Natural Gas Daily: August 21st, 2020
Gas Surges in UK mid-August Power Mix
The UK government has made much of Britain's switch to renewable energy and the corresponding reduction in fossil fuels, especially coal. This is helping the UK to meet its goal of lower carbon dioxide emissions, although the figures do include imports of electricity from the continent, and some of that comes from coal or gas-fired plant.
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- While the winter saw a very large amount of on and offshore wind – according to market regulator gas accounted for just 27% of the total in the first quarter while wind and solar accounted for about 40% – windless days in summer mean gas is essential.
Gazprom Completes Fast-Cycle German Storage Plant
Russian gas monopoly Gazprom has completed the last phase of its salt cavern storage facility at Jemgum, northern Germany, it said August 19. Consisting of 10 caverns, their combined working gas volume is about 900mn m³, making it one of Germany's larges such facilities.
- Most of Europe's gas storage capacity is in depleted gas fields, but purpose-built salt caverns allow very rapid injection and withdrawal, so that traders can take advantage not just of summer-winter price spreads, but weekend-working day price spreads as well.
European Gas Storage at 90% Full, Ukraine Also Rising
Europe's gas storage facilities were 89.90% full August 18, according to data published by Gas Infrastructure Europe, with 995.64 TWh already injected out of a total possible 1,107 TWh. There are another two months or so of injection still remaining, although as the pressure in the facilities reaches maximum the injection rate slows down.
- This year has seen record amounts of LNG seeking a home at almost any price. This has begun to tail off with US cargoes being cancelled in the last few months owing to negative spreads relative to the Henry Hub, after allowing for liquefaction, shipping and regasification.
- Not all the excess LNG has ended up in European storage: power generation has used more gas in a number of countries this year than last, again owing to the low price relative to competing fuels.
Japan's MOL Names New LNGC for Yamal
A naming ceremony was held on August 19 at Hudong-Zhonghua Shipbuilding in China for the third newbuilding conventional LNG carriers for the Yamal LNG project. The carrier was jointly ordered by Japan’s Mitsui OSK Lines (MOL) and China Cosco Shipping Corporation.
- The first carrier, LNG Dubhe, was delivered in November 2019 and the second vessel, LNG Merak, was delivered in January 2020 at the same shipyard, MOL said on August 20 in a statement.
