Page 8 - AsiaElec Week 25
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AsiaElec                               GAS-FIRED GENERATION                                          AsiaElec


       Japanese LNG demand set for slow recovery





        JAPAN            JAPANESE LNG demand is not expected to  warned that it could take a “long time” before
                         recover fully this year, owing to the ongoing eco-  demand fully recovered.
                         nomic fallout from the country’s coronavirus   “The surplus of LNG will be a serious man-
                         (COVID-19) lockdown coupled with higher  agement issue also for buyers, as we have com-
                         than normal stockpiles of the fuel.  mitted to take a certain level of supply under the
                           The Japan Gas Association (JGA) said last  long-term contracts with gas producers,” he said.
                         week that city gas demand had fallen by 10% year   His concerns were echoed by industry
                         on year in April and by more than 20% in May.  sources interviewed by S&P Global Platts on
                         Japan’s LNG imports fell by 8.8% y/y in April to  June 12. They said unusually high inventory
                         5.13mn tonnes, Ministry of Finance data showed  levels and weak demand meant that not even a
                         in May.                              hotter-than-average summer could improve the
                           “An impact from the coronavirus pandemic  outlook. They also warned that the full effects
                         on our business is quite significant,” Reuters  of the lockdown on gas demand were only just
                         quoted JGA chairman Michiaki Hirose as say-  beginning to emerge
                         ing on June 11.                        “Most factories in our region can’t run at
                           Hirose said commercial demand had suffered  full operations unless the entire supply chain is
                         the most, with sales down 20-30% in April and  backed up by strong exports. Without this, our
                         50% in May. Industrial demand followed, with  counterparts can’t predict demand accurately, so
                         sales contracting 10-20% in April and 20-30%  we also can’t have an accurate outlook on down-
                         in May.                              stream demand and adjust procurement,” one
                           “Things are slowly improving in June but  Japanese gas company source said.™
                         demand will largely stay weak,” he said. Hirose




       Santos’ Narrabri CBM




       project takes step forward





        AUSTRALIA        AUSTRALIAN oil and gas developer Santos  Power Station, there are 16 Santos people living
                         has revealed that its controversial Narrabri coal-  and working in Narrabri, we’re buying goods and
                         bed methane (CBM) project has taken another  services locally, and we’re in a position to ramp
                         important step forward.              up our activity and get back to drilling more
                           The company said on June 11 that the New  appraisal wells as soon as a decision is taken.”
                         South Wales State government had referred the   Australian Prime Minister Scott Morrison,
                         project to the Independent Planning Commis-  speaking at the CEDA State of the Nation sum-
                         sion (IPC) after the Department of Planning  mit on June 15, has highlighted the scale of the
                         recommending that the project was “capable of  economic problem the country is facing. Morri-
                         approval with conditions”.           son said around 1.6mn Australians were receiv-
                           NSW Minister for Planning and Public  ing unemployment benefits and that more than
                         Spaces Robert Stokes has tasked the IPC with  AUD100bn ($68.65bn) of economic activity had
                         holding public hearings on the project and arriv-  already been wiped out this year.
                         ing at a final decision within 12 weeks of receiv-  “The road ahead will be very hard,” Morrison
                         ing the department’s report.         said, adding: “There is a mountain yet to climb.”
                           Santos managing director and CEO Kevin   The prime minister warned that it could take
                         Gallagher said Narrabri’s approval was impor-  “at least” two years before the economy returns
                         tant to the state’s future economic wellbeing  to pre-COVID-19 levels.
                         as the country strives to counter the financial   Gallagher said Narrabri’s gas would the
                         fallout from the  coronavirus  (COVID-19)  cheapest available to NSW customers, with
                         pandemic.                            100% of production earmarked for the local
                           “Narrabri means more jobs and more invest-  market. “Developing local gas supplies in NSW
                         ment in NSW and the local region, and lower gas  means commercial bakers in Sydney will no
                         and electricity prices for customers in the state,”  longer pay AUD26,400 [$18,100] more for gas
                         Gallagher said. “Santos already has appraisal  every year than similar businesses in Brisbane,”
                         wells powering the equivalent of 23,000 house-  the executive added.™
                         holds in north-west NSW from Wilga Park




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