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COVID-19 weighs on LNG exports with Qatar for the top spot in global LNG exports
LNG exports are slumping as a result of – with the US having become the third-largest
lower demand globally amid the coronavirus exporter of the fuel in 2019.
(COVID-19) pandemic, and the outlook for the
coming months remains bearish. If you’d like to read more about the key events shaping
This week, Australia’s government esti- the global LNG sector then please click here for
mated that the country’s export earnings from NewsBase’s GLNG Monitor.
LNG would drop by 26% year on year (y/y) to
AUD35bn ($24bn), in the coming financial year, Latin America still coping with COVID-19
which runs July 2020-June 2021. Both Argentina and Colombia are facing the
Meanwhile, the US Energy Information problem of how to cope with lower crude oil
Administration (EIA) reported last week that prices and weaker energy demand.
US LNG exports had declined by more than half With respect to Colombia, a high-ranking
in 2020 so far. Citing data from consultancy IHS representative of Fitch Ratings says he expects
Markit, the EIA said gas deliveries to US lique- fallout from the oil price crash and the corona-
faction terminals had reached a record high of virus (COVID-19) pandemic to act as a drag on
9.8bn cubic feet (278mn cubic metres) per day the economy for at least two or three years.
in March, but fell to less than 4.0 bcf (113 mcm) The ratings agency has predicted that the coun-
per day in June. try’s GDP will contract by at least 4.5%, and it
Meanwhile, more than 70 cargoes are esti- may revise that figure upward soon.
mated to have been cancelled for loading from In Argentina, the national oil company
US LNG plants in June and July, and the latest (NOC) YPF has issued a declaration of force
media reports suggest that 40-45 cargoes may majeure, saying it is unable to pay the Belgian
have been cancelled for loading in August. company Exmar for services performed since
However, some trade sources cited by Reuters mid-March because of the pandemic. Exmar –
last week have suggested that loading a cargo in the operator of Tango LNG, the floating facility
August might make more sense compared with that is the only working gas liquefaction plant
June and July. This is because there is a price in the country – has responded to this move by
contango between August and forward months, describing it as illegal.
while shipping rates are low. Meanwhile in Peru, indigenous leaders are
In the short term, the gas price differentials concerned that their efforts to secure legal pro-
between Europe and the US are expected to tection for their territory in the Amazon region,
remain unfavourable for US producers. And the near the borders with Brazil and Ecuador, will
Australian government also anticipated LNG spark opposition from the oil industry. The
spot prices to weaken further, with this having a country’s legislature is currently mulling propos-
negative impact on the country’s exports. als to fast-track a bill upholding the indigenous
This comes as Australia continues to compete group’s aim.

Week 27 01•July•2020 www. NEWSBASE .com P9