LNG market: 1Q 2024
Summary
Global LNG loadings, including cabotage transportation and re-export, amounted to 109.1 million tons in the 1st quarter of 2024, which is 1.1 million tons less than in the previous quarter and 2.2 million tons less than a year ago. Global LNG offloadings in Q1 2024 amounted to 109.0 million tons, which is 1.6 million tons more than in the previous quarter and 0.4 million tons less than a year ago. Shipment volumes in the first quarter were at the same level as in the past, taking into account the fewer days in the quarter.
Top 3 leading LNG loading countries are the USA, Qatar and Australia. Russia and Malaysia are the fourth and fifth with a large gap from the top 3.
Top 3 countries in LNG offloadings are China, Japan and South Korea. The positions of importers have not changed compared to the previous quarter. India is number four and continues to increase LNG imports from quarter to quarter.
Key event of Q1 was the increased US pressure on Novatek, its suppliers and customers, in particular, participants in the Arctic LNG-2 project. The first train of the plant was officially and technically put into operation, but immediately went idle due to the lack of commercial possibility of LNG export. This reduced market supply by 1.5%. These actions are an integral part of the US program to promote US LNG in the European and Asian markets.
The most discussed event was the possible self-restriction by the United States of the construction of new LNG plants on its territory, construction permits for which have not yet been received. However, in early April, discussions began on the abolition of this self-ban. This event did not affect the current LNG market.
Warm gas winter led to a decrease in spot gas prices in Europe and in global LNG market in Q1 to the levels of $ 260-360 per thousand cubic meters, which in line with long-term average gas prices.
Loading
Global LNG loadings, including cabotage transportation and re-export, amounted to 109.1 million tons in Q1 2024, which is 1.1 million tons less than in the previous quarter and 2.2 million tons less than a year ago.
The USA is the number 1 LNG exporter. Qatar and Australia round out the top three LNG producers. Russia is in fourth place in the ranking of exporters, Malaysia is in fifth. No significant changes compared to the previous quarter.
In Q1 2024, 47 LNG plants were operating in the world. 2 plants continued idle - Mars-El-Brega LNG in Libya and Yemen LNG, and Arctic LNG 2 went idle immediately after the official launch.
USA
LNG shipments from the United States in the Q1 amounted to 22.1 million tons, which is 1.3 million tons less than in the Q4 2023 and 0.8 million tons less than a year ago. United States became the largest LNG exporter in the world by the end of 2023 and will remain so for several years.
Export poftfolio of US LNG was quite diversified in Q1 2024. Europe is focus of supply.
Details of LNG shipment from the USA are available at the link.
Australia
LNG shipments by Australian plants amounted to 20.9 million tons in Q1 2024. Plus 1.1 million tons of LNG compared to the previous quarter and minus 0.2 million tons compared to Q1 2023.
Production of each Australian LNG plant was stable in Q1.
The strategic factor for the Australian LNG industry continues to be the need to seek to prioritize the needs of domestic gas demand over LNG exports. The geographical remoteness of gas fields and major cities and industrial centers, taking into account the relatively undeveloped system of internal gas pipelines, is a key factor of tension.
Details of Australia's exports are available at the link.
Qatar
LNG shipments by state-owned QatarEnergy LNG from the combined Qatargas and RasGas plant in Q4 amounted to 20.9 million tons of LNG - plus 2.3 million tons of LNG compared to the previous quarter and plus 0.7 million tons of LNG compared to Q1 last year.
Qatar's main efforts are focused on the construction and contracting of future supplies for the expansion of the QatarGas plant with a total capacity of 49 million tons of LNG. The launch of 6 lines will be carried out sequentially in 2025-2027.
Details of Qatar's exports are available at the link.
Russia
LNG shipments in Q1 2024 were at the average level of the previous winter quarters. There was no decrease in LNG shipments due to pressure from the United States and other countries, however, this pressure led to the withdrawal of the first line of the Arctic LNG-2 LNG plant immediately after its technical launch. The growth of shipments from new facilities is extremely difficult. The formation of a domestic fleet of LNG gas carriers, however, this process will take a year before launching the first domestic gas carrier and a decade to form a full-fledged domestic fleet necessary for the export of produced LNG. There is a possibility that until then it will be possible to form a temporary fleet, similar to the oil fleet formed in 2022-2023. At the moment, 7 Ark 7 ice class tankers are under construction:
Built by the South Korean company Hana Okean and 4 gas carriers have already passed sea trials: Pyotr Kapitsa, Lev Landau and Zhores Alferov (all named after legendary professors of Moscow Institute of Physics and Technology) and Ilya Mechnikov. Deliveries of these gas carriers are delayed due to US political pressure on South Korea. The owner and operator of the first three gas carriers is Sovcomflot, and the fourth is Mitsui USK Line.
Two gas carriers are under construction at the shipyards of the South Korean Samsung Heavy Industries: Alexey Kosygin and Pyotr Stolypin. The assessment of the readiness dates of gas carriers is the summer of 2025. The owner and operator of these gas carriers is Smart LNG, a joint venture between Sovcomflot and Novatek.
Shipments are carried out from Sabetta (Yamal LNG plant, with an annual capacity of 17.4 million tons of LNG) and Prigorodnoye (Sakhalin-2 plant, with an annual capacity of 9.6 million tons), as well as from Portovaya (Gazprom LNG plant with a port capacity of 1.5 million tons) and Vysotsk (Cryogaz-Vysotsk plant, with an annual capacity of 660 thousand tons).
Details of shipments of Russian LNG are available at the link.
Malaysia
Shipments of Malaysian LNG in Q1 amounted to 7.8 million tons of LNG. A quarter earlier, there were 0.4 million tons of LNG less. A year ago, it was 0.4 thousand tons more LNG. The main Malaysian LNG producer is the Bintulu plant.
Details of Malaysia's exports are available at the link.
Indonesia
Indonesia shipped 2.6 million tons of LNG in Q1 2024. Minus 1.3 million tons compared to the indicator of Q4 2023. Minus a significant 2.0 million tons compared to the indicator of Q1 2023. LNG shipments have decreased almost twofold over the years.
Algeria
Algeria, a pioneer in the LNG industry, shipped 3.0 million tons of LNG from its two LNG plants Arzew and Skikda in Q1 2024. Minus 0.6 million tons compared to the previous quarter. At the level of the volume of deliveries a year ago.
The main exports of Algerian natural gas are still carried out through pipelines to Spain and Italy.
Details of Algerian exports are available at the link.
Nigeria
Nigeria shipped 3.5 million tons of LNG from its only LNG plant in Q1 2024. This is 0.4 million LNG higher than in the previous quarter, and 0.2 million more than a year ago.
Trinidad and Tobago
Exports from the country's only LNG plant Atlantic in Q1 amounted to 2.3 million tons, which is 0.2 million tons more than in the previous quarter and 0.1 million tons less than a year ago.
Papua New Guinea
Papua New Guinea's LNG exports from its only plant amounted to 1.9 million tons of LNG in Q1 2024, which is 0.1 million tons of LNG less than in the previous quarter, 0.2 million tons less than a year ago.
All other countries exported less than 2 million tons of LNG in the 1st quarter of 2024. Detailed export statistics by country are available at the link.
Discharge
Global LNG offloadings in Q1 2024 amounted to 109.0 million tons, which is 1.6 million tons more than in the previous quarter and 0.4 million tons less than a year ago. This indicator takes into account the import of re-exported LNG, but does not take into account the accumulation of LNG on the water.
East Asian countries - China, Japan and South Korea - continue to top the ranking of LNG importers.
China
LNG offloadings in China in Q1 2024 amounted to 18.0 million tons of LNG. This is 0.5 million tons of LNG less than in the previous quarter and 1.4 million tons more than a year ago.
China continues to actively build regasification terminals.
Japan
LNG offloads in Japan in Q1 2024 amounted to 17.4 million tons of LNG, which is 0.5 million tons more than in the previous quarter and 1.7 million tons less than a year ago.
South Korea
12.6 million tons of LNG were unloaded in the ports of South Korea in Q1. Plus 0.4 million tons compared to the previous quarter. Minus 1.7 from a year ago.
India
India imported 7.3 million tons of LNG in Q1 2024 and strengthened its position as the number 4 importer in the world.
Qatar continues to be the leading LNG supplier to India and accounts for about half of the LNG import market. The United States and the United Arab Emirates occupy 2-3 places with a large gap.
India may become one of the largest buyers of Russian LNG by analogy with the redirection of Russian oil flows from Europe to India. The Indian government prioritizes the needs of a growing domestic market over the need to please Washington. However, they try to avoid direct risks of secondary sanctions on formal grounds. However, there remains the question of the possibility of physical delivery of LNG from the Arctic to India. Currently, Qatar is the key LNG supplier to India. Other major suppliers are the USA, UAE, Algeria, Angola, Trinidad and Tobago, Oman. Given the geography and difficulties of crossing the Panama Canal, it will be possible to compete for the share of the United States and Trinidad and Tobago.
France
France is the largest importer of LNG in Europe at the end of the 1st quarter with an indicator of 5.5 million tons of LNG. Minus 0.7 million tons of LNG compared to the previous quarter and at the level of a year ago.
Details of LNG imports by EU countries are available at the link.
Taiwan (Province of China)
Taiwan imported 5.3 million tons of LNG in Q1. LNG imports to Taiwan are stable and do not change from quarter to quarter.
Spain
Spain imported 4.2 million tons in the 1st quarter of 2024, which is at the level of the previous quarter. A year ago, imports were 1.0 million tons higher. Spain is the number 2 LNG importer in Europe.
Details of LNG imports by EU countries are available at the link.
Belgium
Belgium imported 3.9 million tons of LNG in the 1st quarter of 2024, which is more than the previous quarter by 1.1 million tons. The temporary decrease in import volumes in the 3rd quarter and the beginning of the 4th is explained by the 100% occupancy of European UGS at the beginning of the gas winter.
Belgium, as well as the Netherlands, are the gas gates of Europe. The imported LNG is further regasified and a significant proportion of it goes to neighboring countries via onshore pipelines.
Details of LNG imports by EU countries are available at the link.
Netherlands
The Netherlands imported 3.4 million tons of LNG in Q1, which is 0.6 million tons less than in the previous quarter, at the level of a year ago.
Details of LNG imports by EU countries are available at the link.
United Kingdom
The UK has reduced imports of 3.3 million tons of LNG in the 1st quarter of 2024. This is 0.2 million tons more than in the previous quarter and two times lower than a year ago. The UK does not have large LNG storage facilities, so the volume of LNG imports largely follows seasonal gas demand and the availability of reserves in continental storage facilities.
Details of LNG imports by UK are available at the link.
Türkiye
Turkey imported 3.2 million tons of LNG in Q1 2024, up 0.9 million tons from the previous quarter, but down 1.9 million tons from a year ago. LNG imports follow seasonal heating demand.
Singapore
Singapore imported 2.7 million tons of LNG in Q1 2024, which is 0.9 million tons lower than in the previous quarter, but twice as high as a year ago.
Details of the import and re-export of LNG by Singapore are available at the link.
Thailand
The volume of LNG imports by Thailand in the Q1 amounted to 2.5 million tons of LNG. By 0.8 million tons more than in the previous quarter and by the same 0.8 million tons of LNG more than a year ago.
It is worth noting the statements of the Ambassador of Thailand to Russia about Thailand's strategic interest in Russian LNG. Perhaps these and other new clients for the Arctic LNG-2 portfolio will help to realize the gas of this project. However, of course, for a good discount to international quotes.
Italy
Italy imported 2.5 million tons of LNG in Q1 2024, which is the same as in the previous quarter and 0.4 million tons less than a year ago.
Details of LNG imports by EU countries are available at the link.
Pakistan
Pakistan imported 2.1 million tons of LNG in Q1 2024, which is 0.3 million tons more than in the previous quarter and Q1 2023. Per capita energy consumption remains at a very low level and has a high potential for growth. But the poverty of the population and high risks for infrastructure projects hinder the growth of LNG imports.
By analogy with oil, Pakistan may become one of the new consumers of Russian LNG. However, the Pakistani authorities will demand a substantial discount compared to market quotations.
All other countries imported less than 2 million tons of LNG in the 4th quarter of 2023. Detailed import statistics by country are available at the link.
Price dynamics
Asia
Average crude oil quotes are the basis for formulas for long-term LNG supply contracts. Crude oil prices in terms of energy units of gas are usually a resistance level for the spot gas market. When gas reaches this level, some buyers may switch to burning oil instead of gas, reducing demand. In Asia, three quarters of LNG supplies are carried out under long-term contracts and depend on oil prices. Additionally, price fluctuations are smoothed out by averaging the prices of all gas resources imported by China. Thus, East Asian countries are the least sensitive to price fluctuations in the spot gas market. Oil prices in Q1 were at the level of the average values of the previous quarter, although they were quite volatile.
Brent price 2022-2024
EU
Spot gas prices in Europe in Q1 2024 decreased significantly compared to Q4 due to the fact of warm weather in Europe and East Asia this winter and, as a result, high volumes of natural gas reserves in UGS. The current spot price for gas in Europe on April 2, 2024 is $296 per thousand cubic meters.
Exchange prices for gas at the TTF hub (Netherlands) in the last 12 months, dollars per thousand cubic meters
Spot gas prices have almost reached long-term averages. However, the departure of the era of cheap Russian gas from Europe leads to the process of transferring energy-intensive industries, primarily chemical ones, from Europe to the United States and the Middle East (on the initiative of European holding companies themselves), as well as increased global competition from Chinese manufacturers, who continue to massively introduce gas processing facilities. A temporary decrease in gas prices will no longer stop the transformation that has begun.
Exchange prices for gas at the TTF hub (Netherlands) in 2010-2023, dollars per thousand cubic meters
Russia
Domestic gas prices in Russia are still among the lowest in the world, but have no impact on LNG exports from Russia - the systems of gas production, production and export of LNG by Yamal LNG and Sakhalin Energy plants are technologically independent of Gazprom's Unified Pipeline Network. Only the medium-tonnage plants of Novatek Cryogaz-Vysotsk and Gazprom LNG Portovaya consume mains gas.
The decrease in gas prices in Europe, coupled with a decrease in exports, led in the 1st quarter of 2024 to zero capitalization of shares of Gazprom PJSC minus the value of shares of operationally independent Gazprom Neft PAO owned by Gazprom PAO. However, Gazprom continues to pay high rents to the state through mineral extraction tax, export duties and other corporate taxes.
USA
American gas prices (Henry Hub) remained low during Q1, which still keeps the margin of LNG supplies from the United States to Europe at a high level.
Market view for Q2 2024
The gas winter of 2023-2024 passed quietly and was warm in Europe and East Asia, which led to planned gas consumption and sufficiently high residual reserves of natural gas in UGS.
Traditionally, the gas summer is a fairly calm and predictable season without significant weather and economic uncertainties on either side. The key risks for all participants are exclusively political:
Possible attacks and new political restrictions on the remaining Russian pipeline exports to Europe (transit through Ukraine) and Turkey (Blue and South Stream) and, accordingly, the growing demand for LNG imports from Europe and Turkey. Russian pipeline gas supplies are no longer systemically important for the European gas market, as they were a couple of years ago, but their further decline may disrupt the fragile balance of the European gas market.
Possible additional political restrictions from Western countries on the supply of Russian LNG, primarily to Europe.
The intensification of the Israeli-Palestinian war and the closer involvement of the United States and the countries of the Middle East in the conflict.
Potential conflict between mainland and island China (Taiwan).
Notes:
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