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Let down by UAE firm, Pakistan seeks two LNG cargoes

AsifIjaz

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May 22, 2014
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LNG market is expected to get interesting by late 2021 to early / mid 2022. Some limited LNG production is coming online or being repaired in Australia, Egypt has re-entered the market after a gap of months and SOCAR has started sending piped gas to EU with Italy set to receive more than 5 bcm. How the piped gas affects the EU's LNG demand in general and specifically that of Italy, Greece and Bulgaria etc in particular would be interesting.

The higher demands expected post covid followed by newer LNG and FSRU terminals coming online, Pakistan needs to secure its short term (3 - 5 years) LNG supplies the moment it sees a brief dip in the LNG rates like there was early to mid 2020. Miss the train and we will be tied to above 11-13% price rate for half a decade.
 

AZADPAKISTAN2009

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Sep 8, 2009
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Various countries of world have , Land Gas lines example Canada-USA have a large gas/oil line agreement
the second was recently halted

1970 Pakistan wants gas with Iran , Afghan war starts
1980 Pakistan wants gas with Iran , Iran -Iraq war starts
1990 Pakistan wants gas with Iran , Iraq war starts
2000 Pakistan wants gas with Iran , WOT starts
2010 Pakistan wants gas with Iran , War in Syria-Iraq starts
2020 Pakistan wants gas with Iran


During this time most of the world minus few Arab countries and USA are not trading with Iran rest of world is getting cheaper priced goods



Cost in bringing gas from Ship

a) You have to pay cost of the shipping company Transport
b) You have to deal with global politics of who to buy
c) You may get your delivery late
d) Various middle man companies take their cut


Benefit of Dealing with Iran

a) Dependable Large supply enters country , people stop burning trees for fuel
b) The price of steady Gas can be negotiated
 

niaz

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A window on the near to medium term LNG market:

Quote

S&P Global Platts Analytics expects global LNG demand to grow by 2% in 2020 to around 362 million mt, despite the pandemic, and by another 3% in 2021. This is slower than the 11% market growth in 2019 and double digit percentage growth of previous years, as China-led Asian demand growth offsets a decline in Europe.

Global liquefaction capacity will grow by 14.5 million mt in 2021, compared with the export capacity growth of 27.8 million mt in 2020, with the commissioning of Corpus Christi Train 3 in the US, the restart of Egypt's Damietta Train 1, Shell's Prelude FLNG and Petronas' second FLNG, according to Platts Analytics.

"2021 is likely to feature a higher overall gas price complex than 2020, but there is also expected to be significant downward pressure on JKM compared to current levels as we exit the winter," Jeff Moore, head of Asian LNG at Platts Analytics, said.

In 2020, the Asian LNG market emerged from a mild winter with an overhang of gas inventories, but for 2021 North Asia is already reeling from multiple cold waves and gas shortages that will leave the market much tighter.

"There could be an uptick in contract signings in 2021 as end-users get a better handle on their demand profiles and supply needs in a post-COVID world, but the interesting thing to watch will be whether buyers opt to re-sign existing contracts or if we start to see uncontracted capacity for new liquefaction projects get some traction in the market," Moore said.

He said the current market volatility will also likely weigh on end-users' minds in terms of contracting, as the advantage is slowly shifting back into the sellers' courts.

In Asia, the liquefaction projects most likely to get sanctioned in 2021 are the Barossa back-fill project for Darwin LNG, and potentially new regasification projects in Australia, Vietnam, Pakistan or the Philippines, Moore said.

Meanwhile, Citigroup's base case forecast Henry Hub price is $3.30/MMBtu in 2021, TTF at $4.80/MMBtu in 2021, and JKM at $5.50/MMBtu.

It expects the TTF-Henry Hub and JKM-Henry Hub price spreads to narrow in 2021, particularly in the summer as the global LNG supply-demand balance implies a slight oversupply. This will have implications for interregional LNG arbitrage.

Unquote.

https://www.spglobal.com/platts/en/...iner-lng-shipping-all-time-highs-2021-freight

P.S. For those unfamiliar with the LNG market; TFF is the Dutch Title Transfer Facility (Pricing reference point for Europe) & JKM is the Japan Korea Marker, relevant to the Far Eastern markets. These are used similar to the Henry Hub delivery point for the US Gas Future Contract.
 

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