Natural Gas Daily: April 17th, 2020
Oil Prices Tank as China Reports Shrinking GDP
Oil prices have slid further, after China reported that its economy had contracted in the first quarter for the first time in decades as a result of the measures taken to contain the Covid-19 outbreak.
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The Big Picture:
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Chinese GDP fell 6.8% year-on-year in the three-month period, marking the first contraction since at least 1992, when the country began reporting quarterly GDP.
Canada Extends Long-Awaited Aid to Energy Industry [UPDATE]
The Canadian government of prime minister Justin Trudeau extended a C$2.45bn (US$1.75bn) aid package to the country’s oil and gas industry on April 17 – more than a month after his finance minister promised aid for the industry was only “hours, potentially days” away.
The Big Picture:
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Most of the funding – about C$1.7bn – will be earmarked for cleaning up abandoned wells in Alberta, Saskatchewan and BC.
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About 5,200 jobs are expected to be created in Alberta alone.
Shell JV Sanctions Oz Surat Gas Project [Update]
Arrow Energy, a joint venture comprising Shell and PetroChina, has sanctioned start of the first phase of its Surat gas project in southern Queensland, with construction set to begin this year, it said in a statement.
The Big Picture:
- “Today’s decisions by PetroChina, Shell and Arrow demonstrate commitment to and confidence in Queensland and the Australian market at a time of global economic turmoil from Covid-19 and against the backdrop of sustained low oil prices,” Arrow CEO Cecile Wake said.
USTDA to Help Develop Gas Distribution in India
The US Trade and Development Agency (USTDA) said it has awarded a grant to Gujarat-based Arush Gas Technology Services to help accelerate India’s use of natural gas and improve energy access to support economic growth.
The Big Picture:
- USTDA will fund a feasibility study to evaluate the development of a ‘virtual pipeline’ in India.
- With demand for gas rising in India, companies are looking to distribute LNG by road, railways or waterways; a concept otherwise known as ‘virtual pipeline’.
Norway's Gas Output Beats Forecast in March
Norwegian gas extraction beat forecasts by 2.3% in March, averaging 344.4mn m3/day, the Norwegian Petroleum Directorate (NPD) reported. This represents a 1.1% growth month on month (m/m), but a 2% decline year on year (yr/yr).
The Big Picture:
- Equinor and its partners announced on March 30 that Sverdrup would reach its first-phase capacity in May, rather than in the summer as originally planned.
- Sverdrup needs only $20/b oil to breakeven, meaning that it is still profitable following the oil price collapse.
