Trend of Natural Gas and LNG Prices
- The assessed spot LNG price for near-month delivery to Northeast Asia, JKM was generally in the low 40s per million Btu in the first half of July, fueled by rising TTF. Since mid-July, JKM has also declined with a slight easing of gas supply concerns in Europe and a decrease in TTF, temporarily hovering in the upper USD 30s, but with supply concerns rising again, JKM has also risen again, hovering in the USD 40s and the reversal with TTF continues to persist.
- 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 June 2022 and scheduled to be delivered from the month onward (contract-based price) was USD 23.3. 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 was in the upper USD 5s to lower USD 6s in the first half of July, but after reaching USD 7.0 on 15 July, the price has remained in the high USD 7s to high USD 8s due to the extremely hot weather. According to the U.S. Energy Information Administration’s 12 July Short-Term Energy Outlook, the average natural gas spot price for the first half of 2022 is USD 6.07, the average forecast for the second half of the year is USD 5.97, and the average forecast for 2023 is USD 4.76.
- The U.S. LNG exports averaged 11.2 bcf/d for the first half of 2022 and 9.5 bcf/d for the same period in 2021, according to the same outlook. It also forecasts the U.S. LNG exports average 10.9 bcf/d for 2022 and 12.7 bdf/d for 2023, respectively.
- The Dutch TTF Gas Futures price reached USD 50.0 on 4 July due to concerns over a strike at offshore developments in Norway and remained in the low USD 50s until mid-month, supported by supply concerns, including a Russian pipeline gas outage. After falling to USD 46.0 on 15 July on optimism over the resumption of Russian gas supply following the completion of the annual repairs to the Nord Stream pipeline in mid-July, prices remained in the high USD 40s due to the actual resumption of gas supply. However, when Gazprom announced further gas supply cuts to Nord Stream on 25 July, the TTF reached USD 53.7, and then USD 63.5 the following day on 26 July.
- The decline in Nord Stream gas flows since mid-June and the 10-day supply outage due to scheduled maintenance in July, as well as uncertainty about supply after the maintenance, resulted in a significant premium to TTF and further widened the discount of the UK gas price NBP to TTF, which reached a maximum of USD 23.4 in July.
- Based on the preliminary figures from Japan's customs statistics of the Ministry of Finance, the country's average LNG import price was USD 14.96 in June 2022. The Japanese yen denominated price was JPY 101,105 per tonne, exceeding JPY 100,000 following the previous month. 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 17.48, USD 12.96, USD 19.16, and USD 13.27, respectively. Elsewhere in Asia, average import prices in June were USD 13.68 in China, USD 14.67 in Korea, and USD 16.29 in Chinese Taipei. Japan’s average landed crude oil import price (JCC: Japan crude cocktail) was USD 116.92 per barrel in June 2022, the highest since May 2012. The Japanese yen denominated price stood at JPY 95,880 per kilolitre, the highest ever. Japan’s average LNG import price, which accounts for 70%-80% of long-term contracts linked to JCC prices, is expected to continue to be affected by current crude oil prices.
- Japan imported 5.80 million tonnes of LNG in June 2022, 2% higher than the same month of 2021. The total import volume during the first half of 2022 was 37.54 million tonnes, a decrease of 4% from the same period of 2021. Notably, Japan’s import of LNG from the United States nearly halved from one year earlier to 2.10 million tonnes in the first half of 2022. China imported 4.82 million tonnes of LNG in June 2022, 26% less than the same month of 2021. China's total LNG import volume during the first half of 2022 was 31.26 million tonnes, a decrease of 21% from the same period of the previous year. While Korea imported 2.53 million tonnes in June 2022, a decrease of 19% from the same month of 2021, Chinese Taipei imported 1.59 million tonnes, 1% lower than one year earlier. LNG import volume from these four markets was 101.54 million tonnes during the first half 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 USD 36 to USD 22 in April and remaining in the low USD 20s during May and the first half of June. However, since the second half of June, the price reached USD 40 against the backdrop of rising natural gas and LNG supply concerns, and has remained at a similarly high level in July.
- 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, and showed a price differential of USD 1-10 during April and May, and USD 1-5 in June, and further expanded in July with a price differential of USD 5-15.
- 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 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 USD 9s 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 15s in April and May, and falling to the high USD 14s in June.
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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 March 2022 stood at 3.75 million tonnes, an increase of 6.0% and 0.21 million tonnes from February, and a decrease of 15.2% from March 2021, lower than the past five-year average by 0.34 million tonnes.
- The LNG inventories for city-gas supply as of the end of March 2022 were 1.57 million tonnes, 5.6% higher than February and 10.1% higher than March 2021. LNG consumption for city-gas in March 2022 was 2.95 million tonnes, increased by 4.7% year-on-year. City-gas companies received 2.98 million tonnes of LNG in March 2022, increasing year-on-year by 9.4%.
- The LNG inventories for power generation as of the end of March 2022 were 2.19 million tonnes, increasing by 6.2% from February and 27.2% lower than March 2021. LNG consumption for power generation in March 2022 was 3.47 million tonnes, decreasing by 6.5% from March 2021. Power generation companies received 4.29 million tonnes of LNG, decreasing year-on-year by 6.0%.
- According to the "LNG Inventory for Power Generation" released by the Ministry of Economy, Trade and Industry (METI) on 20 July 2022, major power utilities’ LNG inventories were 1.94 million tonnes as of 17 July. This is lower by 0.32 million tonnes than the end of July 2021 and 0.09 million tonnes below the average of the end of July of the past five 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 15 July 2022, working gas in underground natural gas storage in the United States was 2.40 Tcf, 10.7% increase from the previous month, according to the U.S. Energy Information Administration (EIA). Gas inventories were 10.3% lower than those at the same time in 2021 and were 328 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 July 2022, the stored volume of natural gas in European underground storage facilities operated by the Aggregated Gas Storage Inventory (AGSI +) EU member companies was 741.2 TWh (about 49.03 million tonnes LNG equivalent). The volume was higher than that of one year ago by 22.1% or 134.1 TWh (about 8.87 million tonnes LNG equivalent). The inventories represented 66.7% of the capacity, which was higher than 54.4% on the same day in 2021 and higher than the five-year average of 65.8%. The inventories in Germany and the Netherlands (which have relatively large storage capacity among the member countries) were 66.4% and 62.8% 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 July 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 4.72 million cubic meters (in liquid), 3.2% down from the previous month. The inventories were higher than the same day in 2021 by 53.2% and by 6.4% 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
- In the first half of 2022, the world traded nearly 200 million tonnes of LNG, a 4% increase from the same period of 2021. During the last five months from late February, long-term LNG SPAs amounting to nearly 38 million tonnes per year were announced, focusing on LNG supply sources from the United States, fuelling expectations toward progress of LNG export projects in the country. During the same period, two definitive investment decisions were announced for combined capacity of 23 million tonnes per year.
Asia and Oceania
- Italy‘s Saipem announced that on 18 June 2022 the Nong Fab LNG Regasification Terminal in Thailand executed in joint venture with CTCI Corporation began offloading the first LNG.
- Gunvor announced on 30 June 2022 that the company had entered into a master SPA (MSPA) and Confirmation Notice (CN) with PT Perusahaan Gas Negara (PGN), a unit of Indonesia's Pertamina.
- Pakistan LNG (PLL) issued a tender on 1 July 2022 seeking 10 spot LNG cargoes for delivery over July – September, in the end failing to attract bids.
- In late June 2022, Western Australia's Environmental Protection Authority (EPA) backed a proposal to extend the life of the North West Shelf LNG plant by 50 years - on the condition that it achieves net zero emissions by 2050.
- The Australian Department of Industry, Science and Resources announced on 5 July 2022 a proposed extension of the Australian Domestic Gas Security Mechanism (ADGSM) until 2030 to help secure domestic gas supplies.
- Venice Energy announced on 1 July 2022 that it had signed an MOU with Japan's Marubeni to create a joint venture partnership for its LNG import terminal project in South Australia.
- TotalEnergies announced on 20 July 2022 the decision of the Papua LNG joint venture to launch the first phase of front-end engineering and design (FEED) studies for the Papua LNG project's upstream production facilities. Studies for the downstream liquefaction facilities are progressing and the objective is to launch the integrated FEED in the fourth quarter of 2022, according to the announcement. The project is targeting an FID around the end of 2023, and a start-up at the end of 2027. The project will incorporate a CCS scheme for the fields' native CO2.
- Cheniere Energy announced on 20 July 2022 that Cheniere Marketing, LLC, had entered into a long-term LNG SPA with a subsidiary of PetroChina, for up to 1.8 million tonnes per year of LNG on a free-on-board basis. Deliveries will begin in 2026 and continue through 2050. Half of the total volume is subject to Cheniere making a positive FID to construct additional liquefaction capacity at the Corpus Christi LNG Terminal beyond the seven-train Corpus Christi Stage 3 Project.
- Sempra Infrastructure and ConocoPhillips announced on 14 July 2022 that the companies had entered into a head of agreement (HOA) to develop Sempra Infrastructure's Port Arthur LNG project. The HOA anticipates the negotiation of a 20-year LNG tolling arrangement for 5 million tonnes per year at Phase 1 of the project under development. The HOA also contemplates a 30% equity investment in Phase 1 by ConocoPhillips and the potential for ConocoPhillips to supply additional natural gas to the proposed facility. Additionally, the HOA provides for collaboration between the two companies for LNG offtake, natural gas supply and equity investment for Phase 2 of the ECA LNG export project in Mexico, including up to one-third of the exported LNG volumes.
- Freeport LNG Development, L.P. on 30 June 2022 acknowledged the Notice of Proposed Safety Order by the Pipeline and Hazardous Materials Safety Administration (PHMSA). According to the company, it is estimated that the resumption of partial liquefaction operations will be early October 2022. The company continues to target year-end for a return to full production.
- NextDecade Corporation announced on 5 July 2022 a 20-year SPA with China Gas Hongda Energy Trading, for 1 million tonnes per year of LNG delivered on a FOB basis from NextDecade's Rio Grande LNG export project. And it announced on 6 July a 20-year SPA with Guangdong Energy Group for 1 million tonnes per year of LNG delivered on a DES basis. Guangdong Energy Group has the right to purchase an additional 0.5 million tonnes per year of LNG from the project.
- Delfin Midstream announced on 13 July 2022 that it had finalized an LNG SPA with Vitol. Vitol has also finalized a strategic investment in the company. Delfin will supply 0.5 million tonnes per year on a FOB basis to Vitol for 15 years.
- Fluor announced on 11 July 2022 that it had been awarded a full notice-to-proceed (FNTP) contract by New Fortress Energy Inc. (NFE), for the engineering, procurement and fabrication management of the NFE Fast LNG 2 project. The project is a nominal 1.4 million tonnes per year LNG gas treating and liquefaction plant to be placed on fixed offshore platforms. The first NFE Fast LNG 1 project was awarded in the first quarter.
- NFE announced on 5 July 2022 that it had entered into an agreement with Comisión Federal de Electricidad (CFE). The agreement involves (i) expanding and extending NFE's supply of natural gas to multiple CFE power generation facilities in Baja California Sur, (ii) selling NFE's 135 MW La Paz power plant to CFE, and (iii) creating a new LNG hub off the coast of Altamira, Tamaulipas, with CFE supplying the feed gas to two NFE FLNG units using CFE's pipeline capacity.
- NFE announced on 5 July 2022 that it had signed an agreement with Pemex to form a long-term strategic partnership. The agreement involves the joint development of the Lakach deepwater natural gas field for Pemex to supply natural gas to Mexico's onshore domestic market and for NFE to produce LNG for export.
- Shell Eastern Trading and Mexico Pacific announced on 12 July 2022 that they had signed a sales and purchase agreement for Shell to offtake 2.6 million tonnes per year of LNG on a FOB basis for 20 years from the first two trains of Mexico Pacific's LNG export facility. The facility is expected to commence operations in 2026 and when fully operational, the facility will have three trains and a combined capacity of 14.1 million tonnes per year.
- Sempra Infrastructure and Mexico's CFE announced on 21 July 2022 several agreements to advance the joint development of energy infrastructure projects in Mexico, including the rerouting of the Guaymas-El Oro pipeline in Sonora, the proposed Vista Pacífico LNG project in Topolobampo, Sinaloa, and the potential development of an LNG project in Salina Cruz, Oaxaca.
- Siemens Energy announced on 12 July 2022 that it had been selected as the single solution supplier for the all-electric Woodfibre LNG project in Canada. The LNG facility will be located at the site of a former pulp and paper operation. It will be sized for 2.1 million tonnes per year and utilize renewable hydroelectricity, reducing its GHG emissions by more than 80%. Siemens Energy's scope includes all equipment associated with the main refrigeration trains. The project is expected to reach substantial completion in 2027 and begin commercial operation by September of that year.
- Marathon Petroleum Corporation's subsidiary Trans-Foreland Pipeline Company LLC asked on 7 July 2022 for the Federal Energy Regulatory Commission (FERC) additional three years to bring the closed Kenai LNG export plant in Alaska back online as an import facility. FERC authorized Trans-Foreland on 17 December 2020 to commission the LNG import facility in two years.
Europe and Russia
- Grain LNG of the United Kingdom announced on 4 July 2022 that the company had invited market participants to express an interest in capacity at the facility from 2029.
- Gasunie subsidiary EemsEnergyTerminal announced on 7 July 2022 that it had signed the first suppliers that will supply LNG via the port of Eemshaven in the Netherlands. ČEZ a.s. and Shell Western LNG B.V. have jointly contracted 7 Bcm of capacity. The LNG terminal in the port of Eemshaven will consist of two floating FSRUs, the Exmar S188 and the Golar Igloo and which have a combined throughput capacity of approximately 8 Bcm per year. Both FSRUs are expected to arrive at the port of Eemshaven at the end of August. The Golar Igloo will be the first to be connected to the Dutch natural gas grid.
- Hanseatic Energy Hub announced on 30 June 2022 that the German Federal Network Agency (BNetzA) had exempted Stade's Hanseatic Energy Hub LNG terminal from tariff and network access regulation for 25 years.
- Germany's Uniper announced on 4 July 2022 that the State Trade Supervisory Authority had given its approval for an early start of the construction work for the Wilhelmshaven LNG terminal and for the onshore and port infrastructure. Uniper aims for commissioning in winter 2022/2023.
- Germany's Federal Ministry of Economics announced on 19 July 2022 that the third and fourth locations of the four FSRUs that the government plans to lease should be moored in Stade and Lubmin. Two of them are to be used in Wilhelmshaven and Brunsbüttel at the turn of the year 2022/23. The Stade location is expected to be available from the end of 2023 and the facility off Lubmin will not be available until the end of 2023 at the earliest.
- Germany's Deutsche ReGas, which is developing an LNG import terminal at the port of Lubmin, said on 13 July 2022 that it had signed a term sheet with TotalEnergies under which the latter would provide an FSRU for the project. Deutsche ReGas said the FSRU "Deutsche Ostsee" would start delivering about 4.5 Bcm per year from 1 December 2022.
- Italy's Snam announced on 6 July 2022 that Snam and BW LNG had signed an agreement for the acquisition by Snam Group of 100% of the share capital of FSRU I Limited, which upon closing would own the FSRU "BW Singapore" as its sole asset. The FSRU, which is currently bound by a charter agreement with a third party until November 2023, is expected to be installed in the upper Adriatic Sea, close to the coast of Ravenna. Operations are scheduled to commence in the third quarter of 2024.
- Estonia's Eesti Gaas announced on 12 July 2022 that it had signed a contract with Norway's Equinor for 2 TWh (132 thousand tonnes) of LNG. LNG will arrive at the Klaipėda LNG terminal in Lithuania in October and November. Eesti Gaas has acquired three LNG cargoes from Poland's PGNiG. In early May and early June, tankers arrived at Klaipėda from the United States and at the end of June from Norway.
- Finland's Hamina LNG Oy announced on 1 July 2022 its open season offering terminal capacity and related services, as it looks to launch commercial operations at its LNG import terminal in the Hamina port in October.
- Excelerate Energy and Bulgaria's Overgas announced on 18 July 2022 that they signed an MOU 14 on July relating to the sale of regasified LNG downstream of Excelerate's planned Vlora LNG terminal in Albania. The two companies will enter into a negotiation for Overgas to purchase up to 1 Bcm per year of regasified LNG for ten years from Excelerate via the Vlora Terminal and the proposed Vlora-Fier Pipeline which is expected to interconnect with existing natural gas infrastructure in Europe's Southern Gas Corridor.
- According to a Russian President's decree on 30 June 2022, all the property of the Sakhalin 2 project will be transferred to the ownership of the Russian Federation. The operatorship of the project will be transferred from Sakhalin Energy to a newly created Russian company. Unless they express intention to stay in the project under the new conditions within a month, the foreign participants' share will be sold.
- QatarEnergy announced on 27 June 2022 that QatarEnergy had joined the Aiming for Zero Methane Emissions Initiative, an industry-led initiative aiming to reach near zero methane emissions from operated oil and gas assets by 2030.
- QatarEnergy and Shell announced on 5 July 2022 the selection of Shell as a partner in the North Field East (NFE) expansion project. QatarEnergy and Shell will become partners in a new joint venture company (JV), in which QatarEnergy will hold a 75% interest while Shell will hold the remaining 25% interest. In turn, the JV will own 25% of the entire NFE project.
- Fluxys announced on 21 July 2022 that the company and institutional investor EIG had completed the acquisition of Enagás and OMERS Infrastructure's respective stakes, representing 80% of the GNL Quintero share capital.
Supprted by the Institute of Energy Economics Japan (IEEJ)
- Japan Trend of LNG Inventory data(18.6KB) （Jul 28, 2022 update）
- US Trend of Natural Gas Inventory data(52.1KB) （Jul 28, 2022 update）
- Europe Trend of Natural Gas Inventory data(356.5KB) （Jul 28, 2022 update）
- Europe Trend of LNG Inventory data(206.8KB) （Jul 28, 2022 update）