spiralling for a second week. fired recovery will drive jobs and economic
Spot cargoes for July delivery to East Asia fell to growth.”
$1.85 per mmBtu ($52.39 per 1,000 cubic metres),
Reuters reported on June 1. The newswire pointed If you’d like to read more about the key events shaping
to the number of cargoes on the market this week, Asia’s oil and gas sector then please click here for
coupled with depressed industrial demand for gas NewsBase’s AsianOil Monitor.
around the world, as behind the $0.07 per mmBtu
($1.98 per 1,000 cubic metre) decline. South African fuel rationing
Malaysia’s state-owned company Petronas has Many markets are reeling in excess fuel supply
said it is “optimising” its production of LNG in as a result of COVID-19 travel restrictions. But
response to weaker prices and demand. The com- South Africa has had to ration diesel following
pany told Reuters this week that challenges relating a fast recovery in demand as the country’s lock-
to the ongoing COVID-19 pandemic meant that it down is eased.
needed to optimise production volume in line with Only two of South Africa’s six refineries are
the market slowdown. operating normally, with most refining capacity
Malaysia’s exports of LNG are expected to having been shut down in response to a collapse
drop to 1.5-1.64mn tonnes in May, the newswire in demand. Opposition politicians blame the
quoted unnamed industry sources as saying last government for failing to ensure a sufficient
week. This would represent a nearly two-year stockpile of fuel.
low in terms monthly export volumes, down Meanwhile, Egypt has unveiled a new strat-
from the 1.92mn tonnes the country exported egy that aims to realise $19bn in new petro-
in April. chemical projects by 2035. The country is set
The news comes after Petronas announced last for a rapid growth in demand for petrochemical
month that it would cut its 2020 capital expenditure products as its population boom continues. The
budget by 21% and its operating expenditure 12%. government is eager to see domestic resources
With the international gas market tanking, the used to meet this demand, rather than imports.
region’s largest gas exporter – Australia – has begun The Lebanese Army has its work cut out
turning its attention to ways it can prop up domes- trying to clamp down on the smuggling of sub-
tic producers. Australian Energy Minister Angus sidised fuel across the border into Syria. The
Taylor said last week that it was essential for the problem, which has exacerbated Lebanon’s eco-
country to lean on gas-fired power generation as it nomic crisis, shows no sign of abating despite the
transitions to a greener economy. government’s claims of progress.
Taylor’s comments came following an update Nigeria needs to do more to encourage the
to the Australian Energy Statistics, which showed construction of modular oil refineries, a devel-
that renewable energy sources accounted for oper of one such plant has said. These small-
21% of the country’s power generation in 2019. sized refineries will help Nigeria overcome its
Gas-fired power generation represented 20.5% reliance on fuel imports, which has grown since
of the national total. the shutdown of its outdated, loss-making state
Taylor said: “Gas is flexible and provides the plants.
dispatchable capacity we increasingly need to
balance intermittent renewables and deliver a If you’d like to read more about the key events shaping
secure, reliable and affordable electricity system the downstream sector of Africa and the Middle East,
to power our homes, businesses and industries.” then please click here for NewsBase’s DMEA Monitor.

Week 22 04•June•2020 www. NEWSBASE .com P7