Achievement









NEWS
  • Feature: US LNG makes negligible impact on European gas market

    The startup in February this year of US LNG exports based on cheap American shale gas 

    had been  expected  to  see  a  good  proportion  of  cargoes  heading across the Atlantic 

    to Europe given  the  relatively  short  shipping  route  and  Europe's  massively  underus

    ed  LNG import capacity. 


    But with European gas prices staying stubbornly low for most of the year and the margins 

    for US LNG having been largely eroded due to the slump in global LNG prices, in the end 

    only a handful of cargoes ended up in Europe. 

    As 2016 nears its end, more than 50 cargoes have left the Cheniere Energy-operated Sa

    bine Pass terminal in the Gulf of Mexico for international markets. 


    But of  those cargoes, just three landed in mainland Europe -- one in Portugal, one in Sp

    ain and one in Italy -- while another two shipments were made to Turkey. 


    According  to industry sources, the two to the Iberian Peninsula were considered to be "te

    st" cargoes given that they were not followed up by any new cargoes, while  the  shipment 

    to Italy was  seemingly  a  one-off  as  it was procured by Uniper to meet its obligations un

    der the country's "peak-shaving" tender program. 


    Italy's  economy  ministry  holds  tenders  several  times  a  year for companies to provide 

    gas that can be used during periods of unexpected peak demand. 


    Uniper  won Italy's latest peak-shaving tender held in October and opted to supply 105,00

    cum  of  LNG  (63  million  cum  of gas) from Sabine Pass to be stored "until needed" at 

    the Toscana FSRU off the coast of Livorno. NORTHWEST EUROPE 


    So  the  evidence  so  far suggests that southern Europe has been able to attract some U

    LNG -- though in limited volume -- but the appeal of US LNG in northwest Europe has ye

    t to emerge where competition from pipeline suppliers Norway and Russia is fierce. 


    Gazprom  has  repeatedly  dismissed  the economic viability of US LNG in Europe given th

    e current low European gas prices and its own low production costs. 

    Buyers  in northwest Europe have reportedly told Cheniere that they do not have any nee

    for now for US LNG given the abundance of pipeline gas. 


    The  response  to  US  LNG exports starting up from Europe's traditional pipeline suppliers 

    has  been  clear -- Russia, Norway and Algeria are all supplying consistently high volumes  

    to Europe. 

    Russian  exports  to  Europe  and  Turkey (minus the countries of the former Soviet Union) 

    are  set  to  hit an all-time high of 180 Bcm this year, while Norway's supplies to Europe will 

    come in at around the record of 115 Bcm set in 2015. 


    Norway has been targeting its sales on the Netherlands and UK, and is not trying so much 

    to compete with Russia in Germany. Norway's sales to the Netherlands and UK are way up 

    in 2016 compared with the previous year, but slightly down to Germany. ASIA OPENING U



    The  majority of cargoes of US LNG shipped in 2016 went to American  neighbors in Chile, 

    Mexico  and Brazil. This was not a surprise -- Cheniere itself conceded that it made sense 

    for the LNG to remain closer to home given the narrow margins. 


    Things  have evolved again though since the Sabine Pass plant reopened in late October 

    after a  month  of maintenance, as Asian LNG prices jumped sharply on a surprise lack of 

    supply  amid  higher  demand  and several trips at liquefaction plants including Gorgon in 

    Australia. 


    As a result, a number of cargoes are now headed for Asia to make the most of the higher 

    spot prices. 


    Two  shipments  have  been delivered to China so far, while a first cargo is due to land in 

    South Korea at the weekend. 


    Eight other US LNG cargoes from Sabine Pass are currently headed for Asia having trave

    rsed the Panama Canal in mid-December. 


    Platts assessed the JKM LNG Asian benchmark price at $9.20/MMBtu on Thursday. 

    That is a considerable jump from prices as low as $4/MMBtu in the summer of 2016.

Guangzhou Double Peach Fine Chemical Co.,Ltd

Address: No 3401 Huangpu East Road, Huangpu District, Guangzhou, China

Tel:+86 (20) 29035969 Fax:+86(20)29035979

Tel/Wechat/Whatsapp:0086 13826126978  admin@gz-chemical.com

For computer  For mobile