Russian LNG Exports Rise Despite The Push To Cut Dependence On Russia
Russian exports of liquefied natural gas (LNG) rose in October to their highest level since March, vessel-tracking data compiled by Bloomberg showed on Wednesday, in a sign that the world—including Europe—is scrambling to reduce dependence on Russian gas. In October, Russia’s LNG exports increased by 1.1% compared to October 2021 to the level last seen in March, just after the Russian invasion of Ukraine. Europe hasn’t sanctioned Russian LNG or pipeline gas, but buyers have tried to shun Russian cargoes where possible. The EU is considering a price cap on gas, but deliberations continue as the member states are divided on the issue. Unlike the rise in LNG exports, Russia’s pipeline gas exports to Europe are at very low levels after Gazprom cut off all gas supply to several EU countries for their refusal to pay in rubles for gas. Gazprom also started to reduce supply via the Nord Stream pipeline to Germany in June, claiming an inability to service gas turbine maintenance outside Russia due to the Western sanctions against Moscow for the invasion of Ukraine. The Russian gas firm halted Nord Stream in early September, while the pipeline was found to have been sabotaged at the end of that month. Still, Russia’s LNG exports remain strong, and the top importers of the cargoes – although nearly half of them are still en route to their final destinations – were France, China, and Japan, according to the data compiled by Bloomberg. Traders have told Bloomberg that China is buying a lot of Russian LNG to take advantage of a discount for Russian cargoes compared to the prices on the spot market. In September, Chinese imports of LNG from Russia rose by one-third compared to the same month of 2021, according to Chinese customs data cited by Bloomberg. All imports of LNG into China were down by 12% in September.
China’s Natural Gas Consumption Set To Fall For First Time In Two Decades
Natural gas consumption in China may fall this year for the first time in two decades, albeit moderately, because of the slowdown in the economy, Reuters has reported, citing officials from state energy companies. According to a researcher with CNOOC, gas demand in the country could see a one percent decline this year, to 363.6 billion cubic meters. China is also expected to cede to Japan the title of the world’s biggest LNG importer as lockdowns have sapped demand for energy this year. Winter demand for gas is also seen as weaker than usual, at between 168 billion and 190 billion cubic meters. However, this does not mean that all gas imports will decline, according to the report. Imports of liquefied natural gas, which is more expensive, are already on the decline but pipeline gas imports from Russia and the Central Asian republics are on the rise. “Our winter supply policy is stabilizing piped gas imports from Central Asia, boosting volumes from Russia, and increasing domestic production,” a PetroChina official told Reuters. The higher imports will be used both directly and to fill storage, which currently equals just 7 percent of China’s total demand or 26 billion cubic meters. The gas from storage will be used at the height of heating season this winter if necessary. Domestic gas production is also rising as the government pushes the energy industry to reduce its reliance on imported commodities. Despite these efforts, however, imports have been on the rise over the last decade, as has local gas production, Reuters’ John Kemp noted in a recent column. Domestic production of natural gas has been rising at an annual rate of some seven percent over the past decade, turning into the world’s fourth-largest gas producer. Yet demand rose by a rate of around 11 percent during the same period.
Russia becomes the No. 1 oil supplier for India in October
Russia has become India’s top oil supplier, edging past the traditionally dominant suppliers Saudi Arabia and Iraq, according to the energy cargo tracker Vortexa. Russia supplied 946,000 barrels per day of crude to India in October, the highest ever in a month. It accounted for 22% of India’s total crude imports, ahead of Iraq’s 20.5% and Saudi Arabia’s 16%. Compared to September, overall crude import went up 5% in October and that from Russia rose 8%, according to Vortexa, an energy intelligence firm that has offices in Singapore and London and tracks oil and gas tankers across the globe, providing freight and inventories analytics. For the first time, India imported more seaborne Russian crude than the European Union – the volumes were 34% higher than the EU’s. With imports of 1 million barrels per day in October, Chinaremained the largest buyer of Russian seaborne crude. India also imported about 106,000 barrels per day of fuel oil from Russia in October, a new high.
Sri Lanka’s Trinco Petroleum Terminal to invest up to US$70mn in tank farm
Sri Lanka’s Trinco Petroleum Terminal Ltd, a joint venture between state-run Ceylon Petroleum Corporation and India’ Lanka IOC, plans to invest up to 70 million dollars in refurbishing 61 oil tanks in Trincomalee, an official said. TPTL has control of 51 tanks in a World War II era tank farm in a 600 acre land by the Trincomalee port in North Eastern Sri Lanka. The tank farm has 99 tanks of which 15 is operated by Lanka IOC. The balance is expected to be used by CPC. In the first phase 10 tanks with a capacity of 10,000 metric tonnes each will be refurbished and pipelines for white and black oils will be laid Managing Director of Lanka IOC Manoj Gupta said during Sri Lanka’s Colombo International Maritime & Logistics Conference. Phase 1 is estimated to cost between 15 to 20 million US dollars. Phase 1 is expected to be completed in 2023.
IGX clocks over 4.105 million mBtu gas trade volumes in October
Indian Gas Exchange (IGX) on Wednesday said its platform traded 41,05,400 million British thermal unit (mBtu), or around 38 million standard cubic meters (mscm), gas volumes in October, a whopping 298% jump on year. A total of 254 trades were executed, the highest in a single month At 22,48,550 mBtu, IGX traded a record single-day domestic ceiling price gas at $12.46/mBtu during the month, said a statement from the exchange. The exchange witnessed participation from more than 50 buyers from various sectors such as CGDs, petrochemical, Power, Glass, Ceramics, Aluminium, Marketers etc. During the month, major stakeholders such as Reliance Industries Limited and Vedanta Limited joined IGX as Proprietary Members, while BP Exploration (Alpha) Limited and Invenire Petrodyne Limited joined IGX as Clearing Members. “The average gas price discovered at the Exchange during the month was ₹1,858 /$22.65 per MMBtu almost 30% down over last month. Different spot gas benchmark prices of were – HH about $6/MMBtu and TTF at ~$39/MMBtu LNG benchmark indices were – WIM ~30 $/MMBtu,“ Indian Energy Exchange (IEX) said in a statement. “ The prices discovered at IGX for India’s inland gas demand and supply have been in line with the international benchmarks, where similar downtrend in prices of close to 30% was observed,“ it added.