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One year LNG exports from the United States: failure in Europe trying to close Asia
Material posted: Publication date: 15-01-2017
It will soon be a year since the U.S. began exporting LNG. In February, the first vessel left the terminal Sabine Pass Cheniere company — is the only terminal for liquefied natural gas exports in the country. In international consulting Agency Wood Mackenzie then predicted that half of the us LNG by 2020 will be in Europe. And this is 45 billion cubic meters, or about 10% of the current consumption in the EU.

In the first year, however, LNG shipments to Europe did not happen. According to the Information administration of the U.S. Department of energy (EIA), Reuters and Argus, in 2016 in Europe have put about 500 million cubic meters. For comparison, the growth of Russian gas exports to Europe to almost 40 times the volume of us LNG supplies and is 19.9 billion.

Beneficiaries of liquefied gas from USA to Europe last year were Portugal, Spain, Italy and Turkey. The first two countries largely depend on the supply of LNG, but the U.S. lost the competition in the Old world and the traditional suppliers of liquefied natural gas. The share of U.S. LNG in Europe did not exceed 13% of all deliveries. At the same time, how many it was planned to supply us gas to Europe is unknown. We can assume that more than 500 million cubic meters. Many buyers just rerouted the carriers to other countries because of lower gas prices in Europe. According to a leading analyst at the Oxford Institute for energy studies James Henderson, suppliers of LNG to the us are satisfied with the price of $ 245 per thousand cubic meters, while in the middle of the year on the EU market, it was $ 140. Therefore, according to Western and Russian experts, even made gas supplies to European countries was a necessary step vendors, as they were obliged to fulfil their contracts. For example, according to EIA, in Portugal in April, the us LNG bought for $ 127 per thousand cubic meters, and in Spain in July for $ 174.

The indicator of the reluctance of European companies to buy now liquefied natural gas from the US is Gas Natural Fenosa. Writes Argus, the Spanish company signed with the U.S. Cheniere's 20-year contract for the shipment of her in the terminal Sabine Pass to 4.9 billion cubic meters per year. However, last year the court of Gas Natural Fenosa was loaded with LNG to the us three times for a total volume of not more than 300 million cubic meters. In this case, which went to a court, is unknown. As reported by Argus, the price of gas from gasification and loading made for the Spanish company in September to $ 204, and in December — $ 239. Price does not include shipping and regasification, as in Europe, spot gas prices at that time was $ 180 and $ 220.

According to the EIA, the main directions of export of us LNG in 2016 and become Brazil, Chile and Argentina, which imported 1.5 billion cubic meters, or more than a third of all liquefied gas that is exported from the United States. Also American LNG last year, is actively supplied to Mexico and the Arab countries — Jordan, Kuwait and the UAE. On average, countries in South America and the Middle East bought liquefied gas from the US $ 189-236, according to EIA.

It is curious that the two operating lines export terminal, Sabine Pass unable to ship annually more than 12 billion cubic meters, and gas exports last year amounted to slightly more than 4.5 billion And the United States could not achieve even these indicators, if not for the sharp rise in gas prices in Asia. In November and December, the region accounted for nearly a third of all us LNG supplies for the year. Then, for example, a specialized publication LNG World News wrote: "the Export of LNG from the US hits record", Bloomberg: "Forget South America, Asia is the largest buyer of U.S. LNG." The cold led to the fact that in comparison with July of the price of gas on the Asian market, according to Energy Intelligence''s World Gas Intelligence, increased by 79% to $ 350, reports Bloomberg.

Previously, until November, in Asia have committed a total of some us LNG supplies to China and India. The volume is 480 million cubic meters. In the winter, to China and India prisoedinilis Japan and South Korea. In the USA they are considered the most promising markets, however, delivery to these countries only began in November, when prices have increased significantly.

As he writes in the medical journal of the Oxford Institute for energy research senior analyst James Henderson, by mid-2016, the U.S. Department of energy has received 25 applications to build terminals to export LNG, however, granted only 6. These projects involve the creation of infrastructure for supplies of American liquefied natural gas to 90 billion cubic meters per year. That amount of fuel from the U.S., predicts James Henderson, will be in demand if price and demand for gas will grow. Meantime, the companies-purchasers are already suffering losses and large projects unlikely to bring the expected return, while small projects can fail. "However, part of the infrastructure is already built and will continue to produce until it can cover the costs, meaning that the global oversupply is likely to continue, at least until the end of the decade," says analyst at the Oxford Institute for energy studies.

Deputy Director of the national energy security Fund (NESF) Alex Grivach agree with the fact that us LNG the necessary higher prices. Moreover, they should grow faster.

"If we continue the overproduction, the situation for US will not change — said the expert. — And access for Americans will be the pressure on the most inefficient players — companies that have already booked us LNG. And the question will be how long they can incur losses. In addition, the situation of oversupply will impact on new LNG projects not only in the US but around the world. Investors will understand that their investment may not return. In this situation, Russia has a strong position. The bulk of the infrastructure is already established and has a resource base. Today, it allows Russia to be more competitive not only against the U.S. LNG but also pipeline gas of others".

As noted by both Western and Russian analysts, the cost of production and transportation of Russian gas below and "Gazprom" can, for example, in Europe to offer consumers lower gas prices. That it is partly demonstrated this year, although, in fairness, it should be noted that the Russian company is working on long-term contracts in which the price of gas is tied to oil prices.

The situation of American LNG in Europe is aggravated today, it is the position of the two heavyweights — France and Germany. According to the European specialized publication Energypost, in the summer the French government has announced that it is seeking to ban the import of shale gas, of which two-thirds is American LNG. In Germany, as noted by Energypost, there is no terminal for import of liquefied natural gas, and Berlin hopes to increase supplies of Russian pipeline gas. In addition, Poland, which is the largest market in Eastern Europe, built an LNG terminal for Qatari gas supplies expensive, but it increases the consumption of gas and coal for electrical generation.

All these factors also do not play in favor of supplies of expensive American LNG to Europe. Coupled with low gas prices worldwide, and the Asian leap, perhaps associated with seasonal demand, it has given rise to the Executive Director of the American lobbying group gas companies and foreign governments LNG Allies Fred Hutchinson sad to note: "the Atlantic gas will remain in the Atlantic".


Tags: USA , gaz

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