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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Seoul may scale down nuclear expansion plans
Seoul may scale down nuclear expansion plans
The delay to finalising the country's nuclear goals may make it unfeasible to build sufficient capacity before current assets expire, writes Evelyn Lee London, 15 January (Argus) — South Korea's energy industry has faced a whirlwind of challenges since the impeachment of now-suspended president Yoon Suk-Yeol, with the political turmoil stalling a crucial review of its energy strategy in the national assembly. The government is now seeking to scale down its nuclear expansion ambitions in order to hasten the plan's review. Yoon's surprise declaration of martial law last month was reversed within six hours owing to bipartisan political pressure and widespread protests, which resulted in a national assembly vote in favour of the president's impeachment and his subsequent arrest on 15 January. Yoon is suspended from office pending a ruling by the country's constitutional court — due within six months of the impeachment vote on 14 December. If six out of nine justices vote to uphold the impeachment, Yoon will be removed from office and presidential elections will be held within 60 days. South Korea acted quickly following the martial law declaration, but government action has overall been slowed down by the political turmoil — including on energy policy. The latest draft of its long-overdue electricity plan was completed in June and scheduled to be submitted to the Trade, Industry, Energy, Small and Medium-sized Enterprises and Start-ups Committee of the national assembly by the end of last year. But the committee has suspended general meetings since 19 December, according to schedules released on its website. The long-term electricity plan is renewed every two years and serves as a basis for business planning, especially for state-controlled companies. Gas incumbent Kogas' procurement strategy has historically reflected the electricity plan. The latest draft lays out Seoul's intention to build three more nuclear reactors by 2038. But planning and construction would take nearly 14 years, according to the government, so the delay in finalising the plan could result in a power supply shortfall by 2038 — when 9.15GW of existing nuclear capacity is set to expire. Nuclear fallout The government may opt to scale down its nuclear expansion ambitions in order to get the draft electricity plan seen by the committee — which must review the plan, although it is not required to approve it. And less nuclear capacity could increase the need for more gas-fired capacity. The energy ministry pledged on 8 January to finalise the plan by June, after which it will pass related bills including the power grid act, but it did not say how it intends to progress the plan in the national assembly. The Korean Nuclear Society (KNS) responded on 9 January, accusing the government of allegedly planning to revise its nuclear objectives so it can speed up the plan's progress. The government's intent to revise its nuclear goals "without any scientific basis" shows that the electricity plan is just a "political bargaining tool that can vary depending on political interests", the KNS said. This threatens the stability of the South Korean electricity market, it added. The ministry did not respond to Argus' request for comment. But the alleged revision may not have been solely driven by political motives. Seoul may have missed the window of opportunity for approving new nuclear capacity in the timescale required, judging by the 14-year timeline for planning and construction. It remains unclear how the government would offset any reduction in its nuclear ambitions, but South Korea's slow grid development may leave little alternative other than boosting gas-fired capacity. Under the current draft electricity plan, gas-fired output would account for a 25.1pc (160.8TWh) share of total generation in 2030 and 11.1pc (78.1TWh) in 2038, up from 22.9pc (142.4TWh) and 9.3pc (62.3TWh), respectively, in the previous plan. Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
Australia's ACCC sees gas surplus for eastern states
Australia's ACCC sees gas surplus for eastern states
Sydney, 10 January (Argus) — Tight gas supply eased in Australia's eastern states during 2024, with a surplus higher than previously anticipated likely this year, according to the Australian Competition and Consumer Commission (ACCC). The ACCC's Gas Inquiry December 2024 interim report anticipates a 77-112PJ (2.1bn-3bn m³) surplus, driven by larger than expected supply from Queensland state's coal-bed methane projects. The projections show a surplus in each quarter of 2025, including in the peak-demand winter months, if LNG projects export all their available uncontracted gas. This compared with the ACCC's September report which showed a possible July-September shortfall. But a 16PJ supply gap is predicted for the southern states of South Australia, Victoria and New South Wales (NSW), which will need to be managed with careful usage of storage. But this does not account for the 2,880MW Eraring coal-fired generator's lifetime extension , which will reduce gas-fired power demand in 2025, the report said. The ACCC is predicting a supply of 1,982PJ in 2025, higher than 1,946PJ in its July report, with demand at 1,871PJ compared to 1,836PJ previously. The exact surplus figure depends on the export quantities from the LNG projects based at Gladstone, with 77PJ of surplus if projects export all their presently uncontracted gas. Gas will need to be transported south from Queensland as usual in the winter months, the ACCC said, with about 9pc of customer demand to be unmet. The 26PJ Iona gas storage site in Victoria held 16.06PJ on 2 January, up from 15.11PJ a week earlier on 26 December, with the ACCC recommending at least 25PJ to be stored before May to maximise levels ahead of winter. The improved outlook reflects Australia's growing coalbed methane output, with production reaching a new monthly high of 3.57bn m³ in August, according to Australian Petroleum Statistics. An average of 3.49bn m³/month was supplied in the first 10 months of 2024, or 26pc of Australia's total average monthly gas production of 13.51bn m³. This compared to 25pc of the total in 2023 and 24pc in 2022. Domestic gas prices have softened, the report said, because of higher supply and lower global prices but remain above historical levels. Offers from producers for 2025 supply fell by 1.8pc from the previous six months to A$14.77/GJ ($9.15/GJ) in the first half of 2024, while bids fell by 6.6pc to A$13.48/GJ. By Tom Major Australian gas prices (A$/GJ) Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
US natural gas producers wary of raising output
US natural gas producers wary of raising output
New York, 7 January (Argus) — Several large US natural gas producers are not planning to increase output in response to a substantial rise in prices ahead of a prolonged period of cold weather forecast to blanket the US this month. Executives at Expand Energy, the largest US gas producer by volume, have been fielding lots of questions lately about whether the company is going to ramp up activity to meet increased heating demand from the Arctic blast sweeping the eastern and southern US, and "the answer is no," Expand chief executive Nick Dell'Osso said today at the Goldman Sachs Energy, CleanTech and Utilities conference in Aventura, Florida. "Nothing has changed for us." Near-term US gas prices would probably have to exceed $5/mmBtu for producers in the Haynesville shale in east Texas and northern Louisiana to bring "significant" new output on line, said Gordon Huddleston, president of Aethon Energy, the largest privately held US gas producer. Beyond near-term price shifts, Huddleston emphasized the importance of the price strip for delivery in the 2025-26 winter heating season, since it takes 9-12 months to bring gas production to market from a new drilling rig. That strip does not suggest Haynesville producers should be ramping up activity, he said. "We don't want to get out in front of the demand pull," he said. Nymex gas prices at the US benchmark Henry Hub in Louisiana for February delivery on Monday settled at $3.672/mmBtu, up by 25pc from a month earlier. Prices for next winter heating season, from November 2025 to March 2026, on Monday settled at $4.181/mmBtu, up by 4.6pc from a month earlier. Any mismatch between supply and demand needs to persist for long enough that producers can reap the benefits of bringing additional supply on line, Dell'Osso said. If Expand were to add a rig today, the company would continue to yield output from that rig "at least 12 months later," when it would need time to earn a return on it, he said. This would likely require higher prices further into the future. "You don't want to grow for a season," Dell'Osso said. "You want to grow for something that is durable over several years." US gas inventories last week were at a 154 Bcf (4.4bn m³), or 4.7pc, surplus to the five-year average, according to the most recent government storage report. This compares to a 214 Bcf surplus at the start of this winter and a 633 Bcf surplus at the end of last winter, which prompted large gas producers like Expand and EQT to slash output. Today, there is probably not any active curtailment of producers' gas volumes, Dell'Osso said. The shrinking US gas storage surplus should lift prices through 2025-26, Bank of America analysts said today. Dell'Osso said he was more optimistic about the durability of the 5.6 Bcf/d demand increase slated to come on line through the end of 2026 resulting from operations at three new LNG export projects on the US Gulf coast: Plaquemines, Corpus Christi phase 3 and Golden Pass. To meet that demand with incremental production from the Haynesville, which is the marginal US gas producing basin, prices will have to significantly and durably exceed $3.50/mmBtu, which is the breakeven price for most producers there, he said. By Julian Hast Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
Viewpoint: Australia edges towards LNG imports in 2025
Viewpoint: Australia edges towards LNG imports in 2025
Sydney, 7 January (Argus) — Australia — formerly the world's largest LNG exporter — edges closer to importing the fuel in 2025, after years of supply warnings from the Australian Energy Market Operator (Aemo). Anti-gas lobbying from environmental groups, new emissions laws, slumping exploration, and rising costs have all been blamed for forecasts of production falling below demand levels, even as gas use dips. Debate about the rationale and demand for LNG continues, with no buyers having signed term sales yet. But the recent purchase of the proposed 386 TJ/d (10.3mn m³/d) Outer Harbor LNG project has raised expectations that deals may occur in 2025, to alleviate winter shortfalls from 2026 onwards. Aemo is predicting southern Australia's gas output will drop by 40pc from 1,260 TJ/d in 2024 to 740 TJ/d in 2028, with four import projects proposed in the nation's south. Initial imports will most likely head to New South Wales (NSW) state, Australia's largest jurisdiction by population. NSW is largely reliant on the ExxonMobil-operated Gippsland basin joint venture for supply, and the closure of a 400 TJ/d plant at the formerly 1,150 TJ/d Longford facility this year has accelerated concerns. Australian firm Squadron Energy said its 2.4mn t/yr Port Kembla Energy Terminal in NSW is now ready for operations, which could cover NSW' entire winter demand of about 481 TJ/d, excluding gas-fired generation. Limited storage capacity exists and no new major fields are under near-term development, but increasing pipeline capacity to bring enough Queensland coal-bed methane south could prove critical. Expansion of Australian pipeline operator APA's 440 TJ/d South West Queensland pipeline could be approved in early 2025, raising gas security. LNG imports cost up to 25pc more than pipeline gas, with the AVX — Argus' assessment for month-ahead spot gas deliveries to Victoria — averaging A$12.46/GJ in 2024 t o 27 December, while the Argus Gladstone fob price — an LNG netback indicator calculated by subtracting freight and costs associated with production from the delivered price of LNG to Asia-Pacific — averaged A$16.03/GJ for the same period. On the export scene, Australian independent Santos will restart production at the 3.7mn t/yr Darwin LNG after commissioning the Barossa field in July-September 2025 . The project has withstood significant legal challenges since 2023, with Santos promising an offshore carbon capture and storage facility later this decade to offset emissions. Other Australian terminals will produce steady volumes in 2025. The Woodside-operated North West Shelf project took a 2.5mn t/yr train off line in 2024, reducing its nameplate capacity to 14.4mn t/yr. The facility will start processing about 1.5mn t/yr of onshore gas from Beach Energy and Mitsui's 250 TJ/d Waitsia plant from early 2025. Energy election Australia's federal elections must take place no later than May, in what could be a referendum on the Labor government's renewables-led vision for Australia's grid. Abolishing Coalition-era gas exploration grants, Labor finds itself wedged between critics of further gas extraction and domestic shortfalls which may be already contributing to manufacturing sector weakness. Aemo expects 13GW of gas-fired generation is required under Canberra's 2050 net zero target to firm renewables. But gas projects remain unpopular in many communities, while anti-fossil fuel member of parliaments could hold the balance of power in the next parliament, polls show. Labor is sticking to its 82pc renewables by 2030 plan, while the Coalition has said it will not be met and it would make changes to Australia's 43pc emissions reduction by 2030 target, persisting with coal until nuclear generators can be built. Regardless, it appears much more gas will be needed in the short term as coal plants retire, meaning the temptation to raid east coast LNG projects for supply will remain. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
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