Page 15 - GLNGl Week 24

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

ExxonMobil mulls investment

in Vietnamese power

INVESTMENT EXXONMOBIL could be considering a major planned coal power projects over the next 10
investment in Vietnam’s gas-fired generating years, and to replace this planned capacity with
sector in a bid to find new gas markets and to gas and renewables.
promote US exports. By 2030, the government’s National Steering
The Vietnamese government said this week Committee for Power Development wants the
that Prime Minister Nguyen Xuan Phuc had held capacity of new power plants using LNG to be
a telephone call with ExxonMobil LNG Market 12,750 MW, excluding old power plants con-
Development president Irtiza Sayyed, where verted to use LNG.
they discussed ExxonMobil buying into two 6,000 MW of this figure are under the PDP
power plants and LNG import assets, Bloomb- VII, including the Nhơn Trạch 3 and 4 (capacity
erg reported. of 1,500 MW) and Sơn Mỹ 1 and 2 (4,500 MW)
The prime minister said shipments of US power plants.
LNG would “help create harmonious trade bal- Vietnam would also need power plants using
ance between Vietnam and US.” LNG in the north and the centre to replace Hải
The government said in a statement that Viet- Phòng 3 and Vũng Áng 3 coal-fired thermal
nam had huge demand for energy and welcomed power plants (TPPs).
ExxonMobil’s move to invest in the country. Meanwhile, ExxonMobil is already involved
One possible project is a 4,000-MW LNG-to- in Vietnam through a 64% stake in the Blue
power plant in the city of Haiphong, the govern- Whale offshore gas development through a
ment said, which could be opened between 2025 partnership with state-owned Vietnam Oil &
and 2030. Gas Group.
Another possibility is a planned 3,000-MW The world’s supermajors are looking to find
LNG power plant in the Mekong Delta province new investment activities as they are forced by
of Long An. investor activism to reduce their dependence oil
The government said that the projects could and to develop cleaner energy.
use LNG imported form the US and other Companies such as Royal Dutch Shell
countries. and Total have been diversifying away from
The turn to gas comes as Vietnam has pub- upstream activities as demand for oil has
lished radical new plans to abandon 15 GW of slumped this year.™

Week 24 19•June•2020 www. NEWSBASE .com P15