Feb 2023
Trend of Natural Gas and LNG Prices
Short-term trend
Asia
- The assessed spot LNG price for near-month delivery to Northeast Asia, JKM fell to USD 15 per million Btu from USD 18 per million Btu in the first half of February due to weak trading amid high LNG inventories caused by a warm winter and expectations of U.S. Freeport LNG production restart. From the second half of February onward, the downward trend of JKM could not be halted and remained at the high USD 14s, although there were signs of purchasing interest from South Asia and other regions due to the declining LNG prices.
- 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 January 2023 and scheduled to be delivered from the month onward (contract-based price) was not disclosed. The average price of spot LNG cargoes that were contracted and delivered in Japan within the month (arrival-based price) was not disclosed.
- 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 18.69 per million Btu and JPY 128,023 per tonne in January 2023, although the figures were lower than those in the previous month. The average landed prices of LNG in Japan from the United States, the ASEAN region, the Middle East, and Russia in January were USD 19.38, USD 17.15, USD 19.04, and USD 16.31, respectively. Elsewhere in Asia, average import prices in January were USD 25.00 in Korea, and USD 18.31 in Chinese Taipei (As of 27 February, China’s trade statistics have not yet been released). Japan’s average landed crude oil import price (JCC: Japan crude cocktail) was USD 88.14 per barrel in January 2023. The Japanese yen-denominated price stood at JPY 73,235 per kilolitre, down from the previous month. 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 6.82 million tonnes of LNG in January 2023, 0.5% higher than the same month in 2022. While Korea imported 4.81 million tonnes in January 2023, a decrease of 4% from the same month of 2022, Chinese Taipei imported 1.83 million tonnes, 28% higher than one year earlier (As of 27 February, China’s trade statistics have not yet been released).
United States
- The Henry Hub Natural Gas Futures price was affected by weather-driven changes in demand and weather forecasts, with slight price fluctuations between the low and high USD 2s in the first half of February. Progress toward the resumption of Freeport LNG production and the state of natural gas inventories also had an effect on prices. The same trend was seen from the second half of February onward, but the price slightly declined and remained in the low USD 2s toward the end of the month. Freeport LNG shipped a couple of cargos in mid-February from inventory stored prior to the accident. The company also announced on 21 February that it had received regulatory approval to resume commercial production of trains 1 and 2.
- The U.S. Energy Information Administration (EIA) in its 7 February Short-Term Energy Outlook forecasted an average natural gas spot price of USD 3.4 in 2023. They revised their previous forecast as a result of much higher-than-normal temperatures in January, which resulted in lower-than-normal consumption of natural gas for heating and higher-than-average inventories over the past five years.
Europe
- The Dutch TTF Gas Futures price hit USD 19.0 on 1 February on the back of forecasts of severe cold weather and an extension of unplanned repairs to Norwegian gas facilities, but has since fallen to the USD 16s due to mild weather, firm underground gas storage and strong UK wind power output. Since the second half of February, prices have been on a downward trend, with the progresses toward the resumption of U.S. Freeport LNG operations also contributing to the downward trend, with the TTF hovering around the USD 15s toward the end of the month.
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 downward trend as TTF declined, falling to the high USD 30s, and generally hovering in the high USD 20s during October and November. In December, the market was active during the year-end procurement season and JKM hovered around the USD 30s. In January 2023, trading resumed but was sluggish, with a downward trend from USD 20s, and a further decline to around USD 15s in February.
- 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. In December and January it rosed to late USD 18s.
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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© 2023 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 October 2022 stood at 5.73 million tonnes, an increase of 0.6% and 0.03 million tonnes from September, and an increase of 14.7% from October 2021, higher than the past five-year average by 1.13 million tonnes.
- The LNG inventories for city-gas supply as of the end of October 2022 were 2.68 million tonnes, 4.7% higher than September and 9.4% higher than October 2021. LNG consumption for city-gas in October 2022 was 2.10million tonnes, decreased by 10.7% year-on-year. City-gas companies received 2.22 million tonnes of LNG in October 2022, increasing year-on-year by 6.3%.
- The LNG inventories for power generation as of the end of October 2022 were 3.05 million tonnes, decreasing by 2.8% from September and 19.8% higher than October 2021. LNG consumption for power generation in October 2022 was 2.86 million tonnes, decreasing by 7.3% from October 2021. Power generation companies received 3.14 million tonnes of LNG, increasing year-on-year by 5.4%.
- According to the "LNG Inventory for Power Generation" released by the Ministry of Economy, Trade and Industry (METI) on 22 February 2023, major power utilities’ LNG inventories were 2.63 million tonnes as of 19 February. This is higher by 0.94 million tonnes than the end of February 2022 and 0.65 million tonnes above the average of the end of February 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 17 February 2023, working gas in underground natural gas storage in the United States was 2.20 Tcf, 19.7% decrease from the previous month, according to the U.S. Energy Information Administration (EIA). Gas inventories were 23.2% higher than those at the same time in 2022 and were 289 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 22 Februay 2023, the stored volume of natural gas in European underground storage facilities operated by the Aggregated Gas Storage Inventory (AGSI +) EU member companies was 705.6 TWh (about 46.67 million tonnes LNG equivalent). The volume was higher than that of one year ago by 108.7% or 367.5 TWh (about 24.31 million tonnes LNG equivalent). The inventories represented 63.0% of the capacity, which was higher than 30.4% on the same day in 2022 and higher than the five-year average of 42.3%. The inventories in Germany and the Netherlands (which have relatively large storage capacity among the member countries) were 71.4% and 63.7% 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 22 February 2023, 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 3.85 million cubic meters, 17.4% down from the previous month. The inventories were higher than the same day in 2022 by 27.5% and by 9.3% 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
- Freeport LNG of the United States shipped out its LNG cargo for the first time in eight months and the export plant is expected to return to full service within the next couple of months. Germany's third FSRU received its first LNG cargo from Abu Dhabi.
Asia and Oceania
- According to China's national statistics, China's natural gas consumption in 2022 was down 1.7% year-on-year at 366.3 bcm. Its natural gas production grew by 6.2% to reach 217.9 bcm.
- China's Lianyungang City government announced on 13 February 2023 that Jiangsu Huadian Ganyu LNG terminal had started construction at Ganyu port, Lianyungang in China's eastern Jiangsu province. Operations are scheduled to start in 2026.
- The Philippines' Department of Energy said on Friday 27 January 2023 that it had issued a notice to proceed (NTP) for the LNG terminal project of Samat LNG Corporation in Barangay Sisiman in Mariveles, Bataan. The company targets to begin the commercial operation by the first half of 2024.
- Australia's Department of Industry, Science and Resources announced on 9 February 2023 the new proposal in the form of draft guidelines for the Australia's Domestic Gas Security Mechanism (ADGSM). The new proposal is that in any quarter forecast to have a shortfall of gas supply, the east coast LNG exporters would have to obtain permission to export LNG. The permission would be based on how much gas an LNG producer had committed to the domestic market and its contribution to mitigate the expected shortfall. LNG producers could apply to the government to increase allowable LNG exports to protect long-term LNG sales contracts.
- Australia's competition regulator ACCC said on 27 January 2023 that its latest gas inquiry report forecasts a supply shortfall of 30 petajoules (PJ) (0.55 million tonnes) in Australia's east coast gas market in 2023 if the LNG producers were to export all their uncontracted gas. The latest report shows that outlook has improved. The LNG producers are expected to produce a further 146 PJ more than they need to meet their contractual commitments, of which 30 PJ is needed domestically to avoid a shortfall.
North America
- Cheniere Energy announced on 23 February 2023 that it had initiated the pre-filing review process with the Federal Energy Regulatory Commission (FERC) for the proposed Sabine Pass Stage 5 Expansion Project. The project is being designed for total production capacity of 20 million tonnes per year, including up to three liquefaction trains, each with a production capacity of 6.5 million tonnes. Cheniere expects full filing of the project by the end of 2023, and that the project's targeted in-service and first LNG is expected by 2030.
- Freeport LNG announced on 21 February 2022 that it had received regulatory approval to commence commercial operations of two trains out of three at the company's natural gas liquefaction and export facility. The restart and return to service of the third train will require subsequent regulatory approval.
- Sempra Infrastructure announced on 25 January 2023 that it had entered into a long-term SPA with Poland's PKN ORLEN S.A. for the supply of LNG from the Port Arthur LNG Phase 1 project. PKN ORLEN has agreed to purchase approximately 1 million tonnes per year of LNG on an FOB basis for 20 years. Port Arthur LNG Phase 1 is fully subscribed with 10.5 million tonnes per year under binding long-term agreements.
- Sempra Infrastructure, Mexico's CFE, and Carso Energy announced on 14 February 2023 an MOU to advance a potential strategic alliance for the joint development of natural gas transportation infrastructure between the states of Sonora and Baja California, Mexico. The agreement is intended to increase CFE's electricity generation capacity and availability of natural gas in the northwest region of Mexico.
- Mexico Pacific announced on 7 February 2023 the execution of two long-term SPAs with ExxonMobil LNG Asia Pacific for the sale of a combined 2 million tonnes per year of LNG on an FOB basis over a 20-year term from the first two trains of LNG export facility, Saguaro Energía LNG. ExxonMobil also has an option for 1 million tonnes per year from Train 3.
European and surrounding regions
- Netherlands' Gasunie announced on 14 February 2023 that options to further expand existing capacity at Eemshaven and at Gate terminal were being further explored. A new floating LNG terminal in the port of Terneuzen is not feasible in the short term, according to the announcement.
- Macquarie Capital announced on 27 January 2023 that the 'Deutsche Ostsee' LNG import terminal, supported by Macquarie Capital, had received its operating licence. Deutsche Ostsee, which delivered first volumes of regasified gas in January, was developed by Deutsche ReGas and is Germany's first privately funded LNG terminal. Deutsche ReGas is planning to install a second floating LNG terminal by the end of 2023 which, alongside potential capacity upgrades, could increase import capacity up to 13.5 bcm of natural gas per year.
- Germany's RWE announced on 15 February 2023 that the Brunsbuettel Elbehafen port had received its first LNG cargo from ADNOC at the FSRU "Hoegh Gannet", which was chartered by RWE on behalf of the German government. RWE and ADNOC signed an MoU in 2022 on several years of LNG supplies to be delivered to Germany from 2023.
- Estonia's Eesti Gaas announced on 3 February 2023 that it had made agreements with LNG terminals to bring a total of ten LNG cargos by the fall of 2023 - three deliveries to the port of Klaipėda in Lithuania in the winter and seven to the port of Inkoo in Finland in the spring and summer.
- According to the Russian State Statistics Service, Russia reduced natural gas production by 13.4% year-on-year to 573 bcm in 2022. Russia's LNG production in 2022 reached 32.5 million tonnes, 8.1% more than in 2021.
- Russia's NOVATEK announced on 6 February 2023 that the company and India's Deepak Fertilisers and Petrochemicals Corporation Ltd. signed a non-binding MoU in the supply of LNG and low-carbon ammonia. The MoU envisages spot and long-term LNG deliveries to Deepak Fertilisers, including from the Arctic LNG 2 project.
Other regions
- Oman LNG announced on 30 January 2023 the signing of a binding term-sheet agreement with Turkey's BOTAŞ Petroleum Pipeline Corporation to supply 1 million tonnes per year of LNG, for 10 years from 2025. Oman LNG also announced on 7 February 2023 that it had signed a binding term-sheet agreement with UNIPEC to supply 1 million tonne per year of LNG starting from 2025 for 4 years.
- NewMed Energy announced on 21 February 2023 that the partners of Israel's Leviathan reservoir approved budgets for 2023 for the performance of Front-End Engineering and Design (Pre-FEED) for Phase 1B for the development of the Leviathan reservoir. The partners are promoting a future construction of an FLNG facility of an annual production capacity of 4.6 million tonnes of LNG.
- New Fortress Energy Inc. announced on 6 February 2023 that it had reached an agreement with Golar LNG Limited for the sale of NFE's ownership stake in the Hilli currently located offshore Kribi, Cameroon in exchange for the return of 4.1 million NFE shares and USD 100 million in cash. GLNG will acquire NFE's entire interest in the floating liquefaction facility Hilli.
- bp announced on 23 January 2023 the floating production, storage and offloading (FPSO) vessel for the bp-operated Greater Tortue Ahmeyim LNG project had started its journey towards the project site off the coasts of Mauritania and Senegal. The project's first phase is set to produce around 2.3 million tonnes of LNG per year.
(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(27.3KB) (Feb 24, 2023 update)
- US Trend of Natural Gas Inventory data(54.8KB) (Feb 24, 2023 update)
- Europe Trend of Natural Gas Inventory data(380.2KB) (Feb 24, 2023 update)
- Europe Trend of LNG Inventory data(223.2KB) (Feb 24, 2023 update)