Global LNG demand is increasing

Since the outbreak of the conflict in Ukraine, European and Asian countries more than most have recognized that they must reduce reliance on any one region or country’s supply of energy including natural gas.

Natural gas is both a transition and a destination fuel. Natural gas and LNG are essential for the energy transition as they play an instrumental role in shifting away from coal and moving toward net-zero emissions. As the transition evolves, natural gas will remain vital in providing reliable and efficient energy to support economies in different parts of the world including Australia and all of Asia.

The re-drawing of global energy supply maps is pushing natural gas and LNG demand to new heights and spurring new off-take contracting and other activities and opportunities for companies like Gulf Energy, for example:

• The number of liquefied natural gas (LNG)-fuelled vessels has grown significantly from 21 in 2010 to 590 today, with 564 more on order, projecting over 1,150 vessels by 2028. That’s according to recent reports from SEA-LNG, which also note that LNG-fuelled vessels account for more than 2% of the global shipping fleet, with the order book continuing to grow. (Gasworld, 8 October 2024)

• Santos Ltd. has signed a mid-term liquefied natural gas (LNG) supply contract with TotalEnergies Gas & Power Asia Private Limited. The contract is to supply 20 LNG cargoes, or up to approximately 0.5 million metric tons of LNG per annum over a period of three years plus one quarter. (Rigzone, 4 October 2024)

• Growth in global gas demand is set to pick up this year due to colder winter temperatures and easing prices, with emerging economies leading the increase in consumption, but geopolitical risks and supply-side concerns could trigger renewed price volatility, according to the IEA’s latest Gas Market Report. (IEA, 3 October 2024)

• Mitsubishi Corp. has extended an existing 10 percent stake each in two of the four joint ventures comprising the Petronas LNG complex in Bintulu district, Sarawak state. (Rigzone, 30 September 2024)

• Japan’s Mitsubishi Corporation has signed new agreements with Malaysia’s state-owned energy giant Petronas, reaffirming its engagement in two of Malaysia’s liquefied natural gas (MLNG) plants owned by the latter in the country’s Sarawak region. (Offshore Energy, 30 September 2024)

• Glencore is set to purchase 2 million tonnes per annum (mtpa) of LNG for 20 years from the Commonwealth LNG project and equivalent natural gas supply from KTG under a netback agreement. The definitive agreements are expected to follow in Q4 2024. (Offshore Energy, 23 September 2024)

• In line with its strategy to grow its long-term liquefied natural gas (LNG) sales, TotalEnergies announces a 5-year extension of its sales and purchase agreement (SPA) with CNOOC, for the delivery of 1.25 million tons of LNG per year to China until 2034. (TotalEnergies, 19 September 2024)

• TotalEnergies has signed a heads of agreement (HoA) to supply LNG to Türkiye. In a deal aligned with its strategy to grow long-term LNG sales, the HoA signed with BOTAŞ calls for TotalEnergies to deliver 1.1 million tonnes/year of LNG for 10 years beginning in 2027. (Oil & Gas Journal, 19 September 2024)

• Woodside Energy Group Ltd. has signed a sale and purchase agreement (SPA) with JERA Co. Inc. for the long-term supply of liquefied natural gas (LNG) to Japan. Under the SPA, Woodside will supply approximately 0.4 million metric tons, or six cargoes, of LNG per year over 10 years on a delivered basis, beginning April 2026. (Rigzone, 19 September 2024)

• MidOcean Energy is acquiring an additional 15 percent interest in Peru LNG (PLNG) from Hunt Oil Company. Upon closing of the transaction, MidOcean’s interest in PLNG will increase from 20 percent to 35 percent. Hunt’s interest in PLNG will decrease from 50 percent to 35 percent, and Hunt will remain the operator of PLNG following the transaction. (Rigzone, 19 September 2024)

• ADNOC has signed 15-year agreement with Indian Oil Corp. Ltd. (IndianOil) for the delivery of 1 million tonnes/year (tpy) of LNG, primarily sourced from ADNOC’s lower-carbon Ruwais LNG project under development in Al Ruwais Industrial City, Abu Dhabi. (Oil & Gas Journal, 11 September 2024)

• The Japanese government is considering support measures to make it easier for companies to enter into long-term purchase contracts for liquefied natural gas to ensure a stable supply of the super-chilled fuel. (Reuters, 11 September 2024)

• QatarEnergy signed an agreement with China State Shipbuilding Corp. (CSSC) for the construction of six additional QC-Max vessels, bringing the total number of LNG vessels on order under its fleet expansion program to 128. (Gas & Oil Journal, 10 September 2024)

• Santos has signed a mid-term LNG supply contract with Glencore Singapore Pte Ltd. The contract is to supply 19 LNG cargoes, or up to 500,000 tonnes/year of LNG over a period of 3 years plus one quarter. (Oil & Gas Journal, 9 September 2024)

• North America's LNG export capacity is on track to more than double to 24.4 bcfd by 2028 from 11.4 bcfd in 2023 if projects currently under construction begin operations as planned, according to data from the US Energy Information Administration (EIA). (Oil & Gas Journal, 4 September 2024)

• Shell International Trading Middle East Fze (Shell) and Türkiye’s Boru Hatları ile Petrol Taşıma AŞ (BOTAŞ) signed a 10-year agreement through which Shell will supply BOTAŞ with up to 4 billion cu m/year (bcmy) of LNG a year from its US and global portfolio, with deliveries starting in 2027. (Oil & Gas Journal, 3 September 2024)

• AMIGO LNG SA de CV (Amigo LNG) of Mexico, a subsidiary of LNG Alliance Pte Ltd, Singapore, announced today that it entered into a binding Heads of Agreement (HOA) with OQ Trading (OQT), the trading arm of the national energy company of the Sultanate of Oman, to supply LNG from its liquefaction facility in Guaymas, Sonora, Mexico. This key milestone paves the way for the long term supply of LNG targeting the rapidly growing Asian market. (LNG Alliance Pte Ltd, 30 August 2024)

• Mexico Pacific has finalized a 20-year sales and purchase agreement (SPA) with POSCO International, a leading energy trading company from Korea. The deal, announced this week, involves POSCO International purchasing 0.7 million tonnes per annum (mtpa) of LNG from Mexico Pacific's SaguaroEnergía facility. (Pipeline & Gas Journal, 29 August 2024)

• Based on the 2024 Global Gas Report by the International Gas Union (IGU), Italian energy player Snam, and energy market intelligence group Rystad Energy, the world may face an energy deficit soon, with renewable energy targets at risk of falling through due to insufficient funding allocated to gas and clean energy projects. (Offshore Energy, 29 August 2024)

• QatarEnergy has agreed to a 15-year deal with Kuwait Petroleum Corp. (KPC) for the supply of up to 3 million tonnes/year (tpy) of LNG to the State of Kuwait. (Oil & Gas Journal, 27 August 2024)

• Amigo LNG SA de CV, a subsidiary of Singapore’s LNG Alliance Pte Ltd, has entered into a long-term liquefied natural gas (LNG) supply agreement with Malaysia’s E&H ENERGY SDN BHD. Under the agreement, Amigo LNG will supply 3.6 million metric tons per annum (mtpa) of LNG to E&H for the Malaysian market over 20 years, beginning in the third quarter of 2027. (Rigzone, 27 August 2024)

• South Korean liquefied natural gas (LNG) infrastructure company GAS Entec has secured a contract to build the Sheikh Sabah Al-Ahmad Al-Jaber Al Sabah onshore regasification LNG Terminal at Port of Aqaba in Jordan. (Rigzone, 22 August 2024)

• Abu Dhabi National Oil Company (ADNOC) has signed a long-term heads of agreement (HOA) with Japan’s Osaka Gas for liquefied natural gas (LNG) supply mainly originating from its low-carbon Ruwais LNG project, currently under development. Under the terms of the deal, ADNOC is set to deliver up to 0.8 million metric tonnes per annum (mmtpa) of LNG to the ports of Osaka Gas and its Singapore-based subsidiary, Osaka Gas Energy Supply and Trading (OGEST). The Japanese-UAE duo plans to conclude a detailed sale and purchase agreement in the coming months based on the terms of the HOA, which is said to be ADNOC’s first long-term LNG deal with a Japanese energy company since the early 1990s. (Offshore Energy, 8 August 2024)

• Cheniere Energy, Inc. subsidiary Cheniere Marketing, LLC has secured a long-term liquefied natural gas (LNG) sale and purchase agreement (SPA) with Galp Trading S.A., a subsidiary of Galp Energia, SGPS, S.A. Under the SPA, Portuguese energy company Galp will purchase approximately 0.5 million metric tons per annum (mtpa) of LNG for 20 years from Cheniere Marketing on a free-on-board basis for a purchase price indexed to the Henry Hub price, plus a fixed liquefaction fee. (Rigzone, 7 August 2024)

• Shipping giant A.P. Moller-Maersk A/S is in the process of securing 50-60 vessels as part of its fleet renewal program, including ships that will be able to run on liquefied natural gas, a fuel the company has criticized in the past. The order is for a mix of owned and chartered dual-fuel vessels totaling 800,000 twenty-foot equivalent units — a measure of how much cargo is transported. (Rigzone, 7 August 2024)

• Woodside Energy has splashed $US900 million ($1.35 billion) to expand into the Gulf of Mexico as part of plans to become a “global LNG powerhouse” despite a backlash from investors who say it is too slow to transition away from the fossil fuel. (Australian Financial Review, 22 July 2024)

• Woodside Energy Group Ltd. has signed a sale and purchase agreement (SPA) with Taiwan’s CPC Corporation for the long-term supply of liquefied natural gas (LNG) to the country. Under the SPA, Woodside will supply approximately six million metric tons of LNG on a delivered basis over 10 years, beginning in July. (Rigzone, 12 July 2024)

• Abu Dhabi National Oil Co. (ADNOC) has entered agreements farming out a 40 percent ownership in its largest natural gas liquefaction project to BP PLC, Mitsui & Co. Ltd., Shell PLC and TotalEnergies SE. The companies separately signed up for a 10 percent interest each in the liquefied natural gas (LNG) export plant in Al Ruwais Industrial City, which is planned to have two trains with a combined production capacity of 9.6 million metric tons per annum (MMtpa). (Rigzone, 11 July 2024)

• Australia's Woodside Energy (WDS.AX) has signed a deal with Taiwanese state-owned natural gas firm CPC Corporation to supply liquefied natural gas for a period of 10 years to Taiwan. Woodside will deliver 6 million tonnes of LNG over the period, starting from July. The company may supply another 8.4 million tonnes of LNG to CPC from 2034 to 2043, subject to conditions and agreement on terms for this period. (Reuters, 11 July 2024)

• Malaysia’s Petroliam Nasional Bhd. (Petronas) has earmarked three new energy-efficient liquefied natural gas (LNG) vessels as the company gears up for the startup of LNG Canada in Kitimat, British Columbia. (Rigzone, 10 July 2024)

• Swiss-based MET Group has entered into a long-term FOB (Free-On-Board) LNG purchase agreement, by signing a 10-year agreement with Shell. MET’s primary objective is to supply its European customers with US LNG. (MET Group, 9 July 2024)

• Saudi Arabian Oil Co. (Aramco) has awarded construction contracts worth a combined $25 billion for expansion, drilling and capacity maintenance projects for its natural gas assets. The awards “progress its strategic gas expansion, which targets sales gas production growth of more than 60 percent by 2030, compared to 2021 levels”, the state-owned energy giant said in a statement. (Rigzone, 2 July 2024)

• ADNOC L&S last week awarded South Korean shipyards Samsung Heavy Industries and Hanwha Ocean up to $2.5 billion shipbuilding contracts for the construction of new LNG carriers as part of its growth strategy and fleet expansion plans. (Oil & Gas Journal, 9 July 2024)

• Golar LNG Ltd. has entered into definitive agreements with Pan American Energy (PAE) for the 20-year deployment of a floating liquefied natural gas (FLNG) vessel in Argentina. The FLNG project targets monetizing Argentine gas, tapping into the vast resources of the Vaca Muerta shale formation in the Neuquina Basin, the world's second-largest shale gas resource. The project is expected to start liquefied natural gas (LNG) exports within 2027, establishing Argentina as an LNG exporter. (Rigzone, 8 July 2024)

See past activities and opportunities for companies like Gulf Energy below: