Trend of Natural Gas and LNG Prices
- After the assessed spot LNG price JKM for near-month delivery to Northeast Asia rose to the USD 7s in early April, rose to the USD 8s after the delivery month switched to June, and continued rising to the high USD 8s in late April. As LNG imports increased year-on-year in March by 36.5% in China and by 19% in Korea, respectively, prices have been steady due to the strong demand for LNG in Northeast Asia.
- According to preliminary figures of Japan's Ministry of Economy, Trade and Industry (METI), the average of the contracted prices of spot-LNG in March 2021 was USD 6.6 (USD 6.1 lower than February) and the average of landed prices of spot-LNG was USD 9.3 (USD 7.0 lower than February), both nearly halving from February.
- The Henry Hub price was on a downward trend as the record cold weather ended, reaching the mid-USD 2s in early March. It has been stable in the range until late April without major fluctuations. As natural gas inventories in the storage facilities in the United States at the end of March were 2% lower than the average for the past five years due to the severe winter, demand for storage refilling is expected to grow toward the summer. In the future, the export of LNG from the country, which has a price advantage compared to the natural gas spot prices in other regions, is expected to continue growing.
- After the TTF price surpassed USD 6 in early March and USD 7 on 15 April, it has been in the low USD 7s in late April. Demand also increased in Europe due to the lower temperatures than one year earlier, natural gas inventories in the middle of April were 6% lower than the average for the past five years. The modest rise of the Brent crude oil price is thought to be another factor in the rise in European natural gas prices.
- Based on the preliminary figures from Japan's customs statistics of the Ministry of Finance, the country's average LNG import price was USD 7.51 in March 2021. The average landed prices of LNG in Japan from the ASEAN region, Middle East and Russia in the month were USD 7.02, USD 6.93 and USD 6.37, respectively, lower than the average price, while the price from the United States was USD 9.75, higher than the average.
- Japan imported 7.13 million tonnes of LNG in March 2021, 1.1% lower than same month of 2020. The import volumes from January to March were 23.32 million tonnes, an increase of 9.2% from the same period of the previous year. Japan's average import price in March was lower than China’s USD 7.99, Korea's USD 8.44 and Chinese Taipei's USD 7.86. China imported 5.64 million tonnes of LNG in March of 2021, 36.5% more than the same period of 2020. Korea imported 4.21 million tonnes, an increase of 19% from the same month of the previous year, Chinese Taipei imported 1.63 million tonnes, 24% higher LNG in March 2021 than one year earlier. Monthly LNG imports into the four markets combined have increased year-on-year since January 2020. During the first quarter of 2021, the four markets imported 61.19 million tonnes, a 15% increase year-on-year.
Mid- to long-term trend
- The JKM price was around USD 6 in winter 2019 but started to decline from January 2020, reaching an all-time low of USD 1.83 at the end of April 2020 due to increasing supply and slower growth of demand. After hovering in the USD 2s from May until July, it rose again from August 2020 due to supply disruptions at several production facilities to over USD 10 in December, reaching an all-time high of USD 32.5 in January 2021 because of the cold wave. The price spike, as well as the preceding plunge, was unprecedented. However, there were only a few cargoes that changed hands at such extreme price levels and the price spike turned out to be a temporary phenomenon. JKM then fell sharply, dropping to the USD 5s towards the end of February, turning upwards in March, hovering around the USD 6s in March and rising from the USD 7s in early April to the USD 8s near the end of the month.
- Japan's average LNG import price had been declining to the USD 5s in August - October 2020, the lowest level since January 2005, due to the collapse of international crude oil prices from March 2020. Then the average price rose to the USD 7s in December 2020 as crude oil prices recovered. The average price further went up to the middle of the USD 8s in January 2021, above USD 9 in February. It then fell to the USD 7s in March, as the average price of LNG from the United States fell from the USD 13s to the USD 9s and the average price of LNG from the Middle East LNG fell from the USD 9s to the USD 6s.
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Henry Hub price: NYMEX Futures and Options, CME Group
TTF price: ICE Futures Europe, Intercontinental Exchange
JKM: LNG Japan/Korea Marker© 2021 by S&P Global Platts, a division of S&P Global Inc.
METI spot price: Spot LNG Price Statistics, Ministry of Economy, Trade and Industry
Japan’s average LNG import price: Trade Statistics of Japan
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Trend of Natural Gas and LNG Inventories
- Japan's LNG inventories as of the end of December 2020 stood at 3.34 million tonnes, a decrease of 14.5% or 0.57 million tonnes from the preceding month, and a decrease of 26.4% from December 2019. The LNG inventories of 3.34 million tonnes were the lowest since February 2018 and 0.91 million tonnes lower than the five-year average despite larger LNG imports than one year ago, as LNG consumption increased for city-gas and power generation due to the cold weather.
- The LNG inventories for city-gas supply as of the end of December were 1.49 million tonnes, 13.1% lower than November 2020, and 35.2% lower than December 2019. LNG consumption for city-gas was 3.24 million tonnes, increasing by 6.5% year-on-year in December 2020. City-gas companies received 2.71 million tonnes of LNG in December, increasing year-on-year by 7.5%.
- The LNG inventories for power generation in December 2020 were 1.85 million tonnes, decreasing by 15.6% from November 2020 and 17.4% lower than December 2019. LNG consumption in December 2020 increased by 12.9% year-on-year to 5.05 million tonnes, while LNG receipts for power generation in the month increased by 13.3% year-on-year to 5.14 million tonnes.
Compiled based on data from Gas Business and Thermal Power Generation Statistics, Ministry of Economy, Trade and Industry.As the inventory data is available for the period only after January 2008, the five-year average is applicable only after January 2013.
- As of 16 April 2021, working gas in underground natural gas storage in the United States was 1.88 Tcf, a 7.5% increase from the previous month, according to the U.S. Energy Information Administration (EIA). Gas inventories were 12.0% lower than those at the same time in 2020 and were 12 Bcf higher than the past five-year average. The inventories are within the five-year range since November 2020.
- According to the monthly Short-Term Energy Outlook (STEO) released by the EIA in April 2021, natural gas inventories were nearly 1.8 Tcf in March 2021, which is 2.0% lower than the five-year (2016-2020) average. The withdrawals of natural gas in 2020-2021 winter were more than the five-year average because of the cold February temperature and low natural gas production. EIA forecasts that natural gas production will grow and gas consumption for power generation will be less than in the past two summers, leading the storage injections outpacing the five-year average in 2021. In addition, EIA forecasts that natural gas inventories will end the 2021 injection season (end of October) at the level of five-year average, which is more than 3.7 Tcf.
Compiled based on data from the U.S. Energy Information Administration (EIA)
- As of 24 April 2021, the stored volume of natural gas in European underground storage facilities operated by the Aggregated Gas Storage Inventory (AGSI +) members (including European Union [EU] member companies and non-EU [the United Kingdom, Serbia, and Ukraine] member companies) was 327TWh. The inventories were 1.3% down from the previous month and 51.1% lower year-on-year, and 107 TWh lower than the five-year average. This is also the lowest level of storage in two years since March 2018 with 192 TWh of storage. The frigid air spilled from the Arctic to Europe, causing record low temperatures in Central and Eastern Europe. As a result, the heating demand in Northwest Europe and Central and Eastern Europe jumped by more than 40% from 27 March to 6 April. On 24 April 2021, although the working gas volume in storage represented 29% of the capacity and was much lower than 60% one year earlier, it was just slightly lower than the average on the same day over the past five years of 33%.
Compiled based on data from Gas Infrastructure Europe, Aggregated Gas Storage Inventory (AGSI). As the inventory data is available for the period only after January 2011, the five-year average is applicable only after January 2016.
- As of 24 April 2021, the stored volume of LNG in European LNG terminal reported by Aggregated LNG Storage Inventory (ALSI) member operators (including 18 operators in 11 countries) was 3.59 million cubic metres (in liquid), 4.2% down from the previous month. The inventories declined since January 2021 and recorded a low of 2.94 million cubic metres in March, the lowest level since April 2018. After that, the inventories were on an increasing trend. However, due to the frigid air spilled from the Arctic, the inventories decreased to 3.18 million cubic metres, or 38% of storage capacity, on 8 April 2021. It should be noted that in Europe, which has many underground gas storage facilities, imported LNG is generally regasified and injected into those underground storage facilities, resulting in only relatively small LNG inventories.
Compiled based on data from Gas Infrastructure Europe, Aggregated LNG Storage Inventory(ALSI). As the inventory data is available for the period only after January 2012, the five-year average is applicable only after January 2017.
Latest Developments in Major Natural Gas and LNG Projects
- Multiple carbon-neutral LNG cargoes were delivered in the Asian market, through offsetting emissions with carbon credits. On the LNG production project front, one investment decision was announced on a backfill feedgas project to extend operational life of an existing project in Australia. On the other hand, two projects announced suspension of development activities in North America.
Asia and Oceania
- Chevron and Hokkaido Gas announced on 7 April 2021 that they had signed a sale and purchase agreement (SPA) for delivery of LNG from Chevron's global LNG portfolio to the Ishikari LNG terminal for 500,000 tonnes over five years starting April 2022.
- Toho Gas announced on 8 April 2021 that it received its carbon-neutral LNG cargo at the Chita LNG terminal bought from Diamond Gas International (DGI), a 100% subsidiary of Mitsubishi Corporation, with carbon emissions offset with CO2 credits.
- RWE announced on 29 March 2021 that RWE had arranged a carbon offset LNG cargo for POSCO delivered to the Gwangyang terminal in Korea.
- Total announced on 23 March 2021 that the company and Shenergy Group in Shanghai had signed binding agreements for the supply of up to 1.4 million tonnes per year of LNG from Total, as well as the creation of a joint venture to expand LNG marketing in China. The joint venture (Total 49%, Shenergy Group 51%) will sell LNG, supplied by Total, to customers in Shanghai and throughout the neighboring Yangtze River Delta regions. Additionally, Total will supply LNG to Shanghai Gas, the natural gas subsidiary of Shenergy Group, for its distribution business.
- Eni announced on 30 March 2021 that Eni and Zhejiang Energy signed a Memorandum of Understanding (MoU) on strategic cooperation in the energy sector aimed at facilitating joint initiatives across the gas and LNG value chain in China and internationally.
- Qatar Petroleum announced on 22 March 2021 that it entered into a 10-year LNG Sale and Purchase Agreement (SPA) with Sinopec for the supply of 2 million tonnes per year of LNG. LNG deliveries will commence in January 2022.
- China's PipeChina announced on 31 March 2021 that with its acquisition of a 60% stake in its Beijing natural gas pipeline and a 75% stake in its Dalian LNG company, it had completed its national network of main gas pipelines.
- Singapore's Energy Market Authority (EMA) announced on 25 March 2021 that it had appointed ExxonMobil and Sembcorp as new term LNG importers for the country.
- Pavilion Energy announced on 15 April 2021 that it had imported a carbon neutral LNG cargo into Singapore - the first for Singapore and Pavilion Energy. Carbon emissions associated with the LNG cargo from well-to-tank including the extraction, production, transportation, and regasification will be offset by retiring a corresponding amount of carbon credits sourced from its portfolio of carbon offset projects in Peru and in China.
- PETRONAS announced on 25 March 2021 that the company made the first cargo delivery by PETRONAS Floating LNG DUA (PFLNG DUA), its second floating LNG production facility, on 24 March 2021, to an LNG buyer in Thailand. PFLNG DUA is located at Block H Rotan gas field located 140 kilometres offshore Sabah.
- Philippines' First Gen Corporation announced on 5 April 2021 that its FGEN LNG unit had entered into a five-year contract to charter the BW Paris floating storage regasification unit (FSRU) from a unit of Norway's BW Gas for the offshore gas terminal project in Batangas.
- McDermott International announced on 14 April 2021 that its CB&I Storage Solutions business had been awarded a contract by Atlantic Gulf and Pacific Company of Manila Inc. (AG&P) for the engineering, procurement and construction (EPC) of an LNG storage tank for AG&P's Philippines LNG import and regasification terminal, currently under construction in Batangas, Philippines.
- On 29 March 2021, Australia's local authority of Victoria completed his assessment concluding that the environmental effects of the project (Crib Point: AGL APA gas import jetty and Crib Point - Pakenham gas pipeline) on the marine environment of the Western Port Ramsar site are unacceptable. AGL said that it was reviewing and considering its position in relation to the authority's determination.
- Santos on 30 March 2021 announced that a final investment decision (FID) had been taken to proceed with the Barossa project located offshore the Northern Territory. The FID also kick-starts the investment in the Darwin LNG life extension and pipeline tie-in projects, which will extend the facility life for around 20 years. The Barossa development will comprise a Floating Production, Storage and Offloading (FPSO) vessel, subsea production wells, supporting subsea infrastructure and a gas export pipeline tied into the existing Bayu-Undan to Darwin LNG pipeline. First gas production is targeted for the first half of 2025.
- Timor-Leste's national company Timor GAP announced on 31 March 2021 that it had started a feasibility study of an LNG receiving terminal. The Ministry of Public Works, through Eletricidade de Timor-Leste (EDTL), plans to convert Hera and Betano power plants from fuel oil to natural gas.
- Cheniere Energy's plan to begin commercial operations of its Train 3 of the Corpus Christi Liquefaction plant in Texas was authorized by the Federal Energy Regulatory Commission (FERC) on 25 March 2021.
- Sempra Energy announced on 5 April 2021 that it had entered into a definitive agreement to sell a non-controlling, 20% interest in Sempra Energy's new business platform, Sempra Infrastructure Partners, to KKR, a leading global investment firm. The announcement is part of transactions to simplify the company's non-utility infrastructure investments under one self-funding platform, combining Sempra LNG and IEnova (Infraestructura Energética Nova, S.A.B de C.V.), one of the largest private energy companies in Mexico and a leading developer and operator of renewables and natural gas infrastructure in that country.
- NextDecade and Oxy Low Carbon Ventures (OLCV), a subsidiary of Occidental, on 25 March 2021 announced that they had executed a term sheet for the offtake and permanent geologic storage of CO2 captured from NextDecade's planned Rio Grande LNG project in the Port of Brownsville, Texas. OLCV will offtake and transport CO2 from the LNG project and permanently sequester it in an underground geologic formation in the Rio Grande Valley. NextDecade on 29 March 2021 agreed to sell Convertible Preferred Stock to OGCI Climate Investments (OGCI CI).
- NextDecade and Mitsubishi Heavy Industries America, Inc. (MHIA) announced on 14 April 2021 that they had signed an engineering services agreement (ESA) for the design, license, and performance guarantee of the KM CDR ProcessTM, a post-combustion carbon capture technology to be applied at NextDecade's Rio Grande LNG project in the Port of Brownsville, Texas.
- Annova LNG announced on 22 March 2021 the immediate discontinuation of its LNG export facility under development in Brownsville, Texas. The project had proposed building a 6.5 million tonnes per year LNG export facility. The project was being developed by Exelon, Black & Veatch, Kiewit Energy Group and Enbridge.
- Chevron announced on 17 March 2021 that the company intended to cease further feasibility work for the Kitimat LNG project in British Columbia. In December 2019, Chevron announced its plan to divest its 50% interest in the project. Chevron engaged in a process to divest while continuing to work with its partner Woodside on agreed project activities.
Europe and Russia
- Total announced on 13 April 2021 that the company and Siemens Energy had signed a Technical Collaboration Agreement to study sustainable solutions for CO2 emissions reduction. The collaboration will focus on natural gas liquefaction facilities and associated power generation.
- NOVATEK announced on 24 March 2021 that Arctic LNG 1 had won the auction for geological survey, exploration and production license for the North-Gydanskiy subsoil license area located in the Yamal-Nenets Autonomous Region on the Gydan Peninsula and partly in the shallow waters of Gydan Bay of the Kara Sea. The area has estimated hydrocarbon resources of 9.8 billion barrels of oil equivalent according to the Russian resource classification system. The license term is 30 years. The new license area borders NOVATEK's existing assets on the Gydan Peninsula and the company claims that the license expands the company's resource base for implementing new LNG projects.
- Qatar Petroleum (QP) announced on 30 March 2021 that it would not be renewing the Qatargas Liquefied Natural Gas Company Limited (QG1) joint venture upon the expiry of the relevant agreements on 31 December 2021. QP will become the sole owner of 100% of the QG1 assets and facilities on 1 January 2022.
- The Mozambique LNG project and the Government of Mozambique announced on 24 March 2021 that the project would resume construction activities, following the implementation of additional site security measures after the security events in December 2020 near the site. Later in the month Total postponed the restart of works, after deadly attacks on a nearby coastal town of Palma.
Supprted by the Institute of Energy Economics Japan (IEEJ)
- Japan Trend of LNG Inventory data(16.9KB) （Apr 26, 2021 update）
- US Trend of Natural Gas Inventory data(47.9KB) （Apr 26, 2021 update）
- Europe Trend of Natural Gas Inventory data(287.2KB) （Apr 26, 2021 update）
- Europe Trend of LNG Inventory data(219.9KB) （Apr 26, 2021 update）