Blog - Page 25

Natural gas market fundamentals exceeded expectations in 2017

Posted in Natural Gas Market, Natural Gas Statistics, Press release on

Global gas market fundamentals have trended upward in 2017. Global natural gas consumption rose by 3.3% to reach a new peak of 3640 bcm in 2017, according to CEDIGAZ First Estimates (May 2018). Macroeconomic factors (abundant natural gas supply, economic growth) contributed to this bullish trend. Regulatory and policy factors also explained this performance. Considering the average growth of 1.5%/year of the five previous years, the 2017 performance looks impressive.

The biggest story of the gas markets in 2017 was the huge growth in Chinese demand (+ 15%; + 30 bcm). This achievement mainly resulted from the ongoing intensification of environmental policy, enhancing coal-to-gas switching. The Middle East and Africa both also posted strong increases, at 4.8% and 6.7% respectively, aided by improving infrastructure, incremental CCGT generating capacity and availability of gas (Iran, Egypt…). In Europe (Turkey included), natural gas consumption was up 4.8%, helped by both the competitiveness of gas relative to coal and the weakness in nuclear and hydro energy. In the CIS, natural gas consumption returned to growth in Russia, driven by heating and the resumption of industrial activity. In the opposite direction, consumption was sluggish in North America (United States) and South & Central America. In the United States, gas consumption posted an unusual drop in 2017 (- 1.4%), following seven years of strong growth, amid higher natural gas prices. Natural gas consumption in the power sector fell by more than 7% as the strong expansion of renewables affected gas position in the power merit order.

South Korea’s phase-out of nuclear and coal: What does it mean for the LNG market?

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

Shortly after his inauguration in May 2017, the new President of South Korea has unveiled a new energy policy that shifts away from nuclear and coal power and focuses on renewables and natural gas instead. The move responds to growing safety concerns over nuclear power following the 2011 Fukushima accident and a series of earthquakes that hit southern Korea in 2016 and 2017. The energy transformation also responds to rising public hostility to coal power due to worsening air quality. Coal burning is also the main source of greenhouse gas emissions in the country, which has committed to reduce its emissions by 37% by 2030.

How will LNG support Kuwait’s energy transition?

Posted in CEDIGAZ Insights, Country Report, LNG Markets on

Kuwait is mostly known as one of the world’s largest oil producing nations and as a leading member of OPEC. But the country was also a pioneer in 2009 when it became the first in the MENA region to import LNG via a floating storage and regasification unit. At the time, LNG was considered a stop-gap solution to address chronic electricity shortages that threatened Kuwait’s economic and socio-political stability.

Today, Kuwait continues to lead the way in the region by being the first LNG importer to invest in a land-based LNG import terminal. The 22 mtpa facility, for which construction has begun at Al Zour industrial area, is scheduled to come online in 2021. Cedigaz’s latest report examines the risks and opportunities of Kuwait’s LNG strategy.