"Grabbing" liquefied petroleum gas tankers at sea, the global natural gas competition is fierce
Last month, the "Milina" tanker chartered by Royal Dutch Shell set sail from the west coast of France to carry LNG (liquefied natural gas) to Asia.
When it was about to enter the Strait of Gibraltar, the captain received a call.
According to a person familiar with the matter, “We must go to Rotterdam now,” the captain’s boss in London told him.
The tanker had to adjust its head and sailed from the Spanish coast to the French coast.
After unloading part of the LNG in the Port of Rotterdam in the Netherlands, it arrived at the Port of Bilbao in Spain, where it delivered the remaining cargo.
Shippers are turning tankers to higher bidders, and this rare situation adds to the uncertainty of the market.
The world is competing for natural gas supply
It is understood that the global natural gas reserves are now staggeringly low. The storage capacity of European natural gas is less than 75%, which is the lowest level over the same period in more than a decade.
Buyers in Europe, Asia and Latin America are competing for a limited supply of natural gas.
They all want to fill their stocks with fuel before winter in the northern hemisphere.
This week, the price of natural gas in Europe and Asia broke a record high, and many other regions also saw unprecedented increases.
At the same time, as the world's largest natural gas exporter, the price of domestic natural gas in the United States has reached the highest level in more than a decade due to various bidding wars.
This winter, domestic electricity bills in the United States are expected to rise significantly.
In addition, in terms of renewable energy, the wind speed in Europe this year is slower than normal, resulting in unsatisfactory wind power effects. The aging nuclear power plants are being phased out or more easily shut down, limiting the power generation of renewable energy.
Droughts in Brazil and the United States have dried up hydroelectric dams.
Kpler's data shows that with the decline in Brazil's hydropower production, the country has joined the battle for natural gas supply, importing the most LNG since 2013 last month.
Leaders of various countries are preparing to meet at the United Nations Climate Conference in Glasgow starting on October 31 and make major commitments to get rid of carbon-based energy sources, including natural gas.
However, the recent energy shortage has complicated the way that managements in various countries transition to less carbon-intensive electricity (such as wind and solar).
May slow down the speed of economic recovery
Since the carbon emissions of natural gas are about half that of coal, in order to reduce carbon emissions, in some countries, especially some European countries, coal-fired and oil-fired power stations have been idle or stored for a long time.
But in recent months, many of these power stations have been reconnected, driving up oil and coal prices.
These soaring energy prices are likely to increase inflation, disrupt industrial activities, and slow the recovery of the world economy.
Zinc producer Neillstal in the Netherlands started to slow its productivity in mid-September after rising electricity prices.
Norwegian fertilizer giant Yara International ASA cut European ammonia production by 40% in September, saying record high oil prices made the company unprofitable.
British Steel began charging an additional $25 per ton for its alloy metals this month to pass on part of the energy costs to customers.
A British Steel spokesperson said: "The huge costs we are now facing make it impossible for us to produce profitable steel at certain times of the day."
The President of the American Industrial Energy Consumers Association Paul Cisio said that if the price of natural gas in the United States continues to rise from the current nearly $6 to about $10, some manufacturers will not be able to make a profit and may have to close some businesses.
Therefore, the association requires the U.S. Department of Energy to impose restrictions on the export of liquefied natural gas to avoid soaring winter prices and natural gas shortages.
In an interview, Sisio said that LNG buyers who compete with American consumers for natural gas are state-owned enterprises and foreign government-controlled utility companies. American manufacturers cannot compete with them on price. "As long as the price of American natural gas rises, manufacturing Employment opportunities in the industry will be directly reduced."
LNG flows to the highest bidder
Historically, long-term contracts have dominated the LNG market, and most LNG exports have been transported under long-term fixed-price contracts, independent of the benchmark natural gas price and its changes.
However, there is still natural gas for sale in the spot market.
With the increase in export facilities, especially in the United States, the surge in spot has created a market that is more sensitive to price fluctuations.
This change has plunged the world into a bidding war.
Asian buyers in South Korea and Japan are more accustomed to paying high energy prices, and they keep increasing their bids during the summer.
This attracted the ship to the east.
This period is usually a period of winter storage in Europe, and Europe is in urgent need of LNG.
Europe has recently gained more advantages.
Analysts said that a key benchmark for European natural gas prices is comparable to market price levels that track Asian LNG prices and may help attract more natural gas to Europe.
Kpler's data shows that European LNG imports in September increased by about 35% compared to August.
According to the ship tracking company, a LNG tanker sailing from the coast of the Gulf of Mexico to Asia was diverted to the Mediterranean late last week.
According to ship trackers and industry consultants, in some cases, goods are transferred because the trader sells the product to a higher price buyer and compensates the original buyer, or the shipper cancels for higher profit contract.
Since the beginning of the shale gas boom in the United States, natural gas exporters have rapidly risen along the coast of the United States in order to take advantage of the gap between U.S. and international prices.
This gap has never been greater, and the price difference between Asia and Europe is about $40.
Ship brokers, traders and shipowners said that traders and energy companies that control large LNG fleets such as Shell may profit from arbitrage.
Chengdu Commercial Daily-Red Star News Reporter Luo Tian
Behind the shortage
Lack of inventory?
The global economy gradually recovered in the post-epidemic period. The economic recovery stimulated energy demand and broke the original balance of supply and demand.
Data show that since this year, European natural gas inventories have been lower than the average level of the past five years, and have been declining.
Before last winter, European natural gas inventories reached 1,069 TWh, the second highest level in history.
But at the end of winter, only 323 TWh remained, the lowest level in three years.
The situation in the United States is similar, except that winter energy consumption is not that much, and the natural gas inventory at the beginning of the year was slightly lower than the historical average.
Climate trouble?
Europe and the United States experienced an unusually cold winter last year and a colder spring this year, which increased the demand for natural gas for heating. However, natural gas distributors failed to replenish inventory in time in the first half of the year, and inventory remained low.
Europe and the United States experienced rare high-temperature weather this summer, which increased the demand for energy for refrigeration.
In addition, due to the long-term low wind weather, the wind power generation in Europe this year is far below average; the rare droughts encountered in Norway and other places have also reduced the local hydropower output and it is difficult to meet the export demand; the domestic nuclear power plants in the United Kingdom Entering maintenance, Germany, Sweden and other countries continued to shut down their own nuclear power plants under the denuclearization policy.
Russian control?
Some European politicians accused Russia of not increasing enough natural gas supply to Europe, but many European energy companies said that the amount of natural gas supplied by Russia has not decreased. Reuters believes that these politicians' statements are caused by consumer pressure.
Russia also denies manipulating natural gas supply and accuses the United States of suppressing Russia to harm the interests of Russia and Europe.
At present, the "Beixi" 2 has begun to inject natural gas, but the "Beixi" 2 has been obstructed by the United States before, and the approval procedures have not been completed.
Cut production capacity?
Europe's own natural gas output has entered a clear downward path since 2005.
Since the beginning of this year, European natural gas importers have underestimated market demand due to the shrinking demand during the epidemic last year, and failed to foresee the strong demand for economic recovery, and failed to replenish inventory in time in the first half of the year.
In addition, Europe is rapidly advancing its carbon reduction policy this year, and European carbon emission futures have soared, causing industries to abandon coal and switch to natural gas substitution, which has further increased the demand for natural gas.
chain reaction
Heating costs in Germany rise by 33%
According to a German media report on the 12th, in view of the fact that global natural gas prices have doubled since October last year, 61 German suppliers plan to substantially increase natural gas prices this winter, and 375,000 households are expected to be affected.
According to data from the Leipzig Power Exchange, the average cost of electricity per MWh this month was 155 euros, an increase of 356% compared to the same period last year.
According to portal data, heating costs in Germany in September rose 33% year-on-year, and electricity bills rose 4% year-on-year.
Britain faces a food crisis
At present, the electricity price per megawatt hour in the UK has risen to 285 pounds, an increase of 700%, a record high since 1999.
Energy-intensive industries cannot bear the cost pressure caused by rising energy prices. Many steel, chemical, and food processing companies have stated that rising energy prices will squeeze profits, and even announced production cuts or suspensions due to cost pressures.
Several large-scale fertilizer producers in the UK announced production cuts, and because the British food industry relies on carbon dioxide provided by fertilizer producers in food processing, preservation, and slaughter, British food industry officials said that if the carbon dioxide shortage problem is not resolved, the country will face food crisis.
Spanish inflation rate reaches 13-year peak
According to data from the Spanish National Bureau of Statistics, in September 2021, the price of electricity in Spain increased by 10.9% compared to July and increased by 44% compared to the same period in 2020.
The price of necessities in Spain maintained an upward trend for the seventh consecutive month, and the inflation rate rose to 4%, reaching a peak in 13 years.
The Spanish government previously tried to jointly formulate a solution through the 27 EU countries to avoid further increases in electricity prices in the winter.
However, the European Union believes that governments of all countries have the ability to take measures to prevent the increase in electricity prices. The Spanish government expressed disappointment with the EU's response on October 13th local time.
Energy poverty
Tens of millions of European families
Can’t afford heating
As the northern hemisphere is about to enter a cold winter, if energy prices continue to rise, tens of millions of European households may fall into "energy poverty" because they cannot afford heating.
The International Energy Agency warned that in the coming winter, Europe may face various forms of "stress tests" such as cold currents and unexpected power outages.
Countermeasures
The European Commission develops a "toolbox"
Coping with rising energy prices
On October 13, local time, the European Commission developed a "toolbox" designed to help European companies and people cope with the current rising energy prices.
According to the news released by the European Union that day, the European Union and its member states can use this "toolbox" to deal with the direct impact of current energy price increases and increase resilience to future shocks.
The European Commission expects that the situation of energy prices will improve next spring, and relevant policies can be adjusted at that time, but said that the long-term transformation and investment policies in clean energy will not change.
This "toolbox" includes a series of short- and medium-term measures.
Among them, short-term measures include providing income subsidies or tax cuts to consumers and households, and providing assistance to enterprises or industries, and medium-term measures include increasing investment in renewable energy and expanding energy storage capacity.
European Commissioner Kadri Simsson in charge of energy affairs said that the European Union is very concerned about the rise in global energy prices.
As the economy starts to recover from the epidemic, it is important to protect consumers and support European companies.
Recently, the rising energy prices in Europe have aroused widespread concern.
According to data released by Eurostat a few days ago, the inflation rate in the euro zone reached 3.4% in September, which was higher than market expectations and hit a 13-year high.
Among them, energy prices are the main reason for pushing up inflation.
Putin: Russia is willing to increase natural gas supply
Regarding Russia’s export of natural gas to Europe, Russian President Vladimir Putin said on the 13th that “Russia fully fulfills its contractual obligations to partners, including European partners, to ensure uninterrupted gas supply.” By the end of this year, Russia will supply to the global market. Of natural gas will reach a “record” level.
He said, "Some people are trying to push their mistakes on others." The so-called Russia's "use of energy as a weapon" is groundless and purely nonsense for political purposes; on the contrary, Russia is increasing. For the supply of natural gas to Europe, Russia is willing to further increase the supply of gas if the European side raises demand.
Russian Energy Minister Nikolai Shuliginov said on the same day that if the European side needs to exceed the gas supply volume of the existing contract with Russia, it will need to sign a new contract.
Changes in reflection
Soaring energy prices bring pain to Germany's energy transition
With the general expectation that electricity and natural gas prices will continue to rise this winter, Germany's energy transition is facing challenges and has once again become the focus of attention from the outside world.
Energy transition focuses on both ends of supply and demand
As Europe’s largest economy, Germany’s energy transition started early, focusing on both ends of supply and demand, vigorously developing renewable energy, focusing on improving energy efficiency, and has made significant progress.
On the supply side, the German government has made a clear transition to renewable energy based on wind, solar, and biofuels, and has made increasing the proportion of renewable energy one of the core policy goals of the energy transition.
Among them, wind energy plays a leading role in German renewable energy, and the proportion of wind power generation has reached 24%.
The German government stated that it will continue to expand the installed capacity of wind power, especially offshore wind power, and has developed a promotion plan for this.
On the demand side, Germany has adopted multiple measures to reduce energy consumption, especially building energy consumption, and improve energy efficiency through technological innovation and policy measures.
From 2008 to 2017, Germany's primary energy consumption was reduced by 5.5%.
The German government believes that only on the basis of a strong energy efficiency strategy can the energy transition achieve positive economic, environmental, and social security implications.
Supply gap exacerbates transformation pains
Although Germany's energy transition is ambitious, as a long-term strategy, the phased challenges and contradictions it faces are more prominent.
On the one hand, under the constraints of shutting down all nuclear power plants in 2022, phasing out coal power in 2038, and achieving carbon neutrality in 2045, it is even more urgent for Germany to expand its renewable energy supply.
Raymond Neugebauer, head of the Fraunhofer Association, a German institute of applied scientific research, believes: "The expansion of wind power will soon reach its limit, and Germany needs to maintain energy independence through the hydrogen economy." June 2020 In December, the German government adopted the National Hydrogen Energy Strategy with the goal of supporting "green hydrogen energy" to expand the market.
On the other hand, the supply of renewable energy such as wind energy and solar energy is insufficient, and the potential supply gap continues to affect the stability and security of energy supply in Germany.
Germany has withstood the pressure of the United States to ensure the completion of the "Beixi-2" natural gas pipeline project, reflecting that it will continue to rely on fossil fuels for a considerable period of time.
The German government stated that problems such as over-dispersion of power input into the grid, insufficient power supply and consumption flexibility, and low level of digitization of energy management are real challenges that need to be resolved in the supply of renewable energy.
Comprehensive Xinhua News Agency, CCTV News