NYC-based PIRA Energy Group believes that the U.S. as LNG supplier on a large scale is the new era in the global gas industry.
An initial Asian spot deal for $7.20/MMBtu sourced from Australia is actually a harbinger of a new era in global gas: that of the U.S. as LNG supplier on a large scale. It also strongly suggests that some good deals are available in Australia on FOB cargos to keep the trains operating at a higher capacity, PIRA said in its weekly report.
In the United States, the release of the EIA’s April Monthly came with a wealth of new supply data as the agency expanded coverage to include monthly production statistics from 10 additional states. The data were retroactive through the first quarter of 2015.
The third quarter is, by far and away, the lowest period for gas demand during the calendar year in Europe, says PIRA.
While the year-on-year growth in gas demand seen in the first half of the year will continue in the third quarter, the volume of growth in absolute terms will be so small as to be hardly noticeable in the gas balances. The third quarter is often useful for understanding the outlook for underlying gas demand growth, as the role of weather is severely diminished in most cases.
The recent heat wave will offer some support to gas demand, as it has already been seen in France, but the focus is on 3Q as a period when more about underlying gas demand in sectors such as industry is revealed.
The conclusion is that some recovery is occurring in places like Spain and the U.K., but efficiency gains in gas consumption and renewables substitution in emerging lower carbon markets continue to stymie growth in most other places.
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Image: BG Group