Page 12 - GLNG Week 22

GLNG COMMENTARY GLNG

to the Australian Energy Statistics, which showed plant. (See: Shell reportedly weighs sale of stake in
that renewable energy sources accounted for QCLNG, page 16)
21% of the country’s power generation in 2019. “Royal Dutch Shell is considering a sale of a
Gas-fired power generation represented 20.5% 26.25% interest in the QCLNG common facili-
of the national total. ties – a multi-billion dollar investment opportu-
Taylor said: “Gas is flexible and provides the nity,” Reuters quoted a sale flyer as saying. The
dispatchable capacity we increasingly need to newswire quoted unnamed industry sources as
balance intermittent renewables and deliver a saying the stake could sell for $2-3bn.
secure, reliable and affordable electricity system Shell owns a majority stake in the QCLNG
to power our homes, businesses and industries.” plant, but wholly owns the common facilities
He added: “This has never been more impor- that include two LNG storage tanks, water, fuel
tant – particularly as we begin our recovery from and power systems, a jetty and terminals.
the impact of the COVID-19 pandemic. This is
why the Australian government believes a gas- What next?
fired recovery will drive jobs and economic Global LNG demand must first bounce back
growth.” to pre-COVID-19 levels before the process of
To this end, he encouraged state and terri- soaking up additional supply can begin. It is still
tory governments to do more to help developers unclear how that process will unfold, with the
bring fields into production. International Monetary Fund (IMF) warning
His comments come at a tough time for the recently that its April forecast of a 3% contrac- The IMF expects
country’s LNG sector. In the wake of the oil price tion in the global economy is looking increas-
crash and the pandemic’s demand destruc- ingly optimistic. the global
tion, the country’s biggest developers have As it stands, the IMF expects the global econ- economy to
deferred several major export orientated pro- omy to partially bounce back in 2021, with a
jects. Woodside Petroleum has deferred FIDs predicted growth of 5.8%. The body said: “The partially bounce
on the Scarborough, Pluto Train 2 and Browse cumulative loss to global GDP over 2020 and
LNG projects, while Santos has pushed the Dar- 2021 from the pandemic crisis could be around back in 2021,
win LNG back-fill Barossa development to the 9 trillion dollars, greater than the economies of
backburner. Japan and Germany combined.” with a predicted
Australia’s LNG shipments climbed 3% y/y Much depends on the global response to a growth of 5.8%.
in April to 6.9mn tonnes, or 101 cargoes, local second wave of infections, which will come as
consultancy EnergyQuest said in May. The car- quarantine conditions are relaxed. If major econ-
goes are likely to be part of long-term supply omies embrace a second lockdown the economic
contracts, meaning that while prices will be bet- impact will far surpass current projections based
ter than the spot market, they will still be worth on a single wave of social distancing restrictions.
less than this time last year owing to oil price Indeed, LNG may not recover to pre-COVID-19
indexation. levels until well into 2022.
The sustained pressure on the LNG market This will lead to a prolonged LNG price
has reportedly encouraged Royal Dutch Shell to slump and even less motivation to develop
consider the sale of a stake in the common facil- projects beyond the scope of meeting con-
ities at its Queensland Curtis LNG (QCLNG) tractual obligations.™

P12 www. NEWSBASE .com Week 22 05•June•2020