Global LNG demand falls as European receipts plunge
Global LNG demand fell in November as a sharp drop in European receipts more than offset growth in Asian markets, but it remains on track to grow in 2020 from a year earlier.
LNG receipts fell to 29.7mn t in November from 30.9mn t a year earlier, preliminary figures from analytics firm Vortexa show. The drop was mainly the result of European demand shrinking by nearly 30pc to 5.85mn t. Poland and Lithuania were the only two markets in the region that recorded a slight increase in deliveries last month.
Slower European demand more than offset growth in Asian, which rose to 18.5mn t from 17.3mn t, driven by stronger deliveries to India and China. Deliveries to northeast Asia rose slightly to 18mn t from 17.8mn t, as a 12pc increase in deliveries to China was largely offset by a slowdown in demand from Japan, South Korea and Taiwan. LNG demand grew more consistently across south Asia, with deliveries to India and Pakistan rising sharply on the year.
China was again the largest LNG importer in November, but is on course to remain behind Japan for the whole of 2020. Deliveries to Japan totalled 68.7mn t in January-November, above Chinese receipts of 61.1mn t.
Global LNG demand remains on track to grow this year, with 327mn t delivered in January-November, up from 318mn t a year earlier. But the bulk of the demand growth in 2020 was recorded before the onset of the Covid-19 pandemic, with the 13pc increase recorded in the first quarter gradually eroded throughout the rest of the year. Global demand shrank in June for the first time since 2015 and fell short of a year earlier in July-August, before rebounding slightly in September-October.
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APLNG's Jan-Mar output higher: Origin
APLNG's Jan-Mar output higher: Origin
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Yara first-quarter gas consumption higher on year
Yara first-quarter gas consumption higher on year
London, 29 April (Argus) — Europe's largest fertiliser producer Yara's European gas consumption in the first quarter was up by 26pc on the year, but remained far lower than in the second half of last year. Norway-based Yara's gas consumption across Europe in January-March totalled 29.2 trillion Btu, well above the 23.1 trillion Btu a year earlier, but drastically down from 37.5 trillion Btu in the fourth quarter last year, the company's latest quarterly report shows. Yara did not report its European ammonia production for the first quarter, but the company's global output totalled 1.74mn t, up from 1.38mn t a year earlier. Yara's first-quarter European gas consumption fell from the preceding three months, despite its average European gas costs falling to $11.70/mn Btu from $13/mn Btu. The firm's European gas costs have declined sharply since peaking at $34.50/mn Btu in the third-quarter 2022, when European wholesale prices hit all-time highs ( see price graph ). Yara's quarterly spending on European gas supplies fell to $343mn in January-March, the lowest since at least summer 2021 when the company began reporting this data, and around one third the $1.08bn peak in April-June 2022. Yara's European gas consumption also fell despite a 37pc annual increase in total fertiliser deliveries in Europe . Lower curtailments, improved production economics and "volume catch-up" had supported output, Yara said. But while European deliveries improved on the year, they remained "below normal" — particularly for nitrates — and Yara sourced a larger share of its European deliveries from its global plants, the company's chief financial officer Thor Giaever said. Yara had hinted earlier this year its ammonia assets might run at 90pc or more of capacity as the company expected to boost production this year . But one explanation for the lower gas demand compared to the previous quarter is Yara may be maximising production at more efficient plants like Sluiskil in the Netherlands and Brunsbuttel in Germany, while ramping down less efficient plants, allowing the company to maintain or increase production while consuming less gas. Yara last year curtailed 19pc of its European ammonia capacity , turning towards greater imports of ammonia to replace the lower production. And that remains key to Yara's business plans , which the company said last week focused on "further strengthening operational resilience and flexibility". Argus assessed European ammonia production prices based on the TTF front-month price at roughly a $100/t discount to northwest European import prices in its last weekly assessment on 25 April, suggesting a still-significant financial incentive to produce ammonia domestically. The European fertiliser market remains under pressure by large volumes from Russia, meaning Europe has swapped an energy dependency on Russia for a food dependency, chief executive Svein Tore Holsether said, echoing previous statements . Comparing global assets Yara consumed 54.4 trillion Btu of gas globally in January-March, down from a multi-year high of 61.9 trillion Btu in October-December ( see consumption graph ). European consumption accounted for roughly 54pc of Yara's global gas demand in January-March, well down from 61pc in the previous quarter. And Yara spent $485mn on gas worldwide in January-March, 71pc for European supply, a lower proportion than at any other point since 2021. Yara's global average gas cost was $8.90/mn Btu in January-March, 24pc below its reported European cost. That discount has been a significant driver for Yara and others to increase production abroad rather than in Europe over the past two years. Yara forecasts its European gas costs at $9.70/mn Btu and $10.50/mn Btu in the second and third quarters of this year, respectively, holding well above its global average gas costs of $7.70/mn Btu and $8.40/mn Btu during those same periods. Globally, the firm aims to produce 8.6mn t of ammonia in 2025, significantly up from 7.8mn t in 2023, it said. By Brendan A'Hearn Yara European vs global gas costs $/MMBtu Yara European vs global gas consumption million MMBtu Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Service firms talk up long-term gas prospects
Service firms talk up long-term gas prospects
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BP inks another LNG deal with Korea's Kogas: Correction
BP inks another LNG deal with Korea's Kogas: Correction
Corrects total volume of LNG supplied in paragraph 2 Singapore, 29 April (Argus) — BP has signed another long-term LNG sales and purchase agreement with South Korean state-owned importer Kogas, the former said today. BP will provide Kogas with up to 9.8mn t of LNG over 11 years from mid-2026 on a des basis. But other details regarding pricing and the origin of the contracted supplies were not available. This most recent deal is in addition to the existing long-term sales and purchase agreement between the two companies that was signed in 2022. Kogas on 22 April 2022 signed an 18-year LNG purchase agreement to buy 1.58mn t/yr of LNG from BP that will begin in 2025. Australian independent Woodside Energy and Kogas in February signed a sales and purchase deal for term supplies of LNG to South Korea. The deal for 500,000 t/yr on a des basis will start in 2026 and run for 10½ years. Kogas may be seeking more imported term supply as the firm has increased its downstream contractual supply deals. Kogas signed a series of deals to supply gas to subsidiaries of the country's state-controlled utility Kepco in December 2023. By Simone Tam Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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