International oil companies are optimistic about the development prospects of the LNG consumer market in the medium and long term in the future, but under the combined influence of factors such as the weak recovery of world economic growth, the restriction of export approval of LNG projects by the United States, the continuous expansion of regional natural gas geographic risks, and the strengthening of global environmental and climate governance, LNG demand is difficult to grow significantly.

●Hou Mingyang

Recently, Woodside, Australia's largest liquefied natural gas (LNG) export company, released a forecast that global LNG demand will increase by 50% in the next decade as demand in emerging markets in Asia continues to grow.Shell also predicted in its latest annual LNG outlook report that by 2040, global LNG demand will grow by more than 50%, of which the increase in natural gas demand in China, South Asia and Southeast Asian countries is the main driving force.

Although some international oil companies are optimistic about the development prospects of the LNG consumer market in the medium and long term in the future, in the short term, the weak recovery of world economic growth, the restriction of export approval of LNG projects by the United States, the geopolitical conflicts in Europe and the Palestinian-Israeli conflict and other regional natural gas geographic risks continue to expand, and the global environment and climate governance strengthen. Under the combined influence of factors, it is difficult for global LNG demand to grow significantly, and the market will enter a new stage of stable supply and demand.

Total global LNG trade increased slightly by 1.8%.

From a supply perspective, according to statistics from Wood Mackenzie, an energy consulting company, the total global LNG trade in 2023 will be about 407 million tons, a slight increase of 1.8% over 2022.

In terms of LNG exports, the United States, Algeria, Mozambique and Norway are the four countries with the largest increase in LNG exports in 2023, an increase of 9.4 million tons, 3.1 million tons, 2.5 million tons and 1.4 million tons respectively compared to 2022. The United States also surpassed Australia and Qatar to become the world's largest LNG exporters; Egypt, Russia, Qatar and Nigeria became the four countries with the largest decline in LNG exports in 2023, a decrease of 4.1 million tons, 2.8 million tons, and 2.2 million tons respectively compared to 2022. 10,000 tons and 1.7 million tons.

In terms of new LNG export projects, only the third liquefaction production line of Tanggu LNG in Indonesia was completed and put into operation in October 2023; the Tortue project located in the border waters of Senegal and Mauritania and the Marine project in the Congo have been postponed to 2024. Put into operation.

In terms of supply disruptions, the global LNG supply will be reduced by about 12 million tons due to planned maintenance in 2023, a record high. For example, the Prelude project in Australia carried out planned maintenance in the fourth quarter, which reduced the global market by about 1.1 million tons of LNG supply; and the global unplanned LNG supply interruption fell to the lowest level in nearly four years, with only about 4.4 million tons of supply reduced.

LNG demand in Europe as a whole fell by 9%

From the perspective of demand, in Asia, China's LNG imports in 2023 will be 69.74 million tons, an increase of 8.8% from 64.07 million tons in 2022, and it has once again become the world's largest LNG importer. The continued high temperature in summer, the decline in water and electricity production and economic growth are the main reasons for the growth of China's LNG imports.Affected by factors such as weak industrial recovery, high inventory levels and warm winter, Japan and South Korea's LNG imports in 2023 were 67.19 million tons and 44.97 million tons, respectively, both of which were significantly lower than in 2022, with declines of 8.1% and 3.7%, respectively.In 2023, India will continue to promote the marketization reform of natural gas. In April, a unified pipeline gas price system was launched. Driven by the demand of the power and fertilizer industries, LNG imports were 21.98 million tons, an increase of 7.7% over 2022.Affected by factors such as the decline in domestic natural gas production and the decline in pipeline gas imports from Myanmar, Thailand's LNG imports in 2023 reached 11.66 million tons, a significant increase of 35.2% over 2022.

In Europe, affected by the strong growth of renewable energy capacity construction, the decline in the proportion of natural gas in the power sector, and relatively few extreme weather, the overall LNG demand in Europe fell by 9% in 2023. Among them, the LNG imports of the United Kingdom, France and Spain were 14.37 million tons, 22.51 million tons and 18.95 million tons, respectively. Compared with 2022, the declines were 24.5%, 16.2% and 14.2%, respectively.However, affected by factors such as a significant decrease in pipeline gas imports, the LNG imports of Germany and Italy in 2023 showed a significant increase compared to 2022, with increases of 6107.2% and 10.6%, respectively.In South America, affected by factors such as heavy rainfall, high stocks and reduced natural gas demand in the power generation sector, Brazil's LNG imports in 2023 fell sharply by 58.6% compared to 2022; and affected by factors such as the decline in pipeline gas imports from Bolivia, Argentina's LNG demand in 2023 increased, an increase of 24.6% compared to 2022.

Both natural gas and LNG market prices are experiencing downward fluctuations

From a price point of view, after experiencing a sharp increase in gas prices caused by geopolitical risks such as geopolitical conflicts in Europe in 2022, the global natural gas and LNG market prices in 2023 will show a large downward fluctuation trend. The average spot price of TTF in Europe fell by 63% compared to 2022, and the average spot price of LNG in Asia fell by 55% compared to 2022.

In Europe, affected by factors such as record-high stocks in the northern hemisphere, the oversupply of the European market pushed TTF prices to their lowest level since August 2021 in early 2023; entering the second half of 2023, due to the reduction of LNG exports from Western Australia due to strikes, the Baltic gas pipeline accidents in Finland and Estonia, and the geographical risks in the Middle East, European TTF prices rose sharply to US美元15/million British thermal units; at the end of 2023, affected by factors such as high inventories and warm winter, European TTF prices once again showed a downward trend.

In Asia, the average spot price of LNG in Asia in 2023 will be US115.3/million British thermal units, which is significantly lower than the US334/million British thermal units in 2022. Japan's LNG spot once again has a premium relative to the European region, which objectively has also promoted the continued growth of LNG imports in the Asia-Pacific region.

The signing volume of LNG Long-term association contracts remains at an all-time high

From the perspective of contract signing, the number of LNG long-term association contracts signed has maintained a historically high level.According to Wood Mackenzie statistics, in 2023, the global LNG long-term contract signing volume will be close to 70 million tons, slightly lower than the level in 2022.

From the supply side, Qatar, Oman and the United States are the main sources of new contracts signed in 2023, with signing scales of 17 million tons/year, 11 million tons/year and 30 million tons/year, respectively.

From the demand side, the scale of new long-term association contracts signed in China in 2023 will be about 15 million tons/year, which is basically the same as in 2022; the scale of new long-term association contracts signed in Europe in 2023 will increase slightly to 15.5 million tons/year; and affected by price fluctuations and other factors, the amount of new long-term association contracts signed by buyers in South and Southeast Asia in 2023 will exceed 7 million tons/year.In addition, about 27 million tons/year of purchase and sales agreements are “flexible destination” contracts.

In 2023, the new capacity of the global LNG receiving station will be 50 million tons/year

From the perspective of infrastructure construction, in 2023, the new capacity of the global LNG receiving station will be 50 million tons/year.

In order to further ensure the security of energy supply in the near and medium term, the new LNG regasification capacity in Europe will exceed 25 million tons/year in 2023, which is also the largest annual increase in Europe. Record.

In the Asia-Pacific region, in 2023, a total of 5 LNG receiving station projects such as Xintian Energy Caofeidian LNG Receiving Station, Zhejiang Energy Group Wenzhou LNG Receiving Station, and Guangzhou Gas LNG receiving Station in China will be completed and put into operation, with an additional receiving capacity of more than 15.5 million tons/year; the Dhamra receiving station in India will be completed and put into operation in April 2023, with an additional receiving capacity of about 5 million tons/year; two floating LNG receiving stations in the Philippines, Ish and First Gen Batangas, were completed and put into operation in April and July 2023, respectively, with an additional receiving capacity of 15.5 million tons/year. 5 million tons/year and 3.8 million tons/year.

The demand for LNG carriers in the shipping market continues to grow

From the perspective of the shipping market, shipbuilding companies will receive a total of 64 orders for new LNG carriers in 2023, slightly higher than the average new order level of 57 ships from 2018 to 2021, which objectively reflects the continued growth of the demand for new modern LNG carriers in the shipping market.South Korea's Hyundai shipyard has received orders for 39 LNG carriers from important customers including Qatar Energy, accounting for about 60% of the total shipbuilding market.

In addition, rental prices in the shipping spot market will fluctuate greatly throughout 2023. The lowest annual rent appeared in May, at only US338,000/day, but the highest rent in September exceeded US。200,000/day.

 (Author's unit: Sinopec Petroleum Exploration and Development Research Institute)

North American LNG exports: ”U.S. retreat and increase" has become a new tone?

●Xin Shangji

At the end of January, the Biden administration announced that it would suspend the approval of new liquefied natural gas (LNG) export projects and would investigate the impact of LNG exports on U.S. energy costs, energy security, and the environment.After the Biden administration introduced the above-mentioned policies, it immediately attracted the attention of the industry, especially LNG importers from Europe and Asia.In early February, Canadian Energy Minister Jonathan Wilkinson's statement caused a lot of speculation in the industry.Wilkinson pointed out that the Biden administration's suspension of approval of new LNG export projects is an opportunity for Canada.He also declared that the production and mining of Canadian natural gas is the lowest carbon intensity in the world, and it is also the most suitable as a substitute for highly polluting energy sources such as coal.

In recent years, especially after the geopolitical conflicts in Europe, U.S. LNG exports have continued to grow.Data show that the total volume of LNG exports from the United States reached 91.2 million tons last year, surpassing Qatar and Australia to become the world's largest LNG exporters.Europe is the largest export market for U.S. LNG. From 2021 to 2023, the U.S. supply of LNG to Europe has surged by 170%.Asia is the second largest export market for LNG in the United States.At the same time, U.S. LNG production capacity is also showing a continuous upward trend.Earlier this year, Reuters reported that two new LNG projects in Louisiana and Texas are about to be put into operation, which will increase the annual LNG production in the United States by another 38 million tons.

However, after the Biden administration takes the initiative to “put on the brakes” on new LNG export projects, the North American LNG export pattern may usher in major changes. Canada, which has been regarded as a “potential stock” of LNG, may make a difference.

Canada has an outstanding natural endowment for the development of the natural gas industry, and has previously formulated an ambitious LNG development plan.According to data from the Ministry of Natural Resources of Canada, since 2011, Canada has successively proposed 18 LNG export facility projects.However, Canada's long-term environmental supervision is significantly stronger than that of the United States, which has led to the cancellation or long-term stagnation of many of its LNG projects.After the geopolitical conflict in Europe in 2022, the United States has greatly increased LNG exports, while Canada has missed the opportunity.

However, it is precisely because Canada's supervision of natural gas production and mining is stronger than that of the United States that there is what Wilkinson calls the “slogan” of Canadian natural gas production with the lowest carbon intensity in the world.Judging from the statements of important Canadian government officials, it is not ruled out that the next step is to vigorously develop the LNG industry and actively expand the scale of the export market.

So, can there be a trend of “U.S. retreat and increase” in North American LNG exports in the future?In fact, from the perspective of North America and even the global market, the United States has a large LNG export volume and a strong foundation, making it extremely difficult for Canada to catch up with the United States as a rising star.Even if Canada wants to increase LNG exports, it will still be highly dependent on LNG facilities in the Gulf of Mexico in the United States for a period of time, and it will take time for them to be built and put into operation.

At present, 6% of Canada's LNG production is used for export, and this proportion is expected to increase to 10% to 15% in the next three years. The key measure to increase export volume is the opening and operation of the LNG export terminal natural gas pipeline from British Columbia, Canada to the Gulf of Mexico in the United States.At the same time, Canada is also actively promoting the construction of LNG projects, including the world's leading floating liquefied natural gas (FLNG) production, storage and unloading equipment.Overall, in the context of the Canadian government's expected deregulation of the LNG industry, Canada's position in the global LNG export market may rise in the future.

Total Energy expects global LNG demand to expand

Newspaper news Total Energy executives recently said that global demand for liquefied natural gas (LNG) is expected to expand in 2024.The reason is that China, the largest buyer, has returned to the market, while European consumption is also increasing.

Thomas Morris, senior vice president of Total Energy's LNG business, said at an industry conference that with the expansion of demand, new LNG production capacity is not expected to be put into production soon, and prices will face continued moderate upward pressure.

Recently, Asian LNG spot prices have hit a nearly three-year low, and sluggish demand in Asia and Europe has put pressure on the market.

National Petroleum Corporation of Malaysia Vice President Ibrahim said that as LNG prices remain low, trading activity is picking up.However, if there is a problem on the production side, it may cause prices to soar.(Wang Yingbin)

Natural gas expenditures will exceed 1 trillion U.S. dollars in the next ten years

According to <url>, the climate campaign organization Global Witness recently analyzed data released by Rystad, a Norwegian energy consulting company, and said that driven by European natural gas demand, natural gas expenditures will exceed 1 trillion U.S. dollars in the next ten years.

According to an analysis by Global Witness, the oil and gas industry is expected to invest US2223 billion in European natural gas supplies by 2033.Europe's natural gas demand may experience a structural decline, but Europe needs other sources of supply to replace pipeline gas, which will be the main source of natural gas in Europe until 2022.After the geopolitical conflict, Europe has turned to liquefied natural gas (LNG) and increased pipeline gas supplies from Norway and Africa to meet demand.

Global Witness said, "Although climate and energy experts warn that any new fossil fuel production will increase global temperatures by more than 1.5 degrees Celsius, of this trillion-dollar total investment, 223 billion U.S. dollars will be used to develop and operate new natural gas extraction projects to supply Europe.”

ExxonMobil, Shell, Total Energy, Equinor (Norwegian National Oil Company) and Eni will be the largest investors in this funding.According to data released by Global Witness, the total investment of these five companies in European natural gas supply will reach US1144 billion in the next ten years.

Dominique Eagleton, a senior fossil fuel activist at Global Witness, said in a statement, “These figures show that Europe, which has doubled its use of natural gas, is heading on a dangerous path and needs to go all out to end the fossil fuel era.The European Commission must seize the opportunity to accelerate its exit from the natural gas sector and set 2035 as the target date for the phase-out of this costly fossil fuel.”

The International Energy Agency (IEA) also recently said that falling prices and increased demand in the winter of 2023-2024 will drive global natural gas consumption to resume strong growth this year.In its first-quarter natural gas market report, the International Energy Agency said that global natural gas demand will grow by 2.5% this year, while natural gas demand will grow by only 0.5% in 2023.