Insight and analysis for the global LNG industry Editorial: Feature: Feature: Project Spotlight: Technology: China pushes Oil Prices and the Spain’s Energy Woodfi bre LNG Taking the gas reforms US LNG Juggernaut Transition modular option RAPID PROGRESS ON NORTH FIELD EXPANSION A string of contracts and tenders has been launched on the North Field expansion project, which is designed to boost Qatar’s LNG production capacity by 33mn metric ton a year to 110mn mt/yr by 2025-26. Apart from the economic benefi ts, the ambitious move seems designed as a statement of confi dence by Doha in its future, in the face of Saudi Arabian-led sanctions. It will also fi nally put the North Field’s giant reserves to the test. UNDER THE PATRONAGE OF H.H. SHEIKH KHALIFA BIN ZAYED AL NAHYAN, PRESIDENT OF THE UNITED ARAB EMIRATES UNDER THE PATRONAGE OF H.H. SHEIKH KHALIFA BIN ZAYED AL NAHYAN, PRESIDENT OF THE UNITED ARAB EMIRATES TH 24TH WORLD ENERGY CONGRESS 9-12 SEPTEMBER 2019 | ABU DHABI BEJoin PA RtheT O onlyF T HglobalE MOST event INF thatLUENTIAL covers theGLO entireBAL ENER energyG Yspectrum EVENT Held every three years, the World Energy Congress is the world's largest, longest-running and most influentialR energyEGISTER gathering. Unique in itsNOW coverage of the entire energy spectrum from oil and gas to renewables and nuclear as well as power, the Congress provides a forum for the industry's largest and most diverse conversation. The Congress will bring wwtogetherw world.w leaders,ec 24CEOs, .oentrepreneursrg and experts in the industry with policy makers, citizens and NGOs to pioneer new ways of thinking and crystalize action around energy to deliver an equitable and sustainable future 250 70 4 1 GLOBAL SESSIONS DAYS GOAL: SPEAKERS ENERGY VISIT THEFOR PRO EXHIBITIONSPERITY Plenary sessions www.wec24.org New visions of The new people power: Power, policies and New regional Featureenergy: AreasDriving change for purpose: a new era of perspectives: The role Succeeding in a sustainable energy energy geopolitics of gas in the transition context of disruption to a lower carbon economy in the MENA region Start-up Energy The business outlook Driving innovation: Reflections on the week: Transition: The for oil The role of Energy for prosperity power of the bold governments in the E-MOBILITY - THE FUTURE OF LAGI - LAND ART GENERATOR 100 BEST GLOBAL ENERGY MOBILITY INITIATIVEfuture of energy STARTUPS Host Sponsors Co-host Sponsors Platinum Sponsors Gold Sponsors Logistics Partner [email protected] WECongress 24th World Energy Congress worldenergycongress worldenergycongress [email protected] www.wec24.org WECongress 24th World Energy Congress worldenergycongress worldenergycongress INDEX 6 13 18 FEATURE: FEATURE: FEATURE: Rapid progress on North China pushes gas reforms Oil Prices and the US LNG Field expansion Juggernaut 23 27 29 COUNTRY FOCUS: PROJECT SPOTLIGHT: TECHNOLOGY: Spain’s Energy Transition Woodfi bre LNG Taking the modular option Editorial ................................................. 4 LNG News .......................................................... 34 Recession Impact Global LNG .................... 34 Corporate ..................... 45 Supply ............................. 38 In Transport ................. 49 Demand ......................... 41 Shipping .......................... 52 Events and Conferences .......... 32 Copyright 2019 Minoils Media: LNG Condensed Editorial: Ross McCracken [email protected] Managing Director: Rick Gill [email protected] William Powell [email protected] Events/Advertising: Joao Salviano [email protected] Design: Jeremy Seeman [email protected] LNG CONDENSED | NATURALGASWORLD.COM 3 EDITORIAL RECESSION IMPACT he LNG industry looks set for a prolonged period of the northern hemisphere summer, boosting air cooling of price weakness hit by a double whammy of a demand and thus power generation, and then an early and T supply surplus within the LNG market itself and a cold start to the northern hemisphere winter pushing up steadily worsening outlook for the global economy, which heating demand. will impact energy demand more broadly. While forward spreads show a widening differential ECONOMIC HEADWINDS STIFFEN between Asian spot LNG and European hub prices going into the winter, low prices over the summer mean storage levels The LNG market will certainly need some extra-terrestrial are high. In Europe, many countries’ storage facilities are help because the outlook for the world economy, and thus above 90% full well before the end of the injection season. energy demand more broadly, does not look good. Yet supply continues to build with the US Energy Natural gas demand has grown in recent years faster Information Administration reporting a monthly record for than that for either coal or oil, rising by 5.3% in 2018, the provision of feed gas to US LNG plants in July of 6.0bn compared with oil’s 1.5% and coal’s 1.4%, but if the world ft3/d, 7% of total US dry natural gas production. This is economy moves into recession then the demand boost roughly 40mn mt/yr of LNG on an annualised basis. Export from low gas prices will be ever more dependent on taking volumes over the next 12 months should in fact be higher market share from other energy commodities. as more new capacity is brought online. The signs of worsening economic headwinds continue The ramp up in volumes came in the fi rst half from Cameron to grow, whether one looks at the inversion of US Treasury Train 1 in May and Corpus Christi LNG Train 2 in June. Freeport yields, downward revisions to OECD GDP forecasts, weak LNG and Elba Island LNG are expected to start commercial growth in container ship volum es or plummeting Chinese operations in coming months. The US will have six major LNG and Indian auto sales. facilities in operation, consolidating its recently-acquired position Running alongside is the Chinese-US trade war which as the third largest LNG producer in the world. has resulted in the imposition of tit-for-tat tariffs on hundreds of billions of dollars’ worth of goods. Then there ABSORPTION CONSTRAINTS is Brexit. Even if a no-deal exit for the UK is avoided, uncertainty over the fi nal terms of the UK and the EU’s The problem of where to put all this LNG may become future trading relationship have yet to be determined. acute because the ability to absorb it is limited by Business confi dence in Germany, Europe’s largest contractual and infrastructural constraints. economy and the fourth largest in the world, in August A huge amount of US LNG has fl owed into Europe’s sank to its lowest level in nearly seven years. The German typically under-utilised LNG terminals, but that doesn’t economy shrank by 0.1% between April and June and the mean they can continue to import at the same level. country’s central bank has warned it may enter a technical European utilities have take-or-pay contracts for pipeline gas recession – two consecutive quarters of contraction – in which reduces the amount of spot LNG they might take on the third quarter. It can ill afford serious fallout from Brexit. price grounds alone, while gas-in-storage hitting the tank The next wave of LNG projects is heavily dependent top is another fi nite constraint. on continued robust growth in global gas demand. In the The ability to absorb more LNG relies on demand. Cheap short term, in the event that the weather fails to ride to the gas plus the recent rise in carbon prices under the EU rescue and the global economy stalls, gas demand will be Emissions Trading System has certainly given a boost to ever more dependent on energy policies – such as carbon gas-fi red generation in Europe. trading – that provide it with an economic advantage over However, this alone is unlikely to be enough to absorb its fossil fuel rivals. the surplus unless Mother Nature comes to the industry’s aid in the form of higher temperatures for the remainder — NGW PHOTO: FLICKR.COM/AMANDA GRAHAM LNG CONDENSED | NATURALGASWORLD.COM 4 CONTRIBUTORS ROSS MCCRACKEN Ross McCracken was managing editor of S&P Global’s fl agship analytical newsletter Energy Economist for 13 years. He was formerly Platts crude oil manager EMEA. Ross has written extensively on oil, gas and power markets, with a particular interest in long-term energy forecasts, new technologies and China. He graduated with an MSc from the London School of Economics in 1993. DR. NEIL ALEXANDER FORD Dr. Neil Alexander Ford is a freelance consultant, journalist and expert witness on African affairs, specialising in international relations, the energy sector and political risk. Most of his work focuses on Sub-Saharan Africa, but he also writes on other emerging markets. Neil has a PhD in African international relations from the University of Edinburgh and 20 years of experience as a writer and analyst for magazines, newspapers and websites, including as associate editor of African Business magazine. MARTIN DANIEL After graduating from Oxford, Martin Daniel worked in the Economics Unit of the British Coal Corporation and then the Supply, Transport and Markets team at IEA Coal Research. He later founded the publication Global Private Power and worked for FT Energy and then for S&P Global Platts as editor of Power in Asia and International Gas Report. He is currently a freelance energy consultant. WILLIAM POWELL William has been reporting and commenting on Europe’s gas markets for 20 years. He started in journalism at PH Energy Analysis (now ICIS Heren) in 1995, shortly before the UK devised the National Balancing Point -- Europe’s fi rst gas hub. His subsequent career has included senior management and editorial positions at FT Energy, Petroleum Economist, Argus Media and Platts, where he latterly edited International Gas Report. His focus has been on regional markets and how they function.