Post by
snowshoedb on Apr 08, 2021 1:00pm
Europe Needs LNG
Excerpts from recent articles about Europe's need for LNG:
1) Bloomberg reports that Europe’s natural gas inventories are about 25 billion cubic meters below the levels from this time last year. This amount, according to the report, is equal to about a third of Germany’s annual consumption.
2) Norway’s Equinor, the other major gas exporter to Europe after Gazprom, said it expected European natural gas demand to rise by 2 percent this year after dipping by 4 percent last year.
3) Europe will need to stock up some 65-70 billion cubic meters of natural gas this summer, Bloomberg reports, quoting a Russian energy analyst. Sergei Kapitonov from the Skolkovo Energy Center told the news agency. That’s about 60 percent more than what Europe needed last year to keep its gas storage facilities filled.
4) Bernstein analysts warned as recently as this week that demand for LNG remains strong in Asia. This could push international prices higher, Energy Voice reported Monday, adding that Bernstein forecast a 6-percent increase in global LNG demand, again driven by Asian economies
5) Shell, in its latest LNG Outlook forecast, said that as much as 75 percent of future gas demand will come from Asia. This means that prices for the commodity will be no longer set in Europe even though it will still continue to be a substantial consumer of both LNG and pipeline gas.
6) Net exports (net agaiinst Canadian imports) = pipeline & LNG exports from the US continue to run at rates of 12-14 BCF/day (net of Canadian imports 3-5 bcf/d). These amounts are a staggering 20-30% above last year. These exports amount to 15% of the US dry production of 90 bcf/d.
7) Hence, we can expect that the rate of replenishing US storage during filling season will be 4 bcf/d less than in 2020. ceteris paribus (all things being equal). It is possible that up to (maximum) 720 bcf less will be injectd into storage in 2021 by October 31. The mid point of the number is more likely at 360 bcf... as we can expect less power generation from gas in the summer of 2020... asumming a normal summer for cooling days.
This bodes well for Canadian gas exports top the US which mean less gas going into Canadian storage. Western Canadian gas production is expected to decline in 2021 and at best stay on par while demand in the oil sands and electrical power generation is expected to increase as more coal plants close in Canada due to increasingly punitive carbon tax and provicial gov't commitments to convert coal generation to gas.