PIRA Energy: Japan Conserves and Limits LNG Tightness

PIRA Energy Japan Conserves and Limits LNG Tightness

PIRA Energy Group said in a report it believes that Japan conserves and limits LNG tightness. In the U.S., there is optimism for future supply prospects. In Europe, German stocks show a stronger build.

Specifically, PIRA’s analysis of natural gas market fundamentals has revealed the following:

The big question mark will be whether Japan will also continue to conserve as much as it has in recent months. Demand there has been weaker in recent months, but a warmer than normal August could shift that sentiment, particularly as the country looks to be preparing for another, possibly extended period of nuclear free power generation from mid September. PIRA remains open to the possibility that one or two smaller units outside of the key Tokyo/Osaka demand regions could be restarted by the end of the year.

Optimism for Future Supply Prospects

The expanding size of recent U.S. technically recoverable resource (TRR) estimates unmistakably generates optimism for future supply prospects, giving powerful credence to a U.S. gas production upside that was unimaginable in pre-shale years. These estimates could still to prove to be overly conservative, due to the mix of improving technology as well as unexplored and publically undisclosed resources that seems likely to expand U.S. gas TRR estimates in the years ahead.

German Stocks Show Stronger Build

Storage levels still remain below normal in most countries, although storage injections appear to be rising. Germany, in particular, is showing aggressive injections backed by higher flows out of Russia. PIRA’s June-Oct. balance built an extra 25-mmcm/d year-on-year from Russia in order to meet injection needs through October, but in July we have seen exports shoot up. German storage injection estimates, is running at 110-mmcm/d in July, which is even above our somewhat bold forecast of 101-mmcm/d made prior to the month. Normal German injections are only 67-mmcmd and the previous monthly record was only 90-mmcm/d.

[mappress]
LNG World News Staff, July 17, 2013