IEA sees major shifts in global gas trade over next five years

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Massive growth in LNG supplies despite weak gas demand and low prices

8 June 2016 Brussels

The next five years will bring a reshaping of the global gas trade, the International Energy Agency (IEA) said Wednesday in its 2016 Medium-Term Gas Market Report. New liquefied natural gas (LNG) supplies are coming online just as demand growth in some major markets weakens, resulting in major shifts in global gas trade patterns. A weak outlook for Japan and Korea – the world’s top two LNG buyers – means that new supplies will need to find other markets. China, India and ASEAN countries will emerge as key buyers.

“We see massive quantities of LNG exports coming on line while, despite lower gas prices, demand continues to soften in traditional markets,” said IEA Executive Director Fatih Birol. These contradictory trends will both impact trade and keep spot gas prices under pressure.”   Dr. Birol added that the combined factors of cheaper coal and continued strong renewables growth were blocking gas from expanding more rapidly in the power sector.

The annual IEA report, which gives a detailed analysis and five-year projections of natural gas demand, supply and trade developments, sees global demand rising by 1.5% per year by the end of the forecast period, compared with 2% projected in last year’s outlook. Slower primary energy demand growth and the decline in the energy intensity of the world economy are lessening demand growth for all fossil fuels, including gas. As demand growth for coal and oil also weakens, the share of gas in the energy mix is still expected to increase – albeit modestly – by 2021.

While gas demand is projected to remain weak, global LNG exports will increase substantially. Between 2015 and 2021, liquefaction capacity will increase by 45%, mostly from the United States and Australia. New projects in both countries have commenced ramping up production. Several others are at an advanced stage of development. By 2021, Australia will rival Qatar as the world’s largest LNG exporter and the US will not be far behind.

Fundamental developments point to oversupply in the market over the forecast horizon of this report which should keep spot gas prices across the globe under pressure: “unwanted” LNG supplies will look for a home in Europe, due to the flexibility of its gas system and well-developed spot markets. As a result, intense competition will develop among producers to retain or gain access to European customers. “We are at the start of a new chapter in European gas markets” Dr. Birol said.

Ample LNG supplies will also affect markets outside Europe. Weaker-than-expected demand in Asia is leaving several large LNG buyers in the region over-contracted. This should help accelerate a transition towards more flexible contractual structures. Moreover, with oil markets expected to rebalance before gas markets do, renewed pressure to move towards hub pricing and reduce oil exposure in long-term contracts will likely re-emerge before the end of the decade.

Dr. Birol warned that today’s oversupply could foreshadow a number of supply-side challenges and security risks down the road, noting that a growing level of LNG export capacity had gone offline during the past five years due to technical and security issues and that such problems could get worse with low oil and gas prices. As producers slash investments to refocus on cost reductions and budget savings, he said that such efforts may be too late for global gas markets to rebalance during this decade, but could sow the seeds for tighter markets into the next decade.

Medium-Term Gas Market Report 2016 is for sale at the IEA online bookshop. Accredited journalists who would like more information or who wish to receive a complimentary copy should contact press@iea.org.

To download the executive summary of the Medium-Term Gas Market Report 2016, please click here.

To view IEA Executive Director Fatih Birol’s presentation at the launch of the Medium-Term Gas Market Report 2016, please click here.

Homepage photo credits: Statoil on Flickr.com

Source : http://www.iea.org/newsroomandevents/pressreleases/2016/june/iea-sees-major-shifts-in-global-gas-trade-over-next-five-years.html

IGU Releases 2016 World LNG Report

April 12, 2016

IGU Releases 2016 World LNG Report: A Global Industry Ready for Significant Growth

[Click here to download the official press release.]

Perth/Oslo, 12 April 2016 – The International Gas Union (IGU) today released its 2016 World LNG Report, which demonstrates how the global LNG industry is poised for growth and plays a key role in expanding access to natural gas in the world’s future energy mix. Natural gas is a vital energy resource that can lead to a lower carbon future, cleaner air in metropolitan areas, and a prosperous economic future.

LNG trade in total reached 244.8 MT in 2015, up 4.7 MT from 2014 and the largest year ever for LNG trade, surpassing the previous high of 241.5 MT set in 2011. Although the Pacific Basin remains the largest source of demand, growth was driven by Europe and the Middle East. New regasification markets formed in Egypt, Jordan, Pakistan and Poland, just in time to benefit from near record-low prices. The decline in oil prices and growing weakness in Pacific demand led all global LNG price markers to fall in 2015, from an average $15.60/MMBtu in 2014 to $9.77/MMBtu in 2015.

In 2015 global liquefaction capacity reached 301.5 MTPA. A further 142 MTPA of liquefaction capacity was under construction world-wide as of January 2016. Final investment decisions (FID) occurred for a combined 20 MTPA at Sabine Pass T5, Corpus Christi T1-2, Freeport LNG T3, and Cameroon FLNG.

In 2015, the start-up of new projects in Australia and Indonesia contributed to the growth in non long-term trade (all those volumes traded under contracts of less than 5 years), as the delivery of commissioning cargoes plus the prevalence of more flexible contracts allowed short- and medium-term trade to grow in both countries by over 3 MT year-on-year (YOY). In total, all non long-term LNG trade reached 71.9 MT in 2015, accounting for 29% of total gross LNG trade.

While the natural gas industry is undergoing fundamental changes as it operates in a historical low-price environment, the global social and political momentum illustrated by the COP21 agreements suggests that natural gas can be a critical part of the globe’s future energy mix more than ever.

“Natural gas accounts for roughly a quarter of global energy demand, of which 9.8% is supplied as LNG. The 2016 IGU World LNG Report shows that a major expansion of LNG supply through 2020 positions LNG to further increase its market share. The LNG industry has developed to a point where the necessary foundations have been built to turn natural gas into a truly global commodity, enhancing both energy security and meeting growing demand,” said David Carroll, President of the IGU.

Natural gas has many important benefits – it is abundant, flexible and is the perfect complement to intermittent renewables for power generation. Natural gas provides clean affordable heating for industrial processes and for commercial and residential customers around the world. Natural gas also has benefits relative to coal and oil – in terms of lower carbon emissions, of course, but also in terms of particulates and other pollutants that contribute to poor air quality and ensuing health concerns.

The World LNG Report, a flagship publication of IGU first published in 2010, provides key insights into LNG industry developments through the end of calendar year 2015. While the Report’s focus remains, as in years past, upon recent historical data on world LNG activity, the Report also provides key insights on issues addressing world LNG activity going forward. Now published on an annual basis, the Report serves many in the international energy business as a standard desk reference for information on the LNG industry. To download the full report, please visit www.igu.org

Source : http://www.igu.org/news/igu-releases-2016-world-lng-report

PT Pertamina EP Bor Sumur Pengembangan Kuang (KAG)-A2

21 Juni 2016

Ogan Komering Ulu- Kontraktor Kontrak Kerja Sama (Kontraktor KKS) PT Pertamina EP telah melakukan pengeboran sumur pengembangan Kuang (KAG)-A2 di Ogan Komering Ulu, Sumatera Selatan. Pengeboran ini ditargetkan mampu menghasilkan gas sebesar 1,5 juta kaki kubik per hari (MMSCFD) dan kondensat sebesar 7,8 barel condensat per day (BCPD).

Sumur KAG A2 merupakan bagian dari Proyek Pengembangan Paku Gajah. Sumur ini terletak di Desa Mandala, Kecamatan Peninjauan, Kabupaten Ogan Komering Ulu (OKU), Provinsi Sumatera Selatan. Pengeboran ini dimulai pada tanggal 14 Juni 2016 dan akan membutuhkan waktu sekitar 35 hari.

“Sumur Kuang (KAG)-A2 merupakan sumur kedua yang dibor tahun 2016 dari total target 6 sumur,” ujar Public Relation Manager PT Pertamina EP Muhammad Baron.

Saat ini total rata-rata produksi gas dan kondensat dari Proyek Pengembangan Paku Gajah mencapai sekitar 45 juta kaki kubik per hari, sementara produksi kondensat mencapai 1000 barel condensate per day (BCPD). Pada bulan Maret tahun 2017 Proyek Pengembangan Paku Gajah dijadwalkan akan on stream, sehingga dapat menambah sumber energi untuk wilayah Sumatera Selatan.

sumber: http://www.skkmigas.go.id/27451

Infrastruktur gas berupa SPBG dan jargas untuk rumah tangga di Balikpapan

BALIKPAPAN – Infrastruktur gas berupa SPBG dan  jargas untuk rumah tangga di Balikpapan, Kalimantan Timur yang merupakan penugasan pemerintah kepada PT Pertamina (Persero) hari ini diresmikan oleh Menteri Energi dan Sumber Daya Mineral.

Fasilitas SPBG terdiri dari SPBG Mother Station Rapak Balikpapan yang berlokasi di Jl. Ahmad Yani, Rapak Balikpapan, SPBG Daughter Station Balikpapan di Jl. Iswahyudi, Balikpapan, dan SPBG Daughter Station Balikpapan di Jl. Pattimura, Balikpapan. SPBG Mother Station Rapak Balikpapan berkapasitas 1 mmscfd dengan sumber gas dari Chevron Indonesia Company, sedangkan dua SPBG Daughter Station masing-masing berkapasitas 0,5 mmscfd yang bersumber dari Mother Station Rapak Balikpapan.

SPBG tersebut merupakan tiga dari 56 SPBG penugasan dari pemerintah kepada Pertamina. Adapun anggaran yang terserap untuk pembangunan tiga SPBG di Balikpapan sekitar Rp103,5 miliar.

Adapun jaringan gas rumah tangga yang dilakukan ground breaking berupa jaringan gas kota di Balikpapan untuk 3.849 sambungan rumah tangga dengan alokasi gas 0,5 mmscfd dari Chevron Indonesia Company. Adapun anggaran pembangunan menggunakan APBN 2015 dan 2016 dengan total sekitar Rp52,2 miliar.

Menteri ESDM Sudirman Said mengatakan pemerintah sangat serius dalam upaya penyediaan sumber energi bersih dan murah kepada masyarakat. Langkah yang ditempuh pemerintah adalah membangun infrastruktur gas bumi sebanyak-banyaknya untuk menfasilitasi pemenuhan kebutuhan gas bumi di masyarakat, utamanya di sektor transportasi dan rumah tangga.

“Pembangunan SPBG dan Jargas di Balikpapan dan Jargas untuk Bulungan adalah bagian dari komitmen serius pemerintah untuk penyediaan gas bumi kepada masyarakat. Pemerintah telah menugaskan BUMN untuk pembangunan infrastruktur gas bumi, baik SPBG maupun jaringan gas rumah tangga atau city gas. Untuk Pertamina, sejauh ini pemerintah telah menugaskan sebanyak 56 SPBG dan 89.232 sambungan gas rumah tangga,” kata Sudirman.

Pertamina mendapatkan penugasan untuk pembangunan SPBG sebanyak 56 unit yang tersebar di DKI Jakarta dan 21 kabupaten/kota lainnya. Dari penugasan tersebut, 14 unit telah beroperasi, 40 unit siap beroperasi dan 2 unit dalam tahap pembangunan.

Adapun jaringan gas rumah tangga penugasan kepada Pertamina saat ini 18.976 sambungan rumah tangga telah beroperasi, 30.407 sambungan rumah tangga segera beroperasi dan tahap pembangunan dan rencana pembangunan tahun ini sebanyak 39.849 sambungan rumah tangga.

Wianda Pusponegoro Vice President Communication PT Pertamina (Persero) menyatakan infrastruktur gas di Balikpapan dan Bulungan akan sangat bermanfaat untuk mendukung upaya pemerintah dalam penyediaan energi bersih dan ramah lingkungan. Menurut dia, pengembangan infrastruktur gas sejalan dengan target pemerintah untuk bauran energi nasional untuk gas bumi sebesar 22% pada 2025.

“Pertamina akan berupaya dengan sebaik-baiknya melaksanakan penugasan pemerintah untuk mengembangkan infrastruktur gas bumi. Komitmen tinggi dari pemerintah daerah di Balikpapan maupun Bulungan sangat positif untuk mendukung percepatan pembangunan infrastruktur gas bumi guna mendukung upaya konversi BBM ke BBG,” ujar Wianda.

sumber: www.pertamina.com

IEA releases Oil Market Report for June

14 June 2016

Outages in OPEC and non-OPEC countries cut global oil supply by nearly 0.8 mb/d in May. At 95.4 mb/d, output stood 590 kb/d below a year earlier – the first significant drop since early 2013. Non-OPEC supply growth is expected to return in 2017 at a modest 0.2 mb/d, after declining by 0.9 mb/d in 2016, the newly released IEA Oil Market Report  (OMR) for June informs subscribers.

OPEC crude output fell by 110 kb/d in May to 32.61 mb/d as big losses in Nigeria due to oil sector sabotage more than offset higher Middle East output. Iran has clearly emerged as OPEC’s fastest source of supply growth this year, with an anticipated gain of 700 kb/d.

Global oil demand growth in 1Q16 has been revised upwards to 1.6 mb/d and for 2016 growth will now be 1.3 mb/d. In 2017 we will see the same rate of growth and global demand will reach 97.4 mb/d. Non-OECD nations will provide most of the expected gains in both years. The growth rate is slightly above the previous trend, mostly due to relatively low crude oil prices.

Commercial inventories in the OECD increased from March levels by 14.4 mb to stand at 3 065 mb by end-April, an impressive 222 mb above one year earlier. As the US driving season kicks off, OECD gasoline stocks stand above average levels and last year in absolute and days of forward demand terms. There is a similar picture in China.

Refinery runs in 2Q16 are suffering from deepening outages. Throughput is nearly flat year-on-year, as refiners finally catch up with maintenance postponed from 2015. The seasonal ramp-up to 3Q16 is expected to be the largest on record, surging by about 2.3 mb/d quarter-on-quarter.

 

Source : http://www.iea.org/newsroomandevents/news/2016/june/iea-releases-oil-market-report-for-june.html

Japan eyes Yokohama port for first LNG fueling station

TOKYO — The Port of Yokohama could house Japan’s first fueling station for ships using liquefied natural gas under a public-private investment effort aimed at meeting growing interest in the relatively clean fuel.

A committee including officials from Japan’s transport and economy ministries as well as representatives from Tokyo Gas and shipper Nippon Yusen will meet as soon as Thursday to look into the creation of LNG fueling stations, using Yokohama’s port as a model case. Officials from the city and the port’s operator will participate as well.

Tokyo Gas already operates an LNG terminal in Yokohama, while Nippon Yusen has introduced tugboats running on the fuel. The committee will examine the state of the city’s port, as well as the costs, technological needs and market factors involved in the project, to produce an infrastructure development plan as soon as this year. Updating port facilities and purchasing fueling ships alone are seen costing over 10 billion yen ($93.1 million).

The higher cost of building vessels that burn LNG means that only some current container and cruise ships are capable of doing so. Yet the fuel yields environmental benefits compared with traditional heavy oil, releasing few sulfur oxides when burned. Emissions of those compounds already are heavily regulated off the shores of North America and northern Europe. The United Nations’ International Maritime Organization could tighten rules for other oceanic territory as soon as 2020.

Measures to promote liquefied natural gas as a fuel for ships are included in Japan’s plan to develop that market, announced in May at the meeting of Group of Seven energy ministers. The transport ministry anticipates the addition of LNG stations making Japan’s ports more internationally competitive as well.

(Nikkei)

Source : http://asia.nikkei.com/Politics-Economy/Policy-Politics/Japan-eyes-Yokohama-port-for-first-LNG-fueling-station