Apr 2022
Trend of Natural Gas and LNG Prices
Short-term trend
- The assessed spot LNG price for near-month delivery to Northeast Asia, JKM had been hovering around the USD 30s per million Btu, but fell below the USD 30s on 12 April and fluctuated around USD 25s toward the end of the month. JKM has been moving in tandem with the price movement of European gas prices, but the reversal with European prices continues. In the Northeast Asian market, while there is sluggish demand, including lockdowns in China, buying interest from South Asia is emerging.
- 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 March 2022 and scheduled to be delivered from the month onward (contract-based price) was USD 29.8. The average price of spot LNG cargoes that were contracted and delivered in Japan within the month (arrival-based price) was USD 27.6.
- The Henry Hub Natural Gas Futures price continued its upward trend from last month, opening in the middle of USD 5s, and then exceeding USD 6 on 5 April and reaching USD 7.82 on 18 April, but remained in the middle of USD 6s toward the end of the month. The upward pressure is coming from below normal temperatures, low inventories of natural gas underground storage, strong demand for LNG and the situation that domestic gas production hasn’t kept pace. According to the U.S. Energy Information Administration (EIA), the price outlook is expected to average USD 5.7 for the second quarter of 2022, average USD 5.2 for all of 2022, and average USD 4.0 for the year 2023. U.S. LNG exports were estimated to be about 7.75 million tonnes in March 2022 which was higher than the previous month. EIA expects high U.S. LNG exports are to continue through 2022, increasing 25% over 2021 to 93.51 million tons.
- The Dutch TTF Gas Futures price generally trended lower in April, falling below USD 30 on 19 April. On 21 April, the price temporarily rebounded to USD 32.9 following reports of below-average wind power generation in the U.K. and other factors, but is currently hovering around the USD 29s. Wind power generation outputs in the UK are generally strong, although intermittently below-average weekly outputs, and pipeline gas flows from Norway are also relatively stable. Russian pipeline gas flows in Italy and western Germany have declined or ceased, while LNG cargo receipts have increased. European gas underground storage is still diverting its five-year average, European gas prices remain volatile amid geopolitical tensions.
- Based on the preliminary figures from Japan's customs statistics of the Ministry of Finance, the country's average LNG import price was USD 14.50 in March 2022. 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 12.93, USD 13.21, USD 17.44, and USD 11.86, respectively. Elsewhere in Asian, average import prices in March were USD 12.69 in China, USD 19.54 in Korea, USD 16.12 in Chinese Taipei. The Japan’s average landed crude oil import price (JCC: Japan crude cocktail) was USD 91.79 in March 2022, rising for three consecutive months. Japan’s average LNG import price, which accounts for 70%-80% of long-term contracts linked to JCC prices, is expected to continue rise to the current rise in crude oil prices.
- Japan imported 6.51 million tonnes of LNG in March 2022, 9% lower than the same month of 2021. The total import volume during the first three months of 2022 was 20.40 million tonnes, a decrease of 12% from the same period of 2021. During this period, Japan continued its shift to nuclear, renewable and coal-fired power in the power generation sector since late 2021, reducing natural gas-fired power generation and natural gas consumption. China imported 4.63 million tonnes of LNG in March 2022, 17% less than the same month of 2021. China's total LNG import volume during the first three months of 2022 was 17.28 million tonnes, a decrease of 11% from the same period of the previous year. In China, during this period, factories were closed during the Winter Olympics to combat air pollution, and lockdowns also occurred, as well as a relatively mild climate, which reduced natural gas consumption. While Korea imported 4.99 million tonnes in March 2022, an increase of 19% from the same month of 2021, Chinese Taipei imported 2.09 million tonnes, 30% higher than one year earlier. LNG import volume from these four markets was 56.26 million tonnes during the first three months of 2022, an 8% decrease year-on-year.
- On a fiscal year basis from April 2021 to March 2022, Japan's LNG imports totaled 71.46 million tons, down 6% or 4.9 million tons from the previous year. Japan's natural gas consumption increased in 2021 through the summer season due to a harsh winter in the first quarter and increased demand in the industrial sector, but declined sharply in the last four months of the year as a series of nuclear power plants were restarted and the country switched from natural gas-fired to oil- and coal-fired power generation in response to higher LNG prices.
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. In January and February 2022, JKM was in the USD 20s, temporarily surged to USD 85 in March due to fears of Russian pipeline gas supply disruptions, and then hovered around the USD 30s. Trading was slow in April, initially hovering around the USD 30s but dropping to the USD 24s-26s toward 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. 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 was on the rise as crude oil prices rose, climbing to USD 14 in November and December, then rising to the high USD 15 in February 2022, and falling to the mid-USD 14s in March.
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(source)
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
- Japan's LNG inventories as of the end of December 2021 stood at 4.99 million tonnes, a decrease of 2.0% and 0.1 million tonnes from November, and an increase of 49.6% from December 2020, exceeding the past five-year average by 1.02 million tonnes.
- The LNG inventories for city-gas supply as of the end of December 2021 were 2.24 million tonnes, 7.6% lower than November and 50.2% higher than December 2020. LNG consumption for city-gas in December 2021 was 3.12 million tonnes, decreased by 3.7% year-on-year. City-gas companies received 2.74 million tonnes of LNG in December 2021, increasing year-on-year by 1.8%.
- The LNG inventories for power generation as of the end of December 2021 were 2.76 million tonnes, increasing by 3.1% from November and 49.1% higher than December 2020. LNG consumption for power generation in December 2021 was 3.92 million tonnes, decreasing by 22.4% from December 2020. Power generation companies received 4.49 million tonnes of LNG, decreasing year-on-year by 12.7%.
- According to the "LNG Inventory for Power Generation" released by the Ministry of Economy, Trade and Industry (METI) on 20 April 2022, major power utilities’ LNG inventories were 1.76 million tonnes as of 17 April. This is lower by 0.25 million tonnes than the end of April 2021 and 0.14 million tonnes below the average of the end of April 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.
United States
- As of 15 April 2022, working gas in underground natural gas storage in the United States was 1.45 Tcf, 4.4% increase from the previous month, according to the U.S. Energy Information Administration (EIA). Gas inventories were 23.0% lower than those at the same time in 2021 and were 271 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 April 2022, natural gas inventories through March are projected to end at a total of 1.4 Tcf. This is 17.0 % lower than the five-year average (2017 - 2021) for the time of the year.
Compiled based on data from the U.S. Energy Information Administration (EIA)
Europe
- As of 24 April 2022, the stored volume of natural gas in European underground storage facilities operated by the Aggregated Gas Storage Inventory (AGSI +) EU member companies was 349.5 TWh (about 23.12 million tonnes LNG equivalent). The volume was higher than that of one year ago by 6.7% or 21.9 TWh (about 1.45 million tonnes LNG equivalent). The inventories represented 31.6% of the capacity, which was higher than 29.4% on the same day in 2021 and lower than the five-year average of 37.8%. The inventories in Germany and the Netherlands (which have relatively large storage capacity among the member countries) were 33.4% and 25.2% of their respective capacities.
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 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 4.05 million cubic meters (in liquid), 32.6% up from the previous month. The inventories were higher than the same day in 2021 by 29.7% and by 6.0% 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
Highlights
- LNG production projects in the United States have made steps to increase supply capacity, including an increase in LNG export approvals for existing projects, advancing in the engineering front with either EPC or early construction activities and signing long-term SPAs in new projects, and entering agreements with partners for expansion projects.
Asia and Oceania
- JGC Holdings Corporation announced on 6 April 2022 that the company, in a consortium with Chinese Taipei's construction companies, had been awarded an engineering, procurement, construction, and commissioning (EPCC) contract for the construction of LNG terminal facilities in Taichung from CPC Corporation, Taiwan. Osaka Gas also announced also on the same day that Daigas Gas and Power Solution had been awarded Front End Engineering & Design (FEED) and technical consulting service for further expansion project.
- Australia's Woodside announced on 31 March 2022 that the processing of gas from the offshore Pluto fields had commenced ahead of schedule at the North West Shelf Project's (NWS) Karratha Gas Plant (KGP) after the start-up of the Pluto-KGP Interconnector.
- Woodside announced on 6 April 2022 that the company, as the operator for the Scarborough Joint Venture, had received key primary approvals from the Commonwealth-Western Australian Joint Authority to support execution of the Scarborough Project.
- Australia's National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) has cleared Shell to resume operations at its Prelude floating LNG facility offshore Western Australia. Shell announced on 11 April 2022 that the facility had resumed operation.
North America
- The Export-Import Bank of the United States (EXIM) announced on 14 April 2022 that its Board of Directors had approved the Make More in America Initiative. The initiative is designed to support for export-oriented domestic manufacturing projects to strengthen U.S. supply chains and also provides incentives for environmentally friendly operations. The US LNG Association, LNG Allies said that today's action by the EXIM board could prove beneficial during the current global LNG shortage.
- Cheniere Energy announced on 19 April 2022 a collaboration with natural gas midstream companies, methane detection technology providers, and leading academic institutions to implement quantification, monitoring, reporting and verification (QMRV) of greenhouse gas (GHG) emissions at natural gas gathering, processing, transmission, and storage systems specific to Cheniere's supply chain.
- Sempra Infrastructure announced on 4 April 2022 that it had entered into a Heads of Agreement (HOA) with TotalEnergies, Mitsui & Co. and Japan LNG Investment a company jointly owned by Mitsubishi Corporation and Nippon Yusen Kabushiki Kaisha (NYK), for the development of the Cameron LNG expansion project. The project is expected to include an LNG train with a maximum production capacity of 6.75 million tonnes per year, as well as debottlenecking of the existing three trains.
- JGC Holdings Corporation announced on 7 April 2022 that JGC America together with joint venture partner Zachry Industrial had been awarded a Front-End Engineering Design (FEED) and Engineering, Procurement and Construction (EPC) Bid Agreement contract for the Cameron LNG expansion project, under a competitive dual FEED process. The expansion project is aimed to enlarge production capacity by adding a fourth train utilizing electric drive (E-drive) motors instead of gas turbine drives.
- Tellurian Inc. announced on 29 March 2022 that it had issued a limited notice to proceed to Bechtel Energy under its executed Engineering, Procurement and Construction (EPC) contract to begin construction of phase one of the Driftwood LNG export facility. Driftwood LNG is an approximately 27.6 million tonne per year liquefaction export facility. Phase one will include two LNG plants with an export capacity of up to 11 million tonnes per year.
- NextDecade Corporation announced on 24 March 2022 the execution of a binding HOA with Guangdong Energy Group Natural Gas for the long-term supply of LNG for 20 years from NextDecade's Rio Grande LNG export project. NextDecade also announced on 6 April another 20-year SPA with ENN LNG (Singapore), a subsidiary of ENN Natural Gas. ENN LNG will purchase 1.5 million tonnes per year of LNG indexed to Henry Hub on an FOB basis.
- Energy Transfer LP, ENN Natural Gas and ENN Energy Holdings Limited announced on 29 March 2022 that ENN NG and ENN Energy had entered into LNG Sale and Purchase Agreements with Energy Transfer LNG Export (ET LNG), a subsidiary of Energy Transfer LP, related to its Lake Charles LNG project. Under the two SPAs, ET LNG is expected to supply 1.8 million tonnes of LNG to ENN NG, and 0.9 million tonnes of LNG to ENN Energy, per year on an FOB basis for 20 years, with first deliveries expected to commence as early as 2026.
- New Fortress Energy announced on 31 March 2022 that it had filed applications with the U.S. Maritime Administration (MarAd), the U.S. Coast Guard (USCG) and U.S. Department of Energy (DOE) to request permits and regulatory approvals to site, construct and operate a new offshore LNG liquefaction facility off the coast of Louisiana with a capacity of exporting 2.8 million tonnes per year of LNG. NFE targets beginning operations in the first quarter of 2023.
- Sempra and TotalEnergies announced on 31 March 2022 that Sempra Infrastructure and TotalEnergies were expanding their North American strategic alliance through two MOU. The MOU for Sempra Infrastructure's Vista Pacífico LNG contemplates TotalEnergies potentially contracting for approximately one-third of the long-term export production of the LNG facility under development on Mexico's West Coast, as well as TotalEnergies' potential participation as a minority equity investor in the project.
- JGC Holdings Corporation and Kawasaki Kisen Kaisha ("K" Line) announced on 14 April 2022 that JGC Corporation (JGC Global) and "K" Line had been granted an Approval in Principle (AIP) for the design by the American Bureau of Shipping (ABS) establishing a new-concept floating liquified natural gas (FLNG) hull design that incorporates existing storage tanks from LNG carriers.
- Guangzhou Development Group announced on 1 April 2022 a contract with Mexico Pacific LNG for LNG purchase and sale of 2 million tonnes per year for 20 years from the date of commercial operation of the project. MPLNG is expected to make an FID in the second half of 2022 on the first two trains.
Europe and Russia
- The United States and the European Commission (EC) on 25 March 2022 announced their plans to establish a joint Task Force on Energy Security. The United States will strive to ensure additional LNG volumes for the EU market of at least 15 bcm (11 million tonnes) in 2022. EC will work with EU Member States toward ensuring stable demand for additional U.S. LNG until at least 2030 of approximately 50 bcm (36.75 million tonnes) per year.
- EC set out ideas on 23 March 2022 for collective European action to ensure security of supply. EC is tabling a legislative proposal, introducing a minimum 80% gas storage level obligation for next winter, rising to 90% for the following years.
- The European Commission announced on 31 March 2022 that it had decided to close its antitrust investigation into agreements for the supply of LNG between QatarEnergy and several European gas importers.
- German LNG Terminal GmbH and Shell announced on 23 March 2022 that they had signed an MOU on the import of LNG through the Brunsbüttel terminal. They agree that Shell will make a long-term booking of a substantial part of the terminal's capacity.
- Hanseatic Energy Hub announced on 21 March 2022 that it planned to develop an LNG terminal in Stade, Germany and was conducting an Expression of Interest Process from 21 March to 08 April 2022. Parties are invited to express their interest in booking long-term capacity as from 2026.
- Estonia's and Finland's Ministries of Economic Affairs announced on 7 April 2022 that the countries had agreed to the joint leasing of a floating terminal for LNG to supply gas to both countries. The plan foresees Estonia and Finland establishing the hauling quays. The unit can be used by both countries on the northern and southern shores of the Gulf of Finland.
- TotalEnergies announced on 22 March 2022 that the company had decided to no longer record proved reserves for Arctic LNG 2 in its accounts and will not provide any more capital for the project.
Other regions
- QatarEnergy announced on 12 April 2022 that it had signed time-charter parties (TCPs) with a subsidiary of Mitsui O.S.K Lines for the long-term charter and operation of 4 LNG ships, constituting the first batch of TCPs awarded under QatarEnergy's LNG shipping program. LNG carrier shipbuilding contracts were signed between MOL and Hudong-Zhonghua Shipbuilding Group.
- ENI announced on 13 April 2022 that Egypt's EGAS and Eni had signed a framework agreement that would allow to maximize gas production and LNG exports. Together with the one signed for the restart of Damietta liquefaction plant in 2021, the agreement will provide LNG cargoes for overall volumes of up to 3 BCM in 2022 for Eni LNG portfolio bound to Europe and Italy, ENI added.
- The Panama Canal Authority (ACP) announced on 1 April 2022 a proposal for new toll structure for 2023 and thereafter. For the LNG sector, the special round trip ballast tariff of an around 10% discount is no longer included in the new proposal. For a 174,000 m3 LNG carrier, the round-trip toll would increase from USD 851,340 in 2022 to USD 1,016,310 in 2023.
- Institutional investor EIG and Fluxys announced on 28 March 2022 that they would acquire an 80% equity stake in GNL Quintero LNG regasification terminal in Chile, from Enagás Chile SpA and affiliates of OMERS Infrastructure.
Supprted by the Institute of Energy Economics Japan (IEEJ)
添付ファイル
- Japan Trend of LNG Inventory data(17.8KB) (Apr 26, 2022 update)
- US Trend of Natural Gas Inventory data(52.0KB) (Apr 26, 2022 update)
- Europe Trend of Natural Gas Inventory data(323.0KB) (Apr 26, 2022 update)
- Europe Trend of LNG Inventory data(224.9KB) (Apr 26, 2022 update)