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 mid-USD 13s in the middle of October as buyers proceeded to replenish stocks ahead of winter, with the potential for significant price fluctuations due to rising geopolitical tensions in the Middle East. But generally, it was small price movement on the ground of high price and solid supply throughout of the month.
• 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 September 2024 and scheduled to be delivered from the month onward (contract-based price) was USD 13.7/MBtu. The average price of spot LNG cargoes that were delivered in September 2024 (arrival-based price) was USD 13.0/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 12.06 per million Btu and JPY 90,261 per tonne in September 2024. The USD price in September was lower than in August as Japan’s average landed crude oil import price in June was lower than 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 September were USD 12.06, USD 11.93, USD 11.09, and USD 12.41, respectively. Elsewhere in Northeast Asia, average import prices in September were USD 11.23 in China, USD 11.81 in Korea, and USD 10.91 in Chinese Taipei. Japan’s average landed crude oil import price (JCC: Japan crude cocktail) was USD 82.77 per barrel and JPY 75,138 per kilolitre in September 2024.
• Japan imported 5.43 million tonnes of LNG in September 2024, 1.7% lower than the same month of 2023. In the first half of the Japanese Fiscal Year (period of April to September), Japan imported 31.5 million tonnes of LNG, 5.1% more than the same period of the previous year but 9.7% less than two years ago. China imported 6.84 million tonnes of LNG in September 2024, an increase of 21.7% from the same month of 2023. Korea imported 3.34 million tonnes of LNG in September 2024, 14.5% higher than the same month of 2023, and Chinese Taipei imported 1.99 million tonnes, 18.1% higher than one year earlier.

United States

• The Henry Hub Natural Gas Futures price approached the level of USD 3s in early October. After the middle of the month, however, it has generally been on a downward trend throughout the month since power outages caused by Hurricane Milton cut demand for gas-fired power generation and above-average temperatures in Texas and large part of the Midwest through the end of October is expected.

Europe

• The Dutch TTF Gas Futures price was hovering in the mid-USD 12s range amid sporadic declines with Norwegian gas supplies due to due to unplanned maintenance and heightened geopolitical risks in the Middle East. However, high inventories and low demand curbed the rise, and large fluctuations were not observed.

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. In mid-August, JKM hit the mid-USD 14s and updated its highest in 2024 amid geopolitical uncertainty. From September to October, the price softened slightly to hover around USD 13s due to low demand.
• 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 range between USD 11 and USD 13 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. (No update from last month's publication)
• The LNG inventories for city-gas supply as of the end of July 2024 were 2.40 million tonnes, 7.5% lower than June and 0.5% lower than July 2023. LNG consumption for city-gas in July 2024 was 2.45 million tonnes, which increased by 10.3% year-on-year. City-gas companies received 2.25 million tonnes of LNG in July 2024, increasing year-on-year by 10.4%.
• 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%. (No update from last month's publication)
• According to the "LNG Inventory for Power Generation" released by the Ministry of Economy, Trade and Industry (METI) on 23 October 2024, major power utilities’ LNG inventories were 2.12 million tonnes as of 20 October. This is lower by 0.07 million tonnes than the end of October 2023 and 0.10 million tonnes above the average of the end of October of the past five years.

United States

• As of 11 October 2024, working gas in underground natural gas storage in the United States was 3.71 Tcf, 7.5% increase from the previous month, according to the U.S. Energy Information Administration (EIA). Gas inventories were 2.2% higher than those at the same time in 2023 and were 158.4 Bcf higher than the past five-year average.

Europe

• As of 21 October 2024, the stored volume of natural gas in European underground storage facilities operated by the Aggregated Gas Storage Inventory (AGSI +) EU member companies was 1093.9 TWh (about 72.36 million tonnes LNG equivalent). The volume was lower than that of one year ago by 2.5% or 28.5 TWh (about 1.89 million tonnes LNG equivalent). The inventories represented 95.3% of the capacity, which was lower than 98.4% on the same day in 2023 and higher than the five-year average of 92.2%. The inventories in Germany, Italy and the Netherlands (which have relatively large storage capacities among the member countries) were 97.8%, 98.1% and 91.0% of their respective capacities.

 

• As of 21 October 2024, the stored volume of LNG in European LNG terminals reported by Aggregated LNG Storage Inventory (ALSI) member operators was 5.44 million cubic meters, 14.6% up from the previous month. The inventories were lower than the same day in 2023 by 5.4% and by 2.3% below the five-year average for the same day. The inventories represented 61.2% of the capacity, which was lower than 63.8% on the same day in 2023.

Latest Developments in Major Natural Gas and LNG Projects

Highlights

• There have been accelerated LNG-related activities around the world, including LNG sales transactions, LNG production development, and value-chain improvement (carrier ship design improvement and development, methane emission management). Emerging Asian markets that have already started importing LNG are moving to procure spot LNG cargoes. Progress has been observed in several engineering deals regarding LNG projects in the United States, the Middle East and Africa.

 

Asia and Oceania

• TotalEnergies announced on 24 September 2024 the signing of an HoA with Korea's HD Hyundai Chemical for the delivery of 200,000 tonnes of LNG per year for 7 years starting from 2027, with prices indexed both to Brent and Henry Hub.
• Vitol announced on 18 October 2024 that China Gas Hongda Energy Trading Co., LTD. and Vitol had entered into a long-term swap arrangement. Vitol will purchase 0.5 million tonnes of LNG from China Gas' contracted volume in the United States on FOB basis and sell 0.5 million tonnes of LNG to China Gas on DES basis from 2029.
• Japan's Mitsubishi Corporation and Malaysia's PETRONAS announced on 27 September 2024 agreements for Mitsubishi Corporation's extension of its 10% equity shareholding in MLNG Dua, and reinvestment of a 10% equity shareholding in MLNG Tiga.
• Malaysia's PETRONAS announced on 2 October 2024 that, in collaboration with key players from the ASEAN (Association of Southeast Asian Nations) energy sector, government agencies, and international organisations, launched the ASEAN Energy Sector Methane Leadership Programme 2.0 (MLP 2.0). Themed "Turning Capacity into Action", MLP 2.0 builds on the inaugural Methane Leadership Programme (MLP) that ran from June 2023 to October 2024. It also marks the beginning of a collaboration between PETRONAS and JOGMEC (Japan Organization for Metals and Energy Security) to establish METEC (Southeast Asia Methane Emissions Technology Evaluation Centre).
• Australia's Santos said on 17 October 2024 that the Moomba CCS project had completed commissioning and was online and storing CO2 in Cooper Basin depleted reservoirs at full rate. Santos expects to inject approximately 250,000 tonnes (gross) of CO2 in 2024.
• Australia's Santos announced on 2 October 2024 the signing of a mid-term LNG supply contract with TotalEnergies Gas & Power Asia Private Limited for 20 LNG cargoes, or up to approximately 0.5 million tonnes of LNG per year over a period of 3 years plus one quarter. The contract will commence in Q4 2025 with LNG being supplied from Santos' global portfolio on a DES (delivered ex-ship) basis, with oil indexed pricing.
• Australia's Santos announced on 10 October 2024 that the Darwin LNG joint venture had achieved financial close of new syndicated bank loan facilities totalling USD 800 million. Following cessation of LNG production from the Bayu-Undan field in late 2023, Darwin LNG is undertaking 'Life Extension' works to extend the design life of the plant and to provide gas processing and marine loading services under long-term contract to the Barossa Joint Venture.
• Australia's Woodside Energy announced on 11 October 2024 the completion of the installation of the Scarborough Energy Project trunkline. The 433 km trunkline will transport gas from the offshore Scarborough field to the onshore Pluto LNG processing facility in Karratha. The installation took around 12 months. The first Scarborough LNG cargo is targeted in 2026. The Scarborough Energy Project is more than two-thirds complete.
• Australia's Woodside Energy announced on 7 October 2024 that the company and JOGMEC signed an MOU on the day before centred on their joint interest in methane emissions management. Titled METRIC (Methane Emissions Technology Reduction and Innovation Collaboration), the MOU will see JOGMEC introduce Woodside to Japanese organisations looking to collaborate on technology development related to the detection and quantification of methane emissions. Over the three-year term of the MOU, Woodside will seek to deliver on METRIC's aims, furthering knowledge on methane emissions management and developing possible options for future digital or technology commercialisation collaborations, according to the announcement.
• Australia's Woodside and Singapore's Keppel announced on 21 October 2024 that the companies had signed a conditional Offtake Term Sheet for supply and purchase of liquid hydrogen aimed at powering Keppel's data centres in Singapore from as early as 2030. The Term Sheet follows the signing of a non-binding HOA in April 2023. The sources of liquid hydrogen would include Woodside's proposed production facilities, including H2Perth.
• Wison New Energies (WNE) announced on 18 October 2024 that the company and Papua New Guinea's Kumul Petroleum Holdings Limited (KPHL) signed an FLNG pre-FEED contract. With an expected capacity of 1.5 million tonnes per year, Papua New Guinea's first FLNG is planned to be deployed to Gulf of Papua. The pre-FEED will be completed by June 2025.

 

North America

• DOE/FECM (U.S. Department of Energy's Office of Fossil Energy and Carbon Management) announced on 3 October 2024 progress achieved by an international working group to advance credible information about greenhouse gas emissions (GHG) across the natural gas supply chain to drive emissions reductions in the global marketplace. The absence of an agreed framework for MMRV (measurement, monitoring, reporting, and verification) limits the ability of buyers to use purchasing decisions to incentivize greenhouse gas emissions reductions. The International MMRV Working Group has reached milestones in its effort to develop and deliver the framework for comparing natural gas supply chain GHG emissions from different suppliers in the global market, starting in 2025.
• FERC issued a letter on 17 October 2024 to Corpus Christi Liquefaction, LLC granting the company's request of 12 August to commence in service of the terminal supply line associated with the Stage 3 Project.
• Regarding Venture Global Calcasieu Pass L.L.C.'s Calcasieu Pass LNG Project, Cameron Parish, Louisiana, FERC said on 26 September 2024 in its Construction and Commissioning Inspection Report that construction and commissioning activities observed during the inspection complied with the designs and plans filed with and approved by FERC. No environmental problem areas or non-compliances were identified during the inspection. The report said that the Venture Global team was approaching the diagnosis and remediation of the equipment performance in a careful, technically sound manner to correctly identify the problem, and work collaboratively with the equipment vendor and other industry experts to establish a permanent solution to resolve the equipment performance.
• Venture Global Plaquemines LNG, LLC submitted on 1 October 2024 its Semi-annual Status Report to DOE/FECM. According to the report, Plaquemines LNG currently anticipates that it will commence operations with the first export of LNG targeted before the end of 2024, the commencement of commercial operations of the initial phase of the Project in mid-2026, and the commencement of commercial operations of the second phase in the mid-2027.
• Tellurian Inc. announced on 4 October 2024 that its stockholders had approved the Merger Agreement Proposal (with Australia's Woodside Energy). Woodside Energy announced on 9 October that it had completed the acquisition of Tellurian Inc. and its Driftwood LNG development opportunity on the Louisiana Gulf Coast. Woodside also announced that it had renamed the development opportunity Woodside Louisiana LNG, which is an under-construction, pre-FID, LNG production and export terminal, with a total permitted capacity of 27.6 million tonnes per year. Woodside is targeting FID readiness from the first quarter of 2025, according to the announcement.
• Two Republican Texas U.S. Senators announced on 27 September 2024 that they had introduced the Protect LNG Act. The legislation ensures that a court cannot vacate a previously authorized LNG permit, clarifies the venue for LNG lawsuits before federal courts, and mandates that courts grant expedited decisions in relevant cases.
• Engineering companies KBR and Technip Energies respectively announced on 19 September 2024 that KTJV joint venture had been selected by Lake Charles LNG Export Company, a subsidiary of Energy Transfer LP, for its Lake Charles LNG transformation project. KTJV will provide EPC services subject to Lake Charles LNG's decision to issue a notice to proceed for the project. The project would transform Energy Transfer's existing import facility into an LNG export facility.
• Honeywell announced on 30 September 2024 the completion of its acquisition of Air Products' LNG process technology and equipment business. Honeywell says its full-service solution provides customers a holistic offering that encompasses natural gas pre-treatment, state-of-the-art liquefaction and digital automation technologies unified under the Honeywell Forge and Experion platforms, as well as the addition of Air Products' coil-wound heat exchangers (CWHE) technology.
• Chesapeake Energy Corporation and Southwestern Energy Company announced on 26 September 2024 that the waiting period in connection with the companies' pending combination under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act) had expired. Upon closing, the combined company will be the largest natural gas producer in the United States and assume the name Expand Energy Corporation.
• Sempra Infrastructure, on behalf of ECA Liquefaction, S. de R.L. de C.V., submitted the semi-annual report to DOE on 1 October 2024. According to the report, ECA Liquefaction is targeting the commencement of commercial operations in spring 2026, pushing back from summer 2025 in the previous report. Sempra's 2Q 2024 report on 6 August had included an update of the ECA project, including ECA LNG Phase 1 progress of 85% completion; Steel construction completion and focus on above-ground piping (65% complete); and COD (commercial operations date) expected spring 2026 with the new schedule driven by contractor labour retention and productivity issues.

 

European and surrounding regions

• Britain's National Grid operated Grain LNG terminal announced on 9 October 2024 that the methane emissions performance of its operations had been verified by MiQ. Graded a 'B' by MiQ, Grain LNG is the first LNG port in the world to receive MiQ's accreditation and is the first facility outside of North America. The certification will enable buyers of LNG to choose cargoes based upon methane emissions profile thanks to the third-party audited verification of emissions at Grain LNG. MiQ has certified the methane emissions of 20% of natural gas production in the United States, and through its pioneering Supply Chain Protocol, can provide natural gas buyers with a credible estimate of emissions from LNG for the first time, according to the announcement.
• Greece's Gastrade announced on 1 October 2024 that the Alexandroupolis LNG Terminal had entered commercial operations. According to the announcement, 14 Greek and international companies are participating commercially in the project, committing almost all of the terminal's capacity until at least 2030.
• The government of the United Kingdom (Foreign, Commonwealth & Development Office) announced on 26 September 2024 that the United Kingdom had sanctioned 5 ships and 2 entities involved in the shipping of Russian LNG, including from the Arctic LNG 2 project. The United Kingdom has now sanctioned 15 vessels and entities involved in the Russian LNG sector.

 

Other regions

• McDermott announced on 3 October 2024 that the company had been awarded an EPCI contract by QatarEnergy LNG for the North Field South (NFS) Offshore Pipelines and Cables Project. The new contract is in addition to the awards received by McDermott earlier for the NFS Pipelines FEED, the NFS Jackets EPCI, and the NFXP Topsides and Pipelines which included the NFS Topsides. The NFS infrastructure is designed to supply feed gas for two additional LNG trains and is part of the North Field Expansion Project (NFXP). The scope of the contract comprises EPCI of almost 250 kilometers of gas pipelines connecting five new offshore wellhead platforms with two new onshore LNG trains in addition to subsea composite power and control cables.
• Oman LNG L.L.C. said on 9 October 2024 that it had signed a 4-year contract with Kansai Electric Power starting in 2026. The contract secures 0.4 million tonnes per year.
• Netherlands' Dixstone revealed in late September 2024 that it had been awarded an EPC service for an LNG project in Cap Lopez, GABON. The project is a nearshore LNG facility that will produce 0.7 million tonnes per year of LNG and 25,000 tonnes of LPG per year (phase 1). Dixstone plans construction of the liquefaction barge in Dubai.
• TotalEnergies' "2024 Strategy and Outlook" presentation on 2 October indicated the schedule of the company's LNG projects including Mozambique LNG targeting its first LNG in 2029.
• JGC Holdings Corporation and Technip Energies announced on 25 September 2024 that JGC Corporation and Technip Energies had been awarded the FEED contract by ExxonMobil - on behalf of Mozambique Rovuma Venture (MRV), a joint venture of ExxonMobil, Eni, and CNPC - for the Rovuma LNG project in Northeast Mozambique. The project will consist of an LNG plant with a total production capacity of 18 million tonnes per year. The plant design will feature electric-driven LNG trains. It will also include prefabricated and standardized modules to be assembled at the project site.
• McDermott announced on 30 September 2024 that the company, through a consortium with Saipem and China Petroleum Engineering and Construction Corporation, had been awarded a FEED contract for the Rovuma LNG Phase 1 Project in Mozambique, a joint venture between ExxonMobil Development Africa B.V., Eni S.p.A. and CNODC Dutch Cooperatief U.A. The project includes liquefaction and export of natural gas extracted from the Offshore Area 4 fields off the Afungi Peninsula in Mozambique. The FEED contract scope of work includes the modular design of a greenfield LNG production facility in Afungi, all associated gas pre-treatment units and the utilities and offsite systems to support the LNG production. The plant will have an overall production capacity of 18 million tonnes per year. The scope of work also includes the EPC proposal.
• Eni announced on 6 October 2024 that Eni and JOGMEC signed an MOC (Memorandum of Cooperation) with the aim of collaborating in the gas and LNG field to increase diversification of supply sources. The Memorandum aims to promote the role of gas and LNG in the energy transition pathway, emphasizing the importance of achieving carbon neutrality in the context of economic growth and the protection of energy security, including LNG supply opportunities by Eni to the country and the support of Japanese financial institutions to the Coral North project in Mozambique. Eni also supports the CLEAN initiative.
• KBR announced on 14 October 2024 that it had been awarded an engineering and procurement services contract for the Beachfield Manatee upgrade, the onshore portion of the Manatee gas field project. The Manatee gas field provides gas for the country's Atlantic LNG facility. The award follows recently completed contracts under which KBR delivered the FEED across the whole of the Manatee project.

 

(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)