By CS LNG, Apr 27 2020 06:31PM
UNCERTAINTY OVER PAPUA LNG TO GO-AHEAD
In its external market conditions assessment, Kina Securities Limited (KSL) reports an air of uncertainty regarding the proceeding of Papua LNG project citing P’Nyang’s no deal outcome a key to the sentiment. This was in its 2019 Annual report released last week Friday on the PNG National Stock Exchange. This is an important reason for our economic view of the immediate future. This large scale LNG project would have seen multi USD billion investments into PNG over a number of years and was a key driver of confidence – which has fallen since the negotiations, concluded unsuccessfully. There is an element of uncertainty as to whether the Papua LNG project (which is the second leg of the overall LNG project) will now go ahead. It added the best case alternative would be a redesign of what were to be shared facilities to support P’Nyang and Papua LNG, to allow only the Papua LNG project to proceed. This will delay the development of Papua LNG, however the parties are reengaging to see if an acceptable solution can be found. The assessment, however, stated a reassuring fact is that in the 2020 National Budget, the government had not allowed for revenues from these gas projects in its revenue track so there will not be additional fiscal downside from the project not proceeding. Notwithstanding this, the difficulties experienced by the economy and business in general will not be helped by this development. We expect that the short to medium term outlook will be a period of ongoing reform and adjustment as the government puts in place initiatives to reduce the fiscal deficit over time, while simultaneously building on foundational work in areas such as infrastructure spending and value added processing to build the manufacturing base of the country. Priority outcomes for government spending in 2020 include rightsizing the public service and laying the groundwork for future infrastructure investments in economic corridors, it added.
Source: Post Courier 20/04/2020
CS LNG comment: Of course, there is uncertainty given the current price collapse and no demand not to mention no buyer willing to commit to a 20-year SPA.
CHINA RECEIVES FIRST US LNG SHIPMENT SINCE MARCH 2019
A BP-chartered tanker delivered the first US LNG cargo to China in 13 months on Monday, after tariff exemptions that followed an initial trade agreement between the two countries made the shipment more economical. The resumption of US deliveries to China -- the last one was in March 2019 -- could provide more optionality for the market heading into summer, especially as European storage fills up. How much volume China can absorb is uncertain, as Northeast Asian spot LNG prices remain low and the potential for a second wave of the virus in the region looms. Reports of more cargo cancellations and deferments and an extension of the lockdown in India due to the virus have further dampened sentiment. In the near-term, at least, the Maran Gas Vergina's arrival is positive for US exporters, which have been eager to serve the world's second-largest LNG importer behind Japan. The Greek-owned tanker, which loaded at Freeport LNG in Texas last month, pulled alongside the pier for the port city of Tianjin, on China's northern coast, around 0130 GMT on Monday. The top LNG receiving port in China is home to regasification facilities operated by China National Offshore Oil Corp. and Sinopec. Earlier this year, state-owned distributor Beijing Gas won government approval to build a 5mtpa LNG receiving terminal in Tianjin. At least five other tankers that loaded on the US Gulf Coast are headed to China as of Sunday, Platts cFlow showed. Three of them showed Tianjin as their captain's destination -- the Palu LNG, SK Resolute and Hoegh Giant. The captain's destination for the Cool Explorer and Arwa Sprit doesn't currently specify a port in China. The RWE-chartered Palu LNG, which loaded at Cheniere Energy's Corpus Christi Liquefaction in Texas, is expected to arrive April 22, followed on April 24 by the Cool Explorer, which is under charter to Cheniere and loaded at the exporter's Sabine Pass terminal in Louisiana. The Total-chartered SK Resolute, which loaded at Sempra Energy's Cameron LNG in Louisiana, is scheduled to arrive in China on April 29, while the Naturgy-chartered Hoegh Giant, which loaded at Sabine Pass, is set to arrive on May 5. The Cheniere-chartered Arwa Spirit, which loaded at Corpus Christi Liquefaction, showed a scheduled arrival in China on May 8, according to Platts cFlow. US LNG exporters are preparing to release their financial results for the January-March quarter and their outlooks for the rest of the year. The reports will give the market a clearer idea of the challenges they may face in placing cargoes in the months ahead. In the fall of 2018, China imposed tariffs of 10% on imports of US LNG in retaliation for duties the US placed on imports of Chinese goods. The tit-for-tat tariffs were raised to 25% by Beijing in June 2019. Then in January, China promised to increase its energy purchases from the US by $52.4 billion over the next two years, as part of the initial trade agreement that Beijing and Washington signed. The purchases are to include LNG. The following month, China said it would begin offering a limited number of tariff exemptions on certain commodities, including LNG, based on volume and market demand.
Source: S&P Global Platts 20/04/2020
CS LNG comment: It would be interesting to see the real US$ loss figure for these cargoes!
TOTAL SHUTS DOWN MOZAMBIQUE LNG ON OUTBREAK
Total has shutdown work at Mozambique LNG in order to manage an outbreak of coronavirus at the site in Cabo Delgado. A first case was detected on April 1, Total said. Since then a large number of workers have been tested for the virus and a “small proportion” have tested positive. In order to reduce the risk of further transmission, Total and its contractors have “progressively moved to temporarily reduce the number of personnel at the project site in collaboration with the Ministry of Health”. For now, the focus of those remaining at the Afungi site will be on security, logistics and the provision of essential services to maintain the camp. Total said it, and its partners, were working to upgrade local medical facilities in the province, with PPE, ventilators and test kits. According to the Mozambique authorities, there are 39 reported cases in the country, as of April 19. In the previous 24 hours, 85 tests were carried out in the last 24 hours, of which four were positive. All four were found in Cabo Delgado, where the ministry is working on an investigation. One case was reported in Afungi and three in the city of Pemba. Mozambique’s cases appear concentrated in the northern province and Maputo, the capital city.
Source: Energy Voice 20/04/2020
CS LNG comment: So, did the ISIS just mingle whilst infected rather than trying to kill people outright?