Anxious strike in the gas markets
Concerns that production at some LNG facilities in Australia, the world’s largest exporter of liquefied natural gas (LNG), will be halted after workers move to go on strike next week, has raised concerns in oil markets. gas in short supply and led to a sharp rise. in gas prices in Europe.
The supply-demand imbalance, which arose with the recovery of the economies after the Covid-19 epidemic, turned into an energy crisis with the effects of the war started by Russia in Ukraine on the gas supply, and Europe became the region most affected by the energy crisis.
THE HIGHEST LEVEL IN GAS PRICES OF THE LAST 12 YEARS
Gas markets, dominated by the crisis for almost two years, are just beginning to stabilize with high fill rates at gas tanks and falling demand in Europe, as workers at major Chevron-owned LNG facilities and Woodside Energy Group in Australia reached a consensus this week. to go on strike there was an increase.
Prices on the Netherlands-based virtual natural gas trading point TTF, which has been hovering around 30 euros per megawatt-hour for the past month, rose 30 percent to 39.8 euros on August 9. , after the news of the strike.
Thus, gasoline prices almost reach the highest level of the last two months.
Prices closed the day at 37 euros after exceeding 42 euros per megawatt-hour on August 10. Today, prices opened at 37 euros per megawatt hour.
EXPORT CAPACITY RISK OF STRIKE
Although Australia’s direct supply of LNG to Europe was limited, the drastic reduction in Russian gas supplies to the continent after the war increased Europe’s reliance on LNG imports. Therefore, supply concerns in world LNG markets directly affect gas prices in Europe.
According to data from Columbia University’s Global Energy Center, the Gorgon, Wheatstone and North West Shelf projects at risk of strike account for half of Australia’s total LNG export capacity, at 40.8 million tonnes, and the 10 percent of the world trade volume of LNG.
In the past 12 months, 44 percent of LNG exports from these facilities have been to Japan, 22 percent to China, 13 percent to Taiwan, 12 percent to South Korea, and the rest to Thailand. , Singapore and India.
COMPETITION MAY INCREASE IN ASIA AND EUROPEAN
International Gas Union (IGU) spokeswoman Tatiana Khanberg stated that supply shortages in the LNG market are such that no disruption can be afforded.
Stating that even the slightest decrease in supply for whatever reason can cause huge fluctuations in the market, Khanberg said: “The world is in an energy crisis since 2021, after Covid-19, and this crisis has reached its peak. with the structural decrease of gas. supply to Europe via pipelines from Russia. “This structural gap will continue until 2026 or 2027, when new supplies are placed on the market.”
Khanberg said any threat of supply disruption to Australia, which ranks first in global LNG exports, worries markets and “the risk is priced in.”
Recalling that most of Australia’s LNG exports are to the Asian region, Khanberg said: “However, (in the event of a strike) a 10 per cent decline in LNG supply in the Asian market will make Asia compete with Europe for LNG supply which will result in prices in both regions rising A possible supply disruption could be a big global shock, although occupancy rates at European gas tanks are in a healthy 87 .7 percent. Therefore, there are valid reasons for concern,” he said.
Khanberg said that the risks that may arise will vary according to the size of the possible disruption and other factors that affect the balance between supply and demand in the market.
Underlining that the gas market is not in equilibrium and gas supply is insufficient, Khanberg said that price volatility will continue until the market stabilizes and new sources of gas supply must be provided.
AUSTRIA’S WORLD EXPORT SHARE 20.1 PERCENT
According to the latest IGU report, global LNG trade rose 6.8 percent year-on-year to 401.5 million tons in 2022.
Australia maintained its position as the world’s largest exporter with 80.9 million tons in 2022 and earned a 20.1 percent share of global LNG exports. This country was closely followed by the US with 80.5 million tons of LNG exports, while Qatar ranked third with 80.1 million tons of LNG exports.
The three largest LNG exporters also accounted for 60 percent of global LNG production in 2022.
Russia was the fourth country to export the most LNG last year with 33.8 million tons.
THE LARGEST BUYERS CHINA AND JAPAN
Japan rose to the position of the world’s largest importer with a total of 73.6 million tons last year. China ranked second with 63.7 million tons of LNG exports. The two countries in question accounted for nearly two-thirds of Australia’s LNG exports. The remainder of Australia’s LNG exports went largely to the Asian region, including South Korea, Taiwan, Singapore and India.
According to data from Rystad Energy, in the first half of this year, China and Japan received 26 million tons of LNG from Australia, 60 percent of the country’s total exports in this period.
According to IGU data, Japan and China were the world’s largest LNG importers by country, while the Asia-Pacific region remained the world’s largest LNG import market.
The European Union (EU) became the second largest importing market for LNG with 126.6 million tons in 2022. Trying to make up for the decline in Russian gas supply with LNG, the EU increased its LNG imports by 66 percent last year, while the US became the region’s largest supplier. (AA)