Falling demand and minimum prices for LNG has already led to the freezing of some ambitious projects for the liquefaction of gas, for example, in Qatar – a world leader in LNG production. At the same time almost built factories, primarily in the United States, many of which, apparently, come into operation, which will further increase the imbalance in the balance of supply and demand in favor of the latter.
the Russian leader in the production of LNG and planned projects LNG NOVATEK is only postponed until the end of 2020 the commissioning of the last – 4 stage of the plant “Yamal LNG” with a capacity of 0.9 million tons per year and allowed the transfer of the start-up for 2024 “Ob LNG” with a capacity of 4.8 million tons. The largest of the upcoming projects – “Arctic LNG 2” with a capacity of 19.8 million tons per year, the company to defer does not intend.
“From the low prices suffer absolutely all exporters. After prices fell for oil, even old suppliers in Asia under contracts with oil bound forced to sell LNG at prices that are close to multi-year lows,” – said the Deputy head of the national energy security Fund Alexei Grivach.
To the “old” providers that are paid a large part of the capex can be attributed to the Russian “Sakhalin-2” , which operates since 2009. This project has another very important advantage is closeness to market. The main consumers of its products are the countries of the Asia Pacific region, primarily Japan. In addition, the price of LNG in Asia tend to be higher than in Europe. Although now there is the opposite situation. New facilities for liquefied gas in the United States, Africa, and our Yamal LNG, was introduced to a greater degree with the expectation of the European market.
“the Position of suppliers of LNG from new projects that were started in the last 5 years can be disastrous. They sell gas below cost. And significantly lower,” – said Alexey Grivach. He explained that in April the cost of us LNG in the Gulf of Mexico without the cost of delivery to market exceeded $ 180 per thousand cubic meters, and prices for hubs in Northwest Europe was about $ 80. In Asia about 70 dollars, and in the UK 50-60 dollars. Thus, the losses of the supplier that sold us LNG on the spot market (quick contracts) ranged from $ 150 supplied, for example, in the Netherlands, $ 180 shipped to the UK or China. The expert underlined that LNG plants in the United States received from its customers a fixed rate for liquefaction (average around $ 108 per thousand cubic meters) and, therefore, the loser does not remain. That is, in this case the main losses carried it the sellers of liquefied natural gas.
the Russian liquefied natural gas plant in Yamal LNG, which also applies to new production boasts a relatively niscoe cost that allows him to win the competition, for example, the same product from the US, but no more. As noted by Alexei Grivach, there are problems at all – and the Australians, and our “Yamal LNG”. Maybe just not as serious as from suppliers American gas. “For example, “NOVATEK” for the first time in five years, showed a quarterly loss (for the first three months 2020). This is due primarily to the falling prices for LNG,” – said Grivach.