LNG market in Q2 2024
Summary of event in Q2 2024
Global LNG shipments, including coastal transportation and re-export, amounted to 101.2 million tons in the 2nd quarter of 2024, which is 8.3 million tons less than in the previous quarter and 2.9 million tons less than a year ago. Global LNG offloads in the 2nd quarter of 2024 amounted to 100.5 million tons, which is 11.3 million tons less than in the previous quarter and 3.1 million tons less than a year ago.
The three leading LNG shipping countries are the USA, Qatar and Australia. Russia is the fourth. Malaysia is the fifth.
China continues to increase its leadership in LNG imports, which is in line with the trend in other energy markets. Japan and South Korea with stable imports. India is number four.
The key event of the second quarter was the increased pressure from the United States and the EU on Novatek, its suppliers and customers, as well as an increase in the fleet of LNG gas carriers designed to export LNG from Russian LNG projects. Following the oil market, Russia continues to create the Freedom Fleet and the associated financial and technical infrastructure, destroying the established dictatorship of London and New York in maritime trade.
Another important development is the growth of orders for LNG gas carriers, primarily at shipyards in China and South Korea.
Energy prices were volatile in Q2 and rose slightly compared to Q1. Prices are at long-term average levels at the moment and are neither low nor high.
Loading
Global LNG shipments, including coastal transportation and re-export, amounted to 101.2 million tons in the 2nd quarter of 2024, which is 8.3 million tons less than in the previous quarter and 2.9 million tons less than a year ago. This corresponds to the long-term trend of seasonal decrease in demand in the gas summer.
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 the 2nd quarter of 2024, 47 LNG plants were operational. 3 plants in simple - Marsa-Brega LNG in Libya, Yemen LNG and Arctic LNG 2 in Russia. And in addtion one of the lines of the Atlantic LNG plant in Trinidad and Tobago was idle as well.
USA
LNG shipments from the United States in the second quarter amounted to 20.4 million tons, which is 1.8 million tons less than in the first quarter and 3.2 million tons less than a year ago. The United States remains the largest LNG producer and is guaranteed to remain so over the coming years.
Export poftfolio of US LNG was quite diversified in Q2 2024. Europe is focus of supply for US LNG. South Korea has significantly increased offtake of US LNG.
U.S. LNG companies are preparing to launch LNG projects in the Gulf of Mexico, including the U.S. coast proper, as well as Mexico.
Details of LNG shipment from the USA are available at the link.
Qatar
LNG shipments by the state-owned QatarEnergy LNG from the combined QatarGas and RasGas plant in the second quarter amounted to 19.0 million tons of LNG - 1.9 million tons less than in the previous quarter and 0.4 million tons less than a year ago.
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.
Australia
LNG shipments by Australian plants totaled 18.6 million tons in the second quarter of 2024. Minus 2.3 million tons of LNG compared to the previous quarter and minus 0.8 million tons compared to the second quarter of 2023.
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 the largest 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.
Russia
LNG shipments in the 2nd quarter of 2024 amounted to 7.6 million tons. This is 0.3 million tons less than in the last quarter and 0.6 million tons more than a year ago. Shipments are carried out from Sabetta (Yamal LNG plant) and Prigorodnoye (Sakhalin-2 plant), as well as from Portovaya (Gazprom LNG Portovaya plant) and Vysotsk (Cryogaz-Vysotsk plant).
A key event in the Russian LNG market is the expansion of the LNG fleet of gas carriers to export additional volumes of LNG (from Arctic LNG-2), as well as overcoming EU restrictions on transshipment of Russian LNG in ports of France and Belgium. It is developing in two directions:
Purchase of ice-class gas carriers, including gas carriers originally built for the Arctic LNG-2 project at South Korean shipyards, as well as purchase of used gas carriers.
Formation of competencies for the construction of own gas carriers at domestic shipyards and with domestic equipment. This area is a system solution for the industry, but it will take many years.
Details of shipments of Russian LNG are available at the link.
Malaysia
Shipments of Malaysian LNG in the second quarter amounted to 6.2 million tons of LNG. This is 1.6 million tons of LNG less than a quarter ago and 0.2 million tons less than it was a year ago.
Details of Malaysia's exports are available at the link.
Nigeria
Nigeria shipped 3.4 million tons in the second quarter of 2024. Deliveries are at the level of the last quarter and the second quarter of 2023.
Indonesia
Indonesia shipped 2.8 million tons of LNG in the second quarter of 2024. This is 0.2 million tons more than in the first quarter and 1.0 million tons less than it was a year ago.
Algeria
Algeria shipped 3.5 million tons of LNG from its two LNG plants Arzev and Skikda in the second quarter of 2024. Plus 0.5 million tons compared to the previous quarter and plus 0.1 million tons compared to the second quarter of last year. The main exports of Algerian natural gas are still carried out through pipelines to Spain and Italy.
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.
Oman
Oman shipped 2.9 million tons of LNG in the second quarter of 2024. 0.3 million tons of LNG is less than in the last quarter, but 0.4 million tons of LNG is more than a year ago.
All other countries exported less than 2 million tons of LNG in Q2 2024. Detailed export statistics by country are available at the link.
Discharge
Global LNG offloads in the 2nd quarter of 2024 amounted to 100.5 million tons, which is 11.3 million tons less than in the previous quarter and 3.1 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". The seasonal decrease in unloading during the gas summer is a long-term seasonal factor.
East Asian countries - China, Japan and South Korea - continue to top the ranking of LNG importers.
China
Record volumes of 49 million tons of LNG regasification capacity are expected to be commissioned in 2024. Some projects are likely to be delayed, but in any case it will be the record year in terms of LNG infrastructure commissioning.
LNG offloads in China in the second quarter of 2024 amounted to 16.9 million tons of LNG. This is 1.6 million tons of LNG less than in the previous quarter and 0.2 million tons more than a year ago.
In addition, LNG unloading in Taiwan Province of China amounted to 5.3 million tons of LNG in the second quarter. LNG imports to Taiwan Province are stable and do not change significantly from quarter to quarter.
Japan
LNG offloads in Japan in the second quarter of 2024 amounted to 14.0 million tons of LNG, which is 3.0 million tons less than in the previous quarter and 0.5 million tons less than a year ago.
South Korea
11.3 million tons of LNG were unloaded in the ports of South Korea. Minus 1.6 million tons compared to the previous quarter. Plus 1.1 million tons compared to the indicator of the second quarter of 2023.
India
India imported 6.9 million tons of LNG in the second quarter of 2024. Last quarter there were 0.4 million tons of LNG more, a year ago there were 0.5 tons of LNG less.
The total capacity of India's 8 regasification terminals is 50 million tons of LNG per year, which is equivalent to 12.4 million tons of LNG per quarter. Thus, in the second quarter, the Indian terminals were used at 56% of their capacity. This is a fairly low indicator for countries that continue to actively introduce new regasification capacities. The key reason for the underutilization of terminal capacity is the lack of transparency in the terms of contracting regasification capacities and synchronizing the construction of regasification terminals and gas supply pipelines. In the second quarter of 2024, it was decided that all owners of existing regasification terminals, as well as projects to expand them and build new ones, will be required to obtain approval from the Council for the Regulation of Oil and Natural Gas Production, as well as publicly disclose tariffs for their services. According to the plans of the Indian authorities, this will increase the effectiveness of regasification in the future.
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 in the second quarter with an indicator of 5.3 million tons of LNG. Minus 0.4 million tons of LNG compared to the indicator of the previous quarter and minus 1.1 compared to the indicator of the second quarter of 2023.
Due to the new portion of EU self-restrictions on Russian LNG, LNG transshipment from Arctic projects in the French port of Montoir will go away, which will reduce the turnover of this port.
Details of LNG imports by EU countries are available at the link.
Spain
Spain imported 3.8 million tons in the second quarter of 2024. This is 0.5 million tons of LNG less than in the previous quarter and 1.6 less than in the second quarter of 2024. Spain is the number 2 LNG importer in Europe.
Details of LNG imports by EU countries are available at the link.
Belgium
Belgium imported 3.2 million tons of LNG in the second quarter of 2024, which is 0.8 million tons less than in the previous quarter and 0.3 million tons less than a year ago.
Belgium, as well as the Netherlands, is Europe's gas gateway. The imported LNG is further regasified and a significant proportion of it goes to neighboring countries via onshore pipelines.
Due to the new portion of EU self-restrictions on Russian LNG, LNG transshipment from Arctic projects in the Belgian port of Zeebrugge will go away, which will reduce the turnover of this port.
Details of LNG imports by EU countries are available at the link.
Netherlands
The Netherlands imported 4.0 million tons of LNG in the second quarter, which is 0.5 million tons more than in the previous quarter, but 0.9 million tons less than a year ago.
Details of LNG imports by EU countries are available at the link.
United Kingdom
The UK imported 1.1 million tons of LNG in the second quarter of 2024. This is three times less than a quarter ago, and 4 times less than in the second quarter of last year.
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 1.1 million tons of LNG in the second quarter of 2024, which is three times lower than in the previous quarter. LNG imports to Turkey follow seasonal heating demand and are carried out mainly during the gas winter.
Singapore
Singapore imported 3.4 million tons of LNG in the second quarter of 2024, which is 0.5 million tons more than in the previous quarter and twice as high as a year ago.
LNG bunkering continues to actively develop in Singapore. Bunkering volumes almost reach standard LNG cargo per month.
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 second quarter amounted to 2.2 million tons of LNG, which is at the level of the previous quarter.
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 2.3 million tons of LNG in the second quarter of 2024, which is 0.3 million tons less than last quarter and 0.8 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 the second quarter of 2024, which is at the level of the previous quarter. 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.
Similarly to crude 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 2nd quarter of 2024. Detailed import statistics by country are available at the link.
Price dynamics
Asia
Averaged crude oil quotes are the basis of 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 increased in Q2 2024 compared to Q1. The current spot price for gas in Europe on April 2, 2024 is 369 dollars per thousand cubic meters, which is equivalent to 33 thousand rubles per thousand cubic meters.
Exchange prices for gas at the TTF hub (Netherlands) in 2023-2024, 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 transfer of 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.
Russia
Regulated prices for domestic gas in Russia have increased by 11.4% in ruble terms since July 1, 2024. The key reason for the increase in gas prices is the losses of Gazprom PJSC by the end of 2023. 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 PJSC owned by Gazprom PJSC. This is also the reason for the plans to join Gazprom Neft PJSC to Gazprom PJSC from an operational point of view. However, it is worth remembering that Gazprom Group continues to pay high rents to the state at the expense of mineral extraction tax, export duties and other corporate taxes, which does not allow us to talk about the unprofitability of the gas business from the point of view of the state.
Gas prices in Russia are still among the lowest, especially given the gradual depreciation of the ruble.
Domestic gas prices do not affect 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 medium-tonnage plants Novatek, Cryogaz-Vysotsk, Gazprom LNG Portovaya consume mains gas.
USA
US gas prices (Henry Hub) continued to remain low during the second quarter, which still keeps the margin of LNG supplies from the United States to Europe at a high level for all participants in the transactions. Gas prices in the United States are significantly determined by the lack of sufficient gas transmission system capacity to transport gas between the regions of production and consumption. Unlike Russia, the United States does not have a unified system of main gas pipelines, which reduces the possibilities of comprehensive and long-term planning for the development of the industry.
Market view for Q3 2024
The first half of the gas summer of 2024 passed quietly, which led to the fundamental stability of the gas market in Europe and East Asia. In the second half of the summer, the fundamental stability of the market is expected to continue, but political tensions will continue to rise.
The United States and the EU continue to put pressure on Novatek and Sovcomflot, thereby reducing the fundamental reliability of the LNG market next winter 2024/2025. The United States is interested in both increasing its share in the LNG market, taking into account the active launch of new gas liquefaction projects in the Gulf of Mexico. For Europe, the restrictions imposed, including by the EU itself, worsen energy security, but no one thinks about it seriously.
An additional negative factor for Russia and the EU is the end of the contract for gas transit through Ukraine. The annual volume of supplies is 15 billion cubic meters of gas. In case of non-renewal of the contract, almost all of this volume will be transferred to the LNG market in 2025 as additional demand for LNG, but not its supply. The key beneficiary is the United States and, in a few years, Qatar, which are actively introducing new capacities.
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