China’s Plan To Increase Natural Gas To 10% Of Its Energy Mix Is A Global Game Changer Including For BC LNG

The news flow from China this summer on its increasing fight and urgency to fight pollution supports China’s plan to increase natural gas to 10% of its energy mix in 2020 and 15% of its energy mix in 2030.  This is a game changer to global natural gas markets and, by itself, can bring LNG to under supply 2 to 3 years earlier than expected.  China’s natural gas consumption increased by ~15% per year from 2005 thru 2016 and ~1.5 bcf/d per year vs China’s 8.5% growth rate in energy in total.   Yet natural gas only got to 5.9% of China’s energy mix.  If China is to hit 10% by 2020, it will need to increase natural gas consumption by 4 to 5 bcf/d per year.  Assuming China continues to grow its domestic natural gas production by 0.6 bcf/d per year (its growth rate for last five years), China will need to import an additional ~3.5 to ~4.5 bcf/d per year.  This is “per year”!  And if so, we believe BC LNG will be back and there is a higher probability than ever before for a Shell FID on its BC LNG project in 2018. Continue reading “China’s Plan To Increase Natural Gas To 10% Of Its Energy Mix Is A Global Game Changer Including For BC LNG”

Shell: “Every LNG Cargo That Could Technically Be Produced In This World Has Been Produced And Has Found A Well Paying Customer”

We will be presenting a very bullish outlook for natural gas later today in our webcast for Stream’s 2018 Energy Outlook.  The key to our call is that a massive natural gas demand surge has started and will lead to world LNG markets being corrected closer to 2020 than the current conventional wisdom of closer to 2025.  One of the reasons we see this happening quickly is we share Shell’s view that global LNG markets, as of mid 2017, are not in an oversupply situation and there is data support (Japan LNG spot prices, NW Europe storage) for this view.  Two weeks ago, Shell said “Actually, over the last 18 months, every LNG cargo that could technically be produced in this world has been produced and has found a well paying customer”.   Therefore, we have a different starting point than conventional wisdom that says LNG markets are oversupplied in 2017.  And if you combine a different starting point with a different view on a massive surge in natural gas demand, then you end up with a much different view of when LNG markets will move to undersupply.   We will be posting a blog post today’s webcast on why we see a massive surge in natural gas demand. Continue reading “Shell: “Every LNG Cargo That Could Technically Be Produced In This World Has Been Produced And Has Found A Well Paying Customer””