Natural Gas Daily: June 1st, 2020
QP Strikes $19.2bn in Shipbuilding Deals
Qatar Petroleum (QP) has struck a trio of deals worth Qatari riyals 70bn ($19.2bn) to reserve capacity for the construction of LNG carriers at South Korean shipyards, it announced, hailing the agreements as the biggest of their kind in history.
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The Big Picture:
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QP said it was reserving around 60% of global LNG shipbuilding capacity over the next seven years, with the aim of building potentially over 100 vessels.
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Qatar has a two-stage plan to expand its liquefaction capacity from 77mn mt/yr at present to 110mn mt/yr in 2025 and 126mn mt/yr in 2027. Al-Kaabi said recently that QP was moving "full steam ahead" on the project.
Golden Pass LNG Seeks Capacity Expansion
Golden Pass LNG, a venture of Qatar Petroleum and ExxonMobil, has asked the US Federal Energy Regulatory Commission (Ferc) for authorisations to expand LNG capacity at the Texas facility to 18.1mn mt/yr from 15.6mn mt/yr.
The Big Picture:
- ExxonMobil and Qatar Petroleum made the final investment decision on the three train, $10bn project in February 2019. The liquefaction facilities are expected to enter service in 2024.
US Considers More Sanctions on NS2: Press
Two US senators are expected to introduce sanctions this week on the Nord Stream 2 (NS2) project to prevent Russia from finishing the pipeline, Reuters reported on May 29. The pair of lawmakers backed sanctions imposed on NS2 in December which threatened penalties against pipelaying contractors, forcing Swiss firm Allseas to halt work on the project.
The Big Picture:
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NS2 could also face operational challenges, after an EU court in May rejected Gazprom's challenge against EU gas law amendments that may require the company to partially divest the pipeline and provide third-party access to its capacity.
Petronas Adjust LNG Output Amid Low Prices: Press
Malaysian LNG exporter Petronas said it was optimising its production volume in response to low prices and weaker demand, Reuters reported.
The Big Picture:
- Malaysia was the fourth biggest exporter of LNG in the world last year, delivering 26.2mn mt.
- In contrast, the world's top LNG exporter Qatar said it had no plans to cut production, saying such a step would be unnecessary, despite the current market conditions, thanks to its low cost.
Russia Lifts Lockdown at China-Supplying Gas Field
A quarantine has been lifted at the Gazprom-operated Chayandinskoye field in east Siberia, which supplies gas to China, local authorities said. The lockdown was put in place on April 17 to contain the spread of the coronavirus (Covid-19).
The Big Picture:
- Chayandinskoye has been pumping gas to China via the Power of Siberia since the pipeline's launch in December. Work is underway to bring its production capacity to a plateau rate of 25bn m3/yr by 2022-2023.
Fortum Defends Uniper's Coal Plant Start
Finnish state utility Fortum has defended the planned start-up of the Datteln 4 coal-fired power plant, operated by its German subsidiary Uniper.
The Big Picture:
- Europe's green transition must not come at the expense of security of supply, says the Finnish utility.
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The market may however also prove an effective mechanism for turning down Uniper's use of coal: in late May, Uniper announced the return to service of its ultra-efficient Irsching 4 and 5 gas-fired power plants, citing low gas prices.
