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 on upward trend despite of weak demand by high inventories in Northeast Asian countries. The trend was due to lower temperatures toward winter, and JKM reached USD 14s on 18 November. Then the rising tensions between Russia and Ukraine pushed the price up to USD 15s in the second half of the month.
• 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 91,190 per tonne in October 2024. The USD price in October was almost the same as in August and September, as Japan’s average landed crude oil import price in July was almost the same as in May and June. The average landed prices of LNG in Japan from the United States, the ASEAN region, the Middle East, and Russia in October were USD 10.93, USD 12.13, USD 12.14, and USD 12.29, respectively. Elsewhere in Northeast Asia, average import prices in October were USD 11.44 in China, USD 12.42 in Korea, and USD 11.52 in Chinese Taipei. Japan’s average landed crude oil import price (JCC: Japan crude cocktail) was USD 80.09 per barrel and JPY 73,473 per kilolitre in October 2024.
• Japan imported 5.29 million tonnes of LNG in October 2024, 2.2% lower than the same month of 2023. China imported 6.55 million tonnes of LNG in October 2024, an increase of 28.0% from the same month of 2023. Korea imported 4.46 million tonnes of LNG in October 2024, 31.4% higher than the same month of 2023, and Chinese Taipei imported 1.84 million tonnes, 13.6% higher than one year earlier.

United States

• The Henry Hub Natural Gas Futures price was in the range of mid and high-USD 2s due to warm weather in the first half of November. However, it rose to USD 3s as heating demand increased due to falling temperatures in U.S. by the end of November.

Europe

• The Dutch TTF Gas Futures price rose earlier this month due to lower wind power output and lower temperatures. In the middle of the month, the price rose to USD 14s after Austrian OMV announced cutting off gas supplies to them from Russia. But supply concerns declined as Russian pipeline gas seemed to keep flowing to Austria. And the withdrawals from European underground gas storage have continued since early November.

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. In November, falling temperatures and rising geopolitical tensions pushed it  to USD 15s, updated its highest in 2024.
• 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 April 2024 stood at 4.71 million tonnes, an increase of 19.3% and 0.76 million tonnes from March, and a decrease of 10.9% from April 2023, higher than the past five-year average by 0.16 million tonnes.
• Japan's LNG inventories as of the end of May 2024 stood at 5.03 million tonnes, an increase of 6.9% and 0.33 million tonnes from April, and a decrease of 10.0% from May 2023, higher than the past five-year average by 0.16 million tonnes.
• Japan's LNG inventories as of the end of June 2024 stood at 5.16 million tonnes, an increase of 2.6% and 0.13 million tonnes from May, and a decrease of 6.0% from June 2023, higher than the past five-year average by 0.30 million tonnes.
• The LNG inventories for city-gas supply as of the end of August 2024 were 2.30 million tonnes, 4.4% lower than July and 5.8% higher than August 2023. LNG consumption for city-gas in August 2024 was 2.27 million tonnes, which decreased by 2.2% year-on-year. City-gas companies received 2.13 million tonnes of LNG in August 2024, increasing year-on-year by 3.2%.
• The LNG inventories for power generation as of the end of April 2024 were 2.60 million tonnes, increasing by 45.7% from March and 3.8% lower than April 2023. LNG consumption for power generation in Apirl 2024 was 2.39 million tonnes, decreasing by 0.7% from April 2023. Power generation companies received 3.56 million tonnes of LNG, increasing year-on-year by 30.9%.
• The LNG inventories for power generation as of the end of May 2024 were 2.59 million tonnes, decreasing by 0.4% from April and 10.3% lower than May 2023. LNG consumption for power generation in May 2024 was 2.34 million tonnes, decreasing by 2.0% from May 2023. Power generation companies received 2.64 million tonnes of LNG, decreasing year-on-year by 5.7%.
• The LNG inventories for power generation as of the end of June 2024 were 2.57 million tonnes, decreasing by 0.9% from May and 10.8% lower than June 2023. LNG consumption for power generation in June 2024 was 2.55 million tonnes, increasing by 0.4% from June 2023. Power generation companies received 2.86 million tonnes of LNG, increasing year-on-year by 1.4%.
• According to the "LNG Inventory for Power Generation" released by the Ministry of Economy, Trade and Industry (METI) on 20 November 2024, major power utilities’ LNG inventories were 2.28 million tonnes as of 17 November. This is higher by 0.12 million tonnes than the end of November 2023 and 0.15 million tonnes above the average of the end of November of the past five years.

United States

• As of 15 November 2024, working gas in underground natural gas storage in the United States was 3.97 Tcf, 4.9% increase from the previous month, according to the U.S. Energy Information Administration (EIA). Gas inventories were 3.7% higher than those at the same time in 2023 and were 243.0 Bcf higher than the past five-year average.

Europe

• As of 23 November 2024, the stored volume of natural gas in European underground storage facilities operated by the Aggregated Gas Storage Inventory (AGSI +) EU member companies was 1008.9 TWh (about 66.74 million tonnes LNG equivalent). The volume was lower than that of one year ago by 9.6% or 107.3 TWh (about 7.10 million tonnes LNG equivalent). The inventories represented 87.9% of the capacity, which was lower than 98.2% on the same day in 2023 and higher than the five-year average of 90.1%. The inventories in Germany, Italy and the Netherlands (which have relatively large storage capacities among the member countries) were 92.5%, 92.8% and 76.7% of their respective capacities.

 

• As of 23 Noember 2024, the stored volume of LNG in European LNG terminals reported by Aggregated LNG Storage Inventory (ALSI) member operators was 3.89 million cubic meters, 29.3% up from the previous month. The inventories were lower than the same day in 2023 by 31.3% and by 25.7% below the five-year average for the same day. The inventories represented 43.1% of the capacity, which was lower than 65.5% on the same day in 2023.

Latest Developments in Major Natural Gas and LNG Projects

Highlights

• In the United States, Corpus Christi Stage 3 and Venture Global Plaquemines projects are on track to start LNG production in 2024, while the Golden Pass LNG project is expected to start production toward the end of 2025. In the Middle East, the Ruwais LNG project in Abu Dhabi has announced its first long-term SPA. In Oman, a FEED contract was announced for the construction of the fourth LNG production train.

 

Asia and Oceania

• TotalEnergies announced on 4 November 2024 the signing of an HoA with Sinopec for 2 million tonnes of LNG per year for 15 years, starting in 2028.
• Mitsui O.S.K. Lines, Ltd. (MOL) announced on 23 October 2024 an agreement with Singapore LNG Corporation on a long-term time charter contract for one newbuilding FSRU. The FSRU will be built at Hanwha Ocean Co., Ltd. in Korea.
• Engineering company Wood Group announced on 24 October 2024 that it had been awarded the FEED contract for the development of Singapore's Second LNG Terminal by Singapore LNG Corporation. The project will feature an FSRU. Wood will review the FSRU design and coordinate its integration into the onshore connecting infrastructure.
• Singapore's Energy Market Authority (EMA) announced on 7 November 2024 that it had signed an MoU with PetroChina International Company Limited to collaborate on strengthening Singapore's expertise and knowledge on LNG supply and management. EMA and PetroChina will explore collaboration opportunities to strengthen each other's LNG supply chains, promote knowledge exchange regarding market dynamics, LNG supply and demand fundamentals, as well as evaluate joint procurement opportunities. EMA and PetroChina will also study cooperation opportunities to support growing Singapore as Asian LNG Hub, gas-to-power and other sustainable development solutions for mutual benefits.
• Malaysia's PETRONAS announced on 13 November 2024 that PETRONAS and CNPC (China National Petroleum Corporation) signed an MoU. The MoU for strategic partnership will strengthen collaboration, among others, in the upstream exploration and production of oil and gas internationally, as well as the LNG value chain.
• Malaysia's Genting Berhad announced on 28 October 2024 that its 95%-owned indirect subsidiary PT Layar Nusantara Gas (PTLNG) entered into an agreement with China National Machinery Import & Export Corporation and Shandong Kerui Energy Development Co. Ltd. for the design, engineering and procurement activities for the onshore gas processing plant, connecting pipelines and supporting facilities for the Genting FLNG Project to be located in West Papua, Indonesia on 23 October 2024. On 28 October, PTLNG also entered into a separate contract for the construction, installation and commissioning of the Midstream Infrastructure with a local Indonesian company called PT China Construction Yangtze River Indonesia. The Midstream Infrastructure is estimated to be completed in 25 months. Once it is completed, it shall be ready to receive raw gas from the Asap, Merah and Kido structures within the concession area of the Kasuri Block in West Papua awarded to Genting Oil Kasuri Pte Ltd, another 95% indirect subsidiary of the Company pursuant to a production sharing contract signed in May 2008 between GOKPL and BP MIGAS, the Indonesian oil and gas regulator (which had since been succeeded by SKK MIGAS). The FLNG vessel which is being constructed by Wison New Energies Co., Ltd. is 32.83% completed as of 26 September 2024.
• bp and the Tangguh production sharing contract partners announced on 21 November 2024 an FID on the Tangguh Ubadari, CCUS, Compression project (UCC), which has the potential to unlock 3 tcf of additional gas resources in Indonesia. The UCC project comprises the Ubadari gas field development, enhanced gas recovery through CCUS and onshore compression. Production at the field is expected to start in 2028.
• Toyo Engineering Corporation announced on 7 November 2024 that Toyo Engineering India Private Limited (Toyo-India) had been awarded the EPC contract for the Topside Facilities of the Third Berth (Jetty) at the Dahej LNG Terminal in Gujarat, India, by Petronet LNG Limited (PLL). The project is scheduled for completion by Q1 2027.
• Crown LNG Holdings Limited announced on 1 November 2024 the conclusion of two acquisition agreements: KGLNG and Grangemouth. KGLNG owns the operating license for the planned LNG import terminal in Kakinada, India. The Grangemouth agreement is to acquire LNG import terminal assets in Grangemouth, Scotland from GBTron Lands Limited.
• Singapore's AG&P LNG announced on 24 October 2024 that it had agreed to acquire Venice Energy, the developer of the LNG import terminal at Outer Harbor in Port Adelaide, South Australia.
• Australia's Woodside announced on 31 October 2024 the completion of the sale of a 15.1% non-operating participating interest in the Scarborough Joint Venture to JERA.
• Papua New Guinea's Kumul Petroleum Holdings Limited (KPHL) announced on 4 November 2024 that it had closed an agreement with Chevron USA Inc (Singapore Branch) that would support KPHL's goal of acquiring additional equity in the PNG LNG Project in Papua New Guinea. In September 2023, Australia's Santos announced a binding sale agreement to deliver Kumul a 2.6% participating interest in the PNG LNG Project for a total purchase consideration comprising cash of USD 602 million and associated project finance debt. Earlier in 2024 Kumul paid USD 352 million to Santos to allow partial completion of the transaction. Chevron will make an advance payment to Kumul Petroleum, in exchange for LNG and condensate cargoes over the next two years. Since the introduction of equity marketing at the start of 2024, KPHL has sold 4 LNG cargoes on the spot market and this term-sale will provide more security for KPHL, according to the announcement.
• Australia's Santos announced on 19 November 2024 completion of the Angore project in PNG's Hela Province. The project is expected to deliver up to 0.350 bcf per day of gas to PNG LNG production. According to the announcement, the supply of associated gas from Kutubu through optimisation of the Central Processing Facility is exceeding expectations with 16 bcf of gas accelerated so far in 2024. The partners are working to make the Agogo and Moran development FID (final investment decision) ready by 2026, which could add associated gas at least another 0.125 bcf per day. The partners are drilling the Hides Footwall exploration well that, if successful, could deliver up to another 0.160 bcf per day.

 

North America

• EPA (U.S. Environmental Protection Agency) announced on 12 November 2024 a final rule to reduce methane emissions from the oil and gas sector. The rule facilitates implementation of Congress's directive in the Inflation Reduction Act to collect a Waste Emissions Charge to better ensure valuable natural gas reaches the market rather than polluting the air. Congress established the charge on large emitters of methane if their emissions exceed specific performance levels and directed EPA to collect the charge and implement other features of the program, including providing appropriate exemptions for actions that reduce methane releases.
• DOE announced on 13 November 2024 that DOE and EPA, in response to the European Union (EU)'s new regulations requiring documentation of reduced methane emissions for fossil fuels produced in, or imported to, the EU, sent a letter addressed to the European Commission, requesting determination of "equivalency" for exports of LNG from the United States to Europe.
• DOE plans to complete its study on LNG export by the end of 2024, according to the Energy Secretary on 15 November. She did not say anything on the public comment period, nor whether the study would be published upon completion. "The study . . . will speak for itself. . ." "Obviously we won't be there to implement based upon the study, so we will have to see how it is viewed by the next administration."
• U.S. Congress House Energy and Commerce Committee lawmakers sent a letter on 15 November 2024 to DOE Secretary demanding the agency stop "rushing to prematurely release its anti- LNG study, which aims to hamstring the incoming Presidential administration". The letter also calls for DOE to lift the pause on LNG exports, "which was a politically motivated decision by the Biden administration to appease radical environmental activists".
• In the company's financial results for the third quarter 2024 on 31 October, Cheniere Energy, Inc. said that first LNG production from the first train of the CCL Stage 3 Project was expected to be achieved by the end of 2024. The project consists of seven midscale Trains with an expected total production capacity of over 10 million tonnes per year. The project was 67.8% complete as of 30 September 2024 with expected substantial completion between 1H 2025 and 2H 2026.
• Cheniere Energy, Inc. announced on 30 October 2024 that it had set a voluntary, measurement-informed Scope 1 annual methane intensity target for its liquefaction facilities. The company claims that the Scope 1 methane target is consistent with the requirements to achieve Gold Standard under Cheniere's membership in the OGMP 2.0 (Oil & Gas Methane Partnership 2.0).
• Cheniere Energy, Inc. announced on 12 November 2024 the publication of an updated life cycle assessment (LCA) study for GHG emissions intensities of the company's LNG. The study leverages the company's multi-year Quantification, Monitoring, Reporting and Verification (QMRV) program by integrating measurement data from the company's facilities and collaborations with natural gas producers, midstream providers, shippers and experts at leading academic institutions.
• FERC issued a letter on 24 October 2024 to Golden Pass LNG Terminal, LLC granting the company's request of 28 August for an extension of time to 30 November 2029 to complete construction. The project had also requested to DOE that its deadline for first LNG exports be extended to 2027.
• FERC issued on 21 November 2024 a letter to Venture Global Plaquemines LNG, LLC granting the company's request to commission and introduce hazardous fluid to Liquefaction Block 1.
• Texas LNG Brownsville LLC announced on 4 November 2024 that it had selected Kiewit, through its subsidiaries Kiewit Engineering Group Inc. and Kiewit Energy Group Inc., to lead the EPC of Texas LNG under a lump-sum turnkey (LSTK) structure.
• Kimmeridge-backed Commonwealth LNG and Kimmeridge Texas Gas (KTG) announced on 1 November 2024 a commitment to obtain independent certification of their natural gas operations under the protocols developed by MiQ. The companies claim that the initiative supports Kimmeridge's innovative ability to deliver a "wellhead-to-water" net zero cargo for Scope 1 and 2 GHG using Kimmeridge's secured LNG offtake from Commonwealth's facility.
• Sapphire Gas Solutions announced on 28 October 2024 that it had received approval from DOE to export LNG through 2050. The approval allows Sapphire to export up to 51.75 billion cubic feet (Bcf) (1 million tonnes) per year of LNG to FTA and non-FTA countries.
• Vitol Inc. announced on 30 October 2024 the execution of a natural gas SPA with Coterra Energy. Coterra will supply 100,000 million Btu/d of natural gas (equivalent of approximately .7 million tonnes of LNG per year) to Vitol with the purchase price indexed to JKM for 11 years beginning in 2027.
• Centrica LNG announced on 30 October 2024 the execution of two natural gas SPAs with Coterra Energy. Coterra will supply 100,000 million btu/d of natural gas linked to European gas prices such as TTF and NBP, for 10 years commencing in 2028.
• Canada's TC Energy said on 19 November 2024 that Coastal GasLink LP had executed a commercial agreement with LNG Canada and CGL customers that declares pipeline commercial in-service for the pipeline, allowing for the collection of tolls from customers retroactive to 1 October 2024. According to the announcement, LNG Canada remains on track to deliver first cargoes by the middle of 2025.
• Trafigura announced on 8 November 2024 that the company had signed a long-term natural gas agreement with NuVista Energy Ltd., a producer of condensate-rich natural gas in the Montney formation in the Alberta Deep Basin, Canada. NuVista will supply 21,000 million btu/d (149 thousand tonnes per year equivalent) of natural gas to Trafigura with the purchase price indexed to JKM for a period of up to thirteen years from January 2027.

 

European and surrounding regions

• ConocoPhillips announced on 25 October 2024 the signing of a 10-year natural gas agreement with EDF Trading.
• Germany's SEFE (Securing Energy for Europe) announced on 23 October 2024 that the company and ConocoPhillips had entered into a long-term natural gas agreement, under which first gas deliveries had been completed. Over the next ten years, ConocoPhillips will deliver up to 9 bcm of natural gas from its portfolio to SEFE at trading hubs across Europe. ConocoPhillips has a supply portfolio including Norwegian natural gas production and LNG imports.
• According to the company's notice on 31 October 2024, in light of the strengthening of sanctions from the United States and Europe, Mitsui O.S.K. Lines (MOL) needs to modify the contract schemes of the charter contract of the three LNG carriers and one condensate tanker with ice-breaking capabilities, which is part of the company's Russia-related business, and has started negotiation with the relevant parties.
• OFAC (U.S. Department of the Treasury's Office of Foreign Assets Control) announced on 21 November 2024 sanctions targeting Gazprombank, as well as dozens of other financial institutions and officials in Russia. Transactions related to the maritime transport of crude oil originating from the Sakhalin-2 project are authorized through June 2025, provided that the Sakalin-2 byproduct is solely for importation into Japan. Transactions related to the Sakhalin-2 project, including such transactions involving Sakhalin Energy LLC, are authorized through June 2025.

 

Other regions

• Abu Dhabi's ADNOC and Germany's SEFE announced on 6 November 2024 the signing of the first long-term SPA for the Ruwais LNG project, which is under development in Abu Dhabi. The SPA converts the previous HoA announced in March into a definitive agreement. The LNG under the 15-year, 1 million tonnes per year SPA will primarily be sourced from the Ruwais LNG project, with deliveries expected to start in 2028 upon commencement of its commercial operations.
• Abu Dhabi's ADNOC Gas announced on 11 November 2024 that it would acquire ADNOC's 60% stake in the Ruwais Liquified Natural Gas (LNG) plant in the second half of 2028 at cost - estimated to be around USD 5 billion. On behalf of the ADNOC Group, ADNOC Gas is managing the construction and design of Ruwais LNG, as well as leading the marketing of LNG volumes. The first of the plant's two trains is expected to come on stream in H2 2028 and the second in early 2029.
• GAIL (India) Limited and Abu Dhabi's ADNOC Gas announced on 14 November 2024 a 10-year SPA for up to 0.52 million tonnes per year of LNG starting in 2026. This is the first SPA of ADNOC Gas with an Indian buyer. The LNG will be delivered in six cargoes per year from ADNOC Gas' Das Island natural gas facility.
• KBR announced on 7 November 2024 it had been awarded a FEED contract for the expansion of the Qalhat LNG complex in Oman. KBR will provide engineering services for the complex's fourth LNG train, which will have a capacity of 3.8 million tonnes per year. The project will involve the addition or expansion of utilities, an LNG tank, the jetty, and associated infrastructure.
• GTT announced on 21 October 2024 that it had been awarded a service contract with Coral FLNG for Eni's Coral Sul FLNG barge. The FLNG is located off the coast of Mozambique with a production capacity of 3.4 million tonnes of LNG per year and a storage capacity of 238,700 m3 and equipped with the Mark III membrane containment system.
• Golar LNG said on 12 November 2024 that the COD (Commercial Operations Date) of the FLNG Gimi was expected within 1H 2025. In October 2024 the LNG carrier British Sponsor started to introduce gas to the FLNG Gimi. FLNG commissioning will continue to utilize gas from the accelerated commissioning cargo until the bp FPSO is ready to send gas to the FLNG Gimi.
• MidOcean Energy, managed by EIG, announced on 24 October 2024 the completion of its previously announced agreement to acquire an additional 15% interest in Peru LNG from Hunt Oil Company. MidOcean's interest in PLNG now stands at 35%. Hunt will remain the operator of PLNG.
• Italy's Eni announced on 15 November 2024 that it had been awarded "Gold Standard reporting" of OGMP 2.0 for its commitment to reporting emissions at the highest data quality levels.

 

(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)