Trend of Natural Gas and LNG Prices
- The assessed spot LNG price for near-month delivery to Northeast Asia, JKM had been hovering in the low USD 20s per million Btu, but fell below the USD 20s on 10 May and fluctuated again in the low USD 20s 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 is gradually emerging from South and Southeast Asia.
- 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 April 2022 and scheduled to be delivered from the month onward (contract-based price) was USD 34.6. The average price of spot LNG cargoes that were contracted and delivered in Japan within the month (arrival-based price) was not disclosed as only one or less company submitted the report for the month.
- The Henry Hub Natural Gas Futures price remained at USD 7s in May after reaching the USD 7s at the end of last month, and exceeded USD 8 for three consecutive days from 4 May on signs of strong summer demand. The price temporarily hovered around the USD 7s, but after the middle of the month, it moved to the USD 8s again, reaching USD 8.97 on 25 May, due to increased demand for gas-fired power generation caused by heat waves in Texas and the Central Plains. According to the U.S. Energy Information Administration (EIA), the price outlook is expected to average USD 7.8 for the second quarter of 2022, USD 8.6 for the second half of 2022, and USD 4.7 for the year 2023. The higher forecast for 2022 reflects the expectation for lower U.S. gas inventories in the summer months than the historical five-year average, according to the EIA. For U.S. LNG exports, it said the April 2022 average is about 7.31 million tonnes, slightly below the high recorded in March. EIA also forecasts that LNG exports from the U.S. in 2022 will be 91.98 million tonnes, up 23% from 2021, and that LNG exports in 2023 will be 96.58 million tonnes, up 5% from 2022.
- The Dutch TTF Gas Futures price rose and fell amid ongoing geopolitical tensions, reaching USD 32.6 on 4 May, while it stood at USD 27.3 on 25 May. During this period, gas supplies from Russia to Poland, Bulgaria, Ukraine, and Finland were cut off or partially cut off, forcing these countries to react. Meanwhile, LNG cargo receipts have been strong, with European gas underground storage reaching a 44.0% fill rate as of 24 May, above the five-year average as of the same date.
- As LNG imports in the UK have led to a 91.6% fill rate of gas underground storage, surplus gas is being supplied from the country to the continent by gas pipelines such as Interconnector and BBL. Although these pipelines are already supplying maximum flow, it is not enough to meet the demand in Europe, which has a huge underground gas storage capacity and has yet to resolve the supply-demand imbalance between the two regions. As a result, the discount of UK gas prices to NBP's TTF is occurring and growing.
- Based on the preliminary figures from Japan's customs statistics of the Ministry of Finance, the country's average LNG import price was USD 15.70 in April 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 27.76, USD 16.44, USD 16.94, and USD 11.37, respectively. Elsewhere in Asia, average import prices in April were USD 13.38 in China, USD 13.40 in Korea, and USD 17.75 in Chinese Taipei. Japan’s average landed crude oil import price (JCC: Japan crude cocktail) was USD 107.77 in April 2022, rising for four 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 to rise to the current rise in crude oil prices.
- Japan imported 5.57 million tonnes of LNG in April 2022, 12% higher than the same month of 2021. The total import volume during the first four months of 2022 was 25.97 million tonnes, a decrease of 8% from the same period of 2021. Notably, Japan’s import of LNG from the United States nearly halved frome one year earlier to 1.60 million tonnes during the four-month period. China imported 4.35 million tonnes of LNG in April 2022, 35% less than the same month of 2021. China's total LNG import volume during the first four months of 2022 was 21.59 million tonnes, a decrease of 17% from the same period of the previous year. While Korea imported 3.45 million tonnes in April 2022, an increase of 22% from the same month of 2021, Chinese Taipei imported 1.49 million tonnes, 5% lower than one year earlier. LNG import volume from these four markets was 71.03 million tonnes during the first four months of 2022, a decrease of 8% 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. 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 has been slow since April, with JKM falling from US$36 to US$22 in April and remaining in the low US$20s in May, but buying interest is gradually emerging for July delivery.
- JKM's discount to the European gas spot price TTF began to materialize after the end of March against the backdrop of growing uncertainty in gas supply in Europe and declining LNG demand in Northeast Asia, especially China, ranging from USD 1 to USD 9 during April and USD 2 to USD 8 during May.
- 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 the high USD 15 in February 2022, but falling to the mid-USD 14s in March and then climbing again to the high USD 15 in April.
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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 January 2022 stood at 3.91 million tonnes, a decrease of 21.7% and 1.08 million tonnes from December, and an increase of 23.9% from January 2021, exceeding the past five-year average by 0.28 million tonnes.
- The LNG inventories for city-gas supply as of the end of January 2022 were 1.78 million tonnes, 20.4% lower than December and 41.8% higher than January 2021. LNG consumption for city-gas in January 2022 was 3.51 million tonnes, decreased by 1.9% year-on-year. City-gas companies received 3.05 million tonnes of LNG in January 2022, decreasing year-on-year by 8.7%.
- The LNG inventories for power generation as of the end of January 2022 were 2.13 million tonnes, decreasing by 22.7% from December and 12.1% higher than January 2021. LNG consumption for power generation in January 2022 was 4.60 million tonnes, decreasing by 9.0% from December 2021. Power generation companies received 4.50 million tonnes of LNG, decreasing year-on-year by 19.9%.
- According to the "LNG Inventory for Power Generation" released by the Ministry of Economy, Trade and Industry (METI) on 18 May 2022, major power utilities’ LNG inventories were 2.13 million tonnes as of 15 May. This is higher by 0.19 million tonnes than the end of May 2021 and 0.15 million tonnes above the average of the end of May 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 13 May 2022, working gas in underground natural gas storage in the United States was 1.73 Tcf, 19.4% increase from the previous month, according to the U.S. Energy Information Administration (EIA). Gas inventories were 17.5% lower than those at the same time in 2021 and were 310 Bcf lower than the past five-year average. The latest inventories have been within the past five-year range since November 2020.
Compiled based on data from the U.S. Energy Information Administration (EIA)
- As of 24 May 2022, the stored volume of natural gas in European underground storage facilities operated by the Aggregated Gas Storage Inventory (AGSI +) EU member companies was 485.0 TWh (about 32.08 million tonnes LNG equivalent). The volume was higher than that of one year ago by 21.2% or 84.8 TWh (about 5.61 million tonnes LNG equivalent). The inventories represented 44.0% of the capacity, which was higher than 35.8% on the same day in 2021 and higher than the five-year average of 42.4%. The inventories in Germany and the Netherlands (which have relatively large storage capacity among the member countries) were 46.0% and 36.0% 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 May 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 4.59 million cubic meters (in liquid), 9.1% up from the previous month. The inventories were higher than the same day in 2021 by 13.0% and by 2.9% 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
- Planned and proposed LNG projects in the United States continue striking long-term LNG sales agreements. In Europe, there have been announcements notably by developers in Germany, where LNG imports are planned, of procurements of multiple FSRUs and progress of permanent LNG receiving infrastructure projects. During the 1Q 2022 reports by major LNG related businesses, increasing profits buoyed by high energy commodity prices - including those of LNG - as well as strategies to pursue clean energy initiatives - including LNG - were confirmed.
Asia and Oceania
- JERA said on 12 May 2022 that in FY 2021, JERA procured approximately 30 million tonnes of LNG for use in Japan, equivalent to 40% of the total for Japan, procuring a record volume of approximately 4.5 million tonnes of LNG on the spot basis through JERA Global Markets Pte. Ltd.
- KOGAS announced on 22 April 2022 that the company had signed a long-term contract with bp for 1.58 million tonnes per year of LNG imports from the United States for 18 years starting in 2025. The price formula is indexed to Henry Hub prices.
- China State Shipbuilding Corporation (CSSC) announced on 28 April 2022 that it had concluded a construction contract for six LNG carriers, each with capacity for 174,000 cubic meters, with Nippon Yusen Kabushiki Kaisha (NYK Line). NYK concluded a long-term time-charter contract with CNOOC for the vessels.
- Saudi Aramco announced that the company and Thailand's PTT signed a MOU on 11 May 2022 to strengthen cooperation across crude oil sourcing and the marketing of refining and petrochemical products and LNG.
- According to Australia's Woodside's first quarter 2022 report, the company has signed binding agreements for long-term charter hire of three new-build LNG carriers to be delivered ahead of Scarborough's first cargo targeted in 2026.
- Cheniere Energy, Inc. announced on 4 May 2022 that its subsidiary, Corpus Christi Liquefaction Stage III, LLC, had entered into a long-term Integrated Production Marketing (IPM) gas supply agreement with ARC Resources U.S. Corp., a subsidiary of Canada's ARC Resources, Ltd. ARC U.S. has agreed to sell 140,000 million Btu per day of natural gas to Corpus Christi Stage III for 15 years, commencing with commercial operations of Train 7 of the Corpus Christi Stage III Project. The LNG associated with this gas supply, approximately 0.85 million tonnes per year, will be marketed by Cheniere. Cheniere will pay ARC U.S. an LNG-linked price for its gas, based on the JKM, after deductions for fixed LNG shipping costs and a fixed liquefaction fee.
- Cheniere Energy, Inc. announced net loss of USD 865 million for first quarter 2022, compared to net income of USD 393 million in first quarter 2021. The decrease was primarily due to an increase in derivative losses relate to the use of commodity derivative instruments indexed to international LNG prices, primarily related to the company's long-term IPM agreements. As a result of the significant appreciation in forward international LNG commodity curves during the quarter, the company incurred approximately USD 3.1 billion of non-cash unfavourable changes in fair value attributed to positions indexed to such prices.
- Sempra Infrastructure and Poland's PGNiG announced on 16 May 2022 that they had entered into a HOA for the purchase of approximately 3 million tonnes per year of LNG delivered free-on-board from Sempra Infrastructure's LNG projects in North America - 2 million tonnes from the Cameron LNG Phase 2 project, and 1 million tonnes from the Port Arthur LNG project.
- Venture Global LNG announced on 10 May 2022 two new long-term SPAs with ExxonMobil LNG Asia Pacific (EMLAP) for the sale of 2 million tonnes per year of LNG, 1 million tonnes per year each from the Plaquemines LNG facility and the CP2 LNG facility. This is the second supply agreement for CP2, which is expected to commence construction in 2023.
- Venture Global LNG announced on 25 May 2022 an FID and closing of the USD 13.2 billion project financing for the initial phase (an upsized 13.33 million tonnes per year) of the Plaquemines LNG facility and the associated Gator Express pipeline. The company said that it had executed 20-year SPAs for 80% of the full 20 million tonnes per year nameplate capacity at Plaquemines LNG. Plaquemines LNG phase one customers include PGNiG, Sinopec, CNOOC, Shell and EDF (Électricité de France); phase two customers announced to date include ExxonMobil, PETRONAS and New Fortress Energy. Marketing is actively underway for the company’s third facility, CP2, and two SPAs with ExxonMobil and New Fortress Energy have already been executed for this project.
- The U.S. Department of Energy (DOE) issued on 27 April 2022 two long-term orders authorizing an additional 0.5 billion cubic feet per day (Bcf/d) (3.8 million tonnes per year) of LNG exports from Golden Pass LNG in Texas and Magnolia LNG in Louisiana.
- NextDecade Corporation announced on 2 May 2022 the execution of a 15-year SPA with ENGIE S.A. for LNG from NextDecade's Rio Grande LNG export project. ENGIE will purchase 1.75 million tonnes per year of LNG on a FOB basis. The first train is expected to start commercial operations as early as 2026. NextDecade anticipates making a positive FID on a minimum of two trains in the second half of 2022.
- Energy Transfer LP and commodity trading house Gunvor Group announced on 2 May 2022 that the companies had entered into an SPA, related to the Lake Charles LNG project in Louisiana. Energy Transfer LNG will supply 2 million tonnes of LNG per year to Gunvor on an FOB basis for 20 years from as early as 2026. Energy Transfer announced on 3 May the execution of another SPA with SK Gas Trading LLC for 0.4 million tonnes per year of LNG from the same export facility. Energy Transfer will supply LNG to SK Gas on an FOB basis for 18 years from as early as 2026. Energy Transfer said that the total amount of LNG contracted from the export facility was 5.1 million tonnes per year.
Europe and Russia
- The Netherlands' Gasunie announced on 25 April 2022 the start of the tendering procedure for market parties interested in transporting LNG from an LNG import terminal at Eemshaven into Europe. Exmar's floating LNG plant (FSRU) will set off on its journey from Singapore to the Netherlands in May and is expected to arrive at Eemshaven in early August. Gasunie announced on 10 May that the company had signed a binding contract with New Fortress Energy for the lease of another FSRU to be installed in Eemshaven for five years from the third quarter of 2022.
- Germany's RWE announced on 5 May 2022 that it had chartered two FSRU from Höegh LNG. The plan is for the FSRU platforms to start operating as early as next winter as two of four floating terminals whose charters the German government has ordered from RWE and Uniper. Uniper announced on the same day that it had facilitated the charter of two FSRUs managed by Dynagas Ltd. to the German government.
- Germany's Tree Energy Solutions announced on 25 April 2022 an open season to import LNG at its Wilhelmshaven regasification terminal. TES is planning for initial capacity to import up to 16 - 20 bcm per year from 2025. From 2027/8, the terminal will increasingly be reserved for imports of fossil-free green gas.
- Italy's Snam and Golar LNG Limited announced on 18 May 2022 that they had signed a contract through which Golar would deliver the existing LNG Carrier "Golar Arctic" as an FSRU that Snam would install in the port area of Portovesme, in Sardinia.
- Norway's Equinor said on 4 May 2022 in its first quarter 2022 report that the company's Hammerfest LNG plant was on track for a start-up on 17 May 2022. But on 16 May, the company announced that the start-up of the plant had been pushed back by a week due to a minor fault on a compressor.
- Gasgrid Finland Oy announced on 20 May 2022, the company and Excelerate Energy, Inc. had signed an agreement on the leasing of an LNG floating terminal vessel for ten years. The storage and supply capacity of the vessel is sufficient for the gas needs of both Finland and Estonia.
- Poland's PGNiG announced on 6 May 2022 that the company received its first cargo of LNG at the LNG terminal in Klaipėda, Lithuania from Freeport. PGNiG announced on 14 May the first LNG cargo delivery on a vessel chartered by the company and the first shipment received from Venture Global LNG at the at the President Lech Kaczyński LNG Terminal in Świnoujście.
- Greece's Gastrade announced that a special ceremony was held on 3 May 2022 to celebrate the commencement of the realisation of the Alexandroupolis FSRU project. The FSRU is expected to operate by the end of 2023.
- Greece's Motor Oil announced that on 9 May 2022 Motor Oil Renewable Energy (MORE) signed two MoUs with Abu Dhabi's MASDAR and ADNOC respectively. ADNOC and MORE will explore opportunities in the upcoming FSRU terminal project of Dioriga Gas and in the supply of LNG.
- TotalEnergies said at the occasion of its First Quarter 2022 Results announcement on 28 April 2022, in connection to the Arctic LNG 2 project, the company took an impairment of USD 4.1 billion in its accounts.
- QatarEnergy announced on 28 April 2022 the award of an engineering, procurement, and construction (EPC) contract for the North Field Expansion Project. A joint venture between Técnicas Reunidas S.A. (TR) and Wison Engineering (Wison) has been selected as the EPC contractor for the expansion of the sulphur handling, storage, and loading facilities within Ras Laffan Industrial City.
- ADNOC revealed on 12 May 2022 that the company had appointed McDermott International to conduct a design work on its planned LNG plant in Fujairah and said the project was expected to increase ADNOC's LNG production capacity by 9.6 million tonnes per year. The award of an EPC contract is expected in 2023.
- Kosmos Energy said on 9 May 2022 during its announcement of First Quarter 2022 Results that the Greater Tortue Ahmeyim LNG project in Mauritania & Senegal was approximately 75% complete at the end of the quarter.
- Atlantic Gulf & Pacific International Holding announced on 9 May 2022 that its GAS Entec subsidiary had completed the conversion of a 125,000 m3 LNG carrier for KARMOL, a joint-venture between Turkey's Karpowership and Japan's Mitsui OSK Lines (MOL), into an 84 mscfd Modular Floating Storage and Regasification Unit (M-FSRU) with Gas Entec's proprietary, patented RegasTainer® technology. The M-FSRU will deliver gas to Karpowership's 236 MW floating power plant, the Karadeniz Powership Aysegul Sultan in Port Dakar. The existing floating power plant previously used heavy fuel oil to meet ~15% of Senegal's power demand.
- GIIGNL published on 5 May 2022 the 2022 GIIGNL Annual Report. According to the report, in 2021 the world imported 372.3 million tonnes of LNG, representing a 4.5% growth from 2020. 136.3 million tonnes of LNG was imported on a spot or short-term basis, representing 36.6% of total trade, compared with 40% in 2020. "True" spot volumes (i.e., volumes delivered within three months from the transaction date) amounted 31% of total imports in 2021 or 116 million tonnes, less than 35% of total imports in 2020 (125 million tonnes).
Supprted by the Institute of Energy Economics Japan (IEEJ)
- Japan Trend of LNG Inventory data(18.4KB) （May 27, 2022 update）
- US Trend of Natural Gas Inventory data(51.3KB) （May 27, 2022 update）
- Europe Trend of Natural Gas Inventory data(349.3KB) （May 27, 2022 update）
- Europe Trend of LNG Inventory data(201.4KB) （May 27, 2022 update）