Page 10 - NorthAmOil Week 27

NorthAmOil COMMENTARY NorthAmOil

India’s Petronet LNG says
its business has recovered
quickly from the impacts of the
country’s lockdown and both of
its regasification terminals are
now operating at their highest
rate.

This comes after Indonesia’s LNG consump-
tion continued to rise during the second quarter
of this year.
“The story of Indonesia is consistent with LNG players is further complicated by the fact
Asia’s outlook at large,” a Wood Mackenzie prin- that new liquefaction capacity continues to come
cipal analyst, Lucy Cullen, said during the com- online. The third train at Freeport LNG recently
pany’s Indonesia Virtual Energy Forum. “The entered service, and Train 3 at Cameron LNG
region’s LNG imports will reach 250mn tonnes has started production ahead of commercial ser-
this year, a 2.5% increase compared to last year, vice later this summer.
and could hit 315mn tonnes in 2025. By 2040, A further three small-scale units at Elba
Asia will account for 40% of global gas demand Island are also due to start up in the coming
growth, with Indonesia and its Southeast Asian weeks. According to the EIA, these start-ups will
neighbours being key engines of this growth.” bringing total US liquefaction capacity to 8.9 The picture for
In another positive development on the bcf (252 mcm) per day of baseload LNG export
demand side this week, India’s Petronet LNG capacity and 10.1 bcf (286 mcm) per day of peak US LNG players
said its business had recovered quickly from the export capacity. is further
impacts of the country’s lockdown and both of On top of this, construction continues at Ven-
its regasification terminals were now operating ture Global LNG’s Calcasieu Pass terminal, and complicated by
at their highest rate. ExxonMobil and Qatar Petroleum’s (QP) Golden
In a further boost to the LNG industry, the Pass export facility. The US – and the world – the fact that
company has said it is seeking to enter into a is not likely to be short of liquefaction capacity
long-term supply contract for 1mn tonnes per anytime soon. new liquefaction
year (tpy) of LNG, with the price indexed to The Australian government, meanwhile, also capacity
spot market rates. According to Petronet’s CEO, anticipates that LNG spot prices will weaken fur-
Prabhat Singh, a deal is due to be finalised soon ther, with this having a negative impact on the continues to
– a welcome piece of news at a time where new country’s exports.
long-term supply agreements have been rela- This comes as Australia continues to compete come online.
tively rare. with Qatar for the top spot in global LNG exports
– with the US having become the third-largest
What next? exporter of the fuel in 2019.
There are fears that despite some fluctuations, Under these circumstances, exporters will
the gas price differentials between Europe and target potential buyers wherever they can find
the US could remain unfavourable for US pro- them, but price trends may not work in their
ducers in the short term. The picture for US favour over the coming weeks and months.™

P10 www. NEWSBASE .com Week 27 09•July•2020