Natural Gas Daily: June 30th, 2020
Shell Warns of $22bn in Q2 Charges
Shell warned it would book up to $22bn in impairments in the second quarter, after cutting its forecasts for oil and gas prices. The announcement comes after rival BP also warned earlier this month it would take up to $17.5bn in charges after lowering its price assumptions.
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The Big Picture:
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The Anglo-Dutch major expects Brent to sell at $35/b in 2020, rising to $40 in 2021 , $50 in 2022 and $60 in 2023. Its long-term guidance is $60/b.
Indonesia's LNG Imports in H2 to Rise 63%: WoodMac
Indonesia's LNG imports are expected to be resilient against the coronavirus-led global economic downturn, Wood Mackenzie said. The country's H2 2020 LNG imports could hit 3.1mn metric tons, up 63% yr/yr.
The Big Picture:
- Reduced pipeline gas and low spot prices were likely to have supported Indonesia's LNG demand.
- The government has also recently introduced a set of regulations aimed at lowering the domestic gas price to $6/mn Btu for seven key industries and the electricity sector.
Canada’s Peyto Still Drilling, Despite Challenges
Despite challenges related to weather, the Covid-19 pandemic and general upheaval in global energy commodity markets, Canadian Deep Basin natural gas producer Peyto Exploration & Development said June 29 it has continued development work through Q2 2020, sustained by “long life, low cost natural gas assets that deliver industry leading operating margins.”
The Big Picture:
- The global demand destruction visited on crude oil and refined product markets has pushed Canada’s gas producers into favour with investors.
India's Petronet LNG Sees Record Annual Profits
Petronet LNG, India’s largest LNG importer, on June 29 reported record net profits during the 12 months ending March 31, on the back of record LNG processing volumes.
The Big Picture:
- India is the fourth-largest LNG importer in the world.
Chinese Yard Wins $552mn Order for LNGCs
China's Hudong-Zhonghua shipyard has won a contract for the construction of three 174,000-m3 LNG carriers worth yuan 3.9bn ($552mn), official state media in Shanghai reported.
The Big Picture:
- Their construction is a response to growing domestic demand for LNG, Jiefang Daily cited an official at Cosco Shipping as saying.
- A "significant" share of Hudong-Zhonghua's LNGC construction capability through 2027 was reserved in April by Qatar Petroleum (QP), which is expanding its LNGC fleet to handle gas from its North Field expansion project.
DNV GL Finds Cheaper Route to EU Carbon Neutrality
Norwegian consultancy DNV GL has found that Europe – which extends further than the European Union, for the purposes of this study – can meet the net zero carbon emissions goal of 2050 far more cheaply than the European Commission (EC's)'s equivalent 1.5TECH scenario, in a study published June 30.
The Big Picture:
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Commissioned by industry group Eurogas, the new study relies a lot more heavily on decarbonised gases such as hydrogen and biogas, allowing much less building work to carry electrons, on which the 1.5TECH scenario depends. The overall result is a saving of €4.1 ($4.5) trillion by 2050.
