Hi Peter. All good points, my response was more directed towards the other poster that was sort of implying that the only place that could supply China energy was the US. The countries I listed were from a quick google search of China’s top energy imports by country of origin 2020. It may not be 100% accurate and it it’s more complicate…
Hi Peter. All good points, my response was more directed towards the other poster that was sort of implying that the only place that could supply China energy was the US. The countries I listed were from a quick google search of China’s top energy imports by country of origin 2020. It may not be 100% accurate and it it’s more complicated as you say. Totally agree with what your saying.
BTW: I didn’t realize China was a major re-exporter of LNG. Maybe that’s were Australia was looking to import cheap LNG from for our East Coast domestic market even though we’re one of the worlds largest exporters of LNG.
China's economy is contracting just as Russia's is--which means their structural demand for natural gas and even oil is reduced at the moment. China has been seizing the moment to flip some surplus shipments of LNG to Europe at a nice markup.
Which is a testament to the precarious state of China's reserves of coal and hydro heading into winter--Beijing told the LNG exporters to stop, and stockpile the natural gas instead.
China is looking to do some value-add flipping of Russian oil by refining it first then selling the distillates and refined products back to Europe, and that still seems to be on the table.
Wow. That doesn’t look good for the Australian economy either, I think we were their biggest LNG supplier at some stage. Stockpiling is easier said than done in Australia, I’m pretty sure we just extract it, process it and ship it. There would be very little intermediate storage capacity that I know of. Like you said what happens in China has major effects outside China.
As I understand the industry, one really doesn't "store" LNG for very long. Rather, one regassifies the LNG back into regular natural gas, after which it can be piped into salt domes or other geological spaces for long term storage.
Liquefying natural gas basically involves chilling it to below -260°F where there's a state change from vapor to liquid. Keeping LNG in a liquid state would require maintaining either the temperature or the pressure (the temperature would be the easier and less dangerous of the two options). Liquefaction is a transport modality; it does not present as a storage modality at all.
Exactly, that’s Australia’s problem, we extract it, process it, compress it and ship it. We’ve got no where to put it like the US salt domes. We’re pretty much set up as JIT supplier. We don’t even bring it onshore in some cases, it’s processed and compressed offshore straight into the transport vessel then shipped direct to the customer. That’s the problem for Australian producers, unless we cut back production we’ve got to sell it pretty much at any price. Most of the contracts are long term supply agreements, not sure if they’re take or pay. But when your biggest customer says stockpile it and you’ve got no “warehouse” and it’s not easy to slow down production you’ve got a problem. The capital cost of these projects is staggering and they rely on massive throughput to be profitable. Remember when the spot price of oil went negative? Similar problem.
Pretty sure they would. Not sure if it’s cost/effective feasible. If the price is right I’m sure they will. Your article has me intrigued, it’s been a long time since I thought about anything to do with LNG. I used to work for a company that supplied specialized instruments to the oil and gas industry and used to be all over this stuff. If your interested check out this Wiki link if you want know what I’m talking about regarding how it’s done. https://en.m.wikipedia.org/wiki/Floating_production_storage_and_offloading
Just did some reading up on it. Turns out China’s lower demand for LNG is actually good news for Australian LNG exporters, bad news for East Coast consumers and businesses that basically pay “World Parity Prices” for natural gas. Lower Chinese demand at low contract prices has freed up gas that is getting a higher price on the spot market. Even though we’re not selling much into Europe we are selling more into Asia at a higher price because the US is diverting gas to Europe which is normally destined for Asia.
Hi Peter. All good points, my response was more directed towards the other poster that was sort of implying that the only place that could supply China energy was the US. The countries I listed were from a quick google search of China’s top energy imports by country of origin 2020. It may not be 100% accurate and it it’s more complicated as you say. Totally agree with what your saying.
BTW: I didn’t realize China was a major re-exporter of LNG. Maybe that’s were Australia was looking to import cheap LNG from for our East Coast domestic market even though we’re one of the worlds largest exporters of LNG.
China's economy is contracting just as Russia's is--which means their structural demand for natural gas and even oil is reduced at the moment. China has been seizing the moment to flip some surplus shipments of LNG to Europe at a nice markup.
Which is a testament to the precarious state of China's reserves of coal and hydro heading into winter--Beijing told the LNG exporters to stop, and stockpile the natural gas instead.
China is looking to do some value-add flipping of Russian oil by refining it first then selling the distillates and refined products back to Europe, and that still seems to be on the table.
Wow. That doesn’t look good for the Australian economy either, I think we were their biggest LNG supplier at some stage. Stockpiling is easier said than done in Australia, I’m pretty sure we just extract it, process it and ship it. There would be very little intermediate storage capacity that I know of. Like you said what happens in China has major effects outside China.
As I understand the industry, one really doesn't "store" LNG for very long. Rather, one regassifies the LNG back into regular natural gas, after which it can be piped into salt domes or other geological spaces for long term storage.
Liquefying natural gas basically involves chilling it to below -260°F where there's a state change from vapor to liquid. Keeping LNG in a liquid state would require maintaining either the temperature or the pressure (the temperature would be the easier and less dangerous of the two options). Liquefaction is a transport modality; it does not present as a storage modality at all.
Exactly, that’s Australia’s problem, we extract it, process it, compress it and ship it. We’ve got no where to put it like the US salt domes. We’re pretty much set up as JIT supplier. We don’t even bring it onshore in some cases, it’s processed and compressed offshore straight into the transport vessel then shipped direct to the customer. That’s the problem for Australian producers, unless we cut back production we’ve got to sell it pretty much at any price. Most of the contracts are long term supply agreements, not sure if they’re take or pay. But when your biggest customer says stockpile it and you’ve got no “warehouse” and it’s not easy to slow down production you’ve got a problem. The capital cost of these projects is staggering and they rely on massive throughput to be profitable. Remember when the spot price of oil went negative? Similar problem.
I do remember. And you're right: Australian NatGas is not likely to sell much to China under present circumstances.
Although I suspect Europe might be willing to take a tanker or two of LNG off Australia's hands! (Just a hunch!)
Pretty sure they would. Not sure if it’s cost/effective feasible. If the price is right I’m sure they will. Your article has me intrigued, it’s been a long time since I thought about anything to do with LNG. I used to work for a company that supplied specialized instruments to the oil and gas industry and used to be all over this stuff. If your interested check out this Wiki link if you want know what I’m talking about regarding how it’s done. https://en.m.wikipedia.org/wiki/Floating_production_storage_and_offloading
Price must be right:
https://www.bbc.com/news/business-62570900.amp
Pretty much in line with what we’ve been discussing.
The world is a much less surprising place when you pay close attention to the facts!
Just did some reading up on it. Turns out China’s lower demand for LNG is actually good news for Australian LNG exporters, bad news for East Coast consumers and businesses that basically pay “World Parity Prices” for natural gas. Lower Chinese demand at low contract prices has freed up gas that is getting a higher price on the spot market. Even though we’re not selling much into Europe we are selling more into Asia at a higher price because the US is diverting gas to Europe which is normally destined for Asia.
Fascinating. Good info to have...tells me to pay even closer attention to energy commodities.