2020 was a perfect storm for the global gas market. Some of the highlights:
1. Global gas trade fell by over 20 bcm: its largest drop on record, and entirely driven by plummeting pipeline trade, whilst resilient LNG grew by 2%;
2. Gas prices have fallen to multi-decade lows: Henry at $2/mmbtu reached its lowest since 1995, while both TTF and JKM averaged at their lowest since being launched -after a wild volatility ride JKM returned to a 6-year high at the end of the year;
3. Paper trading benefitted from the unprecedented market uncertainty: trading on Henry and TTF expanded by ~15% and close to 20% respectively;
4. LNG FIDs dried up: after the record 96 bcm/a of liquefaction capacity sanctioned in 2019, only one LNG project took FID, Costa Azul in Mexico, putting LNG FID activity to its lowest since 1998 (when no FID was taken);
5. Gas market reforms are speeding up: the launch of IGX in India, the Novo Mercado de Gás in Brazil and PipeChina starting operations are major steps towards more competitive and open gas markets.
What is your view? How will gas markets evolve in 2021? Are we set for a rebound or slower recovery?
Stay tuned: Our very first Quarterly Gas Report is coming out mid-January!
Source: Greg Molnar
See original post by Greg on LinkedIn.
