Australia, we’ve heard a lot lately, is set to overtake Qatar as the world’s biggest LNG producer by about 2020. The first shipment from the big Western Australian Pluto development set sail last month and things looked somewhat rosy for Woodside Petroleum, its owner and operator.
However a story in today’s Australian Financial Review confirmed what many have been thinking for a while: the proposed expansion of the Pluto project won’t happen. The AFR quotes Woodside chief executive Peter Coleman: Read more
UK military leaders have raised concerns that more than 80 per cent of the UK’s liquefied natural gas imports would be halted if Iran made good its threat to block the Strait of Hormuz, the FT reports, citing people within the Ministry of Defence and the Department of Climate Change. Ministers and senior military figures have been warned that almost half the UK’s gas imports, and 84 per cent of its LNG imports, use the waterway. Lord West, former head of the Royal Navy and security adviser to Gordon Brown when the latter was prime minister, told the FT that, if the strait were blockaded, the sharp fall in the UK’s gas supplies would be the country’s single most critical issue. Furthermore, Iran’s upcoming presidential elections are adding to Tehran’s need to posture, said Christopher Parry, the MoD’s former director-general of development, concepts and doctrine.
Shares in Woodside Petroleum fell in Sydney trading after a court ruled that compulsory land acquisition notices by Western Australia state for the company’s Browse natural-gas processing hub were unlawful. Bloomberg says Woodside, Australia’s second-biggest oil and gas producer, dropped as much as 1.8 per cent, having risen as much as 0.6 per cent before the court decision was reported. However the WA government will be able to re-issue its compulsory acquisition notice, says UpstreamOnline, leading Woodside Petroleum to state that the project remained on track for a final investment decision to be made in 2012.
Despite the prospects of entering a golden age for natural gas, investors are looking decidedly less excited about LNG.
Australia is set to take over Qatar as the biggest exporter of LNG within the next decade or so. Read more
Natural gas prices have jumped as dealers are braced for Japan to step up its purchases to replace the large amounts of nuclear power capacity knocked out by Friday’s disaster, reports the FT. Japan is the world’s largest buyer of liquefied natural gas, a form of super-cooled gas shipped in tankers from exporters such as Qatar and Algeria. Any abrupt change in its energy demand could therefore affect commodities markets. FT Alphaville says it’s time to start watching the uranium-fossil spread.
As we reported earlier, liquefied natural gas (LNG) cargoes are being diverted to Japan to help it overcome its fuel shortages.
This, though, is having an impact on European natural gas prices — British national balancing point (NBP) prices in particular. Read more
If energy markets were ever confused, it’s now.
On the one hand the Japanese earthquake immediately implies bearishness for crude oil on account of lower demand. On the other hand it implies a hike in demand for refined products. Read more
The global energy market is braced for a shock as Japan seeks to replace large amounts of the country’s nuclear power capacity devastated by Friday’s earthquake, reports the FT. Japan is the world’s third largest oil importer, after the US and China, and the top importer of thermal coal and liquefied natural gas, so any abrupt change in energy production could affect global commodities markets, analysts warned. However, the surge in demand could be cushioned by lower consumption due to factory closures, they added. The final impact of Friday’s earthquake on Japan’s energy needs will also depend on the extent of damage to the country’s economy and whether Tokyo orders the precautionary stoppage of other reactors for safety checks, analysts added. Japan has shut down 9,700 megawatts of nuclear capacity, which equals about a fifth of the total. The country no longer influences energy markets as it once did because of its shift away from oil but the loss of nuclear power will force Tokyo’s utilities to scramble for crude, thermal coal and LNG.
BG Group is set to proceed with a $15bn liquefied natural gas project in Queensland, Australia – the UK oil and gas company’s biggest investment, reports the FT. The 8.5m-tonne annual capacity of the planned Curtis Island plant, equivalent to 10% of UK gas demand, will be sold mostly to China and other Asian customers when exports start in 2014, under existing purchase agreements. The plant will be the world’s first to produce LNG from coal-bed methane, a type of natural gas taken from coal seams, according to BG.
International energy groups are set to miss out on billions of dollars of future sales over the next decade as China, their most voracious customer, aggressively develops its own large gas reserves and slashes its imported gas requirements, the FT reports, citing a new study by Wood Mackenzie. China will need only half as much more liquefied natural gas from 2020 than it will require in the next decade, according to the study. Wood Mackenzie also predicts that China will overtake Europe as the world’s number two in developing unconventional gas.
Talk about the UK natgas/liquefied natural gas (LNG) glut appears to be intensifying.
The latest to warn over the situation is Merrill Lynch, whose analysts on Monday described the market as “plagued by weakness” as they turned “more negative on UK nat gas prices in 2010”. Read more
Here’s a fine example of liquefied natural gas (LNG) arbitrage at work.
While hugely weak fundamentals are doing this to Henry Hub Natgas front-month futures prices : Read more