Page 6 - AsianOil Week 08 2022

AsianOil GLOBAL AsianOil

Shell warns of tight LNG market in 2022

PERFORMANCE SHELL said on February 21 it expected the integrated gas, renewables and energy solutions,
global LNG market to remain tight in 2022, after Wael Sawan, commented. “As countries develop
a 6% climb in demand last year. lower-carbon energy systems and pursue net-
In its latest LNG outlook, the oil major said zero emissions goals, focusing on cleaner forms
that growing demand in China and South Korea of gas and decarbonisation measures will help
had driven the increase in consumption last year, LNG to remain a reliable and flexible energy
with China raising its imports by 12mn tonnes source for decades to come.”
to 79mn tonnes, surpassing Japan as the world’s To avoid future price spikes, Shell said a more
largest buyer. Chinese LNG buyers signed long- strategic approach was needed to ensure that gas
term contracts for more than 20mn tonnes per supply remains reliable and flexible in the future.
year (tpy) of supply during 2021. It forecast that an LNG supply-demand gap was
Exports grew last year in spite of various out- expected to emerge in the mid-2020s, stressing
ages, including in Australia and Norway, thanks the need for extra investment to meet rising
to a surge in US deliveries of 24mn tonnes. This demand, particularly in Asia.
means the US is on track to become the world’s Global LNG demand is set to exceed 700mn
largest exporter this year. tpy by 2040, Shell said, representing a 90%
“Last year showed just how crucial gas and increase on the level in 2021. The majority of this
LNG are in providing communities around the growth – 70% – will originate in Asia, as indig-
world with energy they need as they strived to enous production in the area declines, regional
get back on track following the difficulties caused economies grow and LNG replaces higher-emis-
by the COVID-19 pandemic,” Shell’s director for sions energy sources.™

SOUTH ASIA

Bangladesh to buy spot

LNG cargo from Vitol

POLICY STATE-OWNED Bangladeshi firm Petrobangla spot purchases to meet demand.
is reportedly set to award a contract to commod- The country had been seeking spot cargoes
ity trader Vitol for a spot LNG cargo to be deliv- in January but is reported to have been forced to
ered in March. cancel planned purchases by bids as high as $51
The state-owned BSS news agency reported per mmBtu ($1,410.66 per 1,000 cubic metres).
that Petrobangla would pay $29.70 per million It then resumed spot purchases when it bought
British thermal units ($821.50 per 1,000 cubic the two cargoes for February delivery, and the
metres) of LNG under the contract. It added Vitol deal shows that it is having to continue buy-
that the country would pay more than BDT10bn ing from the spot market.
($118mn) for the cargo in total. This is more than “Prices are too high but we have no other
four times the price Petrobangla paid to Vitol on option but to buy to keep the economy running,”
the spot market in March 2021. Reuters quoted an official with knowledge of the
The price is also only slightly below the $30 Vitol deal as saying.
per mmBtu ($829.80 per 1,000 cubic metres) Vitol was the only seller to participate in the
that Bangladesh paid for two spot cargoes it tender.
recently bought for delivery in February. Bangladesh also has two long-term supply
Bangladesh typically buys more LNG on deals in place with Qatargas and Oman Trading
the spot market than certain other Asian International and there is scope for new agree-
countries, which leaves it exposed to volatil- ments to be negotiated. Also this week, an Aus-
ity. Indeed, it decided to stop buying LNG on tralian government report identified Bangladesh
the spot market late last year because prices – along with India – as a major emerging market
were too high, but has been forced to resume for Australia’s LNG.™

P6 www. NEWSBASE .com Week 08 25•February•2022