Natural Gas Daily: July 17th, 2020

Opec+ Eases Supply Cuts

Oil producers in the Opec+ alliance agreed July 15 to taper supply cuts next month, as they were widely expected to do, releasing an extra 2mn b/d of crude back on to the market.

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• Benchmarks did not suffer as a result of Opec+'s decision, justifying the group's claim that demand has recovered sufficiently for cuts to be eased.

China's Gas Output Up 11% in June

China's natural gas production in June was 15.2bn m³, up 11.3% yr/yr, as per data published by the country’s statistics bureau.

• Earlier this month, the Chinese customs department said that the country's gas imports during the January-June period were up 3.3% yr/yr.

• Slowing demand growth and increasing domestic output have dampened gas imports.

Norway Keeps Gas Back in June 

Norway kept more gas off the market again in June, as prices at continental hubs remained at historically low levels. In the first six months of the year it has produced 56.75bn m³, nearly all of which was exported by pipeline to Europe, down from a December forecast 58.73bn m³ for the first half, according to preliminary June data from the Norwegian Petroleum Directorate.

• June output was 1bn m³ short of forecast as the cancellation of US cargoes failed to boost European prices.

Mozambique LNG Hires Contractors for Marine Facilities

Belgium's Besix and Portugal's Mota-Engil have been hired to build the marine facilities of the Total-led Mozambique LNG export project, Besix said on July 16.

• The project's developer have recently secured financing for the $20bn venture, due on stream by 2024.

European Gas Grid Operators Present Hydrogen Plan

Some 11 European gas grid operators from nine EU member states presented a plan on July 17 for adapting gas infrastructure to transport hydrogen at an affordable cost. The release of the paper, named European Hydrogen Backbone, comes after the European Commission (EC) published its long-awaited strategy to developing hydrogen as an energy source.

• The companies see a hydrogen network gradually emerging in the mid-2020s, and reaching 6,800 km in size by 2030. By 2040 it will reach 23,000 km, of which 75% will consist of converted gas pipelines.

Philippines First Gen Shortlists Three Firms for FSRU Supply

Manila-listed First Gen Corporation has shortlisted three companies to participate in a competitive selection process in respect of the chartering of a floating storage and regasification unit (FSRU) for its Batangas LNG terminal project, it said on July 16 in a stock exchange filing.

• In December 2018, Japanese utility, Tokyo Gas, signed an agreement with First Gen to develop an LNG receiving terminal in the country. Tokyo Gas has a 20% stake in Fgen LNG.

• In September last year, First Gen picked Japan’s JGC Corporation for the engineering, procurement and construction (EPC) work for the project.