Global LNG-Prices slide as Australia, Nigeria offer fresh supply
"Asian spot liquefied natural gas (LNG) prices extended losses this week as demand in December and January flat-lined, which is likely to have reduced interest for two sell tenders by Australia and Nigeria.Spot LNG prices LNG-AS for January delivery fell 70 cents week-on-week to around $10.10 per million British thermal units (mmBtu) on Friday, while prices for December delivery dropped to $9.85 per mmBtu.
Pockets of demand from Indian and Chinese buyers could not hold back the sell-off, which extended for a fifth straight week, traders said.
More supply is due from Australia’s North West Shelf export project, which on Monday will close a tender to sell at least four cargoes for December and January loading.
The tender is likely to draw limited demand from Asian buyers, which are facing lower winter import costs for the first time since the Fukushima nuclear disaster in 2011, thanks to high inventories left over from a mild summer and winter.
“Buyers are careful to indicate any demand. They’ve been saying for months in a very disciplined manner that they don’t need any cargoes whatsoever,” a trader from an oil major said.
“But they do buy here and there. If you call them, they will say they’re not buying anything until April,” he said.
A single-cargo tender by Nigeria’s Bonny liquefaction plant to sell LNG for loading in mid-December was due to close on Friday, sources said.
But with Asian demand falling and the spread between Atlantic and Pacific markets collapsing, the volumes were likely be consumed within the Atlantic Basin, not Asia.
Europe is set to become a dumping ground for the world’s unwanted gas supplies this winter as Asian demand for sea-borne shipments fizzles out, leaving dealers to seek out willing buyers at rock-bottom prices.
Traders see LNG at $8 per mmBtu as achievable as mild weather forecasts dampen Asian demand and weak oil prices add pressure to spot LNG as long-term, oil-linked LNG deliveries become more competitive.
Falling oil prices effectively lower the ceiling beneath which spot LNG prices can remain competitive, especially in a currently oversupplied market.
Traders who have not cleared long positions, including those who are storing LNG on the water, are showing increasing eagerness to sell off supply, another trader said."
British Columbia`s LNG proposals, PETRONAS..EXXON MOBILE..STEELHEAD..WOODFIBRE none of these energy companies can deliver any LNG at that price without incurring massive losses, the break even price for British Columbia`s proposed LNG plants is around $12 to $13 dollars per BTU.....look around, the price is already lower with even more capacity coming online..
There`s a massive LNG glut on the market with tonnes more capacity coming online from both Qatar, and Australia..
Any British Columbia LNG proposal, if any come to fruition and are selling LNG at these prices they will be claiming losses, not profits, will Canadian taxpayers be forced to not only rebate back LNG plant build costs but write off these losses against any future taxes..?
If these giant energy companies aren`t making any money there will be no tax money to collect..
"That appears to be what's happening now. The world already has more LNG trading capacity than it needs: There were about 286 million tons a year of LNG export capacity globally in 2013, while global LNG trade amounted to just 237 million tons.
That's in part a reflection of a big surge by Qatar, the world's leading exporter of liquefied natural gas. Between 2008 and 2011, Qatar built a spate of new projects and now has 77 million tons a year of LNG export capacity.
Now, other gas-producing countries are scrambling to add even more. Australia has three big LNG projects operating and seven more that will come online in the next few years. If all goes as planned, that would push Australia's total export capacity to 83 million tons a year by 2017, which would allow the country to overtake Qatar as the world's top LNG exporter. Even more export projects are under discussion there.
Meanwhile, the United States is moving to take advantage of its own natural gas production boom to turn from gas importer to gas exporter. The Department of Energy has conditionally approved eight U.S. LNG export projects, with a total capacity of more than 80 million tons a year; analysts expect that at least five of those projects could actually get built, with an export capacity of close to 70 million tons. Canada is also hoping to ship natural gas to Asia.
As if that weren't enough, newcomers to the global energy boom, including countries in East Africa and the eastern Mediterranean, are also eyeing LNG exports as a way to fuel their own economic development.
The problem is figuring out just how much demand there really will be for all that gas. Asia, and especially China, is expected to be the main driver, accounting for the overwhelming bulk of natural gas demand in the years to come, according to the IEA.
But there are several huge question marks that could radically affect those projections. Japan's imports of LNG have surged since 2011, when it shut down all its nuclear power plants in the wake of the Fukushima accident. Buying so much expensive gas is not a long-term option for Japan -- fuel imports pushed the country to its first trade deficit in more than three decades. The question for Shinzo Abe's government is not whether, but when, the country will restart at least a portion of its nuclear reactors, which would severely dampen Japanese demand for LNG.
The other big question marks are in China. In theory, as China cleans up its economy and environment, it will need a lot more natural gas. But it's not clear just how much -- or whether it has already lined up much of what it will need.
Beijing has already signed one huge, $400 billion natural gas deal with Russia to get significant amounts of Siberian gas through a pipeline. The two countries are reportedly in talks on another gas deal that would give China even more Russian gas, further reducing Beijing's demand for expensive imported LNG. China is also trying, to tap into its own abundant shale reserves to ramp up its domestic production of natural gas, which, if successful, would reduce the country's need for LNG even more."
I always knew we would end up here, 4 wasted years by the BC Liberals, LNG LNG LNG...almost 2 years since Christy Clark and the Liberals lied their way to victory...Too bad these inept quasi Conservatives/BC Liberals have no plan B
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