LNG Market Turns Bullish: Golar
Golar LNG, the leading London-based Bermuda-registered owner of LNG carriers, said August 23 it anticipates a stronger shipping market in 3Q and the coming years, as LNG demand grows.
It expects the average revenue per ship (time charter equivalent) that it achieved in 2Q2018 of $19,600/d to “at least double” in 3Q. It also explained why it expects day-rates to improve in the medium to long term too - remarks that echo those of another shipowner GasLog. Although shipowners have been wrong in the past with their bullish forecasts, this time the tide looks to have turned in their favour.
“Projects with a nameplate capacity of 72mn mt/yr, equivalent to approximately 23% of current LNG production, are expected to commence operations over the next 24 months,” said Golar LNG noting that new liquefaction projects or trains are starting up at Yamal in Russia; Ichthys and Prelude (offshore Australia); and Corpus Christi, Sabine Pass, Cameron and Freeport (in the US).
"LNG's share of total gas trade is forecast to grow from 33% to about 40% in 2023, with emerging Asian markets accounting for half of LNG imports in 2023. Chinese demand alone is up around 50% year-to-date," it remarked. NGW reported earlier on August 23 that Chinese LNG imports in the first seven months are up by 47% year on year.
"The LNG commodity market is now expected to balance in 2022," asserted Golar adding that it projects the global supply-demand gap to reach around 50mn mt/yr by 2025: "Much of this will likely be provided by new US export projects, however significant investment in quick delivering infrastructure is also needed. Golar is well placed to deliver this."
Nine months ago, the consensus among LNG producers, traders and analysts was that the global market would rebalance in either 2024 or 2023, with many surprised at China's sustained demand growth.
The strong production increase and matching strong demand was also a topic in Hoegh LNG 2Q results, also August 23.
"Global LNG trade reached 156mn mt in 1H2018, up by 7.4% from the 1H2017, on a combination of robust Asian demand and new supplies of LNG from Australia and the USA. The strong momentum in this trade has continued into the 3Q2018, with preliminary figures showing global LNG sales at 27.8mn mt in July 2018, a 7.6% increase over the same period of last year and the third highest volume in any month to date," the Norway-based shipowner remarked.
Hoegh hinted that high Asian LNG prices might tame some of the strong demand growth. It also noted that LNG imports through FSRUs in 1H2018 declined by 6.6% year on year and, whilst significantly higher in China and Pakistan, they were down in Egypt and the Mideast Gulf as indigenous production there increased. It noted Bangladesh and Panama received cargoes so far in 2018, while the existing India market will start importing through an FSRU for the first time later in 2018 when the Total-chartered FSRU GDF Suez Cape Ann commences operations there.
The Aqaba jetty in Jordan with FSRU Golar Eskimo, which serves as Jordan's floating regas terminal, berthed alongside (Photo credit: Dutch firm BAM)