Page 12 - GLNG Week 26

GLNG COMMENTARY GLNG

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.

second half of 2020, which would mark a 63% the gas price differentials between Europe and
increase y/y. the US could remain unfavourable for US pro-
This comes after Indonesia’s LNG consump- ducers in the short term. The picture for US
tion continued to rise during the second quarter LNG players is further complicated by the fact
of this year. that new liquefaction capacity continues to come
“The story of Indonesia is consistent with online. The third train at Freeport LNG recently
Asia’s outlook at large,” a Wood Mackenzie prin- entered service, and Train 3 at Cameron LNG
cipal analyst, Lucy Cullen, said during the com- has started production ahead of commercial ser-
pany’s Indonesia Virtual Energy Forum. “The vice later this summer.
region’s LNG imports will reach 250mn tonnes A further three small-scale units at Elba
this year, a 2.5% increase compared to last year, Island are also due to start up in the coming
and could hit 315mn tonnes in 2025. By 2040, weeks. According to the EIA, these start-ups will
Asia will account for 40% of global gas demand bringing total US liquefaction capacity to 8.9 The picture for
growth, with Indonesia and its Southeast Asian bcf (252 mcm) per day of baseload LNG export
neighbours being key engines of this growth.” capacity and 10.1 bcf (286 mcm) per day of peak US LNG players
In another positive development on the export capacity. is further
demand side this week, India’s Petronet LNG On top of this, construction continues at Ven-
said its business had recovered quickly from the ture Global LNG’s Calcasieu Pass terminal, and complicated by
impacts of the country’s lockdown and both of ExxonMobil and Qatar Petroleum’s (QP) Golden
its regasification terminals were now operating Pass export facility. The US – and the world – the fact that
at their highest rate. is not likely to be short of liquefaction capacity
In a further boost to the LNG industry, the anytime soon. new liquefaction
company has said it is seeking to enter into a The Australian government, meanwhile, also capacity
long-term supply contract for 1mn tonnes per anticipates that LNG spot prices will weaken fur-
year (tpy) of LNG, with the price indexed to ther, with this having a negative impact on the continues to
spot market rates. According to Petronet’s CEO, country’s exports.
Prabhat Singh, a deal is due to be finalised soon This comes as Australia continues to compete come online.
– a welcome piece of news at a time where new with Qatar for the top spot in global LNG exports
long-term supply agreements have been rela- – with the US having become the third-largest
tively rare. (See: India rethinks domestic gas pric- exporter of the fuel in 2019.
ing mechanism, page 15) Under these circumstances, exporters will
target potential buyers wherever they can find
What next? them, but price trends may not work in their
There are fears that despite some fluctuations, favour over the coming weeks and months.™

P12 www. NEWSBASE .com Week 26 03•July•2020