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Quarterly report – Q3 2021 – International natural gas prices

Posted in International Gas Prices, Natural Gas Prices on
  • In a context of an unprecedented tightness on the global gas market, European and Asian spot prices continued their dizzying ascent in the third quarter of 2021. The historic surge became more pronounced as the year progressed and the market tightened.  
  • In Europe, low gas inventories, reduction of both regional production and pipeline imports (from Russia and Norway) as well as record-high carbon prices have propelled the TTF price, which provided a price floor for north-east Asian LNG. 
  • In September, international spot prices went stratospheric, spurred by fresh European concerns over Russia’s ability to increase pipeline exports and continued competition for spare LNG cargoes from Asia and South America. 
  • Spot prices also spiked in Asia. The Asian bull run was mainly driven by gains on the Dutch TTF hub. At the regional level, LNG demand outpaced LNG supply, which underperformed due to a series of unexpected outages. 

AUSTRALIA AT THE FOREFRONT OF DEVELOPING A HUGE HYDROGEN EXPORT INDUSTRY

Posted in Hydrogen on

The Australian government released the National Hydrogen Strategy (the Strategy) in November 2019 and has continued to outline its support for hydrogen through the First Low-Emissions Technology Statement, released in September 2020. The government has stated its commitment to reducing Australia’s emissions through technology investment, rather than through carbon pricing, with the Technology Investment Roadmap a core element of its long-term emissions reduction strategy.

  • The government has taken a technology-neutral approach and the Strategy refers to ‘clean’ hydrogen, which includes both green and blue hydrogen.
  • The Strategy is export oriented. Building on Australia’s unique assets and its track record in energy exports, it aims to build large-scale supply chains to make Australia a leading exporter of hydrogen energy and technologies, and one of the top three exporters to the promising Asian markets by 2030.
  • While primarily focused on the export market, the Strategy looks to initially build a strong domestic hydrogen sector that will underpin Australia’s export capabilities. Hydrogen demand will be concentrated in large hydrogen hubs and will focus on four applications:  its use in transport, as industrial feedstock, blended in gas networks and for electricity grid support/energy storage.
  • One of the government’s priorities and a key success factor for Australia’s hydrogen industry is to reduce the production cost of hydrogen below AUD2/kgH2 ­— US$1.4 (‘H2 under $2’).
  • From 2018 to May 2021, at least AUD1.5 billion (US$ 1.1 billion) have been awarded or committed to progressing clean hydrogen projects. Support is also provided to CCUS technologies and the creation of CCUS hubs, with the goal of reducing the cost of CO₂ compression, hub transport, and storage for CCS below AUD20/tCO₂ (US$14).

Quarterly report – Q2 2021 – International natural gas prices

Posted in International Gas Prices, Natural Gas Prices on
  • In a context of post-Covid economic recovery and an induced rebound of the prices of all energy commodities, the second quarter 2021 saw an unprecedented and steady rally of international spot prices, driven by growing European and Asian gas demand. 
  • In Europe, low gas inventories, an unseasonable and persistent cold weather as well as the highest recorded carbon prices have propelled the TTF price, which provided a strong upside to Asian spot prices. 
  • During the second quarter, Asian spot prices rose even faster than European spot prices because of surging Chinese LNG demand, rising oil prices and LNG supply outages. This results in a growing price premium to the European price. During the second half of June, Northeast Asian spot LNG prices have jumped by $2 to $13/MBtu at the end of the month, more than $10/MMBtu higher than they were this time last year and their highest levels since 2014 for the same summer period.