United States LNG Exports Reach Third Place

[ronwagn + 6,290]

7 hours ago, NickW said:

Sorry to disappoint but Russia is going down the wind and solar path. As the cost of wind and solar tech has fallen its made deployment more viable aided by relatively low labour costs. 

Russia's first commercial wind farm online | Windpower Monthly

A 60 MW wind farm in Northern Russia by 2020 – Eurasia Network

Five wind projects in Russia to be powered by Vestas turbines (nsenergybusiness.com)

Five solar projects planned in Russian Far East – pv magazine International (pv-magazine.com)

Hevel plans Russia's largest solar-plus-storage system | Energy Storage News (energy-storage.news)

 

Infact 100km2 of floating solar on the Caspian sea would generate about 2000 Twh. Before you say anything Azerbijan are already building pilot plants

Hevel plans Russia's largest solar-plus-storage system | Energy Storage News (energy-storage.news)

So, they are just starting now. They should just use their natural gas anyway. I just criticize their hypocrisy in opposing fracking for decades. You know why. 

[Enthalpic + 1,496]

9 hours ago, ronwagn said:

I did object and I objected to bailing out the banks.  I do object to electric car subsidies. Let them compete with natural gas vehicles on an even playing field. 

Keep fighting for natural gas Ron.  Its actually not bad as far as fossil fuels go. Be well

 

 

 

[Boat + 1,323]

22 minutes ago, Enthalpic said:

Keep fighting for natural gas Ron.  Its actually not bad as far as fossil fuels go. Be well

 

 

 

Enthalpic, In my opinion your comments are just fine as is Wards. This is what free speech is all about. Saying Democracy is messy has been this way since it’s inception. I personally have a pretty thick skin since taking a debate class in high school. In that case your required to successfully argue both sides of an issue. It takes research and time and in my case individual opinion vrs the spin by both political parties. Take some time to think before you  decide to leave. 
We’re human so it’s hard not to get caught up with people instead of perusing ideas your pasitionate about. But like you said, who wants an echo chamber. Good luck no matter what you decide. 

[NickW + 2,714]

12 hours ago, ronwagn said:

So, they are just starting now. They should just use their natural gas anyway. I just criticize their hypocrisy in opposing fracking for decades. You know why. 

I don't agree with that interference either. Its up to each country to determine whether or not fracking is suitable in their location. Consideration of the impact on Russian, US, Qatari exports is irrelevant. 

Perhaps Russia wishes to preserve its biggest export earner by utilising more renewables at home? 

[Tom Nolan + 2,443]

Tom Nolan here.  The following two articles are too long to post details which delineate mechanisms at play.  They are worth viewing if you have skin in the game.

Arctic outbreaks, major snowstorms may unfold thanks to polar vortex

https://www.yahoo.com/news/arctic-outbreaks-major-winter-storms-173400498.html

EXCERPTS

Changes are taking place in the atmosphere above the Arctic Circle that suggest the clock is ticking on the mild weather -- for January standards -- gripping much of the United States. Forecasters say signs are pointing toward cold air outbreaks that will begin during the third week of January. At the same time, an active storm track is likely to continue in the South and along the East Coast -- and the combination could spell more chances for snowfall in the coming weeks.

AccuWeather long-range meteorologists have been keeping tabs on the polar vortex and a high-level part of the atmosphere, known as the stratosphere, for signals on potential Arctic air invasions for several weeks now.

 

How does the polar vortex lead to Arctic outbreaks?

By Alex Sosnowki, AccuWeather senior meteorologist

https://www.accuweather.com/en/winter-weather/how-does-the-polar-vortex-lead-to-arctic-outbreaks/867293#:~:text="Storms can become strong enough,-latitudes%2C" Pastelok explained.

EXCERPTS

"For the winter of 2020-21, research and teleconnections told us that the polar vortex would be rather strong through midwinter, which suggests limited intrusions of Arctic air," Pastelok stated.

"There are some signs pointing toward a weakening of the polar vortex toward January with a possible Arctic discharge," Pastelok explained. But, he added, a weakening of the polar vortex is more likely to happen late in the winter, which could spell cold weather outbreaks in March.

Earlier in 2020, the polar vortex dipped down over northeastern Canada in April, causing Easter in many parts of the U.S. to look more like Christmas.

And back in 2018, fierce cold gripped portions of the Midwest and East under the influence of the polar vortex. The intense cold turned deadly as thousands faced power outages amid the extreme cold, which was brutal enough to threaten frostbite in a matter of minutes. Flights were canceled in major cities like Chicago and Minneapolis as the deep freeze shattered record lows -- some of which had stood since the 1800s.

 

 

[Tom Nolan + 2,443]

Rising LNG Prices Welcome News For U.S. Exporters

By Tsvetana Paraskova - Jan 06, 2021, 5:00 PM CST

https://oilprice.com/Energy/Natural-Gas/Rising-LNG-Prices-Welcome-News-For-US-Exporters.html

Recovering demand for liquefied natural gas (LNG) and the strongest spot LNG prices in more than half a decade are set to encourage more U.S. exports of LNG this year.   The economics of U.S. LNG exports are looking attractive again, with the U.S. benchmark Henry Hub prices well below the spot prices in Asia, incentivizing additional exports out of the United States. 

U.S. LNG export capacity rose in 2020 and is set to further increase this year, while high global prices this winter season and a quicker-than-expected recovery in global natural gas demand are driving a surge in U.S. exports of LNG. 

American developers of export terminals are now optimistic about the market opportunities of their projects under development, with spot LNG prices much higher than last winter. 

LNG Prices Hit Six-Year High 

Last month, LNG spot prices for January delivery in Asia jumped to a six-year high as lower-than-normal temperatures in key LNG importers and continued growth in China’s industrial activity boosted demand. Spot LNG prices jumped to over $12 per million British thermal units (mmBtu) as a cold snap in parts of the major LNG importers Japan, China, and South Korea raised the demand for electricity and heating. The prices of LNG in Asia had recovered from less than $2/mmBtu in the spring of 2020 when the winter heating season had already ended, and the pandemic created a massive oversupply of LNG globally as lockdowns heavily depressed demand for natural gas.  Recent unplanned supply issues at major exporters, including Qatar, Australia, and Norway, were also driving LNG prices higher. 

At the start of 2021, a cold snap in Asia and Western Europe continued to drive natural gas and LNG prices higher, making U.S. LNG exports even more profitable.  

U.S. LNG Exports Set New Record

American LNG exports are now set to beat the recent record from November 2020, when U.S. LNG outflows hit an all-time high due to recovering global gas demand and prices and unplanned outages at LNG export facilities outside the United States. According to EIA estimates, the United States exported a total of 9.4 billion cubic feet per day (Bcf/d) of LNG in November 2020, beating the previous record set in January 2020, when exports totaled 8.1 Bcf/d. 

The rebound in Asian gas and LNG demand in recent months has changed the immediate outlook for U.S. exports, Ed Crooks, Vice-Chair, Americas, at Wood Mackenzie said last month.  

In the spring of 2020, when demand for natural gas across the world plunged due to the pandemic, buyers began to cancel cargo loadings of U.S. LNG, as gas in storage from Europe to Asia was abundant after a milder winter and the coronavirus that wiped out a lot of previously expected demand. 

“Now that position has reversed completely, with the rise in LNG prices driving a surge in US exports,” WoodMac’s Crooks said. 

In 2020, the United States added capacity to export an additional 2 Bcf/d, with new trains at the Freeport, Cameron, and Corpus Christi plants entering service, and Elba Island starting full commercial operations. 

“And with US Henry Hub benchmark gas down at around $2.60 per million BTU, the economics of exports look attractive again,” Crooks noted. 

Feedgas deliveries to U.S. terminals hit new record highs and were running in December at about 11.2 bcf/d, easily surpassing the previous high point of 9.5 bcf/d in March, according to Wood Mackenzie. 

Recovering Demand Encourages U.S. LNG Developers 

Higher LNG prices and growing LNG demand, which is recovering from an early 2020 flop, instill confidence among developers of U.S. export projects along the U.S. Gulf Coast. 

The rebound in Asian gas and LNG demand in recent months has changed the immediate outlook for U.S. exports, Ed Crooks, Vice-Chair, Americas, at Wood Mackenzie said last month.  

In the spring of 2020, when demand for natural gas across the world plunged due to the pandemic, buyers began to cancel cargo loadings of U.S. LNG, as gas in storage from Europe to Asia was abundant after a milder winter and the coronavirus that wiped out a lot of previously expected demand. 

“Now that position has reversed completely, with the rise in LNG prices driving a surge in US exports,” WoodMac’s Crooks said. 

In 2020, the United States added capacity to export an additional 2 Bcf/d, with new trains at the Freeport, Cameron, and Corpus Christi plants entering service, and Elba Island starting full commercial operations. 

“And with US Henry Hub benchmark gas down at around $2.60 per million BTU, the economics of exports look attractive again,” Crooks noted. 

Feedgas deliveries to U.S. terminals hit new record highs and were running in December at about 11.2 bcf/d, easily surpassing the previous high point of 9.5 bcf/d in March, according to Wood Mackenzie. 

Recovering Demand Encourages U.S. LNG Developers 

Higher LNG prices and growing LNG demand, which is recovering from an early 2020 flop, instill confidence among developers of U.S. export projects along the U.S. Gulf Coast. 

enture Global LNG is ahead of its construction schedule for the Calcasieu Pass LNG export facility in Cameron Parish, Louisiana, while it also expects that cargoes from its second Louisiana project, Plaquemines LNG, will be fully contracted by the middle of 2021, Venture Global LNG’s chief executive Mike Sabel told Bloomberg TV in the middle of December. 

Also in mid-December, Tellurian’s chairman Charif Souki said in a video posted by the company that the LNG market had become undersupplied in the latter part of 2020, and even European LNG prices are now at least $5/mmBtu for the whole of 2021.

“Structurally, Europe, instead of being a destination of last resort, has become a buyer in its own right,” Souki said. 

The very high LNG prices globally are now structurally here for at least the winter seasons, Tellurian’s executive said. 

“The value of our business proposition, providing very low-cost gas, is more evident than ever,” Souki noted. 

Global exports of LNG could grow by 6-7 percent in 2021, according to the first Annual Short Term Gas Market Report 2020 of the Gas Exporting Countries Forum (GECF), an organization of countries representing 60 percent of the world’s LNG exports and including major gas exporters such as Russia and Qatar. 

LNG Markets to Tighten In Medium Term 

In 2020, a total of 2 Mtpa of new LNG capacity began operations for export to the global market, and all this capacity came from the United States. A total of 2.4 Mtpa of new LNG capacity globally are expected to begin operations in 2021, mostly from the United States, as well as from two projects from GECF members Russia and Malaysia, GECF said in its report.  

“We expect the global LNG market to tighten between 2022 and 2024 as global demand continues to increase, while the growth in LNG supplies slows in the short to medium-term. The tightening of the LNG market is expected to support a recovery in prices during this period,” said GECF. 

Growing LNG demand, higher prices, and increased export capacity are set to further boost U.S. exports of LNG in coming years. 

By Tsvetana Paraskova for Oilprice.com

[Tom Nolan + 2,443]

Bloomberg via Yahoo on Jan 6th - Wed

Winter Is Colder This Year and That’s Good for Energy Prices

https://finance.yahoo.com/news/winter-colder-boost-energy-prices-020050248.html

(Bloomberg) -- Freezing weather that’s gripped large parts of the northern hemisphere is delivering a winter blessing for oil, gas and coal prices as suppliers meet a surge in heating demand.

Temperatures across much of Europe and Asia are well below normal and forecasters expect them to stay there for most of January. The chill is supporting oil prices, which are holding above $50 a barrel, while the profit from turning crude into diesel climbed in Europe to the most since August in recent weeks as consumers -- many stuck working from home because of a resurgent virus -- burn more heating fuel.

The weather is especially severe in northeast Asia. In Japan, a major refiner said December demand was expected to be 7% ahead of last year, and South Korea last week considered a plan to tap state reserves to meet soaring consumption. In China, heating demand has so stretched power supply, factories have bought diesel generators to keep the lights on.

Beyond oil, colder temperatures in Asia have depleted natural gas inventories, resulting in a spot deal above benchmark records this week, and thermal coal in China has also surged as the cold snap has intensified an existing power crunch.

“Winter weather is going to provide a huge boost to heating demand in the residential and commercial sectors,” said Edmund Siau, a Singapore-based analyst at energy consultant FGE.

It’s a very different picture to a year ago, when Europe had its hottest winter on record and North Asia enjoyed milder temperatures. By some estimates that shaved 800,000 barrels a day, or almost 1%, from global oil demand last January, a month when Asian liquefied natural gas prices slumped.

China’s cold wave saw the December average temperature fall to the lowest since 2013, and the country’s Meteorological Administration has warned of a further sharp drop in eastern areas in coming days. European capitals are also shivering, with temperatures in London more than 5 degrees Celsius below average, and 6 degrees below the 30-year normal in Madrid, according to Maxar.

Power consumption in China -- where the economy has roared back from the coronavirus pandemic -- increased by 11% in December, more than double the growth in the same month a year earlier, according to the National Development and Reform Commission.

LNG is selling near record levels in North Asia as the rising demand outstrips available supplies, while deliveries of the fuel to Asia jumped by almost 9% in December compared to last year, according to ship-tracking data compiled by Bloomberg. Last month, China’s largest importers of the fuel sent notices to customers warning of tightening supplies amid record-setting withdrawals from gas storage sites.

“Colder temperatures are proving supportive for LNG prices in Asia, at a time when prices have already trended higher next to a global oil price rebound and tight supplies,” said Peter Lee, a senior oil and gas analyst at Fitch Solutions. While prices will retreat as seasonal demand eases, there’s a bullish outlook through 2021 on a post-pandemic recovery and as green energy policies improve adoption of the fuel across industries, he said.

European gas prices jumped to the highest level since January 2019 earlier this week and the fuel is being taken from storage facilities at a faster pace, according to data from Gas Infrastructure Europe. Storage levels in Germany, Europe’s biggest gas consumer, slipped to the lowest since the winter of 2016-17 and will likely mean there’s also higher demand in the northern summer to replenish the stocks.

Higher power demand in China, coupled with safety problems in mining regions and import curbs, has also seen thermal coal prices surge to record highs, while some factory owners have turned to diesel generators after grid operators rationed electricity to industrial and commercial users to ensure sufficient supplies for homes. Chinese wholesale diesel prices rose late last month to the highest level since April, according to data from the country’s National Bureau of Statistics.

In Japan, spot power prices hit a historic high for the fifth straight day Wednesday amid strong demand and as utilities were forced to curb generation at gas-fired power plants due to lower-than-normal inventories.

Bigger-than-anticipated gas demand has forced Asia’s biggest top buyers, including Korea Gas Corp. and Japan’s Jera Co., to seek prompt supplies.

Japan’s biggest refiner ENEOS, last month said demand for kerosene -- a major home heating fuel in some parts of Asia -- would jump as a direct result of the colder-than-normal weather. Kerosene is very similar to jet fuel, providing a salve to a corner of the oil market most affected by the virus: commercial aviation.

To be sure, there’s a different outlook in the U.S., where current mild weather across the northeast, which accounts for the vast majority of the nation’s heating oil consumption, is limiting demand. Supply is also being swelled as refiners put jet fuel into the distillates pool.

U.S. natural gas prices have plunged about 20% since peaking on Oct. 30, making the fuel the worst performer among major commodities as hopes for a frigid winter faded. Heating demand has trailed long-term averages in eight of the past 10 weeks, according to data published by the National Oceanic and Atmospheric Administration’s National Weather Service, leading traders to slash their bullish gas bets on the New York Mercantile Exchange.

 

[Tom Nolan + 2,443]

Northeast Braces For "High Impact" Snowstorms

by Tyler Durden

Wednesday, Jan 06, 2021 - 17:50

https://www.zerohedge.com/commodities/weather-models-suggest-wintry-pattern-ahead-northeast

Weather models are beginning to show around Jan. 15 and beyond, the possibility of "high impact cold and storminess across eastern US and Canada," said The Weather Network's Ethan Sacoransky. 

Meteorologists at BAMWX also agree with the increased probability of winter storms after "Jan. 15" from the Ohio Valley into the Northeast. 

"The pattern is very quiet right now overall for the central to the eastern US...however, we are starting to see a change in the forecast atmospheric pattern drivers ahead that *could* lead to a more favorable pattern for wintry risks beyond Jan ~15th. Stay tuned!" said BAMWX's Kirk Hinz. 

Breaking down the risk for more wintery weather, BAMWX shows Jan. 13 to Jan. 20 is a timeframe when increased probabilities of snowstorms from Ohio Valley, Mid Atlantic, and Northeast areas could materialize. 

Earlier this week, natural gas February Nymex contracts soared due to colder weather trends and increased heating demand forecasted for the next ten days. 

While nothing is set in stone and models can certainly change, keep an eye out for the possibility of winter weather returning to the Northeast within the next couple of weeks. 

[Tom Nolan + 2,443]

ProShares Ultra Bloomberg Natural Gas (BOIL)

https://finance.yahoo.com/quote/BOIL?p=BOIL

~~~~~~~~~~~~~~~~~

ProShares UltraShort Bloomberg Natural Gas (KOLD)

https://finance.yahoo.com/quote/KOLD?p=KOLD

~~~~~~~~~~~~~~~~~~~

Natural Gas Prices LIVE CHART -  https://tradingeconomics.com/commodity/natural-gas

or here

https://oilprice.com/oil-price-charts/51

[Coffeeguyzz + 454]

Ghana just started operations with its Gas To Power project at Tema with an FSRU providing fuel to local power plants.

Relatively small set up, but still looking to import 1.7 mtpa in LNG.

The new  Sergipe plant in Brazil, at 1,500 Mw is currently the largest thermal plant in South America, but when the GNA 1 comes online shortly (1,300 Mw) and is joined by GNA 2 in 2 years' time (1,700  Mw), the GNA project will become the biggest.

When GNA 3 and 4 are completed, the total output will be ~6,500 Mw.

All these plants are Combined Cycle, fueled by LNG which is provided via FSRUs.

 

The revolution in natgas fueled energy projects, especially power plants supplied by Floating Storage and Regasification Units, continues to gain momentum.

Golar is attempting to broaden gas consumption in northeast Brazil (Barcarena) and southern Brazil (Santa Caterina) to supply aluminum smelters and fertilizer plants with economical natty.

Vietnam is engaged in a massive electrification buildout that includes  ~15,000 Mw in new CCGPs which, for now, are set to employ FSRUs.

[Tom Nolan + 2,443]

The Future For Natural Gas Is Far From Certain

By David Messler - Jan 07, 2021, 7:00 PM CST

https://oilprice.com/Energy/Natural-Gas/The-Future-For-Natural-Gas-Is-Far-From-Certain.html

[LONG ARTICLE WHICH COVERS A VARIETY OF ASPECTS]

EXCERPT bottom paragraphs...

Your takeaway

Natural gas, while it is often seen as a bridge fuel to a cleaner energy future, faces challenges on a couple of key fronts. First, the productivity of new gas wells is so high that even the drastically reduced drilling now taking place in the U.S. is delivering new supplies at a rate that nearly equals daily withdrawals. This does not help with the inventory imbalance that carries over from the prior year. Second, tax-advantaged renewable forms of energy, especially wind and solar, are gaining ground at the expense of natural gas, and only cheap prices can slow this trend. I said, slow but not stop.

While natural gas will remain an important source of energy for power generation for decades, current trends do not favor it for year over year growth. Only in the LNG space where gas cannot be replaced does the growth story hold. But, it is doubtful foreign LNG demand can sustain higher prices in this commodity.

With no changes likely in any of these narratives for 2021, I view gas-related stocks as a trading opportunity for sharp-eyed traders willing to keep their eyeballs glued to their computer screens. I cannot make a case for them as a long term investment though.

By David Messler for Oilprice.com

 

[Coffeeguyzz + 454]

Using EIA figures of ~62,000 cubic feet for the average annual US residential natgas consumption ... and

Using the number of 3 residents per household, 1 billion cubic feet can provide heat, cooking, and hot water for almost 50,000 people.

Now, taking just 2 high producing wells from  Chesapeake -  the Deremer 2 HC and Deremer 4 HC, online 13 months with combined production of 27 and 1/2 Billion cubic feet (no typo), these 2 wells can provide for the total residential gas needs for over 1,300,000 people.

 

That is to say, at the production cost of ~$20  million, the residential populations of Cleveland, St. Louis, Pittsburgh, AND Cincinnati can heat, cook, warm water, dry clothes for an entire year.

 

The Ra and Zephyr boys have some tough competition here.

[Tom Nolan + 2,443]

8 hours ago, Coffeeguyzz said:

Using EIA figures of ~62,000 cubic feet for the average annual US residential natgas consumption ... and

Using the number of 3 residents per household, 1 billion cubic feet can provide heat, cooking, and hot water for almost 50,000 people.

Now, taking just 2 high producing wells from  Chesapeake -  the Deremer 2 HC and Deremer 4 HC, online 13 months with combined production of 27 and 1/2 Billion cubic feet (no typo), these 2 wells can provide for the total residential gas needs for over 1,300,000 people.

 

That is to say, at the production cost of ~$20  million, the residential populations of Cleveland, St. Louis, Pittsburgh, AND Cincinnati can heat, cook, warm water, dry clothes for an entire year.

 

The Ra and Zephyr boys have some tough competition here.

The stats tell the story.

[Tom Nolan + 2,443]

Natural Gas Price Fundamental Daily Forecast – Buyers Likely to Return on Test of $2.517 to $2.457

Look for aggressive counter-trend buyers to come in on a test of $2.517 to $2.457. They are going to try to form a secondary higher bottom.

James Hyerczyk

1 hour ago (Jan 08, 2021 12:33 PM GMT)

https://www.fxempire.com/forecasts/article/natural-gas-price-fundamental-daily-forecast-buyers-likely-to-return-on-test-of-2-517-to-2-457-693018

Natural gas futures are trading lower early Friday after posting an inside move the previous session. The price action suggests the nearly two week long short-covering rally may have run out of steam after the government storage report fell short of expectations.

Although prices could weaken over the near-term, they’re not likely to fall apart because the market appears to be well supported by continued strong U.S. liquefied natural gas (LNG) exports and the potential for colder domestic temperatures later in the month and maybe into early February.

At 12:11 GMT, February natural gas futures are trading $2.648, down $0.081 or -2.97%.

One good thing has come out of this week’s move, at least we know where resistance is located on the charts. On Wednesday, the market posted a high at $2.770, just shy of its December 22 top at $2.775.

US Energy Information Administration Weekly Storage Report

U.S. natural gas in storage fell by 130 Bcf last week, according to the EIA. Storage inventories decreased to 3.333 Trillion Cubic Feet (Tcf) for the week-ended January 1. The withdrawal was less than an S&P Global Platts survey of analysts calling for a 13 Bcf pull. Responses to the survey ranged from a 121 to 157 Bcf withdrawal.

The pull was much stronger than the 48 Bcf draw reported during the same week last year as well as the five-year average of 115 Bcf, according to EIA data.

Ahead of the report, Natural Gas Intelligence (NGI) wrote, “A Bloomberg survey found estimates ranging from a pull of 124 Bcf to a decrease of 146 Bcf, with a median forecast for a 138 Bcf decline in stockpiles. A Reuters poll found withdrawal estimates spanning from 118 Bcf to 158 Bcf and a median estimate of a 135 Bcf decline.”

“A Wall Street Journal poll, meanwhile, landed at an average pull of 137 Bcf, though estimates ranged from a decrease of 119 Bcf to a decline of 158 Bcf. NGI modeled a 135 Bcf withdrawal.”

Short-Term Weather Outlook

According to NatGasWeather for January 9-14, “Weather systems with rain & snow will impact the Northwest and Southeast today, although mild with highs of 30s to 50s. Cooler air will spread across much of the U.S. this weekend with highs of 20s to 40s across the northern U.S. and 40s to 60s across the southern U.S., increasing national demand to moderate levels.

However, above normal temperatures will return across much of the U.S. mid-next week with highs of 30s to 50s across the northern U.S. and 50s to 70s across the southern U.S., even though still unsettled over the South and Southeast. Overall, moderate demand this weekend, then back to low next week.”

Daily Forecast

A failure to overcome $2.775 indicates sellers are still in control. Crossing to the weak side of the Fibonacci level at $2.706 indicates the selling pressure may be getting stronger.

If the 50% level at $2.621 fails as support then look for the selling pressure to possibly extend into a retracement zone at $2.517 to $2.457. Trader reaction to this zone could determine the near-term direction of the market.

Look for aggressive counter-trend buyers to come in on a test of $2.517 to $2.457. They are going to try to form a potentially bullish secondary higher bottom.

For a look at all of today’s economic events, check out our economic calendar.

 

[Tom Nolan + 2,443]

Cold Weather In China Sends Coal, Gas Prices Sky-High

By Charles Kennedy - Jan 08, 2021, 10:00 AM CST

https://oilprice.com/Energy/Energy-General/Cold-Weather-In-China-Sends-Coal-Gas-Prices-Sky-High.html

The coldest winter in China since 1966 has sent coal and gas prices soaring as power demand surges.

Gas prices hit a three-year high, Bloomberg reported, while coal prices ticked up by 4 percent this week. Reuters noted that despite record liquefied natural gas imports, the cold spell caused a supply crunch.

China went on an LNG-buying spree last year amid low prices caused by oversupply. Reuters reported last September that imports of the commodity into China were set to hit record-highs that year, at 65-67 million tons. That would set China on course to become the largest importer of LNG by 2022. Meanwhile, due to the cold weather, LNG prices in some parts of China have doubled since late November, Bloomberg noted.

Despite the power crunch, however, China has not budged on its ban on Australian coal—a major fuel source for its coal-powered plants—which resulted as bilateral relations worsened severely last year.

The row erupted when Australia insisted on an international inquiry into the origin of the coronavirus that first appeared in China, which signaled the start of a trade war that has been affecting more and more Australian industries.

Yet the spat is affecting China as well at a time when it needs all the coal and gas it can import—much of it sourced from Australia, which accounts for as much as 40 percent of Chinese LNG imports. As a result, China has been forced to pay much higher prices for the commodities it needs to go through the cold spell.

According to Wood Mac’s head of coal for Asia Rory Simington, China’s demand for coal jumped 12 percent last December from December 2019, the Australian Financial Review reported. This resulted in a sharp increase in coal prices, prompting Beijing to stop publishing daily prices last month.

By Charles Kennedy for Oilprice.com

[Dan Warnick + 6,100]

35 minutes ago, Tom Nolan said:

Cold Weather In China Sends Coal, Gas Prices Sky-High

By Charles Kennedy - Jan 08, 2021, 10:00 AM CST

https://oilprice.com/Energy/Energy-General/Cold-Weather-In-China-Sends-Coal-Gas-Prices-Sky-High.html

The coldest winter in China since 1966 has sent coal and gas prices soaring as power demand surges.

Gas prices hit a three-year high, Bloomberg reported, while coal prices ticked up by 4 percent this week. Reuters noted that despite record liquefied natural gas imports, the cold spell caused a supply crunch.

China went on an LNG-buying spree last year amid low prices caused by oversupply. Reuters reported last September that imports of the commodity into China were set to hit record-highs that year, at 65-67 million tons. That would set China on course to become the largest importer of LNG by 2022. Meanwhile, due to the cold weather, LNG prices in some parts of China have doubled since late November, Bloomberg noted.

Despite the power crunch, however, China has not budged on its ban on Australian coal—a major fuel source for its coal-powered plants—which resulted as bilateral relations worsened severely last year.

The row erupted when Australia insisted on an international inquiry into the origin of the coronavirus that first appeared in China, which signaled the start of a trade war that has been affecting more and more Australian industries.

Yet the spat is affecting China as well at a time when it needs all the coal and gas it can import—much of it sourced from Australia, which accounts for as much as 40 percent of Chinese LNG imports. As a result, China has been forced to pay much higher prices for the commodities it needs to go through the cold spell.

According to Wood Mac’s head of coal for Asia Rory Simington, China’s demand for coal jumped 12 percent last December from December 2019, the Australian Financial Review reported. This resulted in a sharp increase in coal prices, prompting Beijing to stop publishing daily prices last month.

By Charles Kennedy for Oilprice.com

I read earlier today that they were having trouble keeping the heat on in Beijing.  It gets cold in Beijing, especially about 3 o'clock in the afternoon every day when the winds come down off the Gobi desert.  When I lived in Chengdu it got cold, but not Beijing cold.  They are reporting that today the temperatures in Beijing are the lowest in 5 decades, at some minus 19.6 degrees today!  Brrrr.  During the years I lived in Chengdu buildings (except hotels) did not have heat because Chengdu is below the Yangtze river.  We had to scour the city to find a space heater and ended up finding and buying an overpriced (but available!) model that was like an electric radiator filled with oil.  There were only two when I bought the one.  Took a long time to make an impact inside cement walls.  We kept that heater for some years before bugging out.  They tell me that more people, at least in new buildings, have steam heat piped in these days.  That must put a much bigger strain on energy use.  That and the fact that China builds building faster than any place on earth, and they do so continuously, means their energy needs must have gone up tremendously all over the country.

[NickW + 2,714]

4 hours ago, Dan Warnick said:

I read earlier today that they were having trouble keeping the heat on in Beijing.  It gets cold in Beijing, especially about 3 o'clock in the afternoon every day when the winds come down off the Gobi desert.  When I lived in Chengdu it got cold, but not Beijing cold.  They are reporting that today the temperatures in Beijing are the lowest in 5 decades, at some minus 19.6 degrees today!  Brrrr.  During the years I lived in Chengdu buildings (except hotels) did not have heat because Chengdu is below the Yangtze river.  We had to scour the city to find a space heater and ended up finding and buying an overpriced (but available!) model that was like an electric radiator filled with oil.  There were only two when I bought the one.  Took a long time to make an impact inside cement walls.  We kept that heater for some years before bugging out.  They tell me that more people, at least in new buildings, have steam heat piped in these days.  That must put a much bigger strain on energy use.  That and the fact that China builds building faster than any place on earth, and they do so continuously, means their energy needs must have gone up tremendously all over the country.

They seem very determined to punish Australia.

I had anticipated a slow down of imports rather than complete halt. 

RE steam heat. One of the benefits of the amount of central planning they have is that district heating is more common which means they utilise waste heat from power plants. Its very common in Northern China I understand. TBH - if they use waste heat from coal fired power stations then its pretty efficient use of the fuel - from a CO2 footprint comparable to CCGT & independent gas central  heating

[Tomasz + 1,608]

As for Russia, about 1/3 of Russia's population still has no NG, which on the other hand should not come as a surprise when looking at the map.

On the other hand, significant savings could be made on the installation of consumption meters because the temperature is generally too high in buildings and commercial areas.

Simply put, gas and electricity are cheap for domestic use in Russia, so it would be good to raise the price a little, install gas consumption meters and rationalize consumption.

As far as exports are concerned, the second Turkish Stream gaspipe with a capacity of 16 billion m3 will be used more and more to Greece, the Balkans, Bulgaria and Hungary.

Next year, LNG production capacity will increase by an additional 1.5 million tonnes of LNG. Gazprom estimates that gas exports to Europe are at 183 billion m3 at $ 170 per 1,000 m3.

Last year Russia produced about 31 mln tons of LNG an increase of about 3 % to 2019.

Gazprom gas export to Europe were at 179,3 bilion cubic meters total Gazprom production at 452 billion cubic meters (-10 % year to year)

Total NG production with other producers was down 6,8 % to last year.

 

[Tom Nolan + 2,443]

6 hours ago, Dan Warnick said:

I read earlier today that they were having trouble keeping the heat on in Beijing.  It gets cold in Beijing, especially about 3 o'clock in the afternoon every day when the winds come down off the Gobi desert.  When I lived in Chengdu it got cold, but not Beijing cold.  They are reporting that today the temperatures in Beijing are the lowest in 5 decades, at some minus 19.6 degrees today!  Brrrr.  During the years I lived in Chengdu buildings (except hotels) did not have heat because Chengdu is below the Yangtze river.  We had to scour the city to find a space heater and ended up finding and buying an overpriced (but available!) model that was like an electric radiator filled with oil.  There were only two when I bought the one.  Took a long time to make an impact inside cement walls.  We kept that heater for some years before bugging out.  They tell me that more people, at least in new buildings, have steam heat piped in these days.  That must put a much bigger strain on energy use.  That and the fact that China builds building faster than any place on earth, and they do so continuously, means their energy needs must have gone up tremendously all over the country.

To me, personal anecdotes really give insight.  Thanks Dan.  This was incredibly interesting.

[Tom Nolan + 2,443]

1 hour ago, Tomasz said:

As for Russia, about 1/3 of Russia's population still has no NG, which on the other hand should not come as a surprise when looking at the map.

On the other hand, significant savings could be made on the installation of consumption meters because the temperature is generally too high in buildings and commercial areas.

Simply put, gas and electricity are cheap for domestic use in Russia, so it would be good to raise the price a little, install gas consumption meters and rationalize consumption.

Interesting.

Really interesting.

[Coffeeguyzz + 454]

While the current day rate to spot charter an LNG carrier is at nose bleed levels of ~$165,000/day, BP just shattered the all time high record by spot chartering a Nigerian flagged carrier for $350,000/day.

This coincides with reports that JKM is in the ~$35/mmbtu  range for February deliveries.

These highly disruptive data points should have several ripple effects, one being a more favorable investment climate for new LNG projects.

[Tom Nolan + 2,443]

China Power Demand Hits Record As Polar Vortex Split Pours Arctic Air Into Region

Friday, Jan 08, 2021 - 22:05

https://www.zerohedge.com/commodities/china-power-demand-hits-record-polar-vortex-split-pours-arctic-air-region

The Beijing meteorological station recorded one of the coldest temperatures in decades this past week, sending power demand through the roof. 

Lei Lei, the chief forecaster for Beijing meteorological station, told China Daily that the first cold wave in 2021 features a "dramatic temperature drop," "significant wind-chill effect," and "prolonged period of low temperature."

On Jan. 7, Beijing recorded the coldest day since the 1960s while cities such as the eastern port city of Qingdao recorded the lowest temperature in history, according to Reuters. 

China's State Grid reports peak power load hit record highs in at least nine provincial grid systems in northern China. These areas are considered China's industrial belt, where a manufacturing recovery is underway. 

"The (latest) historic peak load came as extremely cold weather increased demand for electricity-powered heating facilities, which account for 48.2% of total load," an official from the State Grid was quoted by Reuters. 

China has spent the last several years swapping out coal-burning power stations for electricity-fueled heating devices as part of a green energy campaign to combat air pollution in northern regions. Power demand has been so high because of the severe cold that state-backed China Huaneng Group had to fire up a coal plant earlier this month to meet surging electricity demand. 

Last month, China imported a record volume of liquefied natural gas as heating fuel demand soared for tens of millions of households. 

According to Goldman Sachs, colder temperatures may increase the probability of COVID-19 outbreaks. This week alone, China implemented travel restrictions in Hebei, a province neighboring Beijing after a spike in coronavirus cases. 

A possible theory behind the wicked cold weather in China could be sudden stratospheric warming pushing colder air into Asia. 

If SSW theory is correct, this would mean a weakening polar vortex would also bring colder air into Europe and the US. 

[Tom Nolan + 2,443]

The World’s Most Controversial Pipeline Project Enters Its Final Phase

By Viktor Katona - Jan 09, 2021, 10:00 AM CST

It took more than a year to break the Nord Stream 2 stalemate and now - amidst the world expecting full-scale coronavirus vaccination, amidst the United States expecting the inauguration of President-elect Biden and Europe preoccupied with the future of the EU-UK cooperation rather than energy issues – Gazprom has restarted pipelaying operations on the Nord Stream 2 pipeline. The Fortuna pipelaying vessel has finished working on the NS2 section in Germany’s exclusive economic zone (EEZ) and now it is only the Danish EEZ that remains to be laid. Coincidence or by some unfathomable design, it is exactly now that the next round of US sanctions goes into effect, indicating that the pipeline’s endgame will take place in the upcoming 3-4 months.  Gazprom took quite some time to fully prepare itself for the pipelaying, almost a year has passed since Allseas ceased all operations out of concern for potential US retaliation and the Fortuna vessel started pipelaying in Germany’s EEZ. Such a massive timespan has left many analysts wondering how exactly would the Russian side opt to finish the pipeline and most of them, betting on Akademik Cherskiy, had been caught wrong. Fortuna started its operations off the Adlergrund shoal on December 11 and it took the vessel 17 days to complete both parallel strings (the 55 bcm per year throughput capacity is split between two strings the capacity of both which stands at 27.5 cm per year) of the German section, implying that the average pipelaying speed was much lower than the 1-1.5km per day initially assumed by industry watchers. ...

[ARTICLE CONTINUES]

...From now on, any entity, be it Russian or European, that helps build Nord Stream 2, provides retrofitting and upgrading services to vessels participating in the project, or provides insurance and/or underwriting might be subject to sanctions. Though the new sanctions package provides for a 30-day wind-down period, most European companies providing a technical assessment of Nord Stream-2 will cease any sort of cooperation with the pipe-laying vessels and Gazprom as the coordinator of its construction. 

The European Union has so far refrained from robust political steps vis-à-vis the US Administration against what it perceives to be meddling in its internal affairs, however, the cohesion of the European block seems to have solidified over the course of 2020 and will fortify even more with Britain’s departure. Lack of progress on the Ukrainian dossier and Alexei Navalny’s poisoning notwithstanding, virtually the entirety of Germany’s financial leaders continue to support the project, stating that canceling Nord Stream-2 would not only hurt European customers and consumers but would also damage the financial standing of the top oil and gas majors involved in the project. Against such a geopolitical landscape, the US should find an elegant way to avoid acknowledging the failure of its multi-step sanctions-tightening.

By Viktor Katona for Oilprice.com

 

[Tom Nolan + 2,443]

Chinese Cities Go Dark Amid Energy Spat With Australia

By Haley Zaremba - Jan 09, 2021, 12:00 PM CST

https://oilprice.com/Energy/Coal/Chinese-Cities-Go-Dark-Amid-Energy-Spat-With-Australia.html

Despite all of China’s aggressive efforts to shore up their energy autonomy over the course of this year, the precariousness of Beijing’s energy security has been thrown into the spotlight in recent weeks as the country is plagued by severe energy shortages in the wake of an unofficial blacklisting of Australian coal. As China scrambles to ration electricity for millions of citizens, entire cities have reportedly gone dark.  This latest development is just another chapter in a lengthier saga of rising tensions and failed diplomacy between China and Australia...

... the world’s second largest economy continues to rely heavily on coal. The sudden stop to the flow of the fossil fuel into China has caused coal prices to shoot through the roof at the very same time that the country is experiencing a cold snap, causing the demand for coal to rise to even higher numbers than usual. This double whammy has created “chaos” in Chinese markets according to the Financial Review. ..

... Reports show that power rationing is already well underway in China, and although there are no official reports to corroborate, a widely shared December article purported to list planned blackouts by the Shanghai State Grid. Eyewitness accounts have reported on many Chinese cities going dark, despite China’s official stance that there’s nothing wrong and that the country has plenty of energy to go around...

...But there is another player in this game that may very well come out as the ultimate loser in this scenario: the coal industry. “China is forcing Australia to confront what many countries are concluding: The coal era is coming to an end,” the New York Times reported last month. While it may be a painful process for China, this squeeze might just be the step that Beijing needs to finally wean itself off of coal for good.

By Haley Zaremba for Oilprice.com

[Tom Nolan + 2,443]

Will Oil Demand Recover In 2021?

By Osama Rizvi - Jan 09, 2021, 2:00 PM CST

https://oilprice.com/Energy/Crude-Oil/Will-Oil-Demand-Recover-In-2021.html

...

... Primary Vision Network (PVN) has also released their End of Year Report for 2021, covering Natural Gas Liquids’ supply, consumption and demand in China, supply profiles by Pumpers, and much more. The PVN report says that they are “cautiously optimistic” regarding demand recovery and E&P activity in 2021. Producers can be expected to continue looking for cost savings where possible. The report points to tense relations between the U.S. and China as adding pressure to global economic activity. The report also highlighted the possibility of a Frac Spread supply crunch. Analysts also highlight how floating storage is rising in the North Sea and Europe while oil in transit is up. Commercial storage is getting crowded as well....

By Osama Rizvi for Oilprice.com