LNG
Overview
LNG's role as a key feedstock is well established as it helps manage both input costs and carbon emissions. Heavy industrial users' drive to achieve net zero targets has added a new dimension to how and where it is being deployed. Overall, its use is expected to increase and is tipped to become the strongest-growing fossil fuel.
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Japan’s FEPC calls for clearer nuclear policy stance
Japan’s FEPC calls for clearer nuclear policy stance
Osaka, 20 May (Argus) — Japan's Federation of Electric Power Companies (FEPC) has called for a clarification of the country's nuclear power policy, to ensure stable electricity supply and alignment with its net zero emissions goal. The call comes as the government reviews its basic energy policy , which was formulated in 2021 and calls for the reduction of dependence on nuclear reactors as much as possible. But Japan's guidelines for green transformation, which was agreed in February 2023, states that Japan should make the most of existing nuclear reactors. Tokyo should clearly state in its new energy policy that it is necessary to not only restart existing nuclear reactors, but also build new reactors, said FEPC chairman Kingo Hayashi on 17 May. Hayashi is also the president of utility Chubu Electric Power. Hayashi emphasised that to utilise reactors, it would be necessary to have discussions regarding financial support, policy measures that would help ensure cost recovery, address back-end issues in the nuclear fuel cycle and conduct a review of nuclear damage compensation law. Japan's current basic energy policy is targeted for the April 2030-March 2031 fiscal year, when the country's greenhouse gas (GHG) emissions is forecast to fall by 46pc from 2013-14 levels. To achieve this, the power mix in the policy set the nuclear ratio at 20-22pc, as well as 36-38pc from renewables, 41pc from thermal fuels and 1pc from hydrogen and ammonia. Japan typically reviews the country's basic energy policy every three years. Nuclear, as well as renewables, would be necessary to reduce Japan's GHG emissions, although thermal power units would still play a key role in addressing power shortages. But Japan has faced challenges in restarting the country's reactors following safety concerns after the 2011 Fukushima nuclear disaster, with only 12 reactors currently operational. Japan's nuclear generation in 2023 totalled 77TWh, which accounted for just 9pc of total power output. Tokyo has made efforts to promote the use of reactors, after the current basic energy policy was introduced in 2021. The trade and industry ministry (Meti) has updated its nuclear policy, by allowing nuclear power operators to continue using reactors beyond their maximum lifespan of 60 years by excluding a safety scrutiny period in the wake of the 2011 Fukushima nuclear disaster. This could advance the discussion on Japan's nuclear stance, especially if the new basic energy policy includes more supportive regulations. The trade and industry ministry started discussions to review the energy policy on 15 May, aiming to revise it by the end of this fiscal year. It is still unclear what year it is targeting and what ratio will be set for each power source in the new policy. But the deliberation would form a key part of efforts to update the GHG emissions reduction goal, ahead of the submission of the country's new nationally determined contribution in 2025, with a timeframe for implementation until 2035. By Motoko Hasegawa Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Japan’s Jera to handle 35mn t/yr LNG until FY2035-36
Japan’s Jera to handle 35mn t/yr LNG until FY2035-36
Osaka, 17 May (Argus) — Japan's largest LNG importer Jera plans to maintain its LNG handling volumes at no less than 35mn t/yr until the April 2035-March 2036 fiscal year. Rising renewable power supplies and the possible return of more nuclear reactors are likely to pressure LNG demand from Japan's power sector. Jera consumed 23mn t of LNG in 2023-24, down by 3pc on the year, although it handled 35mn t through its global operations during the same year. But Jera needs to secure sufficient LNG supplies to adjust for imbalances in electricity supplies and ensure power security, through more flexible operations. It is also looking to further promote LNG along with renewable electricity in Asian countries, while helping to reduce their dependence on coal- and oil-fired power generators. The 2035 target for LNG is part of Jera's three pillars of strategic focus, along with renewables as well as hydrogen and ammonia , which was announced on 16 May to spur decarbonisation towards its 2050 net zero emissions goal. The company plans to invest ¥5 trillion ($32bn) for these three areas over 2024-36. Jera also aims to retire all supercritical or less efficient coal-fired units by 2030-31 . This would help achieve the company's target of cutting CO2 emissions from its domestic business by at least 60pc against 2013-14 levels by 2035-36. By Motoko Hasegawa Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Chinese importers seek five LNG cargoes for Jun-Sep
Chinese importers seek five LNG cargoes for Jun-Sep
Shanghai, 15 May (Argus) — Five Chinese importers, mostly second-tier buyers, are each seeking one LNG cargo for June-September delivery, according to an official notice published by China's national pipeline operator PipeChina on 15 May. The five importers are PipeChina, Chinese independent ENN, Hong Kong-listed city gas firm China Resources Gas, Hong Kong-based Towngas and state-owned China Gas. PipeChina and ENN have indicated a target price of at most $9.50/mn Btu for their intended cargoes, both for delivery to PipeChina's 6mn t/yr Tianjin terminal. China Gas has indicated a target price of at most $9.30/mn Btu for delivery to PipeChina's 6mn t/yr Beihai termial. China Resources Gas and Towngas have both indicated a target price of at most $9/mn Btu for delivery to PipeChina's 2mn t/yr Yuedong and Tianjin terminals, respectively. This consolidated requirement came about because of a need for PipeChina to better leverage on its infrastructure advantages and, at the same time, meet the varying needs of gas importers and consumers in the country. But this requirement comes at a time when spot LNG prices are still somewhat higher than the importers' targeted prices. But the importers can choose not to buy if offers are not within their expectations. The front-half month of the ANEA, the Argus assessment for spot LNG deliveries to northeast Asia, was last assessed at $10.485/mn Btu on 15 May. Chinese importers mostly perceive spot prices below $9-9.50/mn Btu for June-September deliveries to be unattainable for now because there is strong buying interest from south and southeast Asia in particular. Indian state-controlled refiner IOC most recently bought LNG for delivery between 22 May and 15 June at around $10.60/mn Btu, through a tender that closed on 14 May. Thailand's state-controlled PTT most recently bought three deliveries for 9-10 July, 16-17 July and 22-23 July through a tender that closed on 13 May , at just slightly above $10.50/mn Btu. The most recent spot transaction was Japanese utility Tohoku Electric's purchase of a 10-30 June delivery at around $10.55/mn Btu through a tender that closed on 14 May . This is at least $1/mn Btu higher than Chinese importers' indications. Summer requirements have so far been muted but concerns among buyers about potential supply disruptions remain. Malaysia's 30mn t/yr Bintulu LNG export terminal suffered a power loss on 10 May, but this issue may have been resolved as of early on 15 May, according to offtakers. Some unspecified upstream issues may still be affecting production at the Bintulu facility, resulting in Malaysia's state-owned Petronas having to ask some of its buyers for cargo deferments, according to offtakers. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Banks’ 2023 fossil fuel funding rises to $705bn: Study
Banks’ 2023 fossil fuel funding rises to $705bn: Study
London, 13 May (Argus) — Fossil fuel financing by the world's 60 largest banks rose to $705bn in 2023, up by 4.8pc from $673bn in 2022, with the increase largely driven by financing for the LNG sector. This brings the total funding for fossil fuels since the Paris agreement was signed in 2015 to $6.9 trillion. The 15th annual Banking on Climate Chaos (BOCC) report was released on 13 May by a group of non-governmental and civil society organisations including the Rainforest Action Network and Oil Change International, and it analyses the world's 60 largest commercial and investment banks, according to ratings agency Standard and Poor's (S&P). Funding had previously dropped in 2022 to $673bn from $742bn in 2021, but this was because higher profits for oil and gas companies had led to reduced borrowing. JPMorgan Chase was the largest financier of fossil fuels in 2023 at $40.9bn, up from $38.7bn a year earlier, according to the report. It also topped the list for banks providing financing to companies with fossil fuel expansion plans, with its commitments rising to $19.3bn from $17.1bn in 2022. Japanese bank Mizuho was the second-largest financier, increasing funding commitments to $37bn for all fossil fuels, from $35.4bn in 2022. The Bank of America came in third with $33.7bn, although this was a drop from $37.3bn a year earlier. Out of the 60 banks, 27 increased financing for companies with fossil fuel exposure, with the rise driven by funding for the LNG sector — including fracking, import, export, transport and gas-fired power. Developers have rallied support for LNG projects as part of efforts to boost energy security after the Russia-Ukraine war began in 2022, and banks are actively backing this sector, stated the report. "The rise in rankings by Mizuho and the prominence of the other two Japanese megabanks — MUFG [Mitsubishi UFG Financial Group] and SMBC [Sumitomo Mitsui Banking] — is a notable fossil fuel trend for 2023," the report said. Mizuho and MUFG dominated LNG import and export financing, providing $10.9bn and $8.4bn respectively, to companies expanding this sector. Total funding for the LNG methane gas sector in 2023 was $121bn, up from $116bn in 2022. Financing for thermal coal mining increased slightly to $42.2bn, from $39.7bn in 2022. Out of this, 81pc came from Chinese banks, according to the report, while several North American banks have provided funds to this sector, including Bank of America. Some North American banks have also rolled back on climate commitments, according to the report. Bank of America, for example, had previously committed to not directly financing projects involving new or expanded coal-fired power plants or coal mines, but changed its policy in late 2023 to state that such projects would undergo "enhanced due diligence" and senior-level reviews. The report also notes that most banks' coal exclusions only apply to thermal coal and not metallurgical coal. Total borrowing by oil majors such as Eni, ConocoPhillips, Chevron and Shell fell by 5.24pc in 2023, with several such as TotalEnergies, ExxonMobil and Hess indicating zero financing for the year. The BOCC report's finance data was sourced from either Bloomberg or the London Stock Exchange between December 2023 and February 2024. UK-based bank Barclays, which ranks ninth on the list with $24.2bn in fossil fuel funding, said that the report does not recognise the classification of some of the data. Its "financed emissions for the energy and power sectors have reduced by 44pc and 26pc respectively, between 2020-23," it said. In response to its increase in financing for gas power, "investment is needed to support existing oil and gas assets, while clean energy is scaled," the bank said. By Prethika Nair Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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