The operational focus has been on preparing four vessels for FSRU operations in Europe and Brazil.

Global demand for LNG rose by 2.4 percent from 396 million tonnes in 2022 to a record high 406 million
tonnes in 2023. Europe and Asia combined drove 93 percent of demand, with Asian imports picking up
significantly in Despite an LNGC orderbook of over 300 units by year-end, newbuilding prices remained
at record highs with extended lead times Only counting projects that are operational or have taken FID,
global liquefaction capacity is expected to grow by more than 40 percent from 488 million tonnes per
annum in 2023, to 689 million tonnes per annum in 2028

The introduction of hybrid FSRUs marked a significant milestone in energy

infrastructure development. These vessels offer the dual capability of
delivering both LNG and clean energy, providing a cost-effective solution for
importing clean energy while ensuring energy security and transitioning away
from fossil fuels.

Advantages include utilising existing infrastructure, cost-effectiveness,

flexibility, and readiness by 2028. Additionally, Höegh LNG actively engaged
in developing floating ammonia terminals to import, store, and distribute
liquid ammonia to shore. Collaborations with partners like Wartsila, BASF,
and Norwegian research institutes aim to implement an industrial-scale
ammonia cracker on a floating terminal by 2028, facilitating hydrogen supply
to end-consumers.

In partnership with Aker BP, Höegh LNG is committed to providing CCS

services to combat climate change. Achieving a significant milestone in 2023
with Aker BP’s receipt of a CO2 storage license, the collaboration aims by
2028-2029 to establish a robust CCS value chain on the Norwegian
Continental Shelf, covering CO2 gathering, transportation, and secure
injection for permanent storage in subsea reservoirs. The dedication to driving
positive change in the energy sector underscores Höegh LNG’s commitment to
sustainability and environmental stewardship. Through innovative solutions
and strategic partnerships, Höegh LNG remains at the forefront of
accelerating the energy transition towards a cleaner future. More detailed
information is available in the company’s sustainability report for 2023 on

Höegh LNG entered in December 2023 into a joint development agreement

with VTTI B.V. to develop the new Zeeland energy terminal in or near the port
of Vlissingen in the Netherlands. The terminal will be based on a FSRU, which
in time, plans to transition from import of LNG to hydrogen. The facility will
be connected to one of the largest industrial clusters in the Netherlands and to
the Dutch and European gas pipeline network and, sequentially, the hydrogen
backbone. It is expected to be in operation in the second half of 2027.
In Europe, five FSRUs became operational in 2023, with four more expected
by 2024. Additionally, two units are set for commissioning elsewhere by 2024.
As of December 31, 2023, there were 47 FSRUs globally, excluding four barges
with limited capacity. Almost all FSRUs are either in long-term contracts or
committed to near-term contracts, leaving only one available for prompt
delivery. Another FSRU newbuild is

expected for delivery in 2026

Income statement Höegh LNG demonstrated significant growth compared to the prior year and
reported a total income of USD 520.9 million, up from USD 380.8 million in 2022. Similarly, operating
profit before depreciation and amortisation (EBITDA) reached USD 338.2 million, marking a substantial
increase from USD 153.2 million in the preceding year. The improved revenues and EBITDA are mainly
explained by the new contracts for the fleet which commenced in late 2022 and in 2023, the addition of
Hoegh Gandria to the fleet in 2023, and reduced administrative expenses compared to the previous
year. Operating profit was USD 220.4 million in 2023 (USD 38.0 million). Net financial expenses
amounted to USD 111.7 million in 2023 (USD 90.8 million). The group reported a net profit of USD 97.0
million for 2023, a substantial improvement compared to the loss of USD 55.4 million reported in 2022.
This increase in profitability was primarily driven by the higher EBITDA, although it was partly offset by
aincreased depreciation and interest costs largely caused by the addition of the new vessel to the fleet.
When launching the public procurement, it is envisaged that within the scope of the O&M services
the selected contractor will plan and organise the day-to-day operation, maintenance, and repair of
the FSRU, and ensure timely procurement of the necessary equipment, spare parts, and services.
Following the general practice in the shipping market, tenderers are invited to submit a tender for
the fixed vessel management service and fixed crew costs for the entire contract period. All other
ongoing maintenance and repair costs will be planned annually and compensated to the contractor
on the actual basis.
The government Trilemma that secure steady energy supply, energy
transistion like look into emissions, also the stable energy price

Lithuania is a great example as in 2012 when govt tender & from 2014 FSRU
Independence & now it fully energy independence and providing gas supply to
Polland & Latvia

Total 8 FSRUs ,, As German councler Oliv FSRU are the key to become energy
independent , total three terminals with 20 BCM or about 1/3 of Russian
Energy gas supply

Currently, according to the Economic Survey of Pakistan 2022-23, the energy

mix consists of 58.8 percent thermal, 25.8 percent hydel, and 8.6 percent
nuclear power. Additionally, alternative power sources contribute 6.8 percent
to the overall mix.
The Inter-Governmental Framework Declaration of the Iran-Pakistan Gas
Pipeline Project was signed by the presidents of Pakistan and Iran on 24th
May 2009 for the supply of gas of 750 MMCFD for 25 years from South Pars
gas field of Iran and delivered at the Pak-Iran border, near Gwadar. The
project, having a length of 1,150-km within Iran and 781-km within Pakistan,
was to be implemented by each country in their respective territories. The first
gas flow was to start from 1st January 2015. Iran has completed construction
of over 900-km within Iran, while the remaining segment of 250-km is yet to
be constructed by Iran.

$2.3 billion Gwadar Nawabshah LNG Terminal and Pipeline

Project gas sales purchase agreement (GSPA). This could include moving the international court
against Pakistan to charge US$2.3 million per day penalty. “

first lay down the 81 kilometers as part of the total pipeline of 781 kilometers that will, in later
stages, connected to Nawabshah

Under the arrangement, China had committed to provide 85% of financing whereas Pakistan
had to contribute 15% of equity. Exim Bank of China indicated to provide funds at London
Interbank Offered Rate (Libor) plus 2%.

In a revised offer, China had withdrawn its offer of setting up an LNG terminal at Gwadar Port
on the build-and-operate model and wanted to work as an engineering, procurement and
construction (EPC) contractor for the project.
In response to the revision of offer by China, Pakistan will own and operate the terminal and
award the EPC contract to the Chinese company working on the Gwadar LNG pipeline project
under a government-to-government arrangement.

The ISGS had also proposed a plan of setting up two jetties at Gwadar Port with two floating
LNG terminals at a cheaper cost for handling 1.2 billion cubic feet of imported gas per day
(bcfd). According to an official, a meeting of the price negotiation committee had already been
held during PML-N tenure.

Pakistan needs to go out to the market and sign long term LNG contracts for at least
three to five ships a month to completely utilise the contracted 12 ships-a-month
capacity at the two terminals,” said Abbasi, as these contracts are still “available at
reasonable rates”.

It can also allow the private sector to pay and use the terminals to import two ships
each. But he said, the government was “reluctant to let the private sector in and let go
of its hold on the gas sector.”

Zakaria, agreeing with Abbasi, said the energy sector needed to be extricated from the
clutches of the government to make it viable. “Let the private sector take over and
operate LNG terminals and sell the gas to willing buyers; let them take the market
risks,” he said.

According to Zakaria, in the short term, if the government as the sole buyer and seller
is out of the picture and gas producers and importers and the buyers [industry] can
negotiate directly on their own terms, the prices will be cheaper for both. “The state
will have enough domestic gas to continue supplying to the poor, at affordable rates,”
he added.

For now, the two up and running terminals have a combined capacity to unload
approximately 9 mtpa of LNG. “The government is making arrangements to unload
LNG every every 10 days at the PGPCL,” said Gill.

With a capacity of 750 mmcfd, of which 600 mmcfd is contracted to the government,
he said the government was utilising 65pc — based on a four-year average — of
PGPCL’s contracted capacity. The remaining 150 mmcfd has remained unutilised
since the commissioning of the terminal. “OGRA is finalising rules and regulations
for the GasPort terminal to follow an open-access model and have multiple users,”
assured the PGPCL spokesperson.

On the other hand, the EETL, considered one of the most utilised regasification
terminals in the world, is working at over 97pc capacity.
“EETL’s operations are not impacted by day-to-day fluctuations in the LNG market
because the terminal solely handles cargos for SSGC which are imported under
Pakistan’s 15-year long-term contract with Qatar and are not subject to supply risks
that arise in the spot [short-term] market. Cargos under this contract ensure significant
supply security as they are also government to government contracts,” explained the
EETL chief executive officer, Yusuf Siddiqui.

Engro LNG 4.5 MTPA came in operation in 2015 a 24 km line to offtaker grid which is SSGS
with Excelerate Energy FSRU project cost of 122 M$ 151,000 Capacity cbm 4 Tanks, 12.20 m
Draught US $. 0.4799 Per MMBTU 5,390mln in 3MCY23 ( CY22: PKR 16,409mln)
RLNG share
country’s total gas demand has risen to 26% in FY2020
5.8 MTPA LNG, commissioned in second half 2009, Construction cost of 1.5 B$

Crown LNG, a Norwegian group which specialises in developing LNG

infrastructure for harsh weather conditions, has entered into an
agreement with Aker Solutions as the main contractor to deliver a
gravity-based structure (GBS) in concrete for Crown’s offshore LNG
terminal at Kakinada, India.
Further, Siemens Energy and Wärtsilä Gas Solutions have been assigned as key subcontractors to
Aker Solutions for the project. Siemens Energy will develop the power generation and
distribution system as well as the platform control system, while Wärtsilä will develop the re-
gasification system for the LNG terminal.

Under the agreement, Aker Solutions and key subcontractors will first conduct the front-end
engineering and design for the LNG terminal. Upon final investment decision, Aker Solutions
will take on the role as EPCIC contractor for the project.

“This LNG terminal will be based in a location exposed to monsoon seasons, which requires
partners with the best track record from harsh environment projects. This is why we have
engaged Aker Solutions, Siemens Energy and Wärtsilä,” says Gunnar Knutsen, CEO of Crown
LNG AS, which is Crown LNG’s project services company.

Gravity-based structure

Crown LNG has opted to develop the LNG terminal as a gravity-based

concrete structure that sits on the seabed. This solution will be able to
withstand the harsh weather conditions the Indian monsoon season presents,
which enables a 365-day operating window for the terminal. KGLNG’s license
has recently been updated to reflect Crown LNG’s solution and 365-days
operational window.

Aker Solutions has designed and built concrete GBSs in rough North Sea and
Artic waters for the past four decades and has also delivered the world’s first
LNG offshore terminal in concrete, the Adriatic LNG Terminal.

US LNG Sector Pause in US LNG exports but impact will come after 2030
Late Jan, US exports more than 87 MT same as produced in 2023 from 7 export plants
In Jan US DOE halted that it will only export to those ountries who have FTA & China, Japan &
other EU countries don’t hav it
QE is going to expand its production capacity to 142 MTPA
Over 200 MTPA volume coming @ end of year
2024 around 6.5 MT but in 2025 over 30 MT mainly b/c of US & Canada
One of key markets for US LNG is Europe b/c of Panama Canal is its increase cost in Frieght &
make less attractive for Asian for Spot
Over 82 MT for contract projection
In 2023 US LNG share was 19% was covered in Europe LNG & previously was only 1 %
For Europe if industry , power sector & residential not picking up then US LNG need to think
with improved renewables and nuclear , weak gas demand, as winter is low Medium to Long
term, Europe storage is around 100 MCuM
China is decarbonization story & SEA markets are offsetting domestic Gas production also Coal
switching, like India but as China but also Thailand on % is quite large but India is whole
another story
China imported 72 & Japan 66 MTPA
Qatar increament is different as iit doesn’t look for SPAs instead its transition for LNG
5 Major projects under construction or completion by 2030
Impact from Qatar from 227 MT to 77 MT
Last Year LNG traded was ~400 MT & prjections by Wood MAckanzy & shell will go by 650
MT by 2040 & market will be good in supply till 2030, Northeast Asia but large markets like
Japan & SK,
Around 2/3 of US LNG exports ended up in Europe & UK,
LNG security will not be of Europe, NEA, JP, SK but emerging Asia market like India, Pak,
Bangladesh , Southeast Asia this where the big wedge of future LNG demand growth is gonna
come from, these are fast going markets have stronger economic growth but are price sensitive
markets so its hard for LNG to compete with cheap coal so drawback of LNG export pause
LNG demand forecast are too roasy for China & SE Asia
75% of emmissions comers through combustion phase
Europe methane legislations that applies to domestic gas & oil production but also Imported gas
fuels from 2030 Europe will also start gathering data & it will be called Methane supply Index or
Methance performance profile
Global methane pledge & Oil and Gas decarbonization charter that was opted COP 28 last year,

The map shows LNG terminals in the EU member states that are
currently operational, due for further expansion, under construction or at the
planning stage.

Spain, France, Italy, Portugal, Belgium, the Netherlands, Croatia, Poland,

Greece, Finland and Lithuania all have operational LNG terminals
Global LNG Market: Sliding Prices In
2024, Rising Opportunities By 2030?
Gaurav Sharma
Senior Contributor
I cover energy markets & sustainability often debunking risk premiums.
Follow

Mar 27, 2024,04:42pm EDT


A vessel carrying liquefied natural gas (LNG) in international waters
between Singapore and ... [+]
AFP VIA GETTY IMAGES

Going by current market trends, the prices of liquefied natural gas (LNG)
appear to be tanking. In fact, if current spot prices in Asia - the fuel's most
lucrative market - are benchmarked against what they were a few years ago,
you'd think there's a garage sale on.

Sources in Singapore suggest April spot cargoes are changing hands between
$8 and $9.25 per million British thermal units (mmBtu). That's more than a
halving of average spot prices of $19 per mmBtu recorded in the same month
in 2023, and nothing short of a slump on the record prices of $70 per mmBtu
seen back in 2022.
However, that was then, with the shock of Russia's invasion of Ukraine having
created a scramble for cargoes in a 2022 sellers' market as European and
Asian buyers toughed it out. At the end of Q1 2024, inventory levels in both
Asia and Europe appear to be historically high just as spot prices hit recent
lows.

For context, LNG is typically traded through long-term contracts averaging 20

years or more and via the spot market, with the latter conventionally higher
than the former.

Yet, undeterred by the current pricing dynamic, major energy players appear
to be building up their LNG capacities and businesses at a canter. That's if the
soundbites and announcements at the recently concluded global conference
CERAWeek by S&P Global, held in Houston, Texas, U.S. from March 18 to 22,
2024 are anything to go by.

Speaking at the event, Shell CEO Wael Sawan said the recent fall in prices is a

blip that is serving to heighten demand. He added that Shell - a major player
in the segment - was eyeing "further LNG opportunities" and investing in what
will likely be a well supplied market for the second half of the current decade.

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A tanker docked at the LNG terminal of Yangkou port, Rudong County,
China.
VISUAL CHINA GROUP VIA GETTY IMAGES

Rival ExxonMobil told Reuters its plan to double the size of its LNG portfolio
to 40 million tons per anum by 2030 was ahead of schedule.

Not to be outdone, Saudi Aramco - the world's largest energy company by

market capitalization - reiterated its market ambitions of investing in global,
especially U.S., LNG projects as well as increasing its own natural gas output
by 60% to 2030.

Not just a transition fuel

U.S. energy players, doubtless basking in the glory of making their country
the world's leading LNG exporter, queued up to criticize U.S. President Joe
Biden's recent pause on permits for new export terminals.

Because much to chagrin of environmentalists, market advocates claim an

increase in LNG exports to emerging markets helps lower their usage of coal
and fuel oil widely regarded as dirtier fossil fuels. Such a take also underpins
the industry's demand growth forecasts.

For instance, in its latest market outlook, Shell said the global LNG market is
estimated to rise by more than 50% by 2040 "as industrial coal-to-gas
switching gathers pace in China, and South Asian and Southeast Asian
countries use more LNG to support their economic growth."

However, for some at CERAWeek the importance of natural gas and LNG
extended well beyond fuel switches and energy transition. Their ranks
included Clay Neff, President, International Exploration and Production,
Chevron, who noted: "Natural gas is not just a transition fuel. We look at it as
a destination fuel in the decades to come.

"The world is going to need all forms of energy, and natural gas will continue
to play a fundamental role. It is essential we stay focused on developing energy
solutions that balance economic development and prosperity, energy security
and environmental protection."

It seems in the quest for what the industry sees as rising opportunities by
2030, sliding prices in 2024 count for naught when it comes to future
investments.

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An EU Carbon Tax Will Upend The Global

LNG Market
By Tsvetana Paraskova - Mar 24, 2024, 4:00 PM CDT
 The global LNG market could face a sea change in prices and trade flows later this
decade if the European Union includes LNG in its carbon border tax
 LNG is currently left out of the carbon border tax, so imports are not being
additionally taxed right now.
 The EU has extended its Emission Trading Scheme (ETS) to shipping, which means
that LNG cargoes into Europe will be subject to a carbon tax from 2024.
The global LNG market could face a sea change in prices and trade flows later this
decade if the European Union includes LNG in its carbon border tax.

The EU’s Carbon Border Adjustment Mechanism (CBAM), commonly known as the
“carbon border tax,” was launched on October 1 in the first transitional phase for
imports of several carbon-intensive groups of products into the European Union.

The first phase of the EU’s carbon import pricing legislation will not impose levies
on the products—such will apply from 2026. However, importers of iron and steel,
cement, aluminum, fertilizer, hydrogen, and electricity into the EU will be asked—as
of now—to report on the volume of their imports and the greenhouse gas (GHG)
emissions embedded during their production, although they will not be paying any
financial adjustment at this stage.
LNG is currently left out of the carbon border tax, so imports are not being
additionally taxed right now.

But, the EU has extended its Emission Trading Scheme (ETS) to shipping, which
means that LNG cargoes into Europe will be subject to a carbon tax from 2024.

“For now, the first draft only refers to new LNG import contracts, but a methane tax
on all LNG imports exceeding defined limits cannot be ruled out,” Wood Mackenzie
analysts wrote in a report this week.
The EU could go further and include LNG in CBAM, setting an import duty at
prevailing carbon prices in ETS, WoodMac noted.Related: Why Do we Still Have
Investor-Owned Utilities?
If the bloc were to include LNG in the carbon border tax mechanism, the LNG
market would be split into two and become a two-tier market of premium prices in
Europe and lower prices in emerging Asian markets, the energy consultancy says in
its analysis.

Now, there is a big ‘if’ in these assumptions. The EU, which currently relies a lot on
LNG imports for its natural gas supply – Russian pipeline gas being mostly out of
the picture – could still need relatively high LNG volumes after 2026 and may not
opt for an LNG import duty that is sure to upend global markets.

It remains to be seen how Europe will juggle its emission reduction targets with
energy security.

“If the EU decides to apply these levies, then this will push European gas prices up
but also bifurcate the global LNG market, creating a two-tier LNG
market,” said Massimo Di Odoardo, Vice President of Gas & LNG Research at Wood
Mackenzie.
This may not play to Europe’s advantage because LNG exporters with the lowest
emissions will benefit the most, but market proximity will be key, including for one
of the top exporters, Qatar, which is planning a massive expansion in its export
capacity by the end of the decade.
According to WoodMac, Qatar and Mozambique, for example, will require high
carbon prices in Europe that could lure them away from closer markets in emerging
Asia, which are unlikely to introduce an import tax on emissions and which—unlike
Europe—are only set to see their demand for LNG rise in the coming years.

On the other hand, the U.S. has some of the world’s highest-emitting LNG projects,
with upstream reservoir type and pipeline distance to LNG plants adding to their
high methane intensity, per WoodMac’s estimates.

U.S. LNG projects will likely be motivated to act to reduce emissions.

However, the scale and extent of future emissions taxes on LNG imports will be
critical to reduce emissions in the LNG industry at scale, according to Wood
Mackenzie.

If only Europe imposed taxes, it would not achieve the required goal of large-scale
decarbonization of LNG projects globally, the constancy notes. The most likely
result will be a bifurcate LNG market instead.

“If there is to be any material impact, a carbon price closer to US$200/t CO2e will be
required for LNG imports,” Di Odoardo said.

“Additionally, this would have to be introduced on a global level for it to be truly

effective in reducing carbon intensity and that is unlikely to happen. For now, all
eyes will be on Europe to see what it does next.”

By Tsvetana Paraskova for Oilprice.com