First Look: Golden Pass LNG risks delay on worker shortage and construction issues
April 30, 2024
Oil is trading higher, around $83, reversing some losses from yesterday
Prices traded lower yesterday by more than $1.20/Bbl following reports that the US was increasing efforts to find a resolution to the Israel-Hamas conflict
Goldman Sachs sees Brent at $84/Bbl by December
The bank sees Brent crude trading at $84/Bbl by the end of the year, assuming no further supply disruptions from Middle Eastern conflicts
High-frequency fundamentals data has shown some softness in North American and Russian production, but OECD inventories have continued to rise
Prompt month Brent is currently trading at $88.70/Bbl, while the December ICE Brent contract is at $84.05/Bbl
Russia renaming oil tankers to avoid sanctions (BBG)
Russia’s state-owned tanker company, Sovcomflot, has been renaming ships that have been hit by US sanctions as Russia attempts to keep its crude exports flowing to buyers
The company was sanctioned in February, with 14 of its ships being added to the Treasury Department list, bringing the total number of sanctioned vessels to 21
Sovcomflot remains the world's largest owner of Aframax vessels, which can transport up to 700 MBbls
Natural gas prices trade above $2 amid LNG rebound and low production
June ’24 Henry Hub is up 0.4c this morning to trade around $2.034 /MMBtu
The Summer ’24 strip is down 1.4c to $2.402 and Winter ‘24/’25 strip is down 2.4c to $3.436
U.S. feed gas deliveries for LNG exports reached a three-week high at 12.84 Bcf/d on Monday, the highest since April 4, driven by a rebound in Freeport terminal deliveries to 800,000 Dth, 31% of Freeport’s capacity (NGI)
Freeport’s third train tripped last week after restarting days before, which, with maintenance work at other terminals, pushed U.S. feed gas levels to below the 12 Bcf/d
Furthermore, production cutbacks since February have reduced Lower 48 natural gas production to 97.5 Bcf/d from February's highs of around 107 Bcf/d (Woodmac)
Golden Pass LNG risks delay on worker shortage and construction issues (Bloomberg)
The 18 MTPA Golden Pass LNG project, co-owned by QatarEnergy and Exxon Mobil, faces potential delays to its start-up, now possibly pushing to the second half of 2025 or later due to a shortage of specialized workers and construction issues, according to people familiar with the matter
Initial LNG production from Golden Pass was initially targeted for the end of 2024, but Exxon Mobil adjusted this timeline to the first half of 2025 as of December 2023
The worker shortage and competitive project landscape threaten to tighten global LNG supply in 2025, potentially leading to higher LNG prices and weighing on U.S. gas prices by delaying export capabilities
Plaquemines LNG seeks approval to import LNG cargoes to expedite start-up process (Criterion)
Venture Global has applied for a short-term blanket authorization from the DOE to export LNG that has been previously imported, targeting up to 6 Bcf of gas over two years beginning July 22, 2024
Plaquemines LNG aims to use imported LNG to cool down terminal facilities for cryogenic operations, requesting import approval effective by June 15, 2024, for up to three LNG carrier cargoes
The request is part of preparations for the expected start of LNG production at Plaquemines in mid-2024, following progress in onsite construction
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