Evgenia Vanadzina Gasum

Evgenia Vanadzina

Analyst
evgenia.vanadzina@gasum.com
tel. +358401801066

20.10.2020  

Maritime market update: LNG producers are racing to add the decarbonized label

Risavika LNG front month has increased by 3.7 % week on week following seasonal change in European gas markets in the environment of low LNG supplies.

Oil prices have been stable for the last week, the inventory data showed a draw both in the US and Europe. Therefore fuel oil 3.5 has gained 3.9 % to 245.63 USD/t, low sulfur oil MFO 0.5 has increased by 0.6 % and traded at 307.55 USD/t, while MGO 0.1 has lost 1.4 % week on week and closed at 336.52 USD/t.

Top LNG producers, traders and consumers have outlined plans to decarbonize the LNG supply chain either fully or partially, signaling how carbon pricing is set to become an important component of LNG market competition in the coming years. Qatar's LNG expansion to 126 million mt/year by 2027 will be low-carbon based. Shell, Total, BP and even traders like Vitol unveiled strategies to supply carbon-neutral LNG. Chevron-operated Gorgon LNG in Australia now has the world's largest carbon capture and storage facility of up to 4 million mt of CO2 equivalent/year. Australia's Woodside said it was extending the build-out of decarbonized fuel supply to ammonia and hydrogen. So far, demand for carbon-neutral or low-carbon LNG has mainly come from Asia.

 

LNG Risavika - LNG FOB Risavika 

LBG Risavika 10 % - 10 % blend of Liquified Biogas

FO 3.5 FOB Rdam – European 3.5% Fuel Oil Barges FOB Rdam (Platts) Futures Quotes

MFO 0.5 FOB Rdam - European FOB Rdam Marine Fuel 0.5% Barges (Platts) Futures Quotes

MGO 0.1 FOB ARA - Gasoil 0.1% Barges FOB ARA (Platts) Futures Quotes

ULSD FOB ARA - European Diesel 10 ppm Barges FOB ARA (Platts) Futures Quotes

 

Front Month Price index

LNG Risavika*

LBG blend

Risavika**

FO 3.5 FOB Rdam

MFO 0.5 FOB Rdam

MGO 0.1 FOB ARA

ULSD FOB ARA

Unit

24.70

27.70

17.61

21.12

23.10

24.70

EUR/MWh

418.43

469.25

245.63

307.55

336.52

344.52

USD/t

 Price index 19.10.2020.png

Source: CME Group, Gasum, S&P Global Platts

*An estimate for LNG FOB Risavika 

** An estimate for 10 % LBG blend FOB Risavika