Egypt to import LNG with an eye on self-sufficiency in 2018

Egypt to import LNG with an eye on self-sufficiency in 2018

Egypt plans to import as many as 108 cargoes of LNG this year as the country prepares to start producing at two gas fields and move closer to its goal of self-sufficiency and even exports by 2019.The North African nation will import 100 to 108 LNG shipments this year, including 43 to 45 cargoes in government-to-government contracts from Oman, Russia’s Rosneft PJSC and France’s Engie SA, according to a person familiar with the matter. The remaining imports will be arranged through a tender to be announced in November, said the person, who asked not to be identified because the information isn’t public.Imports may be reduced in 2018 as BP Plc’s North Alexandria concession works to start gas production in April and EniSpA’s giant Zohr field plans to produce by the end of the year, the person said. BP bought a 10 percent stake in Zohr from Eni last year, giving it access to the largest discovery in the Mediterranean Sea amid a regional race for offshore oil and gas deposits.Egypt was a net exporter of LNG until 2014, when declining output and power shortages resulting from political upheaval forced the country to divert fuel for its own use and turned the most populous Arab nation into a net importer. Zohr, which Eni discovered last year, has an estimated reserve of about 850 BCM of natural gas in place. The government expects the deposit to help ease Egypt’s energy shortage and allow it to resume exports.Egypt started to export limited amounts of LNG from the Idku plant in September to keep equipment at the terminal running, and it plans to run the facility on the Mediterranean coast at full capacity for export in 2020 or 2021, the person familiar with the matter said. Media officials at the oil ministry weren’t immediately available for comment.Gas exports would bring much needed foreign cash to Egypt. Costs have risen sharply since November, when the government allowed the pound to float and raised interest rates in a bid to restore confidence in an economy badly affected by political turmoil in 2011.

Source: LNG Global[Edited]


US set to overtake Australia in LNG exports

Australia’s expected ascendancy to global leadership in liquefied natural gas exports by 2019 could be short-lived, with rival suppliers in the U.S. on track to lift their own gas exports substantially in the 2020s on the back of an expected American energy boom driven by the new administration of President Donald Trump.Over the next decade, what the International Energy Agency calls “footloose” U.S. cargoes will dramatically shake up global LNG trade, putting pressure on prices and forcing changes in how contracts are struck. In its latest World Energy Outlook, the IEA says it expects more flexible prices and terms in the LNG market — a “marked change” from the previous system of strong fixed-term relationships between suppliers and customers.U.S. competition is likely to have an impact on key suppliers such as Australia, which sells all its LNG exports on long-term contracts to power utilities in Japan, South Korea, China and Taiwan. Other new LNG supplies from Southeast Asia, Africa and Russia could give buyers even more flexibility.In a recent report, consultancy Deloitte identified the advent of U.S. LNG exports in 2016 as a “landmark moment” in global LNG trade. Oil and gas major BP said on Jan. 25 in its 2035 Energy Outlook that Asia would remain a big market for LNG, with China, India and Southeast Asia joining Japan and South Korea as major gas consumers.Global demand, now at about 300 MMTPA, is expected to reach 400 MMTPA between 2025 and 2035, according to a recent forecast by the IEA.For now, the Middle Eastern state of Qatar is the world’s biggest and lowest-cost LNG exporter, shipping 77 MMTPA. It has a moratorium on adding more capacity, meaning it will probably relinquish the No. 1 spot to Australia in 2018-19. That is when seven big LNG projects costing a total of 200 billion Australian dollars ($152.7 billion) are expected to reach maximum output at Gladstone in Queensland, and in Western Australia and the Northern Territory. Assuming they come on stream smoothly, they will push Australia’s annual output of exportable LNG to more than 80 MMTPA.For now, most of the LNG supply from Australia and Qatar is sold on long-term contracts to power utilities in Japan, South Korea, Taiwan and China. Japan is by far the largest customer, taking 48% of Australian LNG in 2016. India and Southeast Asia are expected to be big future buyers.

Source: LNG Global [Edited]


U.K. to get first LNG from Peru while still waiting for U.S.

Almost a year after the first LNG cargo left the Gulf of Mexico, the U.K. is still waiting to claim a slice of American supply. By the end of the month it will, but it won’t be made in the U.S.Peru LNG loaded a vessel destined for England, according to Lima-based Perupetro SA’s website. It’s the first of the plant’s 401 cargoes to head to the U.K. and the first into the liquid markets of northwest Europe since 2010, not counting a shipment in August to France’s Dunkirk used to cool down a new import terminal.That a South American supplier beat the U.S. to Britain’s energy market highlights changes in the way gas is being shipped and traded worldwide. While Peruvian LNG has a more natural home in nearby markets, it now has to compete with fuel from the U.S., which is expanding its export capacity. At the same time, an expansion of the Panama Canal means the shipping distance to Europe has shrunk.“Geographically you would think this is a strange deal,” said Nick Campbell, energy risk manager at Inspired Energy Plc in Preston, England. The U.K. “may be the perfect spot to move the cargoes on to more lucrative destinations such as southern France. The expanding LNG trade means the illogical can become logical.”

The Gallina will arrive in Britain on Feb. 21 assuming an average speed of 17 knots, according to shipping website sea-distances. It is the seventh tanker to load at the Hunt Oil Co.-operated Peru LNG facility this year, with the other six vessels going to Spain. “Peru LNG produces the liquefied natural gas and sells the cargoes to traders, like Shell in this case, and doesn’t decide the final destination,” Sara Rivera, the company’s spokeswoman, said in a phone interview from Lima.Peru’s biggest market has traditionally been Mexico, which received 34 of the 71 tankers it loaded in 2016, the last in October, and has boosted imports from the U.S. Of this year’s Peru LNG cargoes, all but two are traveling via the Panama Canal.

While U.K. LNG imports may have plummeted from the highs in 2011, the nation has boosted reloads of previously imported LNG and Trafigura Group plans to reopen an import terminal as new supply is expected to lead to a glut.The shipment to England on the Gallina was priced using the U.K.’s National Balancing Point, where front-month gas cost about $7 a million British thermal units on Tuesday. That compares with $3.13 a million Btu on the U.S. Henry Hub and $7.22 a million Btu for spot LNG in Singapore.The U.K. unloaded just two LNG tankers last month, both from Qatar, compared with more than six a year earlier, according to data compiled by Bloomberg. LNG imports fell 18% from a year earlier in 2016 through November, to about 25% of total foreign supply, the latest government data showed. More than 90% of that came from Qatar, with the rest from countries including Norway, Algeria and Trinidad & Tobago.

Source: LNG Global [Edited]


Pakistan: 1st private LNG terminal to be operational by 2018

The first private sector LNG terminal, having a capacity of 1,000 MMSCFD gas, is expected to be completed by 2018.On completion, this gas supply project will account for around 10% of the primary energy supplies of the country, and will be equivalent of 20 percent of the current domestic natural gas production.“It will re-gassify up to 750 mmfcd gas per day as base-load,” according to a press statement issued by the Ministry of Finance here Thursday.The consortium comprises leading multinational energy companies including Qatar Petroleum, ExxonMobil, Total, Mitsubishi Corp, and Hoegh LNG.Finance Minister said that the government of Pakistan welcomes and appreciates the efforts of the consortium to develop this project.He said that the participation of leading multinational energy companies in this project is yet another demonstration of the international investors’ confidence in Pakistan’s economic turnaround and the investor- friendly policies of the present government.He highlighted the most recent report published by PricewaterhouseCoopers (PwC) according to which Pakistan is projected to become the 20thlargest economy by 2030 and the 16thlargest economy by 2050.He said that Pakistan has achieved macroeconomic stability within three years, contrary to predictions from various quarters that Pakistan would default on its obligations by 2014 and would need six years to attain macroeconomic stability.He said that foreign exchange reserves recently reached an all-time high providing five months of import cover, and that GDP growth was 4.7% in FY 2016, an eight year high.The Finance Minister said that the government was actively working on projects to add over 10,000 MW of electricity to the system in the short term, and a further 15,000 MW beyond 2018.Senior executives representing the consortium acknowledged the government’s achievements in stabilising the economy and putting it on the path to growth. They reaffirmed the fact that the project entails zero burdens on the government.

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