LNG Markets - Page 3

The Impact of New Marine Emissions Regulations on the LNG Market

Posted in CEDIGAZ Insights, Energy Transition, LNG Markets on

Changes to the IMO emissions standards will see the global sulphur limit in marine fuel reduced from 3.5% to 0.5% from 2020.

Marine fuel is a huge energy market which is currently dominated by oil products. However, tighter environmental regulations, particularly MARPOL Annex VI, are driving changes in fuel requirements, especially with regards to sulphur emissions, both in the Emission Control Areas (ECAs) around the coasts of North-West Europe and North America, but also globally, particularly as the 0.5% sulphur limit applies globally from January 2020 . LNG has opportunities in this sector as a low-sulphur fuel, although it also faces strong competition from low-sulphur oil products, sulphur scrubbing technology, and potentially from electric vessels. Currently there are known to be around 139 merchant vessels using LNG as a fuel, with a similar number on order. Whilst LNG-fuelled shipping has been slow to take off, it is now growing rapidly, particularly as supply infrastructure coverage has improved significantly in recent years. LNG is likely to become a fuel of choice for newbuilds in many sectors, whilst there may also be some LNG conversions.

European LNG Imports slump in H1 2018

Posted in LNG Markets, LNG Service, Natural Gas Statistics on

European net LNG imports in H1 2018 did not sustain the growth momentum which was seen in 2017 (nearly 5% Y-o-Y growth in H1 2017) as total LNG net imports fell by 5% (-1.21 MT YoY) to reach 21.2 MT. This trend was mainly the result of higher re-exports, which went up 1.1 MT YoY, and strong declines in net LNG imports in Spain, the UK and France.

In Southern Europe, net LNG imports were down 8.7% to 12.1 MT, as imports in France, Spain and Italy declined. LNG imports in Spain declined by 12 % (-0.65 MT), counterbalanced by pipeline imports from Algeria which grew 18% compared to last year. Spanish LNG imports from Peru were down by 0.88 MT and this was partially offset by increased purchases from Trinidad and Tobago (+0.67 MT). In France, re-exported volumes surged by 0.72MT YoY, resulting in a 10% decline (-0.4 MT) in net LNG imports. The re-exported cargoes from France landed mainly in Asia (China, South Korea, India) and the Middle East (Kuwait). In Italy, LNG imports were down by 10% (-0.28 MT) as the power sector gas demand weakened in H1 2018, while hydroelectric power generation increased. Portugal was the only Southern European country where LNG imports were up, albeit marginally (+ 0.15 MT).

Figure 1: European LNG Importers in H1’18 (net of re-exports)

Global LNG trade continues strong momentum in Q1 2018

Posted in LNG Markets, LNG Service, Natural Gas Statistics on

The global LNG trade in Q1 2018 sustained the growth momentum which was seen in 2017 as total LNG net imports grew by 9.6% (+6.89 MT YoY) to reach 78.7 MT. This strong growth was bolstered mainly by China (+4.83 MT YoY) and South Korea (+1.60 MT YoY) in North East Asia as well as India (+ 1.36 MT YoY) in South Asia. Bangladesh will also add to the regional demand marginally in 2018 as it started importing LNG in April this year. The Q1 2018 growth in China (+62% YoY) which resulted from coal to gas switching is adequate to maintain a 13% annual growth in 2018 even if the April-Dec’18 demand in China holds flat compared to the year earlier. South Korea surpassed China marginally in Q1 2018 in terms of net LNG imports. Domestic gas demand from the power sector in South Korea surged as 12 nuclear power units were offline. In India, LNG imports grew as a result of higher gas demand from the fertilizer sector and city gas distribution.