Energy infrastructure company Sempra Energy said on Feb. 27 the spread of coronavirus had not impacted talks with buyers of LNG, easing some worries after the virus outbreak cut gas demand in China earlier this month.
Short-term sales of LNG into China, the world’s second largest importer of the fuel, almost ground to a halt earlier in February as the outbreak slowed economic activity and hurt demand, and buyers pondered legal action to avoid having to honor purchase agreements.
However, more recently, China appeared to be slowly recovering its appetite for natural gas, with LNG imports rising last week for the first time in five.
“In terms of conversations with counterparties ... we have a long-term view about supply and demand in the middle part of the decade and we’re really dealing with people ... that have a shared view of a potential infrastructure shortage,” Sempra CEO Jeffrey Martin said.
“The virus issue hasn’t really impacted our negotiations with the customers we’re talking to.”
Cheniere Energy Inc., the biggest U.S. LNG company, said earlier this week it was too early to gauge the potential impact of the outbreak on the near-term LNG market, but the lower short-term LNG demand in China was putting additional pressure on the market.
Even before the virus spread, global gas prices had been falling for months on mild winter weather in Europe and Asia, record stockpiles in Europe and slow economic growth because of the U.S.-China trade war.
Sempra, which develops, builds and invests in natural gas liquefaction facilities, said it expects to make final investment decisions this year to build two new LNG export plants, one in the United States and one in Mexico.
Recommended Reading
Public, Private E&Ps Split on Permian Basin Drilling Strategies
2023-03-29 - The Permian led the nation in drilling rig activity in the past year, with data showing much of that growth coming from large, public upstream operators as private companies such as CrownQuest Operating, Iskandia Energy and Mack Energy have downshifted.
Machine Learning Expands Subsurface Knowledge from Permian to Offshore Vietnam
2023-04-06 - Ikon Science's seismic reservoir characterization technology uses machine learning to understand and predict subsurface properties from the Permian to offshore Vietnam.
Occidental CEO: US Permian Production Has Yet to Hit Peak
2023-04-12 - Occidental Petroleum CEO Vicki Hollub said Permian Basin hasn't yet peaked while Pioneer Natural Resources CEO Scott Sheffield said prices could hit $90 per barrel or more this year.
Eni’s Yatzil Well Hits in Mexican GoM
2023-03-17 - Eni’s Yatzil well found 130 ft of pay, and the operator estimates 200 MMboe reserves in place.
April US Shale Production Set to Rise to Highest Since December 2019
2023-03-13 - Crude output in the Permian Basin in Texas and New Mexico, the biggest U.S. shale oil basin, is expected to rise to 5.62 MMbbl/d. Though that would be a record high, oil output from the region is expected to gain by 26,000 bbl/d from the previous month, it’s also the smallest increase since last December, the data showed.