GLOBAL LNG-Oversupply drives Asian prices down

[ronwagn + 6,290]

https://af.reuters.com/article/energyOilNews/idAFL5N27A5NP

All forms of natural gas have a marketing problem because there is more profit in liquid fuels. Leadership is needed, the consumer stands to gain a lot by lowering the cost of shipping with trucking, marine, heavy equipment et all. 

Are oil and gas companies too intertwined to do what is right in the long run?

[Tomasz + 1,608]

According to World Bank pink sheet average LNG price for JAPAN this year was

I quarter 11,70 $ per mbbtu

II quarter 10,15 $ per mbbtu

III quarter 10,62 $ per mbbtu

In my opinion its fair price. Pakistan according to Reuters in new contract pays 13% of Brent price - so today 8,06. Its much more profitable nowadays to sell LNG to Asia than to Europe.

http://pubdocs.worldbank.org/en/928931570034997598/CMO-Pink-Sheet-October-2019.pdf

 

Edited October 25, 2019 by Tomasz

[ceo_energemsier + 1,818]

3 hours ago, ronwagn said:

https://af.reuters.com/article/energyOilNews/idAFL5N27A5NP

All forms of natural gas have a marketing problem because there is more profit in liquid fuels. Leadership is needed, the consumer stands to gain a lot by lowering the cost of shipping with trucking, marine, heavy equipment et all. 

Are oil and gas companies too intertwined to do what is right in the long run?

The LNG is coming out of the US, more LNG plants lined up to be built and more approvals given every month and more and more companies are giving their FID's the green light. LNG from Australia, Qatar, Russia , Canada and PNG and the next big wave coming out of Argentina and Brazil and some from WAF region.

The biggest consumers for natgas as natgas directly is the US, then India, China, Japan, UK  and other emerging markets. It may not be a real oversupply as the actual demand is being suppressed because of economic slowdown in growing and developing economies - India , China etc. But LNG=natgas also great demand for petchems feedstock in Japan, China , S. Korea , Singapore, India and elsewhere.

Some companies are making investments into GTLs (gas to liquids), which can be liquid fuels and liquid petchem feedstocks.

Companies need to diversify from the LNG end use gas scene in consuming countries to LNG-GTL's along with GTL's at export terminals or maybe LNG plants can incorporate GTL facilities if feasible. Regional GTLs can be a great boon to natgas producers and with the new techs becoming available for small scale and compact GTLs it may very well change the game in the NG & LNG landscape.

 

 

 

 

 

 

[ceo_energemsier + 1,818]

We are seeing LNG markets shift from long term locked in contracts to spot and short term contracts that are flexible and also decoupling from  oil based benchmark. There is also a shift on the side of buyers from being a "passive" buyer (just buying LNG from a LNG producer) to being a more "active" buyer, by taking equity positions in the LNG facilities. I am also seeing a lot of heavy interest and actual participation by natgas users from Japan, China and elsewhere into buying upstream portfolios for natural gas and then either contracting with an LNG facility to convert their own natgas into LNG for lot lower costs than buying the LNG and or having an equity position in the LNG facilities.

 

I think that model is a win win for most. A stand alone LNG facility can have a natgas-LNG conversion contract with these buyers and not have idled capacity , while the upstream sector has funding to develop and produce and also in the equity position with buyers of LNG in LNG plants they are making $$$ and saving $$$.

 

 

[ronwagn + 6,290]

40 minutes ago, ceo_energemsier said:

The LNG is coming out of the US, more LNG plants lined up to be built and more approvals given every month and more and more companies are giving their FID's the green light. LNG from Australia, Qatar, Russia , Canada and PNG and the next big wave coming out of Argentina and Brazil and some from WAF region.

The biggest consumers for natgas as natgas directly is the US, then India, China, Japan, UK  and other emerging markets. It may not be a real oversupply as the actual demand is being suppressed because of economic slowdown in growing and developing economies - India , China etc. But LNG=natgas also great demand for petchems feedstock in Japan, China , S. Korea , Singapore, India and elsewhere.

Some companies are making investments into GTLs (gas to liquids), which can be liquid fuels and liquid petchem feedstocks.

Companies need to diversify from the LNG end use gas scene in consuming countries to LNG-GTL's along with GTL's at export terminals or maybe LNG plants can incorporate GTL facilities if feasible. Regional GTLs can be a great boon to natgas producers and with the new techs becoming available for small scale and compact GTLs it may very well change the game in the NG & LNG landscape.

Thanks CEO, I just hope I live long enough to see natural gas do the percentage of the energy job that I think it should. I am really only in it for the lower cost to the final consumers. I don't like wasted money or energy outages. It is interesting to watch what is happening.

I am wondering what is the percentage of cost in production, transit, processing or liquefication, and transport to final destination. I realize that is an impossible question because of all the variations in usage, but maybe you can steer me to a site or two. You have great resources. 

 

 

 

 

 

 

 

[ceo_energemsier + 1,818]

13 minutes ago, ronwagn said:

 

Some pricing info on shipping, transport, logistics

https://timera-energy.com/deconstructing-lng-shipping-costs/

 

 

 

 

 

 

Corporate data and info on LNG plants"

https://www.lnglimited.com.au/site/PDF/1478_0/CompanyPresentation

 

http://static.conocophillips.com/files/resources/smid_016_aiche.pdf

 

https://seekingalpha.com/article/3871866-cheniere-energys-operating-costs-breakdown

 

 

https://www.energy.gov/sites/prod/files/2018/03/f49/Global LNG Fundamentals%2C Updated 3.15.18.pdf

 

 

 

https://www.igu.org/sites/default/files/node-news_item-field_file/104747-IGU-Book-Final_062818.pdf

 

 

https://www.oxfordenergy.org/wpcms/wp-content/uploads/2018/10/LNG-Plant-Cost-Reduction-2014–18-NG137.pdf

This one gives the various costs involved , very detailed study.

 

 

 

 

 

 

 

[ronwagn + 6,290]

CEO, Thank you very much! It looks like our transport puts us at a disadvantage. Just from your first link. I will get back to you on the rest.

[ceo_energemsier + 1,818]

6 minutes ago, ronwagn said:

CEO, Thank you very much! It looks like our transport puts us at a disadvantage. Just from your first link. I will get back to you on the rest.

That is why it makes sense for natgas consumers to take equity positions in both LNG facilities and upstream gas projects for better economics overall and in the long run.

Enjoy the reading LOL !

[ceo_energemsier + 1,818]

Floating shale gas LNG producer moving ahead with build out plans

 

 

Delfin Midstream has furthered its floating approach to liquified natural gas processing. The Houston-based company announced this week that after working with Samsung Heavy Industries and Black & Veatch in early 2019 on a concept to design and develop a floating LNG vessel suited for the Gulf of Mexico, the company is now moving forward with plans to construct and buildout the vessel.

According to Delfin, many land-based LNG export projects seek ‘economies-of-scale’ to lower their costs by developing 10 to 20 million metric tons per annum projects. By re-purposing existing offshore pipelines and building the FLNG Vessels at efficient, low-cost Asian shipyards, Delfin can achieve total capital costs around $500 to $550 Tpa for just 3.5 Mtpa FLNG Vessels. The company added that each FLNG Vessel can be developed independently with its own commercial and

 

financial structure. This enables Delfin to offer standard tolling models with terms of 10 to 25 years, integrated structures or JV arrangements with offtakers, producers and/or traders. Delfin’s existing offshore pipelines connect directly to the extensive network of onshore pipeline systems, with ample supply capacity for the first 2 to 3 FLNG Vessels.

“The two most important innovations of the last 20 years in the global gas market have been the shale gas revolution and the emergence of floating LNG technologies for regasification and liquefaction. Delfin combines these two innovations to offer the LNG market a low cost, simple and flexible LNG supply solution,” said Dudley Poston, CEO of Delfin.

Samsung Heavy Industries was established in 1974 and is today one of the largest ship builders in the world.

The design and engineering work on the FLNG vessel is expected to be complete by mid-2020.