Natural Gas Daily: June 2nd, 2020
Global LNG Demand to Dip 1st time Since 2012: WoodMac
The global LNG industry is expected to see its first seasonal demand contraction since 2012, with demand in summer 2020 expected to fall 2.7% or 3mn metric tons yr/yr, Wood Mackenzie said.
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The Big Picture:
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WoodMac research director Robert Sims said that the most surprising change to the balance is the impact that low market prices are having on LNG supply, with downward revisions seen across all basins and regions.
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"A price correction could begin earlier than previously anticipated and reduce the risk of further US supply reductions next year," Sims said.
Gazprom Starts Exporting More in May
Gazprom’s flows were in May 2020 again down massively vs last year (-20.8%) but slightly up vs last month (+2%), according to a research note by Thierry Bros.
The Big Picture:
- As for storage, since the 54% minimum reached on 2 April, the level has increased to 72.8%.
- Gazprom is not the only producer to swing supply any longer. For the first time ever, Gazprom could only hold half of the global spare capacity.
Bulgaria to Finish TurkStream Work by Year-end: PM
Bulgarian prime minister Boyko Borissov said on June 1 he hoped that work in Bulgaria on the Balkan Stream, an extension of Russia's TurkStream gas pipeline, would be finished by the end of 2020, despite the coronavirus (Covid-19) pandemic.
The Big Picture:
- Bulgaria had initially aimed to complete its 474-km section of the pipeline, which will continue into Serbia and end in Hungary, by the end of last year.
- Russia has grown increasingly frustrated with the lack of progress, with Russian president Vladimir Putin in December even accusing Sofia of deliberating delaying the project.
India's GEECL Reports Drop in Profit
India-focused coalbed methane (CBM) explorer Great Eastern Energy Corporation (GEECL) said its net profit for the 12 months ending March 31 was $6.99mn, down 29.6% yr/yr owing to lower gas sales volumes.
The Big Picture:
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GEECL plans to invest $2bn for the full development of shale resources in its east Raniganj (South) CBM block in the east Indian state of West Bengal.
Australia Holds Talks with Key LNG Buyers
Australia's government has held talks with the governments of Japan and South Korea, two of its key LNG buyers, on the post-Covid-19 economic recovery, it said in a statement.
The Big Picture:
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LNG spot prices have slumped to historic lows as a result of Covid-19's impact on demand, exacerbating a supply glut that began emerging last year.
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This is set to cause some friction between sellers, which will want to continue supplies under standard long-term contract terms, and buyers, which will want to pay lower spot prices.
Unbundled Naftogaz Sees Profits Crash
Ukraine state Naftogaz Group reported consolidated net profits of hryvnia 3.2bn ($119mn) after tax for the three months ended 31 March 2020, down four-fifths from last year's hryvnia 16bn.
The Big Picture:
- The figures allow for the absence of the pipeline business, including payments due under the fixed-volume transit contract with Russian exporter Gazprom.
