Dec 2022
Trend of Natural Gas and LNG Prices
Short-term trend
Asia
- The assessed spot LNG price for near-month delivery to Northeast Asia, JKM rose to USD 38 per million Btu on 1 December due to the cold weather. JKM then generally hovered in the high USD 30s as trading stalled against a backdrop of high LNG inventories and low liquidity in Northeast Asia. It also strengthened temporarily, hitting USD 40 on 8 December on expectations of increased demand when China announced the easing of its zero-corona policy. As year-end procurement slowed down in the second half of the month, trading slowed further and prices continued to fall, hovering around USD 30.
- 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 November 2022 and scheduled to be delivered from the month onward (contract-based price) was USD 22.9. The average price of spot LNG cargoes that were contracted and delivered in Japan within the month (arrival-based price) was USD 18.4.
- Based on the preliminary figures from Japan's customs statistics of the Ministry of Finance, the country's average LNG import price remained expensive at USD 17.86 per million Btu and JPY 135,434 per tonne in November 2022, although the figures were lower than those in October. The average landed prices of LNG in Japan from the United States, the ASEAN region, the Middle East, and Russia in November were USD 26.53, USD 17.02, USD 16.44, and USD 15.78, respectively. Elsewhere in Asia, average import prices in November were USD 16.61 in China, USD 24.27 in Korea, and USD 17.90 in Chinese Taipei. Japan’s average landed crude oil import price (JCC: Japan crude cocktail) was USD 100.38 per barrel in November 2022. The Japanese yen denominated price stood at JPY 92,345 per kilolitre, remaining at a high level. 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 5.55 million tonnes of LNG in November 2022, 5% lower than the same month in 2021. The total import volume during the first eleven months of 2022 was 65.94 million tonnes, a decrease of 2% from the same period in 2021. China imported 6.42 million tonnes of LNG in November 2022, 5% less than the same month in 2021. China's total LNG import volume during the first eleven months of 2022 was 56.88 million tonnes, a decrease of 20% from the same period of the previous year. While Korea imported 3.80 million tonnes in November 2022, a decrease of 1% from the same month of 2021, Chinese Taipei imported 1.60 million tonnes, 10% lower than one year earlier. LNG import volume from these four markets was 177.04 million tonnes during the first eleven months of 2022, a decrease of 11% year-on-year.
United States
- The Henry Hub Natural Gas Futures price fell from USD 6.7 on 1 December to USD 5.5 on 6 December, but reversed to USD 5.7 on 7 December amid forecasts of extremely cold weather in the second half of the month, and continued to rise to USD 6.9 on 13 December. HH hit USD 7.0 on 15 December. The following week, as the severe winter forecast eased slightly, the price turned downward and continued to fall from USD 5.9 on 19 December to USD 5.0 on 22 December. On 23 December, the market reacted slightly when Freeport LNG announced a delay in the resumption of initial production from the end of December to late January 2023, pushing HH back to USD 5.8.
- According to the U.S. Energy Information Administration’s 6 December Short-Term Energy Outlook, the average natural gas spot price forecast for the first quarter of 2023 is USD 6.0. EIA projects that HH will fall after January 2023 as inventories approach their historical 5-year average due to increased natural gas production.
Europe
- The Dutch TTF Gas Futures price was in the high USD 40's range as trading picked up toward the end of the year amid increased winter heating demand, which led to withdrawals from natural gas underground storage and a decline in offshore LNG inventories. On 6 December, it hit USD 46.1, mainly due to the shutdown of a nuclear power plant in Spain. On 15 and 16 December, Uniper and Deutsche ReGas made progress in deployment of FSRUs in Germany, announcing a series of FSRU arrivals, and the TTF fell to USD 35.9. On 19 December, EU energy ministers agreed on a proposal of the market correction mechanism, while the TTF fell further to USD 33.7. TTF was at USD 25.8 on 23 December after a lull in year-end trading and a downward trend, helped by strong wind power generation.
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, the price reached USD 40 in the second half of June and remained at the same level in July, and in August the price was generally USD 50s, temporarily exceeding USD 60 and USD 70, respectively. In September, JKM showed a declining trend, falling to the high USD 30s and remained generally in the high USD 20s in October and November, but was near USD 30 at month-end.
- 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. The average price then rose to late USD 15s in February 2022 as oil prices rose, falling to mid-USD14s in March. It rose to late USD 15s in April and May, fell to late USD 14s in June, rose from late USD 17s to late USD 22s from July to September, and then fell from late USD 20 to late USD 17 in October and November.
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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 August 2022 stood at 5.90 million tonnes, an increase of 11.7% and 0.62 million tonnes from July, and an increase of 17.6% from August 2021, higher than the past five-year average by 1.65 million tonnes.
- The LNG inventories for city-gas supply as of the end of August 2022 were 2.54 million tonnes, 1.1% higher than July and 28.7% higher than August 2021. LNG consumption for city-gas in August 2022 was 2.31 million tonnes, decreased by 6.5% year-on-year. City-gas companies received 2.33 million tonnes of LNG in July 2022, decreasing year-on-year by 14.0%.
- The LNG inventories for power generation as of the end of August 2022 were 3.36 million tonnes, increasing by 21.4% from July and 10.4% higher than August 2021. LNG consumption for power generation in August 2022 was 3.54 million tonnes, decreasing by 2.9% from August 2021. Power generation companies received 4.54 million tonnes of LNG, increasing year-on-year by 10.1%.
- According to the "LNG Inventory for Power Generation" released by the Ministry of Economy, Trade and Industry (METI) on 21 December 2022, major power utilities’ LNG inventories were 2.44 million tonnes as of 18 December. This is higher by 0.10 million tonnes than the end of December 2021 and 0.60 million tonnes above the average of the end of December 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.
United States
- As of 16 December 2022, working gas in underground natural gas storage in the United States was 3.33 Tcf, 6.7% decrease from the previous month, according to the U.S. Energy Information Administration (EIA). Gas inventories were 1.1% lower than those at the same time in 2021 and were 22 Bcf higher 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)
Europe
- As of 24 December 2022, the stored volume of natural gas in European underground storage facilities operated by the Aggregated Gas Storage Inventory (AGSI +) EU member companies was 928.7 TWh (about 61.43 million tonnes LNG equivalent). The volume was higher than that of one year ago by 52.9% or 321.3 TWh (about 21.26 million tonnes LNG equivalent). The inventories represented 83.0% of the capacity, which was higher than 54.7% on the same day in 2021 and higher than the five-year average of 76.0%. The inventories in Germany and the Netherlands (which have relatively large storage capacity among the member countries) were 87.8% and 77.6% 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 December 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 4.96 million cubic meters, 4.2% down from the previous month. The inventories were higher than the same day in 2021 by 47.4% and by 6.5% 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
- Germany’s first two FSRU-based LNG import terminal projects saw their inaugural LNG cargoes arriving in December 2022 from Spain and Egypt, respectively. With a few long-term SPA and HOA deals announced in the month, out of 70 million tonnes per year of SPAs and HOAs agreed so far in 2022, deals amounting to 62 million tonnes per year have been sold from North America.
Asia and Oceania
- bp China announced on 24 November 2022 that China's Shenzhen Energy had signed long-term LNG SPA with bp.
- Petronet LNG said on 15 December 2022 that the company had signed an agreement with Gopalpur Ports Ltd for a floating LNG receiving facility with a capacity of 4 million tonnes per year at the Gopalpur port in Odisha.
- Woodside Energy announced on 28 November 2022 that the company had shipped an LNG cargo to Europe from Australia's North West Shelf and delivered it to Uniper Global Commodities SE (Uniper). The cargo was delivered on 27 November 2022 to the Gate Terminal.
- Woodside said on 2 December 2022 that the company was reconsidering the potential development of Greater Sunrise via an onshore LNG export plant in Timor Leste.
- Australia's Santos said on 2 December 2022 that the company did not anticipate any material cost or schedule impact, and first gas from the Barossa Gas Project remained on track to be delivered in the first half of 2025, in spite of the Federal Court decision on the day to set aside NOPSEMA's (National Offshore Petroleum Safety and Environmental Management Authority) approval of the project's Drilling Environment Plan (Plan).
- Australia's energy infrastructure company Jemena announced on 14 December 2022, that it was partnering with engineering and construction firms Zinfra, Nacap, and Wasco to connect Australia's first LNG import terminal at Port Kembla to the Eastern Gas Pipeline.
- Australia's Woodside Energy announced on 20 December 2022 that Woodside Burrup Pty Ltd and the North West Shelf Project participants had entered into separate nonbinding agreements with Western Gas for the processing of 2 - 3 million tonnes per year of Equus gas from 2027. It is proposed that Equus gas would be produced on a floating production storage and offloading facility and transported through a 200 km pipeline to the Pluto LNG facility. First LNG for the gas processing opportunity is targeted in 2027, with a target aggregate production of 2 - 3 million tonnes per year of LNG and 50 - 75 TJ/d (0.335 - 0.5 million tonnes per year) of domestic gas.
North America
- Mitsubishi Corporation, Tokyo Gas, Osaka Gas, and Toho Gas revealed on 22 November 2022 plans to produce e-methane (synthetic methane) in the United States, liquefy it at the Cameron LNG facility in Louisiana. The four firms have entered into an agreement to conduct a feasibility study.
- New Fortress Energy announced on 22 November 2022 that it had finalized its agreements with Pemex to develop and operate an integrated upstream and natural gas liquefaction project off the coast of Veracruz in Southeast Mexico. New Fortress Energy will deploy to the Lakach field its 1.4 million-tonne-per-year FLNG unit.
- Sempra announced on 1 December 2022 that it had entered into a long-term SPA with INEOS. INEOS has agreed to purchase 1.4 million tonnes per year of LNG delivered FOB from the proposed Phase 1 of Sempra's Port Arthur LNG project for 20 years. The companies have also signed a non-binding HOA for INEOS' potential purchase of an additional 0.2 million tonnes per year from the Port Arthur LNG Phase 2 project. Sempra intends to make a final investment decision for Phase 1 in the first quarter of 2023, with first cargo deliveries expected in 2027.
- Sempra announced on 6 December 2022 that it had entered into a long-term SPA with ENGIE S.A. for LNG from Phase 1 of the Port Arthur LNG project. ENGIE has agreed to purchase approximately 0.875 million tonnes per year of LNG for 15 years, delivered on an FOB basis, and sourced from natural gas producers whose gas has been certified by an independent third party in accordance with environmental, social and governance (ESG) performance criteria, according to the announcement.
- The U.S. Department of Energy (DOE) approved on 20 December 2022 permits for Sempra to send natural gas to Mexico for reexport from LNG projects: the Costa Azul and Vista Pacifico.
- Dallas, Texas-based Energy Transfer LP announced on 15 December 2022 its subsidiary, Gulf Run Transmission LLC had received FERC (Federal Energy Regulatory Commission) approval to place the Gulf Run pipeline in service delivering natural gas to meet the demand along the Gulf Coast and international markets.
- NextDecade Corporation announced on 20 December 2022 the execution of a 20-year SPA with Galp Trading S.A., for LNG supply from NextDecade's Rio Grande LNG (RGLNG) export project. Galp will purchase 1 million tonnes per year of LNG indexed to Henry Hub on an FOB basis.
- The Canadian Energy Regulator (CER) issued on 14 December 2022 a 40-year Licence to export LNG to Ksi Lisims LNG, a proposed 12-million-tonne-per-year natural gas liquefaction and marine terminal project. The project's commercial operations are planned to start in late 2027 or 2028.
European and surrounding regions
- The EU Agency for the Cooperation of Energy Regulators (ACER) announced on 1 December 2022 a plan to establish an Expert Group on LNG Price Assessment/Benchmarks. The proposed new Council regulation on enhancing solidarity through better coordination of gas purchases, exchanges of gas across borders and reliable price benchmarks tasks ACER with developing an LNG price assessment tool by collecting real-time information on all daily transactions.
- The Prime Minister of the United Kingdom and the President of the United States announced on 7 December 2022 the new 'UK-US Energy Security and Affordability Partnership'. The announcement said that the United States was expected to export at least 9 -10 bcm of LNG over the next year via the United Kingdom terminals, more than doubling the level exported in 2021.
- Netherlands' Gasunie announced on 12 December 2022 that the company was investigating options for further temporary expansion of LNG import capacity including FSRUs in the Netherlands.
- Netherlands' VTTI said on 12 December 2022 that the company was exploring the development of a floating LNG facility. In time, VTTI plans to use the infrastructure for the import of green energy carriers such as hydrogen. VTTI aims to bring the facility operational in the beginning of 2024.
- Germany's EnBW announced on 8 December 2022 that the company had booked 3 bcm per year capacity of LNG at the Hanseatic Energy Hub in Stade beginning with commissioning. EnBW will have the option to move to ammonia as a hydrogen-based energy source at a later date.
- Höegh LNG Holdings Ltd. announced on 15 December 2022 that it had signed a binding 10-year Time Charter Contract with the German Federal Ministry for Economic Affairs and Climate Action. Höegh Esperanza will be located in Wilhelmshaven and operated by Uniper acting as agent on behalf of the Charterer. Uniper announced on 17 December that the first German FSRU for importing LNG had been commissioned for service in Wilhelmshaven.
- Deutsche ReGas announced on 16 December 2022 that the FSRU had arrived at the Lubmin port to be the first and so far, only privately financed LNG terminal.
- Gasgrid Finland announced on 20 December 2022 that construction work for the LNG floating terminal had been completed in the Inkoo harbour.
- Equinor announced on 20 December 2022 that the Snøhvit partners would invest NOK 13.2 billion in upgrading the Hammerfest LNG plant. The project involves gas onshore compression and electrification and will secure the future of Hammerfest LNG, according to the announcement.
Other regions
- QatarEnergy announced on 29 November 2022 the signing of two long-term LNG SPAs between QatarEnergy and ConocoPhillips affiliates for the delivery of up to 2 million tonnes per year of LNG from Qatar to Germany with deliveries expected to start in 2026 and on a DES basis.
- Chevron announced on 8 December 2022 that it had taken an FID to expand the Tamar field, offshore Israel. Chevron Mediterranean has a 25% stake in the project. The first phase involves a third 150 km pipeline from the Tamar field to the Tamar platform. This will be upgraded to be able to deliver 1.2 billion cubic feet per day of natural gas. Chevron expects to complete this work in early 2025.
(Note: CCS: Carbon Capture and Storage, EPC: Engineering, Procurement and Construction, FEED: Front-End Engineering Design, FID: Final Invest Decision, FLNG: Floating Liquified Natural Gas, FOB: free-on-board, FSRU: Floating Storage Regasification Unit, HOA: Heads of Agreement SPA: Sale and Purchase Agreement)
Supprted by the Institute of Energy Economics Japan (IEEJ)
添付ファイル
- Japan Trend of LNG Inventory data(27.1KB) (Dec 26, 2022 update)
- US Trend of Natural Gas Inventory data(54.0KB) (Dec 26, 2022 update)
- Europe Trend of Natural Gas Inventory data(372.9KB) (Dec 26, 2022 update)
- Europe Trend of LNG Inventory data(214.7KB) (Dec 26, 2022 update)