Qatar is upset that Japan isn’t renewing its LNG contracts
🇶🇦💥🇯🇵

🥊 “You’ll get no sympathy from us the next time you need LNG,” a Qatar official said to Japan in Dec
🥊 Jera let a giant 25-year contract with Qatar lapse last year

Great Nikkei report

nikkei.com/article/DGXZQO…
Qatar became the world’s top LNG supplier thanks largely to Japan

The first Qatar shipment to Japan was delivered to Chubu Electric (one of the owners of Jera) in 1997

But now Japan wants to diversify supply, and requires flexible contracts. That means lower volumes from Qatar
When the Fukushima nuclear plant suffered a meltdown in 2011, Qatar sent more LNG to Japan to make sure it had enough fuel to keep the lights on

Qatar may not be so willing to help next time

“I don’t even want to go to Tokyo,” where Jera’s HQ is located, said the Qatar official
Japan’s government isn’t terribly thrilled with how Jera is treating Qatar

“It is not the responsibility of companies to handle the relationship between the two nations, but couldn’t they have ended this more clearly?,” lamented a Japanese government official at METI
(Again, hats off to the reporters at the Nikkei. It’s a really insightful article with details from top officials. #jealous)
Japan is targeting significantly lower LNG consumption by 2030 as it restarts nuclear plants and boosts renewables

For Japan’s utilities, it makes sense to curb contracted supply, since they don’t want a glut down the road. Other LNG suppliers may also see contracts lapse
The governments of Japan and Qatar started the popular Producer-Consumer LNG conference 10 years ago to help boost cooperation in the industry

I wonder if this year’s will be awkward (if it happens at all)

lng-conference.org/english/

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More from @SStapczynski

Feb 4
A new U.S. LNG export facility just started production, which will help cement the nation as the world's top exporter of the fuel 🇺🇸🎆🎉

Venture Global’s Calcasieu Pass facility in Louisiana produced its first LNG on Jan. 19, according to a FERC filing posted today
The US has been the world's top exporter of the fuel for the last two months as projects ramp-up output and Europe's energy crisis boosts overseas demand

Worth noting: Calcasieu Pass now holds the record for fastest construction of a large greenfield LNG export project

The plant's modular approach to construction has allowed it to move ahead of schedule despite the pandemic and multiple strong hurricanes

Read 6 tweets
Feb 1
The US was the world's top exporter of liquefied natural gas for the second month in a row 🇺🇸

US LNG exports hit a record 7.3 million tons in January as Sabine Pass started a new unit. Strong European demand aided output

Via @SergioChapa

bloomberg.com/news/articles/…
New export projects will continue to ramp up production this year, cementing the US as the world's top LNG exporter through much of this decade
Out of the 101 U.S. LNG export cargoes in January, more than a third arrived at European ports, while five went to Latin American destinations and the rest remain in transit, shipping data compiled by Bloomberg shows

Gas-starved Europe has become a top destination for US LNG
Read 4 tweets
Jan 30
New England is getting walloped by another snow storm, and the region is again depending on dirty oil-fired power 🇺🇸🛢️

Oil consumption has been way above normal over the last month as some generators switch from gas, which has surged in price

bloomberg.com/news/articles/… Image
New England power generation by source 👇

The yellow line is oil. In the last few weeks, it has often surpassed cleaner nuclear and is a hair below natgas

Oil generators were producing more than 4.2GW on Thursday, accounting for 25% of power supply. Thats the highest since 2018 Image
Prior to the storm, the liquefied natural gas tanker Cadiz Knutsen anchored in Massachusetts Bay. New England relies on overseas LNG imports to meet heating needs

But LNG shipments are way way more expensive than pipeline gas. Like 10-times more expensive Image
Read 7 tweets
Jan 25
The US is prepared to ensure alternative natural gas supplies to Europe covering a potential shortfall from Russia, Biden administration officials said
🇺🇸🤝🇪🇺

🚢 Re-routing supplies could take several days/weeks
🇶🇦 Qatar wouldn’t be able to boost output

bloomberg.com/news/articles/…
To be sure, most US LNG supplies are sold to utilities/portfolio players under long-term contracts. They need to have financial incentive to send more to Europe

In fact, some LNG shipments are already diverting away from Europe and going to Asia due to better profit potential
In other words, US LNG tends to go to whoever will pay the most 💰

Remember, the US government has no direct control over American LNG exports or where gas goes. They can negotiate with export projects, but most of their LNG is under contract to non-US firms (like Jera or Gail)
Read 5 tweets
Jan 24
European natural gas prices surged by more than 10% today on escalating Russia-Ukraine tension 🇷🇺 📈

Goldman says Russian flows to Europe could be curtailed for “an indefinite period” if the Nord Stream 2 pipeline project to Germany is hit by sanctions

bloomberg.com/news/articles/… Image
German power prices for Tuesday jumped to their highest in more than a month as output from thousands of wind turbines across Europe’s biggest market plunged 🇩🇪 💨

Less wind output forces utilities to burn to more gas

bloomberg.com/news/articles/…
Read 5 tweets
Jan 19
China is trying to sell a lot of LNG into the spot market, indicating the world's top importer is well-stocked 🇨🇳

Sinopec issued a sales tender offering up to 45 cargoes for 2022 delivery (They usually buy)

The surprise move may spur bearish sentiment

bloomberg.com/news/articles/…
So why is China doing this now? A few ideas:

> Sinopec has a long-term purchase agreement for 2 million tons of LNG a year from Qatar that started this year, which may give them excess supply

> Covid measures seen having a larger impact on demand

> Testing price levels
This is the first time Sinopec -- traditionally a buyer -- has issued such a large sales tender offering to resell LNG cargoes

To be sure, it isn’t clear how many cargoes Sinopec actually plans to sell via its tender, and the firm may decide not to award any shipments at all
Read 5 tweets

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