Page 5 - AsiaElec Week 23
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AsiaElec COMMENTARY AsiaElec
His comments come at a tough time for the that include two LNG storage tanks, water, fuel
country’s LNG sector. In the wake of the oil price and power systems, a jetty and terminals.
crash and the pandemic’s demand destruction,
the country’s biggest developers have deferred What next
several major export orientated projects. Global LNG demand must first bounce back
Woodside Petroleum has deferred FIDs on the to pre-COVID-19 levels before the process of
Scarborough, Pluto Train 2 and Browse LNG soaking up additional supply can begin. It is still
projects, while Santos has pushed the Darwin unclear how that process will unfold, with the
LNG back-fill Barossa development to the International Monetary Fund (IMF) warning
backburner. recently that its April forecast of a 3% contrac-
Australia’s LNG shipments climbed 3% y/y tion in the global economy is looking increas-
in April to 6.9mn tonnes, or 101 cargoes, local ingly optimistic.
consultancy EnergyQuest said in May. The car- As it stands, the IMF expects the global econ-
goes are likely to be part of long-term supply omy to partially bounce back in 2021, with a
contracts, meaning that while prices will be bet- predicted growth of 5.8%. The body said: “The
ter than the spot market, they will still be worth cumulative loss to global GDP over 2020 and
less than this time last year owing to oil price 2021 from the pandemic crisis could be around
indexation. 9 trillion dollars, greater than the economies of
The sustained pressure on the LNG market Japan and Germany combined.” Much depends
has reportedly encouraged Royal Dutch Shell to on the global response to a second wave of infec-
consider the sale of a stake in the common facil- tions, which will come as quarantine conditions
ities at its Queensland Curtis LNG (QCLNG) are relaxed. If major economies embrace a sec-
plant. ond lockdown the economic impact will far sur-
“Royal Dutch Shell is considering a sale of a pass current projections based on a single wave
26.25% interest in the QCLNG common facil- of social distancing restrictions.
ities – a multi-billion dollar investment oppor- Indeed, LNG may not recover to pre-
tunity,” Reuters quoted a sale flyer as saying. The COVID-19 levels until well into 2022.
newswire quoted unnamed industry sources as This will lead to a prolonged LNG price
saying the stake could sell for $2-3bn. slump and even less motivation to develop pro-
Shell owns a majority stake in the QCLNG jects beyond the scope of meeting contractual
plant, but wholly owns the common facilities obligations.
Week 23 10•June•2020 www. NEWSBASE .com P5
