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COVID-19 drags on Asian gas demand consultancy EnergyQuest’s latest monthly gas
A surge of new COVID-19 cases has taken some sector report.
of the steam out of the oil price recovery, with
Brent crude trading around $38.20 per barrel on If you’d like to read more about the key events shaping
June 15. Analysts have warned that oil demand Asia’s oil and gas sector then please click here for
recovery is likely to be a lengthy affair, with all NewsBase’s AsianOil Monitor.
eyes trained on Chinese import figures to give
some sense of pricing trajectory. Nigerian downstream progress
For the natural gas export sector, however, Nigeria is making advances in its downstream
the short-term supply and demand balance is sector, with industrial conglomerate Dangote
more complicated than simply looking to China. undertaking commissioning on a new $2bn
While the Asian giant is the world’s second-larg- granulated urea fertiliser plant in Lagos. The
est buyer of the fuel, a fundamental weakening in plant, one of several under development, will run
global demand has driven prices to record lows on gas feedstock supplied by Nigerian Gas Co.
this year. and Chevron. But traders warn that it could take
Before COVID-19 hammered LNG demand, until the second quarter of 2021 for commercial
prices were already in a tailspin because of production to start up.
unseasonably warm winter temperatures and the Nigerian authorities have also awarded a Before COVID-19
steady commissioning of new export projects. licence to Nigeria Delta Exploration & Produc- hammered LNG
While China’s LNG imports are anticipated tion (NDEP) to operate a small-sized oil-refining
to remain robust for the rest of the year, demand train in Ogbele, a town in the coastal Rivers State. demand, prices
from Japan – the world’s largest importer of The plant will run on crude produced at a mar-
the super-chilled fuel – is not expected to fully ginal field in the area. were already
recover this year. With a capacity of only 5,000 barrels per day
The Japan Gas Association (JGA) said last (bpd), the train’s launch will have little impact in a tailspin
week that city gas demand had fallen by 10% year on Nigerian fuel supply, much of which comes
on year in April and by more than 20% in May, from abroad. But oil industry figures have called
owing to the national lockdown imposed. on the government to deploy these small-sized
“An impact from the coronavirus pandemic modular refineries en masse in order to wean the
on our business is quite significant,” Reuters country off costly imports.
quoted JGA chairman Michiaki Hirose as saying Lastly, Kuwait has said it is no longer seek-
on June 11. Japan’s LNG imports fell by 8.8% y/y ing expatriates for roles in its oil sector, as the
in April to 5.13mn tonnes, Ministry of Finance government looks to reduce the number of for-
data showed in May. eigners in the Gulf state and protect the local
Between unusually high inventory levels workforce.
and weak demand, unnamed industry sources The employment of foreign workers has been
warned S&P Global Platts on June 12 that not a contentious issue in Kuwait for some time, and
even a hotter-than-average summer could the government is aiming to address it at a time
improve the outlook. when the country grapples with an economic
The effect is already being felt by the world’s slowdown.
largest exporter of the fuel – Australia. Austral-
ian gas exporters shipped 93 cargoes in May – If you’d like to read more about the key events shaping
amounting to 6.4mn tonnes – which was down the downstream sector of Africa and the Middle East,
seven cargoes from April, according to energy then please click here for NewsBase’s DMEA Monitor.

Week 24 18•June•2020 www. NEWSBASE .com P7