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a resulting expansion of regasification capacity – – a welcome piece of news at a time where new
will be welcomed by exporters. long-term supply agreements have been rela-
Companies preparing to ramp up LNG tively rare.
imports include the Electricity Generating
Authority of Thailand (EGAT), which is set to What next
more than double the LNG volumes it receives There are fears that despite some fluctuations, the
in 2021 and 2022. gas price differentials between Europe and the
Meanwhile, consultancy Wood Mackenzie US could remain unfavourable for US producers
has predicted that Indonesia’s LNG imports in the short term. The picture for US LNG play-
will remain resilient in the face of the demand ers is further complicated by the fact that new
slump. The consultancy projects that the coun- liquefaction capacity continues to come online.
try’s LNG imports could hit 3.1mn tonnes in the The third train at Freeport LNG recently entered
second half of 2020, which would mark a 63% service, and Train 3 at Cameron LNG has started
increase y/y. production ahead of commercial service later
This comes after Indonesia’s LNG consump- this summer. A further three small-scale units
tion continued to rise during the second quarter at Elba Island are also due to start up in the com-
of this year. ing weeks. According to the EIA, these start-ups
“The story of Indonesia is consistent with will bringing total US liquefaction capacity to 8.9
Asia’s outlook at large,” a Wood Mackenzie prin- bcf (252 mcm) per day of baseload LNG export
cipal analyst, Lucy Cullen, said during the com- capacity and 10.1 bcf (286 mcm) per day of peak
pany’s Indonesia Virtual Energy Forum. “The export capacity.
region’s LNG imports will reach 250mn tonnes On top of this, construction continues at Ven-
this year, a 2.5% increase compared to last year, ture Global LNG’s Calcasieu Pass terminal, and
and could hit 315mn tonnes in 2025. By 2040, ExxonMobil and Qatar Petroleum’s (QP) Golden
Asia will account for 40% of global gas demand Pass export facility. The US – and the world –
growth, with Indonesia and its Southeast Asian is not likely to be short of liquefaction capacity
neighbours being key engines of this growth.” anytime soon.
In another positive development on the The Australian government, meanwhile, also
demand side this week, India’s Petronet LNG anticipates that LNG spot prices will weaken fur-
said its business had recovered quickly from the ther, with this having a negative impact on the
impacts of the country’s lockdown and both of country’s exports.
its regasification terminals were now operating This comes as Australia continues to compete
at their highest rate. with Qatar for the top spot in global LNG exports
In a further boost to the LNG industry, the – with the US having become the third-largest
company has said it is seeking to enter into a exporter of the fuel in 2019.
long-term supply contract for 1mn tonnes per Under these circumstances, exporters will
year (tpy) of LNG, with the price indexed to target potential buyers wherever they can find
spot market rates. According to Petronet’s CEO, them, but price trends may not work in their
Prabhat Singh, a deal is due to be finalised soon favour over the coming weeks and months.™

Week 27 09•July•2020 www. NEWSBASE .com P5