A brief world tour of LNG: US exports, Asia’s pivot, Middle East’s ambitions
US LNG exports have surged, with more shipments of the liquefied fuel in the first half of 2023 than any other country. That momentum will continue through the decade, putting the US at the heart of the global LNG market, according to ICIS Analytics. (Though September exports dipped due to scattered outages at gas-processing plants.)
The implications are many. Europe’s top energy official last month said that the bloc now expects to rely on US gas for decades, sending a clear signal to US developers that they can expect more supply deals.
Elsewhere, Asian buyers are looking to diversify their portfolios by moving away from additional US LNG commitments, which are linked to the US benchmark Henry Hub, in favor of oil-indexed deals, Energy Intelligence reports.
Middle Eastern LNG suppliers are best positioned to offer those oil-indexed contracts. And this week, the world’s largest oil producer Saudi Aramco finally entered the natural gas market by buying a stake in LNG company MidOcean. Per Bloomberg, Saudi Aramco is looking for more such acquisitions as it sets its sights on becoming a leading global LNG player.
China’s battery dominance extends downstream
China’s dominance of the global battery industry is formidable. And it’s paving the way for Chinese battery energy storage system integrators to muscle into the global top five, according to S&P Global.
System integrators offer a package of downstream services: they procure individual components like battery modules and racks, assemble the system, integrate controls and energy management software, and provide services like project design, operations, and maintenance.
Five years ago, no Chinese player was in S&P’s top five list. Now there are two: Sungrow and Hyperstrong. With upstream inputs and midstream processing manufacturing, Chinese players are now extending their dominance into the downstream—traditionally where profit margins are fattest.