Blog - Page 23

Blue Skies and Natural Gas in China

Posted in CEDIGAZ Insights, Country Report, Energy Transition, Gas-Coal Competition on

2017 was a key and challenging year for the Chinese gas sector. All indicators point to an acceleration of natural gas penetration in the energy mix and an intensification of gas market reforms to facilitate this expansion.

Boosted by the recovery of Chinese economic growth, the acceleration of coal-to-gas switching policies, and the rebound in the competitiveness of natural gas relative to competing fuels, China’s natural gas consumption reached a record high level. According to the National Development and Reform Commission (NDRC), natural gas consumption rose by 15.3% to 237.3 bcm in 2017. China was the world’s fastest growing gas market: the country alone accounted for a quarter of global growth in gas consumption.

Quarterly report – Natural gas prices

Posted in International Gas Prices, Natural Gas Market, Natural Gas Prices on

– In Asia, the average price of gas imports to Japan has risen since year-end 2017 in step with the uptrend in the oil price. LNG spot prices are under pressure and approaching those of oil-indexed contracts.

– These conditions have affected the European market, where price levels for Q2 and Q3 are relatively high.

– In the U.S., the Henry Hub price was lower in Q2 than Q1, due to the magnitude of U.S. natural gas output.

Globally, based on current information, average 2018 prices look to be up sharply in Europe (+36%) and Asia (+30-40%), but down in the United States (-3%).

Figure 1: 2017-19 gas price, by quarter: United Kingdom, Japan and the United States ($/MBtu and €/MWh)


Global trends

European LNG Imports slump in H1 2018

Posted in LNG Markets, LNG Service, Natural Gas Statistics on

European net LNG imports in H1 2018 did not sustain the growth momentum which was seen in 2017 (nearly 5% Y-o-Y growth in H1 2017) as total LNG net imports fell by 5% (-1.21 MT YoY) to reach 21.2 MT. This trend was mainly the result of higher re-exports, which went up 1.1 MT YoY, and strong declines in net LNG imports in Spain, the UK and France.

In Southern Europe, net LNG imports were down 8.7% to 12.1 MT, as imports in France, Spain and Italy declined. LNG imports in Spain declined by 12 % (-0.65 MT), counterbalanced by pipeline imports from Algeria which grew 18% compared to last year. Spanish LNG imports from Peru were down by 0.88 MT and this was partially offset by increased purchases from Trinidad and Tobago (+0.67 MT). In France, re-exported volumes surged by 0.72MT YoY, resulting in a 10% decline (-0.4 MT) in net LNG imports. The re-exported cargoes from France landed mainly in Asia (China, South Korea, India) and the Middle East (Kuwait). In Italy, LNG imports were down by 10% (-0.28 MT) as the power sector gas demand weakened in H1 2018, while hydroelectric power generation increased. Portugal was the only Southern European country where LNG imports were up, albeit marginally (+ 0.15 MT).

Figure 1: European LNG Importers in H1’18 (net of re-exports)