Energy and commodities highlights: Trade wars, US LNG development, energy digitalization

Commodities and financial markets spent the past week watching for progress in US-China trade talks, but there was no firm outcome ahead of a May 10 deadline, leading to a further escalation of US-imposed tariffs.

Without a resolution, a scheduled hike in tariffs kicked in on US imports of $200 billion worth of Chinese goods, from 10% to 25%. Talks were expected to resume on Friday, May 10, but China is now mulling the details of its promised response.

The US LNG sector could be hit hard by the ongoing dispute between the world's two biggest economies. Export project developers in the US had previously looked to China as a key driver of demand growth – and a source of financing – but the deterioration in trade relations means marketers are having to search for other buyers. Nevertheless, the US’ largest LNG exporter, Cheniere, said on May 9 that it remained confident it could commercialize its 9.5 million mt/year Corpus Christi Stage 3 project “with or without China”.

Aside from these issues, global gas markets continue to monitor new LNG project start-ups. The Cameron LNG facility was expected to start production within days, an executive at co-owner Sempra Energy said on May 7. The project, with a total 14.95 million mt/year nameplate capacity, has been beset by delays and the second and third trains of the plant are expected to come online in 2020.

Meanwhile the 2.5 million mt/year Elba Liquefaction project in Georgia encountered “minor issues” during commissioning of equipment, a spokeswoman said also on May 7. The company did not provide further details or a start-up date – officials had previously said they expected to begin LNG production by the end of April.

GRAPHIC OF THE WEEK

Europe continues to attract large volumes of LNG in 2019, as the bloc’s liquid hubs remain attractive in the face of weak Asian demand. In this infographic, S&P Global Platts looks at key indicators for LNG trade in the region.

Click for full-size infographic

WATCH: POWER MARKETS AND DIGITALIZATION

Erik Nygard, co-founder and CEO of Limejump, which was recently acquired by oil major Shell, talks to Henry Edwardes-Evans, associate editorial director at S&P Global Platts, about energy digitalization, building virtual power plants and the benefits of having an ambitious, well-heeled parent.

OIL

OPEC pumps 30.26 mil b/d in April, as sanctions-hit Iran's output falls

After four months of decline, tightening the oil market considerably, OPEC's collective crude oil production in April held relatively steady from March, rising just 30,000 b/d to 30.26 million b/d, according to an S&P Global Platts survey.

SHIPPING

Global debate on open-loop scrubbers adds to uncertainty ahead of IMO 2020

The global debate on the potential ban of open-loop scrubbers continues to add to uncertainty in the shipping industry, ahead of the implementation of the lower-sulfur cap in 2020 mandated by the International Maritime Organization. Countries remain divided over open-loop scrubbers due to environmental concerns over the discharge of polluted washwater into the sea.

PETROCHEMICALS

Global PVC markets await Indian antidumping review

Global trade flows of PVC could change significantly later in 2019 if India eliminates antidumping duties on the construction staple, opening its market to US material for the first time in more than a decade, sources say.

THE LAST WORD

"We see that India is firming up plans to establish a transparent gas market. This will help us to sell our output at market-linked prices in the coming years." 

– Vilas Tawde, CEO of India’s Essar Oil & Gas Exploration & Production, spoke positively about energy sector reforms in the country, in an interview with S&P Global Platts.