Have times ever been so good for the global liquefied natural gas (LNG) business?
With gas prices in besieged Europe seven times those in the US, a vessel carrying LNG between them can make $200 million or more on a single voyage, enough to pay off the ship's cost.
Not surprisingly, new export projects are racing to launch — but can they make it before the market turns again?
Cooling natural gas to minus 160 degrees Celsius turns it to a liquid, so it shrinks by 600 times and can be carried easily by ship. It is the only way of moving gas across oceans or intercontinental distances too long or politically fraught for pipelines.
LNG has always been a cyclical business, even more so than oil. Export plants are multibillion dollar investments and take decades to conceive and build; only a few new ones come along each year.
Present-day supply represents decisions taken under very different market conditions. Most cargoes are still sold under long-term contracts, meaning that only about 15 per cent of LNG is actually available on a “spot” basis, to traders or to end users who have not secured enough for their needs.
Gas is harder to store for long periods than oil — LNG warms up and gradually boils off as it is shipped around. It needs specialised cryogenic tankers, nearly all of them built in a few South Korean and Chinese yards.
Not surprisingly, this means LNG prices around the world are volatile, diverge regionally and alternate extreme slumps — 2009 to 2010 and 2015 to 2020. Booms in the industry are equally violent, as witnessed in 2011 to 2014 following Japan’s Fukushima accident, and the last two years with the post-coronavirus pandemic recovery and Russia’s squeeze on its pipeline exports.
As Europe tries within a couple of years to undo decades of rising dependence on Russia, the LNG market has to fill the gap.
LNG demand this year is expected to reach 436 million tonnes, according to Norwegian consultancy Rystad Energy, and with supply at only 410 million tonnes, someone has to go short.
The result is prices soaring to levels equivalent to almost $300 for a barrel of oil.
Estimates suggest another 150 million tonnes of LNG is needed by 2030 and 200 million tonnes per year by 2040. About 186 million tonnes per year of new capacity is currently making progress, nearly all of it required by 2030.
The giant expansion in Qatar, which recently awarded stakes to Shell, TotalEnergies, ExxonMobil, ENI and ConocoPhillips, will start operations between 2026-2027.
The UAE’s new export facility at Fujairah is also planned to begin service in 2027. Any new plants not already under way, such as in Tanzania, will have to move very quickly to be ready by the end of the decade.
If past experience is any guide, some of these projects will be delayed or derailed by technical problems or politics, environmental or community opposition. New Russian supply is now largely ruled out by sanctions and lack of access to technology and finance. Construction in the north of Mozambique, a key emerging exporter, has been halted by insurgency.
The US accounts for more than half the future portfolio — even more when adding Mexico, whose plans rely on access to American production.
This is concerning given that rising domestic gas prices or an anti-fossil fuel attitude might lead either government to stop issuing permits for new exports.
On the other hand, demand is already constrained by high prices. Emerging LNG-importing countries in South and East Asia, including Pakistan and Bangladesh, are turning back to coal or even burning oil, which is cheaper, in a rare reversal of the usual pattern.
LNG imports by China, now the world’s biggest buyer of the fuel, are set to fall 14 per cent this year. Over the next decade, Russia will try to launch new pipelines to China to divert gas it can no longer sell in Europe.
Renewable energy will enjoy further impetus, particularly in Europe. Nuclear power, which can also generate heat, might expand in some areas.
Gas-saving measures, such as better building insulation, and electrically-driven heat pumps, will gain ground. “Green” hydrogen manufactured with solar, wind and hydroelectricity will replace gas in the fertiliser, steel, chemicals and other industries.
An inflection point will come, determined by the pace of liquefaction plant construction, further disruptions to gas output, economic growth or decline, efficiency measures, climate policy and the rise of alternatives. At that moment, the LNG market will tip back into oversupply, and prices will drop and remain low for an extended period.
Whether this slump starts with an imminent global recession, when the next wave of new LNG plants arrives around 2026-2027, or only into the 2030s, is critical for investment decisions made today.
So LNG developers today need to move fast to get to market ahead of competitors. At the same time, they need to avoid the massive cost blowouts and supply-chain congestion that plagued a previous wave of plants in Australia.
Conversely, buyers are desperate today but have to avoid committing to high-priced, long-term contracts at the peak of the market.
Operations must be as low-carbon as possible to be acceptable. Both sellers and purchasers need a strategy to deal with Europe’s net-zero ambitions once the replacement of Russia is done — whether to shift marketing progressively to Asia after 2030, or to team up with carbon capture and storage developers.
Every boom sows the seeds of its destruction. Current prices are so abnormally high that the subsequent plummet will be dizzying. LNG suppliers should enjoy today’s bonanza, but be cautioned by history.
Robin M Mills is chief executive of Qamar Energy and author of The Myth of the Oil Crisis
JAPANESE GRAND PRIX INFO
Schedule (All times UAE)
First practice: Friday, 5-6.30am
Second practice: Friday, 9-10.30am
Third practice: Saturday, 7-8am
Qualifying: Saturday, 10-11am
Race: Sunday, 9am-midday
Race venue: Suzuka International Racing Course
Circuit Length: 5.807km
Number of Laps: 53
Watch live: beIN Sports HD
Our legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
Motori Profile
Date started: March 2020
Co-founder/CEO: Ahmed Eissa
Based: UAE, Abu Dhabi
Sector: Insurance Sector
Size: 50 full-time employees (Inside and Outside UAE)
Stage: Seed stage and seeking Series A round of financing
Investors: Safe City Group
The Specs:
The Specs:
Engine: 2.9-litre, V6 twin-turbo
Transmission: 8-speed automatic
Power: 444bhp
Torque: 600Nm
Price: AED 356,580 incl VAT
On sale: now.
Scoreline
Abu Dhabi Harlequins 17
Jebel Ali Dragons 20
Harlequins Tries: Kinivilliame, Stevenson; Cons: Stevenson 2; Pen: Stevenson
Dragons Tries: Naisau, Fourie; Cons: Love 2; Pens: Love 2
The specs: 2018 Harley-Davidson Fat Boy
Price, base / as tested Dh97,600
Engine 1,745cc Milwaukee-Eight v-twin engine
Transmission Six-speed gearbox
Power 78hp @ 5,250rpm
Torque 145Nm @ 3,000rpm
Fuel economy, combined 5.0L / 100km (estimate)
Kalra's feat
- Becomes fifth batsman to score century in U19 final
- Becomes second Indian to score century in U19 final after Unmukt Chand in 2012
- Scored 122 in youth Test on tour of England
- Bought by Delhi Daredevils for base price of two million Indian rupees (Dh115,000) in 2018 IPL auction
Scoreline
Arsenal 0 Manchester City 3
- Agüero 18'
- Kompany 58'
- Silva 65'
FIXTURES
Thu Mar 15 – West Indies v Afghanistan, UAE v Scotland
Fri Mar 16 – Ireland v Zimbabwe
Sun Mar 18 – Ireland v Scotland
Mon Mar 19 – West Indies v Zimbabwe
Tue Mar 20 – UAE v Afghanistan
Wed Mar 21 – West Indies v Scotland
Thu Mar 22 – UAE v Zimbabwe
Fri Mar 23 – Ireland v Afghanistan
The top two teams qualify for the World Cup
Classification matches
The top-placed side out of Papua New Guinea, Hong Kong or Nepal will be granted one-day international status. UAE and Scotland have already won ODI status, having qualified for the Super Six.
Thu Mar 15 – Netherlands v Hong Kong, PNG v Nepal
Sat Mar 17 – 7th-8th place playoff, 9th-10th place play-off
Film: In Syria
Dir: Philippe Van Leeuw
Starring: Hiam Abbass, Diamand Bo Abboud, Mohsen Abbas and Juliette Navis
Verdict: Four stars
Result
Qualifier: Islamabad United beat Karachi Kings by eight wickets
Fixtures
Tuesday, Lahore: Eliminator 1 - Peshawar Zalmi v Quetta Gladiators
Wednesday, Lahore: Eliminator 2 – Karachi Kings v Winner of Eliminator 1
Sunday, Karachi: Final – Islamabad United v Winner of Eliminator 2
Scorebox
Sharjah Wanderers 20-25 Dubai Tigers (After extra-time)
Wanderers
Tries Gormley, Penalty
Cons Flaherty
Pens Flaherty 2
Tigers
Tries O’Donnell, Gibbons, Kelly
Cons Caldwell 2
Pens Caldwell, Cross
2018 ICC World Twenty20 Asian Western Sub Regional Qualifier
Event info: The tournament in Kuwait this month is the first phase of the qualifying process for sides from Asia for the 2020 World T20 in Australia. The UAE must finish within the top three teams out of the six at the competition to advance to the Asia regional finals. Success at regional finals would mean progression to the World T20 Qualifier.
UAE’s fixtures: Fri Apr 20, UAE v Qatar; Sat Apr 21, UAE v Saudi Arabia; Mon Apr 23, UAE v Bahrain; Tue Apr 24, UAE v Maldives; Thu Apr 26, UAE v Kuwait
World T20 2020 Qualifying process:
- Sixteen teams will play at the World T20 in two years’ time.
- Australia have already qualified as hosts
- Nine places are available to the top nine ranked sides in the ICC’s T20i standings, not including Australia, on Dec 31, 2018.
- The final six teams will be decided by a 14-team World T20 Qualifier.
World T20 standings: 1 Pakistan; 2 Australia; 3 India; 4 New Zealand; 5 England; 6 South Africa; 7 West Indies; 8 Sri Lanka; 9 Afghanistan; 10 Bangladesh; 11 Scotland; 12 Zimbabwe; 13 UAE; 14 Netherlands; 15 Hong Kong; 16 Papua New Guinea; 17 Oman; 18 Ireland
The Greatest Royal Rumble card as it stands
50-man Royal Rumble - names entered so far include Braun Strowman, Daniel Bryan, Kurt Angle, Big Show, Kane, Chris Jericho, The New Day and Elias
Universal Championship Brock Lesnar (champion) v Roman Reigns in a steel cage match
WWE World Heavyweight Championship AJ Styles (champion) v Shinsuke Nakamura
Intercontinental Championship Seth Rollins (champion) v The Miz v Finn Balor v Samoa Joe
United States Championship Jeff Hardy (champion) v Jinder Mahal
SmackDown Tag Team Championship The Bludgeon Brothers (champions) v The Usos
Raw Tag Team Championship (currently vacant) Cesaro and Sheamus v Matt Hardy and Bray Wyatt
Casket match The Undertaker v Chris Jericho
Singles match John Cena v Triple H
Cruiserweight Championship Cedric Alexander v tba
The biog
DOB: 25/12/92
Marital status: Single
Education: Post-graduate diploma in UAE Diplomacy and External Affairs at the Emirates Diplomatic Academy in Abu Dhabi
Hobbies: I love fencing, I used to fence at the MK Fencing Academy but I want to start again. I also love reading and writing
Lifelong goal: My dream is to be a state minister
MATCH INFO
Uefa Champions League semi-final:
First leg: Liverpool 5 Roma 2
Second leg: Wednesday, May 2, Stadio Olimpico, Rome
TV: BeIN Sports, 10.45pm (UAE)
What the law says
Micro-retirement is not a recognised concept or employment status under Federal Decree Law No. 33 of 2021 on the Regulation of Labour Relations (as amended) (UAE Labour Law). As such, it reflects a voluntary work-life balance practice, rather than a recognised legal employment category, according to Dilini Loku, senior associate for law firm Gateley Middle East.
“Some companies may offer formal sabbatical policies or career break programmes; however, beyond such arrangements, there is no automatic right or statutory entitlement to extended breaks,” she explains.
“Any leave taken beyond statutory entitlements, such as annual leave, is typically regarded as unpaid leave in accordance with Article 33 of the UAE Labour Law. While employees may legally take unpaid leave, such requests are subject to the employer’s discretion and require approval.”
If an employee resigns to pursue micro-retirement, the employment contract is terminated, and the employer is under no legal obligation to rehire the employee in the future unless specific contractual agreements are in place (such as return-to-work arrangements), which are generally uncommon, Ms Loku adds.
MATCH INFO
France 3
Umtiti (8'), Griezmann (29' pen), Dembele (63')
Italy 1
Bonucci (36')
Try out the test yourself
Q1 Suppose you had $100 in a savings account and the interest rate was 2 per cent per year. After five years, how much do you think you would have in the account if you left the money to grow?
a) More than $102
b) Exactly $102
c) Less than $102
d) Do not know
e) Refuse to answer
Q2 Imagine that the interest rate on your savings account was 1 per cent per year and inflation was 2 per cent per year. After one year, how much would you be able to buy with the money in this account?
a) More than today
b) Exactly the same as today
c) Less than today
d) Do not know
e) Refuse to answer
Q4 Do you think that the following statement is true or false? “Buying a single company stock usually provides a safer return than a stock mutual fund.”
a) True
b) False
d) Do not know
e) Refuse to answer
The “Big Three” financial literacy questions were created by Professors Annamaria Lusardi of the George Washington School of Business and Olivia Mitchell, of the Wharton School of the University of Pennsylvania.
Answers: Q1 More than $102 (compound interest). Q2 Less than today (inflation). Q3 False (diversification).
Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
Emirates Cricket Board Women’s T10
ECB Hawks v ECB Falcons
Monday, April 6, 7.30pm, Sharjah Cricket Stadium
The match will be broadcast live on the My Sports Eye Facebook page
Hawks
Coach: Chaitrali Kalgutkar
Squad: Chaya Mughal (captain), Archara Supriya, Chamani Senevirathne, Chathurika Anand, Geethika Jyothis, Indhuja Nandakumar, Kashish Loungani, Khushi Sharma, Khushi Tanwar, Rinitha Rajith, Siddhi Pagarani, Siya Gokhale, Subha Srinivasan, Suraksha Kotte, Theertha Satish
Falcons
Coach: Najeeb Amar
Squad: Kavisha Kumari (captain), Almaseera Jahangir, Annika Shivpuri, Archisha Mukherjee, Judit Cleetus, Ishani Senavirathne, Lavanya Keny, Mahika Gaur, Malavika Unnithan, Rishitha Rajith, Rithika Rajith, Samaira Dharnidharka, Shashini Kaluarachchi, Udeni Kuruppuarachchi, Vaishnave Mahesh
Florence and the Machine – High as Hope
Three stars
Total eligible population
About 57.5 million people
51.1 million received a jab
6.4 million have not
Where are the unvaccinated?
England 11%
Scotland 9%
Wales 10%
Northern Ireland 14%
Winners
Best Men's Player of the Year: Kylian Mbappe (PSG)
Maradona Award for Best Goal Scorer of the Year: Robert Lewandowski (Bayern Munich)
TikTok Fans’ Player of the Year: Robert Lewandowski
Top Goal Scorer of All Time: Cristiano Ronaldo (Manchester United)
Best Women's Player of the Year: Alexia Putellas (Barcelona)
Best Men's Club of the Year: Chelsea
Best Women's Club of the Year: Barcelona
Best Defender of the Year: Leonardo Bonucci (Juventus/Italy)
Best Goalkeeper of the Year: Gianluigi Donnarumma (PSG/Italy)
Best Coach of the Year: Roberto Mancini (Italy)
Best National Team of the Year: Italy
Best Agent of the Year: Federico Pastorello
Best Sporting Director of the Year: Txiki Begiristain (Manchester City)
Player Career Award: Ronaldinho
The specs
Engine: 5.0-litre V8
Power: 480hp at 7,250rpm
Torque: 566Nm at 4,600rpm
Transmission: 10-speed auto
Fuel consumption: L/100km
Price: Dh306,495
On sale: now
'Gold'
Director:Anthony Hayes
Stars:Zaf Efron, Anthony Hayes
Rating:3/5
Results:
6.30pm: Maiden Dh 165,000 1,400m.
Winner: Walking Thunder, Connor Beasley (jockey), Ahmad bin Harmash (trainer).
7.05pm: Handicap (rated 72-87) Dh 165,000 1,600m.
Winner: Syncopation, George Buckell, Doug Watson.
7.40pm: Maiden Dh 165,000 1,400m.
Winner: Big Brown Bear, Pat Dobbs, Doug Watson.
8.15pm: Handicap (75-95) Dh 190,000 1,200m.
Winner: Stunned, Pat Dobbs, Doug Watson.
8.50pm: Handicap (85-105) Dh 210,000 2,000m.
Winner: New Trails, Connor Beasley, Ahmad bin Harmash.
9.25pm: Handicap (75-95) Dh 190,000 1,600m.
Winner: Pillar Of Society, Pat Dobbs, Doug Watson.
The biog
Family: He is the youngest of five brothers, of whom two are dentists.
Celebrities he worked on: Fabio Canavaro, Lojain Omran, RedOne, Saber Al Rabai.
Where he works: Liberty Dental Clinic
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