In January 2015, LNG imports in Japan, South Korea and China grew by 0.8% compared to December 2014. Imports reached 14.7 million tons which is though 3.9% lower than January 2014 levels. January showed the first impacts of decreasing oil prices on LNG prices, as oil-linked contracts usually include a six-month lag. In Japan, the average import price decreased to its lowest point since September 2013 at $15.15/mmbtu in January, while it averaged $16.14/mmbtu in 2014. South Korean price dropped sharply, from $16.07/mmbtu in December (and $16.31/mmbtu on average in 2014) to $14.27/mmbtu in January.
The NBP price averaged €23.4/MWh ($7.8/MBtu) in February, up nearly 14% compared to January. Two factors exerted upward pressure. First, taking the NBP to €25.7/MWh on Feb. 12, was the Dutch debate over Groningen and its level of production (66% of the country’s total) for 2015 and 2016. The latter was cut to 39.4 bcm from the initial target of 42.5 bcm, like in 2014. Proposals of 35 and 30 bcm were also heard. It was agreed to set the level at 16.5 bcm for first half 2015. Secondly, the negotiations between Russia and Ukraine in late February, with threats of cutting off gas deliveries, also gave cause for concern. The fact that a trilateral meeting took place and a prepayment was made in early March, even if it was small ($15 M for about 50bcm), slightly alleviated market pressure. In early March, the pressure lifted slightly and prices fell to €22.9 /MWh ($7.5/MBtu), 2% lower than in January. The market anticipated an average summer price of €21.6/MWh ($7/MBtu).
Natural gas will play a growing contribution in both OECD and emerging markets to meet the economic, environmental and security challenges of the world energy system. However, the future expansion of natural gas should not be taken for granted. Increased competition with coal in the power sector will need to be addressed while maintaining a gas price at a level compatible with the development of large capital-intensive projects. Only by resolving this conundrum can natural gas fully live up to expectations.
Gas demand growth is expected to remain strong to 2035, under the impulsion of the Middle East and China, where natural gas is making inroads in all consuming sectors
➢ Energy efficiency gains will slow down both global primary energy and gas demand growths relative to the previous decade
➢ Global primary energy demand will grow by 1.3% per year and natural gas demand by 1.8% per year to 2035. Natural gas will increase its share in the global energy mix from 21% in 2013 to near 24%
in 2035
➢ Approximately 75% of the projected growth will come from emerging markets, driven by the economic growth and the displacement of oil in every main consuming sector
➢ Natural gas should also expand in the power sector – and, to a lesser extent, in the transportation sector – in OECD countries under the incentive of environmental & climate policies
➢ Asia-Oceania and the Middle-East will drive demand, accounting respectively for 42% and 24% of global growth. Asia-Oceania will become the largest consuming area post-2020, led by China.
➢ In China, the future growth of natural gas will be driven by the implementation of an energy and environmental policy aiming to shift away from coal to cleaner fuels in the long term
In January 2015, LNG imports in Japan, South Korea and China grew by 0.8% compared to December 2014. Imports reached 14.7 million tons which is though 3.9% lower than January 2014 levels. January showed the first impacts of decreasing oil prices on LNG prices, as oil-linked contracts usually include a six-month lag. In Japan, the average import price decreased to its lowest point since September 2013 at $15.15/mmbtu in January, while it averaged $16.14/mmbtu in 2014. South Korean price dropped sharply, from $16.07/mmbtu in December (and $16.31/mmbtu on average in 2014) to $14.27/mmbtu in January.
