Natural Gas Daily: April 22nd, 2020
Oil Recovers From Earlier Losses
Oil prices clawed back some of their earlier losses, with the West Texas Intermediate (WTI) contract for June delivery rising 27.2% to $14.72/b, while Brent climbed $11.6% to $21.58/b.
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The Big Picture:
- The spike came after US president Donald Trump ordered the US navy to "shoot down and destroy any and all Iranian gunboats if they harass our ships at sea."
- Fears remain high that available oil storage – the weakness of the WTI contract – could run out in a matter of weeks, and a conference call between ministers from the Opec+ coalition of producers on April 21 did not result in any new supply cuts being announced.
QP Books Capacity in China to Build LNGCs
Qatar Petroleum (QP) has reserved capacity at China's Hudong-Zhonghua shipyard to build LNG carriers (LNGCs) for use at its North Field East (NFE) project.
The Big Picture:
- QP is pushing ahead with the expansion despite the slump in gas prices over the past year, recently kicking off development drilling for the project. NFE is expected to enjoy the lowest break-even costs out of any of the new liquefaction capacity due to come on stream in the coming years.
Aker BP Brings New Field Online Off Norway
Aker BP has brought on stream the second phase of the Aerfugl gas field in the northern Norwegian Sea three years ahead of schedule, it reported.
The Big Picture:
- Aerfugl has a break-even price of only $15/b, converted from gas, Aker BP said, noting that this made it one of the most profitable projects on the Norwegian shelf.
Baltic States, Finland Agree Plan to Integrate Gas Markets
Lithuania, Latvia, Estonia and Finland have approved an action plan for establishing a regional gas market in the Baltic region, the Lithuanian energy ministry reported on April 22.
The Big Picture:
- Creating a regional market will help reduce cross-border gas transportation costs, creating more favourable conditions for trade and encourage greater competition among suppliers, Lithuania's energy ministry said.
New Study Advocates EU Support for Green Gas
The European Union needs better climate and energy policies if it is to reach its goal of net zero by 2050, according to a new study, Gas Decarbonisation Pathways. Among its suggestions is a binding mandate for 10% renewable gas by 2030.
The Big Picture:
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Coupling the electricity, gas and heat sectors provides the greatest overall benefits for the European energy system, the study finds.
- The study came out two days after a dozen industry associations wrote to the European Commission and members of the European parliament calling for support for gaseous energy.
Gazprom to Build Vietnamese Gas Plant
The international arm of Russia's Gazprom has announced its selection by the Vietnamese government as an investor for the construction of a gas-fired power plant in Vietnam's Quang Tri province.
The Big Picture:
- There is a flurry of interest among investors in gas-fired power projects in Vietnam, which is looking to bolster the use of gas and move away from coal and oil-based generation.
