RIM Market News >  Asian Viewpoints

Singapore LNG International Conference = Increasing FIDs lead to industry’s positive mood

2019/07/12 12:00

Weak spot prices for liquefied natural gas (LNG) recently continued. With long term contract prices linked to crude prices currently said to be at $10-11 per million British thermal units (MMBTU), spot prices are less than $5/MMBTU for delivery to Northeast Asia. End-users, of course, welcome by the trend of lower prices. However, there are no signs of excessive lamentation from traders and LNG producers. The lower LNG market situation compared to other fuels generated perceptions that the growth of the LNG market will be further accelerated. An LNG International Conference (sponsored by CWC, World LNG & Gas Series, Asia Pacific Summit) was held on Jun 26-27 in Singapore. At the meeting, we interviewed market sources about factors that are in focus. Most sources viewed the industry's mood as generally positive as "the number of final investment decisions (FID) is expected to rise to the highest level in the past 10 years in 2019". The number of FIDs has fallen to the lowest level in 10 years during 2016 to 2017. Further, the rapid expansion of spot trading for LNG seems to be a positive factor as well. "Although the margin shrank, the trading volume has significantly increased and profits can be secured by low margins and high turnover," major French trader said. LNG traders, which had been forced to play a supporting role in the trading market, now see an opportunity to expand their market share. In addition, demand for LNG in Japan and Korea, which had been expected to decline gradually, is expected to turn stronger the medium- and long-term due to environmental issues and the enhancement safety standards for nuclear power plants. Although LNG import in Japan is likely to temporarily drop to around 80 million tons per year from the current 86 million tons per year, it is expected to recover from around 2030 and expand to 90 million tons by 2040.

Singapore : Satoshi Hagimoto  +65-6345-9894
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