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China’s natural gas consumption to peak in 2040: CNOOC

  • Market: Natural gas
  • 23/05/24

China's state-controlled CNOOC expects domestic natural gas consumption to peak at 700bn m³ in 2040, said CNOOC's senior economist Xie Xuguang at a liquefied fuel shipping conference in Chongqing over 22-24 May.

The conference was jointly organised by the China Shipowners' Association and Langfang International Pipeline Exhibition. CNOOC also estimated China's gas consumption to hit 410bn m³ in 2024.

These most recent projections are aligned with earlier estimates from fellow state-controlled CNPC's economic and technology research institute in Beijing, which forecast Chinese gas demand will rise by 24bn m³ in 2024 in its annual report published on 28 February.

International Gas Union's president Li Yalan expects natural gas consumption in China to hit 500bn m³ in 2030 and eventually 650bn m³ in 2040. And all above growth scenarios could in fact be further enhanced should gas prices remain at "reasonable" levels, she added.

She did not expand on the definition of "reasonable", but recent buying interest from mostly second-tier buyers in China hinted that the ideal target price considered acceptable for buyers in the country could be no higher than $9-9.50/mn Btu.

Current spot prices are still considered way out of reach for Chinese importers. The front half-month of the ANEA — the Argus assessment for spot LNG deliveries to northeast Asia — was last assessed at $11.525/mn Btu on 23 May, $1/mn Btu higher from a week earlier.

Factors such as higher-than-average temperatures in northeast Asia, southeast Asia, south Europe and the US, and some remaining concerns over production outages in the Atlantic and Pacific basins have resulted in European gas hub prices strengthening and Asian spot prices also jumping higher as a result. This is despite higher-than-average inventories in traditional major importing countries such as Japan and South Korea, and expectations of higher nuclear availability in Japan and South Korea to weigh on gas-fired generation in the summer.

But traders have also pointed out that such higher prices may compel buyers in Asia to withdraw from the spot market, freezing out additional demand and eventually weighing on prices again.

China has continued to step up its LNG imports even as domestic gas production extended gains in April. The country imported more LNG in April as compared to in 2023, and imports even hit a record high in March.


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19/02/25

Investor group urges BP to allow new climate vote

Investor group urges BP to allow new climate vote

London, 19 February (Argus) — A group of 46 BP institutional investors has voiced concerns that the company may ditch a target to reduce its oil and gas production to 2mn b/d of oil equivalent (boe/d) by the end of the decade, urging a new shareholder vote be allowed on its net-zero strategy. The letter's signatories include several UK and European pension fund managers and other investors, including Aegon, Investec and Robeco. It comes ahead of BP's capital markets day on 26 February, when the company has said it will "fundamentally reset" its strategy. The group calls on BP to give another opportunity to vote on its net-zero plans at its 2025 annual general meeting, pointing out that shareholders in 2022 endorsed a BP plan to cut hydrocarbon production by 40pc, to 1.5mn boe/d, by 2030. That achieved 88.5pc support from shareholders, but the group of investors behind the letter note that nine months later BP revised upwards its target for 2030 to 2mn boe/d. BP's output averaged 2.36mn boe/d in 2024. The investors are now concerned that increased spending by BP on oil and gas output, due to subsequent strategy tweaks, will raise "potential exposure to stranded assets as the energy transition progresses." The letter notes there is opportunity for BP to explain how emissions budgets in Paris Agreement-aligned scenarios are considered in the sanctioning of new projects. "Showing where projects will sit on the global merit curve of producing assets would also allow investors to assess the relative competitiveness and resilience of BP's portfolio and capital expenditure," it states. In a statement to Argus a signatory to the letter, Royal London Asset Management, said it recognised BP's past efforts toward the energy transition but it is "concerned about the company's continued investment in fossil fuel expansion. "If BP has decided to scrap its production target, we seek clarity on how capital allocation will shift to ensure resilience through the energy transition," it said. "Will BP scale up investments in renewable energy, carbon capture, and emerging technologies to future-proof the business against regulatory, market, and climate risks?" Royal London urged BP "to strengthen governance and transparency around transition planning, ensuring that future capex decisions align with a net-zero pathway rather than locking in further emissions growth." It added: "Robust oversight and clear long-term strategies are essential to delivering value while managing the risks of an accelerating energy transition." A BP spokesman said the company had received the letter and "will respond in due course." Environmental pressure group Greenpeace said BP can expect this kind of pushback and challenge from its shareholders "at every turn if it doubles down on fossil fuels". "Government policies will also need to prioritise renewable power, and as extreme weather puts pressure on insurance models policymakers will be looking to fossil fuel profits as a way to fund extreme weather recovery," Greenpeace said. "BP might want to seriously put the brakes on this U-turn." Earlier this month BP's shares jumped on media reports that activist hedge fund Elliott Investment Management was building a stake in the UK major. Investment bank analysts that follow BP expect Elliott to attempt to bring about a boardroom shake-up as it has at other resources companies, including at Canadian oil sands business Suncor Energy in 2022. By Jon Mainwaring Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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India’s AMNS seek five-year term LNG deal from 2026


19/02/25
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19/02/25

India’s AMNS seek five-year term LNG deal from 2026

Mumbai, 19 February (Argus) — Indian steel manufacturer ArcelorMittal Nippon Steel (AMNS) is seeking a five-year term LNG deal for six cargoes a year starting in 2026 for its direct reduced iron (DRI) plant in the western Gujarat state of Hazira, sources close to the matter have told Argus . AMNS seeks to sign the deal with prices linked to the US Henry Hub or Brent on a delivered basis to India's west coast either at Petronet's 17.5mn t/yr Dahej terminal or Shell's 5mn t/yr Hazira terminal, the source said. The tender's final stage is expected to close by 27 February. The deal may equate to 1.8mn t of LNG supply over the period to 2030, assuming a 60,000t LNG cargo size. The Hazira plant has crude steel production capacity of 8.8mn t/yr, according to ArcelorMittal's September 2024 report. As much as 65pc of the capacity is based on DRI. The firm is on track to expand its low-cost steel-making capacity to 15mn t by 2026, the report says. This supply pact also underscores a trend in the global steel industry to use cleaner energy sources to produce green steel. The firm imports up to 75pc of its 1.72mn t in natural gas requirements on an annualised basis, a company official told Argus last year. The steelmaker had last signed a 10-year deal to buy LNG from Shell , with deliveries to start from 2027, at a 11.5 percentage of Brent crude prices that still remains one of the lowest-heard slopes for an Indian term LNG supply contract. And AMNS has a deal with TotalEnergies for 500,000 t/yr that is scheduled to expire in 2026 . The firm may consider extending it next year, another source said. India's demand for LNG term contracts continues to grow as several gas majors signed LNG contracts during the India Energy Week event. India's state-run Bharat Petroleum has signed a five-year LNG agreement with UAE's state-owned Adnoc at 115pc of Henry Hub price plus a constant of $5.66, similar to the Gail five-year term LNG deal signed in December, sources told Argus . State-owned refiner IOC signed a 14-year sales and purchase agreement for up to 1.2mn t/yr of LNG, valued at $7bn-9bn with Adnoc Gas, during the event. The deliveries are set to begin in 2026, and the cargoes will be sourced from the UAE's 6mn t/yr Das Island liquefaction facility. The deal was signed at 12.5pc of Brent crude prices, sources told Argus . And state-owned Gujarat State Petroleum (GSPC) during the event signed a 400,000 t/yr of LNG deal with TotalEnergies for 10 years to begin from 2026. Under this deal, TotalEnergies will deliver up to six cargoes a year to GSPC. The deal was signed at 119pc of Henry Hub price plus a constant of $4.4, sources told Argus . By Rituparna Ghosh Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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EU draft plan seeks to cut energy costs


19/02/25
News
19/02/25

EU draft plan seeks to cut energy costs

Brussels, 19 February (Argus) — The European Commission has set out plans to tackle the cost of energy in the EU, warning in a draft document that Europe risks de-industrialisation because of a growing energy price gap compared to global competitors. High energy prices are undermining "the EU's global standing and international competitiveness", the commission said, in a draft action plan for affordable energy, seen by Argus . The plan is expected to be released next week, alongside a clean industrial deal and other strategy documents. Much of the strategy relies on non-binding recommendations rather than legislation, particularly in energy taxation. Officials cite EU reliance on imported fossil fuels as a main driver of price volatility. And they also highlight network costs and taxation as key factors. For taxation, the commission pledges — non-binding — recommendations that will advise EU states on how to "effectively" lower electricity taxation levels all the way down to "zero" for energy-intensive industries and households. Electricity should be "less taxed" than other energy sources on the bloc's road to decarbonisation, the commission said. It wants to strip non-energy cost components from energy bills. Officials also eye revival of the long-stalled effort to revise the EU's 2003 energy taxation directive. That requires unanimous approval from member states. The commission pledges, for this year, an energy union task force that pushes for a "genuine" energy union with a fully integrated EU energy market. Additional initiatives include an electrification action plan, a roadmap for digitalisation, and a heating and cooling strategy. A white paper will look at deeper electricity market integration in early next year. EU officials promise "guidance" to national governments on removing barriers to consumers switching suppliers and changing contracts, on energy efficiency, and on consumers and communities producing and selling renewable energy. More legislative action will come to decouple retail electricity bills from gas prices and ease restrictions on long-term energy contracts for heavy industries. By 2026, the commission promises guidance on combining power purchase agreements (PPAs) with contracts for difference (CfDs). And officials will push for new rules on forward markets and hedging. There are also plans for a tariff methodology for network charges that could become legally binding. Familiar proposals include fast-tracking energy infrastructure permits, boosting system flexibility via storage and demand response. Legislative overhaul of the EU's energy security framework in 2026 aims to better prepare Europe for supply disruptions, cutting price volatility and levels. Specific figures on expected savings from cutting fossil fuel imports are not given in the draft seen by Argus . But the strategy outlines the expected savings from replacing fossil fuel demand in electricity generation with "clean energy" at 50pc. Improving electrification and energy efficiency will save 30pc and enhancing energy system flexibility will save 20pc, according to the draft. The commission is also exploring long-term supply deals and investments in LNG export terminals to curb prices. By Dafydd ab Iago Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Japan sets stricter climate goal in government sector


19/02/25
News
19/02/25

Japan sets stricter climate goal in government sector

Osaka, 19 February (Argus) — The Japanese government is planning to boost the use of renewable electricity at ministries and state-owned facilities, setting a tougher goal to cut greenhouse gas (GHG) emissions from public sector operations. The government aims to reduce its own GHG emissions by 79pc in the April 2040-March 2041 fiscal year against the 2013-14 level, it said in a plan approved on 18 February. This objective comes after the intermediate goal of a 50pc reduction in 2030-31 and 65pc in 2035-36. The government's climate plans are more ambitious compared with Japan's nationally determined contribution (NDC) , which was submitted to the UN climate body the UNFCCC on 18 February, because it wants to take the initiative to accelerate the country's decarbonisation drive. Japan's new NDC targets for a 73pc reduction in GHG emissions by 2040-41, after a 60pc cut in 2035-36. Tokyo plans to ensure at least 60pc of its power use comes from renewable sources in 2030-31 and more than 80pc from zero-emission power sources in 2040-41. Renewable power use at ministries was 27pc in 2021-22. The government aims to install solar power systems at more than 50pc of its own facilities and lands by 2030-31 and ensure 100pc penetration by 2040-41, actively adopting perovskite, the Japanese innovation for solar panel manufacture that uses iodine instead of conventional raw material silicon. Tokyo will also gear up efforts to improve energy efficiency at its buildings and switch all official vehicles to electric vehicles (EVs), fuel cell vehicles, plug-in hybrid vehicles (PHVs) and hybrid vehicles (HVs). Japan plans to generate 40-50pc of its electricity from renewables in 2040-41, up from 22.9pc in 2023-24. The share of thermal power will fall to around 30-40pc from 68.6pc, while the share nuclear power will increase to around 20pc from 8.5pc over the same period. The 2040-41 target is based on the expected Japanese power demand of 1,100-1,200 TWh, which is higher by 12-22pc from 2023-24. The breakdown of thermal output for 2040-41 is unclear. But gas-fed output is expected to hold the majority share, given that gas has already outpaced coal in power generation and Tokyo has pledged to phase out inefficient coal-fired plants by 2030. By Motoko Hasegawa Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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EU proposal to extend gas filling targets due in 1Q


18/02/25
News
18/02/25

EU proposal to extend gas filling targets due in 1Q

London, 18 February (Argus) — The European Commission will publish a legislative proposal on the extension of its gas storage regulation before the end of March, according to a leaked document seen by Argus . The commission will work with member states to "promote more co-ordinated and flexible gas storage refilling, including with dynamic targets to reduce system stress linked to gas storage refilling and support summer preparedness", according to the document. The existing regulation — which obliges member states to fill their storage capacity to 90pc by 1 November, but with derogations for certain countries — expires at the end of this year. The EU's storage fill mandate has supported front-summer contracts across European hubs in recent months, as stronger underground storage withdrawals than in recent years have pushed up expectations of summer injection demand. Summer 2025 contracts have disconnected at well above winter 2025-26 prices. Filling up storage before winter in the context of inverted seasonal spreads has become a growing concern of member states . Some countries, including Germany, have called for the storage fill requirements to be less rigid . Last week, discussions between member states and the EU's gas co-ordination group regarding the potential relaxation of EU storage obligations led to tightened summer-winter spreads. The TTF summer 2025-winter 2025-2026 spread was €2.75/MWh on 17 February, in from €5.29/MWh a week earlier. Tighter gas market supervision The commission will consult stakeholders on tightening the supervision of gas-trading markets, according to the document. The consultation will cover exemptions from conduct and prudential rules applicable to investment firms for which gas derivatives trading is "ancillary" to their main commercial business, as well as position limits in EU spot markets. It will consult on the joint supervision of gas trading by energy and financial regulators and the creation of a database gathering all open positions held by market participants. These measures were promoted in a report by former European Central Bank president Mario Draghi published in September last year . Draghi warned that mounting activity and speculation in the gas derivatives market could lead to price volatility and called for greater oversight of gas trading. The commission had already set up a gas market task force earlier this month to scrutinise European gas markets and identify behaviours that distorted prices, according to the document. The gas market task force will provide recommendations by the fourth quarter of this year. By Isabel Valverde Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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