Trend of Natural Gas and LNG Prices

Short-term trend

Asia

• The assessed spot LNG price for near-month delivery to Northeast Asia, JKM, was mid-USD 12s in the beginning of July. Then, the price fell to mid-USD 11s on 10 July due to sufficient supply. After that, it was low-USD 12s on 24 July by demand and supply tightened in the short term as a result of the increase of buying interest due to the price decline.
• 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 2024 and scheduled to be delivered from the month onward (contract-based price) was not disclosed. The average price of spot LNG cargoes that were delivered in June 2024 (arrival-based price) was USD 10.0/MBtu.
• Based on the preliminary figures from Japan's customs statistics of the Ministry of Finance, the country's average LNG import price was USD 11.46 per million Btu and JPY 93,039 per tonne in June 2024. The price was almost flat from May as Japan’s average landed crude oil import price didn’t change much from February to March 2024. The average landed prices of LNG in Japan from the United States, the ASEAN region, the Middle East, and Russia in June were USD 10.83, USD 11.53, USD 11.11, and USD 12.01, respectively. Elsewhere in Northeast Asia, average import prices in June were USD 10.72 in China, USD 11.50 in Korea, and USD 10.16 in Chinese Taipei. Japan’s average landed crude oil import price (JCC: Japan crude cocktail) was USD 87.85 per barrel and JPY 86,543 per kilolitre in June 2024.
• Japan imported 4.57 million tonnes of LNG in June 2024, 0.8% higher than the same month of 2023. China imported 5.62 million tonnes of LNG in June 2024, a decrease of 4.6% from the same month of 2023. Korea imported 3.11 million tonnes of LNG in June 2024, 6.2% higher than the same month of 2023, Chinese Taipei imported 1.95 million tonnes, 31.9% higher than one year earlier.
• During the first half of 2024, Japan imported 32.41 million tonnes of LNG, 0.7% lower than the same period of 2023, China imported 38.00 million tonnes of LNG, a 13.9% increase from the same period of 2023. The total import volume in these four markets including Japan, China, Korea, and Chinese Taipei was 103.99 million tonnes in the first half of 2024, a 5.2 % increase year-on-year.

United States

• The Henry Hub Natural Gas Futures price continued downward trend and fell to USD 2.0/Mbtu on 17 July due to strong natural gas production and inventory in the U.S. from mid-June. Then, it rose to USD 2.2/Mbtu on 23 July due to increasing feed gas supply to Freeport LNG.

Europe

• The Dutch TTF Gas Futures price was on a downward trend in early July due to weak demand and fell to 9.8/Mbtu on 10 July. TTF rose to USD 10.5/MBtu on 16 July due to uncertainty over the restoration of Freeport LNG, but then got a downward trend again in second half of July due to achieving its restoration.

Mid- to long-term trend

• In June 2023, JKM was hovering around USD 12s due to European gas prices fluctuations and other factors, but softened slightly in July to hover around USD 11s on the back of high inventories and low demand. In August, the possibility of a strike at major projects in Australia caused prices to move slightly higher, rising to USD 15 after the strike was implemented in September. In October, the price rose to USD 17 due to the outbreak of conflict in the Middle East and other factors, but in November, geopolitical risks eased somewhat, and the price generally hovered around USD 14s. In December, abundant supply and soft demand brought JKM down to USD 11, and the trend remained unchanged in January, generally at USD 9. In February, the downward trend was further spurred after the Luner New Year in the Northeast Asia region, falling below USD 8, but temporarily approached USD 10 in March, mainly due to short-term demand. In the middle of April, JKM rose to low-USD 11s due to escalating tensions in the Middle East. In the second half of April, JKM trended low-USD 10s due to easing geopolitical tensions. In the second half of May, the price trended in the range of high-USD 11s to low-USD 12s due to increased demand for the summer season. In June, JKM rose to mid-USD 13s partly due to summer demand. In July, JKM hovered in the range high-USD 11s to low-USD 12s since demand was weak but falling of the price boosted demand in short term.
• Japan's average LNG import price was in the USD 5s from August until 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 had then been on the constant rise for the following 18 months to the highest ever at USD 22.73 in September 2022, along with the rise of crude oil prices until June 2022. Japan's average LNG import price declined, following the decline of the oil prices from July 2022, and has remained in the USD 11s to 13s since April 2023.

Trend of Natural Gas and LNG Inventories

Japan

• Japan's LNG inventories as of the end of March 2024 stood at 3.95 million tonnes, a decrease of 14.3% and 0.66 million tonnes from February, and a decrease of 27.8% from March 2023, lower than the past five-year average by 0.66 million tonnes.
• The LNG inventories for city-gas supply as of the end of April 2024 were 2.11 million tonnes, 2.5% lower than March and 18.4% lower than April 2023. LNG consumption for city-gas in April 2024 was 2.13 million tonnes, which decreased by 0.05% year-on-year. City-gas companies received 2.00 million tonnes of LNG in April 2024, decreasing year-on-year by 3.3%.
• The LNG inventories for power generation as of the end of March 2024 were 1.78 million tonnes, decreasing by 27.6% from February and 36.7% lower than March 2023. LNG consumption for power generation in March 2024 was 3.58 million tonnes, increasing by 19.9% from March 2023. Power generation companies received 3.37 million tonnes of LNG, increasing year-on-year by 1.5%.
• According to the "LNG Inventory for Power Generation" released by the Ministry of Economy, Trade and Industry (METI) on 24 July 2024, major power utilities’ LNG inventories were 2.35 million tonnes as of 21 July. This is higher by 0.41 million tonnes than the end of July 2023 and 0.16 million tonnes above the average of the end of July of the past five years.

United States

• As of 12 July 2024, working gas in underground natural gas storage in the United States was 3.21 Tcf, 5.4% increase from the previous month, according to the U.S. Energy Information Administration (EIA). Gas inventories were 8.0% higher than those at the same time in 2023 and were 466.6 Bcf higher than the past five-year average.

Europe

• As of 22 July 2024, the stored volume of natural gas in European underground storage facilities operated by the Aggregated Gas Storage Inventory (AGSI +) EU member companies was 944.4 TWh (about 62.47 million tonnes LNG equivalent). The volume was lower than that of one year ago by 0.1% or 0.8 TWh (about 0.05 million tonnes LNG equivalent). The inventories represented 83.2% of the capacity, which was lower than 83.4% on the same day in 2023 and higher than the five-year average of 73.4%. The inventories in Germany, Italy and the Netherlands (which have relatively large storage capacities among the member countries) were 87.8%, 86.2% and 76.4% of their respective capacities.

 

• As of 22 July 2024, the stored volume of LNG in European LNG terminals reported by Aggregated LNG Storage Inventory (ALSI) member operators was 4.48 million cubic meters, 3.3% up from the previous month. The inventories were lower than the same day in 2023 by 1.0% and by 1.9% above the five-year average for the same day. The inventories represented 52.1% of the capacity, which was higher than 51.3% on the same day in 2023.

Latest Developments in Major Natural Gas and LNG Projects

Highlights

• An FID on the second LNG production project in Canada in history, and also the second in 2024 in the world, was announced in late June. The Cedar LNG project is anticipated to be in service in late 2028 with an FLNG facility. The Ruwais LNG project in Abu Dhabi, which announced its FID in June, announced 10% each equity participation by four international partners in July.

 

Asia and Oceania

• China's CNOOC announced on 30 June 2024 that it had launched what it said was China's largest LNG storage base at its Binhai LNG import terminal in Jiangsu. Six LNG storage tanks each with the capacity of 270,000 m3 add to the already four existing tanks with a capacity of 220,000 m3.
• GTT announced on 24 June 2024 that it had received an order from Hudong-Zhonghua Shipbuilding (Group) Co. Ltd. for the tank design of ten LNG carriers. Each ship will have five tanks with a total capacity of 271,000 m3. The tanks will be fitted with the NO96 Super+ membrane containment system. Delivery is scheduled between the first quarter of 2030 and the fourth quarter of 2031.
• Philippines' First Gen Corporation revealed on 7 July 2024 its plan to temporarily defer the delivery of its fifth LNG cargo scheduled in July 2024 with the availability of the indigenous Malampaya natural gas. First Gen awarded in June a contract to TG Global Trading Co. (Tokyo Gas) for one LNG cargo to be delivered in July to First Gen Singapore Pte. Ltd (FGEN Singapore).
• Shell announced on 12 Jul 2024 that first gas had been achieved at the Jerun field in Malaysia, operated by SapuraOMV Upstream Sdn Bhd. An FID was made on the development in 2021. The field is located around 160 kilometres (km) north-west of Bintulu in Sarawak, and 190 km north-west of Miri, Sarawak, Malaysia. Comprising an integrated central processing platform, Jerun will export gas through a new 80km pipeline into the E11RB production hub, for onward delivery to Bintulu based customers including Malaysia LNG. The Jerun platform is designed to produce up to 0.55 bcf of gas per day, with condensate production of 15,000 barrels per day during peak production. Jerun is operated by SapuraOMV Upstream (40%) in partnership with Sarawak Shell Berhad (30%) and PETRONAS Carigali Sdn Bhd (30%).
• The Indian Petroleum and Natural Gas Regulatory Board (PNGRB) issued on 5 June 2024 a draft proposal of new regulations which include certification of registration by PNGRB for LNG import projects. All entities would be required to submit information including tariffs.
• Australia's Woodside announced on 11 July 2024 that it had signed an SPA with CPC Corporation, Taiwan for the long-term supply of LNG to Taiwan. Woodside will supply 6 million tonnes of LNG on a delivered basis over 10 years, commencing in July 2024. Woodside may also deliver 8.4 million tonnes of LNG to CPC for 10 years from 2034 to 2043, subject to conditions and agreement on terms for this period. LNG delivered to CPC under the SPA will be sourced from volumes across Woodside's global portfolio.
• Baker Hughes announced on 27 June 2024 that the company had been awarded a 10-year services frame agreement by Woodside Energy to support its Australian LNG operations. In 2021, Baker Hughes was awarded the supply of gas turbine and compressor technology for Woodside Energy's Pluto LNG train 2 project in Western Australia, which serves Woodside Energy's Scarborough offshore gas project. In 2022, the two companies signed an MOU to collaborate on possible decarbonizing solutions.
• Australia's Worley announced on 24 June 2024 that the company had been awarded FEED on a new natural gas compression facility in Queensland, by Origin, as Upstream Operator of Australia Pacific LNG (APLNG). The Angry Jungle gas field is a joint venture gas field run by multiple producers within the Surat Basin. During the FEED phase Worley will support the engineering design of the infrastructure needed to allow APLNG to capitalize on its share of coal seam gas produced within the Angry Jungle gas field.
• Wood plc announced on 9 July 2024 that it had secured a six-year contract to provide brownfield EPCm (engineering, procurement, and construction management) solutions for Shell's Prelude FLNG facility in Western Australia.
• Wood plc announced on 2 July 2024 that the company had been selected as the lead specialist consultant for an independent study for the Sunrise Joint Venture's (SJV) Greater Sunrise Development. The study, on target for completion by no later than Q4 2024, will support the SJV to advance the development to the next stage. SJV comprises TIMOR GAP (56.56%), Woodside Energy (33.44% and Operator) and Osaka Gas (10.00%). The development project is located between Timor-Leste and Australia's Northern Territory and comprises the Sunrise and Troubadour gas and condensate fields.

 

North America

• A federal judge in Louisiana granted on 1 July 2024 a preliminary injunction ending DOE's pause on the issuance of LNG export permits in a case brought by 16 Republican state Attorneys-Generals against the pause of authorizations for LNG exports to non-free trade agreement (non-FTA) nations.
• DOE and EPA (U.S. Environmental Protection Agency) announced on 21 June 2024 that applications were open for USD 850 million in federal funding for projects that would help monitor, measure, quantify, and reduce methane emissions from the oil and gas sectors. Oil and natural gas facilities are the nation's largest industrial source of methane. The funding is expected to help small oil and natural gas operators reduce methane emissions and transition to available and innovative methane emissions reduction technologies, while also supporting partnerships that improve emissions measurement and provide accurate, transparent data to impacted communities.
• Honeywell and Air Products announced on 10 July 2024 that Honeywell had agreed to acquire Air Products' LNG process technology and equipment business. According to the announcement, the new holistic offering will encompass natural gas pre-treatment and liquefaction. Currently, Honeywell provides a pre-treatment solution. Air Products' LNG process technology and equipment business consists of a comprehensive portfolio, including in-house design and manufacturing of coil-wound heat exchangers (CWHE).
• Infrastructure company WhiteWater announced on 12 July 2024 that the ADCC Pipeline entered commercial service on 1 July, and was capable of providing approximately 1.7 Bcf/d of natural gas transportation capacity to the Cheniere Corpus Christi Liquefaction facility from markets on Whistler Pipeline's Agua Dulce Header in South Texas. The receipt points in Agua Dulce provide Cheniere direct access to Permian and Eagle Ford volumes in addition to volumes sourced along the Gulf Coast. The ADCC Pipeline is a joint venture owned 70% by Whistler Pipeline LLC, which is a joint venture between WhiteWater (50.6%), MPLX LP (30.4%), and Enbridge (19.0%), and 30% by a wholly-owned subsidiary of Cheniere Energy, Inc.
• Aramco and Sempra announced on 26 June 2024 that their subsidiaries had executed a non-binding HOA for a 20-year SPA for LNG offtake of 5.0 million tonnes per year from the Port Arthur LNG Phase 2 expansion project. The HoA further contemplates Aramco's 25% participation in the project-level equity of Phase 2. The Phase 2 project is to include the addition of up to two trains capable of producing up to 13 million tonnes per year. Sempra Infrastructure is advancing infrastructure projects within the Port Arthur Energy Hub, including the proposed Titan Carbon Sequestration project.
• Sempra Infrastructure announced on 18 July 2024 that Port Arthur LNG Phase 2 and Bechtel Energy had signed a fixed-price EPC contract for the Port Arthur LNG Phase 2 project in Port Arthur, Texas. The scope of the agreement includes the ability to conduct pre-FID work to better assure project cost and schedule certainty.
• Tellurian Inc. announced on 1 July 2024 that it had closed the previously reported sale of its integrated upstream assets to affiliates of Aethon Energy Management LLC. Aethon Energy continues to work with Tellurian on a long-term SPA for 2 million tonnes per year of LNG.
• Australia's Woodside Energy and Tellurian Inc. of the United States announced on 22 July 2024 that they had entered into an agreement pursuant to which Woodside would acquire all issued and outstanding common stock of Tellurian including its Driftwood LNG project. Woodside pointed to its relationship with Bechtel as the EPC contractor for both Driftwood LNG and the Pluto Train 2 project in Australia.
• Venture Global LNG Inc. received approval from FERC to site, construct and operate the proposed CP2 project in Cameron Parish, Louisiana on 27 June 2024. The project will have 18 liquefaction blocks, each with a capacity of about 1.1 million tonnes per year of LNG, and also four 200,000-cbm full containment LNG storage tanks. The ensuing DOE non-FTA authorization process should attract much attention.
• Texas LNG Brownsville LLC, a subsidiary of Glenfarne Energy Transition, LLC, announced on 2 July 2024 that Texas LNG had signed a non-binding HOA with an anonymous party for a long-term LNG FOB SPA  for 0.5 million tonnes per year of LNG. Texas LNG plans to begin construction in 2024 and commence commercial operations in 2028. The Glenfarne Energy Transition LNG portfolio also includes the 8.8 million tonnes per year Magnolia LNG export facility under development in Lake Charles, Louisiana.
• Mitsui & Co., Ltd. announced on 24 June 2024 that its subsidiary Mitsui E&P USA LLC (MEPUSA) had completed acquisition of an unconventional Takonka gas asset in Texas from Sabana, LLC and Vanna, LLC. MEPUSA will drill wells to evaluate the well performance and develop and operate the asset aiming for full-scale development in 2027 or thereafter.
• The Haisla Nation and Pembina Pipeline Corporation announced on 25 June 2024 an FID on the Cedar LNG Project, an FLNG facility with a nameplate capacity of 3.3 million tonnes per year, located in the traditional territory of the Haisla Nation, on Canada's West Coast. Cedar LNG is majority-owned by the Haisla Nation, in partnership with Pembina Pipeline Corporation, with 50.1% and 49.9% ownership, respectively. Cedar LNG is to power the facility with renewable electricity from BC Hydro. The project leverages existing LNG infrastructure, including the Coastal GasLink pipeline, a deep-water port, roads, and other infrastructure. The FLNG facility is being designed and constructed by Samsung Heavy Industries and Black & Veatch. The project is anticipated to be in service in late 2028. Cedar LNG has secured 20-year take-or-pay liquefaction tolling services agreements with ARC Resources Ltd. and Pembina for 1.5 million tonnes per year each.
• GTT announced on 15 July 2024 that it had received, during the second quarter of 2024, an order from Korea's Samsung Heavy Industries (SHI) for the tank design of a new FLNG, on behalf of the ship-owner Cedar LNG. The FLNG will have a total capacity of 180,000 m3, and will incorporate the Mark III Flex membrane containment system developed by GTT. The delivery of the FLNG is scheduled for the first quarter of 2028.
• New Fortress Energy Inc. (NFE) announced on 19 July 2024 that it had achieved First LNG for its initial Fast LNG asset located offshore Altamira, Mexico. NFE's proprietary Fast LNG design pairs modular liquefaction technology with jack up rigs or similar offshore infrastructure. The facility has a production capacity of 1.4 million tonnes per year.

 

European and surrounding regions

• Germany's Hanseatic Energy Hub announced 28 June 2024 that construction in Stade had started for Germany's first land-based LNG terminal to go into operation in 2027. Two LNG tanks each of which will be ammonia-ready and have a capacity of 240,000 m3 - can be connected to the grid in three years. Besides the two Germany's EnBW and SEFE, which have respectively booked annual capacities of 6 bcm and 4 bcm, Czech's ČEZ has secured long-term import rights for 2 bcm per year. All customers have the option to switch their contracts to hydrogen-based energy sources.
• Swiss-based MET Group announced on 9 July 2024 that it had entered into a 10-year FOB LNG purchase agreement with Shell. MET's primary objective is to supply LNG from the United States to its European customers.
• Finland's Gasum announced on 25 June 2024 that the company would not import Russian LNG as of 26 July, complying with all sanctions imposed by the EU. The 14th sanctions package against Russia that was approved the Council of the European Union on 24 June included a prohibition to purchase or import LNG originating from Russia through European Union terminals that were not connected to the EU gas network. The prohibition included in the sanctions package will come into force 26 July. Although the sanctions do not allow Gasum to terminate its agreement with Gazprom Export, they constitute a force majeure on the purchase or import of Russian LNG to off-grid terminals.
• China's Wison New Energies announced on 21 June 2024 that it had decided to discontinue all ongoing Russian projects and would immediately and indefinitely stop taking any new Russian business. The Arctic LNG 2 had planned to build a gas turbine power station for the project using equipment from Wison.

 

Other regions

• Abu Dhabi's ADNOC, and international partners announced on 10 July 2024 the latter's participation in the Ruwais LNG project. bp, Mitsui & Co., Shell and TotalEnergies are to be awarded a 10% equity stake each with ADNOC retaining a 60% majority stake. Separately, ADNOC has signed several new long-term LNG sales commitments with the international partners, including for the delivery of 1 million tonnes per year with Shell and 0.6 million tonnes per year with Mitsui & Co., taking the committed Ruwais LNG production capacity to 70%.
• Abu Dhabi's ADNOC Logistics and Services plc (ADNOC L&S) announced on 1 July 2024 that it had awarded Korea's shipyards Samsung Heavy Industries and Hanwha Ocean up to USD 2.5 billion (AED 9.2 billion) shipbuilding contracts for the construction of new LNG Carriers. Each was awarded shipbuilding contracts for the construction of four firm vessels with the option for an additional one. The vessels are expected to be delivered from 2028 and will be time chartered to ADNOC Group subsidiaries for a period of 20 years. The LNG Carriers will each have a capacity of 174,000 m3 and feature MEGA and XDF22 engines.
• Saudi Arabia's Aramco announced on 30 June 2024 that the company had awarded contracts worth more than USD 25 billion to progress its strategic gas expansion, which targets sales gas production growth of more than 60% by 2030, compared to 2021 levels. The contracts relate to phase two development of the Jafurah unconventional gas field, phase three expansion of Aramco's Master Gas System, new gas rigs and ongoing capacity maintenance. The expansion of the Master Gas System will increase the size of the network by 3.15 billion standard cubic feet per day (bscfd) by 2028, through the installation of around 4,000 km of pipelines and 17 new gas compression trains.
• Golar LNG Limited announced on 5 July 2024 that it had entered into agreements with Pan American Energy (PAE) for a 20-year deployment of an FLNG  vessel in Argentina. The FLNG project will monetize resources from the Vaca Muerta shale formation in the Neuquina Basin. The project is expected to start LNG exports in 2027. As part of the agreements, Golar LNG will hold a 10% stake in Southern Energy S.A., a dedicated joint venture with PAE, responsible for the purchase of domestic natural gas, operations, and sale and marketing of LNG volumes from Argentina.
• Shell Trinidad and Tobago Ltd. announced on 9 July 2024 that it had taken an FID on the Manatee gas field project in the East Coast Marine Area (ECMA) in Trinidad and Tobago. The ECMA is home to the gas-producing Dolphin, Starfish, Bounty and Endeavour fields. The Manatee field will provide backfill for the Atlantic LNG facility. Manatee is slated to start production in 2027. Manatee is expected to reach peak production of approximately 104,000 barrels of oil equivalent per day (boe/d) (0.604 bscf/d).

 

(Note: bcm: billion cubic metre, CCS: Carbon Capture and Storage, DES: delivered ex-ship, DOE: U.S. Department of Energy, EPC: Engineering, Procurement and Construction, EPCI: Engineering, Procurement, Construction and Installation, EPCm: Engineering, Procurement and Construction management, FEED: Front-End Engineering Design, FERC: U.S. Federal Energy Regulatory Commission, FID: Final Invest Decision, FLNG: Floating Liquified Natural Gas, FOB: free-on-board, FSRU: Floating Storage and Regasification Unit, FSU: Floating Storage Unit, HOA: Heads of Agreement, MOU: Memorandum of Understanding, SPA: Sale and Purchase Agreement)

 

 

Supprted by the Institute of Energy Economics Japan (IEEJ)