Trend of Natural Gas and LNG Prices
- The assessed spot LNG price JKM for near-month delivery to Northeast Asia hovered in the middle of USD 30 per million Btu in early January, then has been around USD 20 since the middle of January, following the trend of European spot gas prices. Although disruptions of LNG production in Malaysia and Australia, as well as the high European gas prices, still have some influences over the LNG market, JKM has fallen. As a relatively warm climate is expected in China, and Chinese companies are offering LNG cargoes after February delivery, the market apparently expects a relaxed balance in the coming months.
- JOGMEC announced in its monthly report of spot LNG prices for delivery to Japan that the average price of spot LNG cargoes for delivery to Japan contracted in December 2021 and scheduled to be delivered from the month onward (contract-based price) was USD 33.2, and the average price of spot LNG cargoes that were contracted and delivered in Japan within the month (arrival-based price) was also USD 33.2. This is the highest since March 2014 when the monthly reporting started.
- The Henry Hub Natural Gas Futures price rose from the high of USD 3 at the beginning of the month to the USD 4.8 and hovering the USD 4 through the end of the month. According to the EIA (U.S. Energy Information Administration), the declining natural gas prices in recent months reflect a relatively warm weather and the demand for heating decreased. EIA forecasts an average of USD 3.82 in the first quarter of 2022 and average USD 3.79 for all of 2022 and USD 3.63 in 2023. U.S. LNG exports reached approximately 74 million tonnes in 2021, but EIA expects the U.S. LNG export capacity will contribute to LNG exports rising to about 87 million tonnes in 2022 and 92 million tonnes in 2023.
- The Dutch TTF Gas Futures price continued rising from USD 32 at the beginning of the month to middle of USD 20 by the middle of the month. Low inventory levels of European gas underground storage, increased demand due to cold weather in Europe, and the issue of the Nord Stream 2 pipeline, as well as growing concern about Russia’s confrontation with Ukraine, have remained as factors of potentially higher gas prices. However, gas supply concerns have eased due to arrivals of LNG cargoes including those from the Asian region, and European gas prices have fallen sharply.
- Based on the preliminary figures from Japan's customs statistics of the Ministry of Finance, the country's average LNG import price was USD 14.36 in December 2021. The average landed prices of LNG in Japan from the United States, the ASEAN region, the Middle East, and Russia in the month were USD 16.32, USD 14.40, USD 11.14, and USD 12.24, respectively. Elsewhere in Asia, average import prices in December were USD 18.88 in China, USD 17.20 in Korea, USD 17.26 in Chinese Taipei, making Japan's the lowest price in the region for four consecutive months. The Japan’s average landed crude oil import price (JCC: Japan crude cocktail) rose to USD 82.27 in December 2021 for the eighth straight month, the highest since November 2014. Japan’s average LNG import price is expected to continue rising, as long-term contracts linked to JCC prices still account for 70%-80％ of LNG imports.
- Japan imported 7.04 million tonnes of LNG in December 2021, 9% lower than the same month of 2020. The total annual LNG import volume was 74.32 million tonnes, a decrease of 0.2% from the same period of 2020. China imported 7.63 million tonnes of LNG in December 2021, 1% more than the same month of 2020. China's total annual LNG import volume in 2021 was 78.93 million tonnes, an increase of 18% from 2020, making China’s the world's largest importer for the first time for a calendar year. While Korea imported 3.86 million tonnes in December 2021, a decrease of 9% from the same month of 2020, Chinese Taipei imported 1.70 million tonnes, 1% lower than one year earlier. The LNG imports into the four markets combined reached a record high of 218.72 million tonnes, a 10% increase year-on-year.
Mid- to long-term trend
- The JKM price 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. JKM then fell sharply to the USD 5s towards the end of February, turning upwards in March and thereafter. Moving along with the also high European gas prices and briefly surpassing USD 56 in October, JKM remained in the middle of USD 30s in November, above USD 40 in December, and in the USD 20s in January.
- 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. In response to strong crude oil price movements, the average price further went up to the USD 9 in February 2021, after falling to the mid-USD 7s in March. It has then been on the rise as crude oil prices have risen, reaching high USD 11 in October, and then climbing to USD 14 in November and December, the highest since January 2015.
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Henry Hub price: NYMEX Futures and Options, CME Group
TTF price: ICE Endex, Intercontinental Exchange
JKM: LNG Japan/Korea Marker© 2022 by S&P Global Platts, a division of S&P Global Inc.
JOGMEC spot LNG price: Monthly spot LNG prices for delivery to Japan, JOGMEC; by March 2021, the source is Spot LNG Prices Statistics, Ministry of Economy, Trade and Industry
Japan’s average LNG import price: Trade Statistics of Japan
EUA(EU ETS): ICE Endex, Intercontinental Exchange
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Trend of Natural Gas and LNG Inventories
- Japan's LNG inventories as of the end of September 2021 stood at 5.41 million tonnes, an increase of 7.9% or 0.39 million tonnes from August, and an increase of 30.9% from September 2020. The LNG inventories of 5.41 million tonnes were higher than the past five-year average by 1.33 million tonnes, and they were also higher than the highest of the past five-years by more than 1 million tonnes. For the second consecutive month, they were more than 5 million tonnes.
- The LNG inventories for city-gas supply as of the end of September were 2.40 million tonnes, 22.0% higher than August 2021 and 22.3% higher than September 2020. LNG consumption for city-gas was 2.01 million tonnes, decreasing by 12.0% year-on-year in September 2021. City-gas companies received 2.54 million tonnes of LNG in September, increasing year-on-year by 9.3%. LNG inventories for the gas business increased for the second consecutive month on a year-on-year basis.
The LNG inventories for power generation in September 2021 were 3.01 million tonnes, decreasing by 1.3% from August 2021 and 38.8% higher than September 2020. LNG consumption for power generation in September 2021 decreased by 33.0% year-on-year to 2.78 million tonnes, while LNG receipts for power generation in the month decreased by 33.8% year-on-year to 3.06 million tonnes.
- According to the "LNG Inventory for Power Generation" released by the Ministry of Economy, Trade and Industry (METI) on 19 January 2021, major power utilities had 2.01 million tonnes of LNG in stock as of 16 January. This is an increase of 0.52 million tonnes from the end of January 2020 and 0.34 million tonnes above the average of the end of January of the past four years.
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 14 January 2022, working gas in underground natural gas storage in the United States was 2.81 Tcf, 16.4% decrease from the previous month, according to the U.S. Energy Information Administration (EIA). Gas inventories were 6.6% lower than those at the same time in 2021 and were 44 Bcf lower than the past five-year average. The latest inventories have been within the past five-year range since November 2020.
- According to the monthly Short-Term Energy Outlook (STEO) released by the EIA in January 2022, natural gas inventories were 3.2 Tcf as of the end of December 2021, 3.0% higher than the five-year (2017-2021) average. The EIA estimates that storage withdrawals in Q1 2022 will be close to the average and predicts that inventory at the end of March will total 1.8 Tcf. This is 8% more than the five-year average for that time period (2017-2021). During the April-October 2022 storage injection season, injections are not expected to keep pace with the five-year average rate, reflecting expected growth in the industrial sector demand and growing LNG exports.
Compiled based on data from the U.S. Energy Information Administration (EIA)
- As of 23 January 2022, the stored volume of natural gas in European underground storage facilities operated by the Aggregated Gas Storage Inventory (AGSI +) members (including European Union [EU] and the United Kingdom member companies) was 472.5 TWh (31.25 million tonnes LNG equivalent). The inventories represented 42.3% of the capacity, significantly lower than 53.5% on the same day in 2021 and the five-year average of 52.3%. The inventories were 600.4 TWh as of 31 December 2021, which was the lowest for the end of the year since 2014, 23.9% and 12.3% lower than the five-year average and the five-year minimum, respectively. Notably, the inventories in Germany and the Netherlands (which have relatively large storage capacity among the member countries) were 53% and 36% of their respective capacities as of the end of December.
- As of 23 January 2022, the stored volume of natural gas in Ukraine was75.0 TWh. The inventories were 24.7% down from the previous month and 57.5% lower year-on-year, and 71.8 TWh lower than the five-year average. The inventories represented 23.3% of the capacity, lower than 55.1% on the same day in 2021 and the five-year average of 42.7%.
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 23 January 2022, the stored volume of LNG in European LNG terminals reported by Aggregated LNG Storage Inventory (ALSI) member operators (including 18 operators in 11 countries) was 5.21 million cubic metres (in liquid), 18.1% up from the previous month. The inventories were higher than the same day in 2021 by 34.4% and by 25.8% above the five-year average for the same day.
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
- While LNG long-term contracting activities continue involving the Chinese market, LNG production development activities appear to be in high gears in different regions in the world, notably in the United States. Operational rates are expected to go up at the existing production projects and those projects under construction or commissioning phases should advance toward initial LNG production. China was officially No. 1 LNG importing country in the world in 2021 as it received 78.93 million tonnes in the year compared to Japan's 74.32 million tonnes.
Asia and Oceania
- Hiroshima Gas announced on 27 December 2021 that it would receive its first Carbon Neutral LNG cargo from Malaysia LNG on 2 January 2022 at the company's Hatsukaichi receiving terminal. The cargo was received accordingly.
- INPEX CORPORATION announced on 17 January 2022 that it planned to implement exploratory drilling operations offshore Shimane and Yamaguchi prefectures in Japan to explore the possibility of locating oil and natural gas resources through INPEX San'in Offshore Development Co., Ltd.
- Japan Petroleum Exploration Co., Ltd. (JAPEX) announced on 11 January 2022 that it would participate in the project to construct an LNG terminal in the northern part of Vietnam. The project involves the construction of an LNG Terminal in the Nam Dinh Vu Industrial Park in Hải Phòng City and procurement, storage, and supply of LNG. As the initial development, the construction of a 50,000 m3 LNG storage tank and associated jetty facilities capable of handling a throughput volume of up to 650,000 metric tonnes of LNG annually is planned, and the parties are working to make a FID expected in the second half of 2022. The facilities to be constructed in the project are planned to commence commercial operation in 2025.
- Malaysia's Sabah State Government and PETRONAS on 4 January 2022 launched the Sabah Gas Masterplan that serves as a reference for both parties in guiding the way forward for the further development of natural gas in the State. The Masterplan highlights investment opportunities for Sabah's natural gas resources, including an LNG plant with a capacity of 2 million tonnes per year at the Sipitang Oil and Gas Industrial Park.
- Singapore's LNG Alliance announced on 5 January 2022 that it had signed a Cooperation Agreement with India's New Mangalore Port Trust (NMPT), Karnataka, to develop an LNG import terminal with an initial capacity of 4 million tonnes per year, with provision for LNG virtual pipelines and an LNG bunkering facility.
- Australia's Veneice Energy announced on 23 December 2021 that the South Australian Government had approved the construction of an LNG import terminal to be built in the Outer Harbor of Port Adelaide. The terminal will become the only LNG import facility in South Australia and the first in the world to be powered by renewable energy, the company claims. Construction is expected to begin in the middle of 2022. The first shipment of LNG into the terminal and connection to the South Australian gas network is anticipated around late 2023 to early 2024.
- Woodside Energy submitted on 10 January 2022 the proposal for its 500 MW Solar Facility to the Western Australian Environmental Protection Authority. Woodside looks to install up to one million solar panels to help power industrial customers in the region, including its own Pluto LNG export facility.
- Australia's Woodside announced on 18 January 2022 that the company had completed the sale of a 49% non-operating participating interest in the Pluto Train 2 Joint Venture to Global Infrastructure Partners (GIP). Pluto Train 2 is a key component of the Scarborough development and includes a new LNG train and domestic gas facilities to be constructed at the existing Pluto LNG onshore facility. The first LNG cargo from Pluto Train 2 is targeted for 2026.
- McDermott International announced on 10 January 2022 that it had been awarded a contract by Woodside, on behalf of the Scarborough Joint Venture, for the engineering, procurement, construction, installation and commissioning (EPCIC) services for its Floating Production Unit (FPU) offshore Western Australia.
- Australia's offshore safety regulator NOPSEMA ordered on Friday 24 December 2021 Shell to shut down its Prelude floating LNG vessel off Western Australia's Northwest coast until Shell can convince the regulator there will be no repeat of the power problems that started on 2 December impacted the Prelude's ability to respond to emergencies, operate safety equipment and evacuate personnel.
- Japan Bank for International Cooperation (JBIC) announced on 27 December 2021 that JBIC concluded a loan agreement on 24 December with JERA Barossa Pty Ltd, an Australian affiliate of JERA with a loan amount of USD 346 million (for JBIC). The loan is cofinanced with a private financial institution and has a total cofinancing amount of USD 497 million.
- Cameron LNG on 18 January 2022 asked the Federal Energy Regulatory Commission (FERC) to amend the authorization to construct Train 4 and associated design enhancements to reduce the GHG emissions from the project and increase the overall reliability and capacity of Train 4. The proposed amendment will include one liquefaction train (Train 4) with its own feed gas pre-treatment facility. Cameron LNG no longer plans to construct Train 5, so the overall maximum production capacity of the Amended Expansion Project will be reduced from 9.97 to 6.75 million tonnes per year, sourced exclusively from Train 4.
- Venture Global LNG and CNOOC Gas & Power Group announced on 21 December 2021 a 20-year SPA. Venture Global will supply 2 million tonnes per year of LNG on an FOB basis from its Plaquemines LNG export facility in Louisiana. In addition, CNOOC Gas & Power will purchase 1.5 million tonnes of LNG from Venture Global's Calcasieu Pass LNG facility for a shorter duration.
- Australia's Woodside announced on 19 January 2022 that Woodside Energy Trading Singapore Pte Ltd had signed a heads of agreement (HOA) with Commonwealth LNG to negotiate a SPA for the supply of LNG from the proposed Commonwealth LNG development in Cameron, Louisiana. The HOA contemplates the purchase by Woodside of 2.0 million tonnes per year of LNG over 20 years, beginning in Q2 2026.
- NextDecade unveiled on 4 January 2022 in its Rio Grande LNG Presentation that it expected an FID on a minimum of two trains of the project in second half of 2022.
Europe and Russia
- Montenegro's state-owned power producer Elektroprivreda Crne Gore (EPCG) announced on 29 December 2021 that the company and Singapore's LNG Alliance signed a MOU on 8 December to explore the potential construction of two gas-fired power plants and an LNG terminal in Montenegro.
- Russia's NOVATEK announced on 11 January 2022 that NOVATEK Gas & Power Asia Pte. Ltd., and Zhejiang Energy Gas Group Co., Ltd., a subsidiary of the Zhejiang Provincial Energy Group signed a long-term LNG SPA for 1 million tonnes per year of LNG for 15 years from the Arctic LNG 2 project.
- NOVATEK also announced on 11 January 2022 that NOVATEK Gas & Power Asia Pte. Ltd., and ENN LNG (Singapore) Pte. Ltd., a subsidiary of ENN Natural Gas Co., Ltd. had signed a long-term LNG SPA for 0.6 million tonnes of LNG for 11 years from the Arctic LNG 2 project.
- McDermott International announced on 10 January 2022 that it had been awarded an offshore contract from QatarEnergy to deliver engineering, procurement, construction and installation (EPCI) for the North Field East Topsides and the North Field East Offshore Pipelines and Subsea Cables projects, with an option included to also award the North Field South Offshore Topsides.
- Mozambique's National Petroleum Institute announced on 3 January 2021 that the floating platform that would be installed in Area 4 of the Rovuma Basin for gas exploration had arrived in Mozambique.
- New Fortress Energy announced on 21 December 2021 the execution of a MOU with the Islamic Republic of Mauritania for the development of an Energy Hub, including natural gas, power, LNG and blue ammonia, utilizing existing offshore gas reserves off the coast of Mauritania. To produce LNG, NFE will deploy its "Fast LNG" liquefaction technology with jack up rigs or similar floating infrastructure to enable a much lower cost and faster deployment schedule than today's floating liquefaction vessels.
- Höegh LNG announced on 28 December 2021 that it had concluded a 10-year FSRU charter with Terminal de Regaseificação de GNL de São Paulo S.A. (TSRP). The Höegh Gannet is assigned to the charter and operations are expected to start in late 2022 or early 2023.
Supprted by the Institute of Energy Economics Japan (IEEJ)
- Japan Trend of LNG Inventory data(17.6KB) （Jan 25, 2022 update）
- US Trend of Natural Gas Inventory data(51.1KB) （Jan 25, 2022 update）
- Europe Trend of Natural Gas Inventory data(321.0KB) （Jan 25, 2022 update）
- Europe Trend of LNG Inventory data(202.8KB) （Jan 25, 2022 update）