The LNG market has become more settled after the unprecedented price volatility from 2022, but there is still competition between Asia and Europe for cargoes given the short-term lack of new supply set to come online. What can we expect for LNG markets in the coming months?Learn more at the Asia Hydrogen & LNG Markets conference

Europe is now increasingly dependent on LNG to offset lost Russian pipeline flows and as a result is more exposed to the global LNG market, and with it competition with Asia and elsewhere for cargoes and potential LNG price volatility.Learn more at Asia Hydrogen & LNG Markets Conference 2023 | October 24-25, 2023 | SingaporeConferences LIVE

Natural gas is becoming a global market, Kira Savcenko writes, as Europe moves away from Russian pipeline supply and prioritizes LNG imports.The Russia-Ukraine war is in the process of resetting the energy sector, with natural gas turning into a global and interconnected market, affected by events and dynamics that are far beyond its traditional physical scope, similar — to some extent — to what oil used to be for decades.The European gas market — until recently nearly isolated, with prices largely dependent on pipeline flow dynamics between Russia and Norway — can now be driven by anything across the world: from an LNG cargo diversion in the US to a river drying up in China and tensions over Taiwan.This has immensely accelerated the gas market’s globalization, with analysts and market participants calling it the "new oil," referring specifically to its geopolitical aspect, as gas is traded very differently from oil and cannot compete in terms of liquidity."[Natural gas] is like oil in that it’s now a global commodity via LNG and has a much higher geopolitical significance because of the events of the past year. It is also now arguably a higher value product than oil," said Glenn Rickson, S&P Global Commodity Insights head of European power analysis.A gas trader operating in Northwest Europe agreed, saying "gas is the new oil, in a way.""For many years oil was the macroeconomic and geopolitical asset. Impacted by wars, monetary policies, overall health of the economy while gas was more linked to physical and regional dynamics. This has changed," the trader said.The sharp turn took place as Europe moves away from its reliance on Russian natural gas imports and replaces it with LNG, which can be supplied from multiple locations, including the US, Qatar and Nigeria.Gazprom dominated the European market for decades and has a monopoly on Russia’s pipeline gas. It lost most of its LNG market share following Russia’s military invasion of Ukraine on February 24, 2022.LNG has a pivotal role in filling the gap left by Gazprom’s exit both as a feedstock to produce chemicals, fertilizers and hydrogen, and as a fuel for CCGTs (combined cycle power plants) for power generation.The power market is highly correlated with natural gas — with nearly 20% of European electricity generated from burning gas last year — and is now driven by global geopolitical factors."Russian pipeline gas acted as a buffer for the global gas market because essentially if LNG was diverted to Asia, then Europe would just buy more Russian gas. That buffer has now gone," said Dr. James Henderson, head of gas research at the Oxford Institute for Energy Studies.LNG has become almost the entire source of flexibility in the market, with pipeline flows from Norway — now Europe’s biggest gas supplier — typically running at full capacity, and imports from North Africa having a limited upward potential."Therefore, LNG tightness or looseness becomes the most important factor in the market," Henderson said. LNG’s share in European gas supply rose to 33% in 2022 from just 19% in 2021, according to Ying-Chin Chou, a senior gas analyst at S&P Global Commodity Insights. This is likely to rise further in 2023, as LNG climbed to a record high of 41% in April, and with TTF, European LNG and Asian LNG prices showing increased correlation.This data still includes Russian LNG, with European Commissioner for Energy Kadri Simson recently urging companies not to sign new contracts.On a knife’s edgeEuropean gas and power traders have had to adapt to this new reality, as decades-old market rules and dynamics stopped working shortly after Russia invaded Ukraine."[My job] is very different now. It’s basically all LNG on the supply side, whereas it was all pipeline before," a Germany-based gas trader said, adding that storage dynamics have also changed dramatically.Before the war, gas storages were essentially a singleperiod problem. Traders had confidence that whatever happens, stocks will be high at the start of the European heating season and low by the end of it.With almost limitless Russian gas at relatively competitive prices out of the equation, traders run the risk of not having enough supply to refill storage tanks."The level of volatility is also completely different, so position sizing has changed a lot. Previously, Eur1/MWh was a huge move. Now, Eur1/MWh is noise. Tail risk is much bigger, as we are always balancing on a knife’s edge," the German trader added.It is not just German traders who have had to adapt. The rest of the world could also be driven by regional European issues."It’s arguable that the effect goes both ways," Rickson said. "For example, the French nuclear and hydro [shortage] last summer lifted EU gas demand, which in turn helped support LNG prices and limited demand for imported gas in Asia and elsewhere."A comebackOne could argue that natural gas being a new oil is a bit of a stretch, yet all market experts agree on one thing: Russian gas in Europe as we knew it is over for good.That said, limited quantities of Russian gas may still find their way back to Northwest and Central Europe. Several eastern and southeastern European countries continue to buy supplies from Gazprom post-invasion."We won’t see ‘Putin’s gas’ back in Europe. [But] I think Russian gas could rebound a little bit an outcome which was satisfactory to Ukraine and to [Kyiv’s] European allies," Henderson said, adding that full capacity is unlikely to come back as Europe "is signed up for LNG anyway."Indeed, Europe had been investing heavily in LNG infrastructure even before the invasion of Ukraine, with the pace picking up as the war escalated. Germany — until recently the most reliant on Russian pipeline gas — has plans to build at least six floating storage and regasification units (FSRUs) and three shore terminals, which will eventually replace FSRUs.This way, Russian gas could become a part of the regional system in the future, but at a much smaller scale than ever before. The European gas market is bound to preserve its global status.Article included in Commodity Insights Magazine. View full issue

Jean-Marc Gilson, CEO of Mitsubishi Chemical talks to Rob Westervelt, editor in chief of Chemical Week about how the company is investing heavily in new energy sources, such as blue hydrogen and artificial photosynthesis, to reduce its reliance on imported energy and lower its carbon emissions. The company is confident that these investments will pay off in the long run, as the world transitions to a low-carbon economy.Register for the World Petrochemical Conference 2024 and learn how the industry is leveraging hydrogen.

Singapore | October 25-26, 2023

Japanese LNG buyers are in no rush to secure spot cargoes despite potential strikes at the 16.9 million mt/year North West Shelf LNG project, one of their key supply sources in Australia, with any near term impact likely to be limited as Japan heads into the lower demand shoulder months season.Japanese company officials and sources said they had not received notices of any supply impact so far, but continued to closely monitor developments on potential industrial action at offshore platforms for the Woodside Energy-operated NWS LNG project.Woodside is set for what appears to be final negotiations with the Offshore Alliance labor union grouping on Aug. 23. Failure to reach an agreement would pave the way for industrial actions at its platforms.The Offshore Alliance has unanimously endorsed the issuance of a seven working-day notice to Woodside if a resolution is not reached by the end of Aug. 23, the alliance said on its Facebook page Aug. 20.Industrial action could start as early as Sept. 2 at Woodside's North Rankin Complex, Goodwyn Alpha and Angel platforms, which feed gas to NWS LNG, ranging from minor action to full-scale stoppages after providing seven working days' notice.Limited impact on Japan For now, NWS cargoes are being loaded as normal according to the annual delivery program, and Japanese buyers have not received any notice of changes to supply plans, industry sources said. Buyers are therefore waiting to see how events unfold."We cannot act now based on expectations [when nothing concrete has been decided]," said one Japanese importer.In any case, the uncertainty over industrial action at NWS platforms comes at a time when Japan's summer demand for power generation is nearing the end of its peak, with city gas utilities in the midst of low-demand season."Even if the strike goes ahead at NWS' natural gas and liquefaction facilities leading them to suspend LNG production immediately, Japan would have limited impact on its LNG supply and demand balance unless such outage lasts for a long time," said Takayuki Nogami, chief economist at Japan Organization for Metals and Energy Security, or JOGMEC."A chance of seeing significant impact on LNG procurements like many end-users rushing to secure substitute supply sources to NWS is not high," Nogami added.Spot LNG prices in Asia have risen nearly $3/MMBtu since the start of this month as market participants await clarity on the risks to LNG supply from Australia.Platts, part of S&P Global Commodity Insights, assessed the October JKM at $14.056/MMBtu Aug. 22, up from $11.174/MMBtu on Aug. 1.NWS exports NWS LNG exported around 16.19 million mt of LNG in 2022, and has exported around 10.12 million mt of LNG so far this year, according to S&P Global data.In 2022, around 42% of NWS's LNG exports were sent to Japan, followed by 32% to China, 13% to South Korea and around 10% to Taiwan.This year the profile has changed, with China accounting for 36% of its total LNG exports, followed by Japan at 34%, Taiwan at 11% and South Korea at 9.4%. Thailand has emerged as an offtaker from NWS, accounting for 6.3% of its exports so far in 2023, compared to less than 1% in 2022.Following several contractual expiries in the last few years, Japanese buyers' long-term LNG contracts account for a total of 5.058 million mt/year or 30% of the 16.9 million mt/year NWS production, according to S&P Global calculations based on industry information.Of the Japanese NWS customer base, city gas utilities' long-term LNG contracts account for 18% of the total NWS output, according to the S&P Global calculations.NWS is operated through a number of joint ventures, most of which have Woodside as the main operator with a 33% stake, and BP, Chevron, Shell and Japan Australia LNG -- a 50-50 joint venture between Mitsubishi and Mitsui -- holding the remainder split equally, according to company data.China's CNOOC International holds a 5.3% working interest in one of the North West Shelf upstream joint ventures, but it does not have a stake in the downstream assets. CNOOC International also holds a 25% working interest in the China LNG joint venture (CLNG), established to supply LNG from North West Shelf to the Dapeng LNG Terminal in Guangdong, China.

US short- and long-term power demand forecasting is becoming increasingly challenging as the power generation fuel mix shifts more toward weather-dependent renewables and energy storage resources, and extreme weather becomes more common, causing power grid operators to adopt new load forecasting approaches. The increase in renewable energy penetration is making day-ahead load forecasting more dependent on accurate weather forecasting, with extreme weather creating additional challenges. For example, temperatures across PJM Interconnection territory plummeted beginning on Dec. 23, 2022, and the cold lasted into the morning of Dec. 25, with record lows in some areas as well as record drops in some regions. PJM said it was the most drastic temperature drop in a decade, and power demand during the Christmas weekend was an "extreme outlier" in magnitude and timing. The weather event put extreme stress on the power grid, and the rapid power demand increase resulted in extremely elevated power prices. Zonal power prices reached as high as around $4,300/MWh Dec. 24, according to PJM. The highest December PJM West Hub daily average real-time on-peak price of $1,111.90/MWh was reached Dec. 23, according to PJM data. Regarding long-term planning, power system operators have traditionally relied on historical weather patterns to help create power demand forecasts, but with weather becoming more erratic because of climate change, historic weather dynamics are becoming less reliable indicators of future conditions. Short-term adjustments Asked how increased weather-dependent renewables penetration is impacting load forecasting day-ahead, an ISO New England spokesperson said in a recent email that the rise in weather dependent renewable penetration, particularly behind the meter solar production, has "introduced a significant level of variability to electricity demand, particularly during daylight hours." This increased variability presents a challenge for day-ahead and short-term load forecasting and to address this, ISO New England has recently implemented two new load forecasting projects within the last 10 months, the grid operator said. Artificial Intelligence is also playing a role in short-term power demand forecasting. In the short-term forecast process, a variety of load forecast models and "model blending algorithms" are employed to inform the human forecasters in their decision-making to produce a final forecast, the spokesperson said, adding that "the models and tools we use are machine learning and AI-based algorithms," and these encompass "neural network models and gradient boosting models that employ tree-based learning algorithms." The New York Independent System Operator is also working to address these short-term load forecasting challenges. "In terms of the short-term, day ahead and, real time, the NYISO has for the last several years, developed essentially working with third-party contractors, a pretty robust framework for collecting actual and forecasted output for both wind and solar resources," Tim Duffy, NYISO's manager of demand forecasting and analysis, said in a recent phone interview. The grid operator is working with contractors that facilitate the data gathering and forecasting process, and then NYISO integrates that into its day-ahead as well as real-time forecasting process, Duffy said. Extreme weather can also be a challenge for NYISO weather forecasters when storms move through, and the grid operator relies on various services for that data. Duffy said NYISO uses and is looking to expand the use of "probabilistic forecasting." A deterministic forecast might predict no clouds tomorrow at 3 pm, while a probabilistic forecast provides a more detailed prediction, like there is a 30% chance of cloud cover tomorrow at 3 pm, and that additional level of detail on the forecast uncertainty enables grid operators to better manage costs and risks when dispatching generation resources, according to the US Department of Energy. Regarding the use of AI, Duffy said NYISO is using neural nets as part of its day-ahead load forecasting, whether that is considered to be AI or machine learning. Long-term challenges Given the evolving nature of weather patterns due to climate change, "we are actively investigating methods to incorporate the anticipated impacts of climate change into our supporting data and overall forecasting methodology," the ISO-NE spokesperson said, adding that "we anticipate implementing the selected chosen solution within the next couple of years." The ISO is also collaborating with the Electric Power Research Institute, an independent nonprofit energy research and development organization, to conduct a probabilistic energy security study to assess energy security risks. The major challenges in long-term load forecasting center on understanding and modeling emerging technologies such as distributed energy resources like solar PV and batteries as well as technologies involved in electrifying and decarbonizing the heating and transportation sectors, the ISO-NE spokesperson said. The NYISO's Duffy highlighted that understanding the timing of the energy transition is critical. "We can understand what the end state will be, whether that's 2030, 2040, 2050, 100% electric, but it's really the path to get there and the timing of the increased penetration of electric vehicles and building electrification," he said. "That really, in my mind, is the biggest challenge."

SABIC's Chief Sustainability Officer and Chief Technology Officer, Bob Maughon, says that electrification is key to reducing emissions in the chemical industry. Maughon says that SABIC is committed to reducing its emissions by 20% by 2030, and that electrification will play a major role in achieving this goal.Register for the World Petrochemical Conference 2024 and find out about electrification and decarbonization in the chemical industry.

The United States has a robust domestic hydrogen market but as clean energy developers chase federal incentives to build out low-carbon hydrogen production, legacy customers have shown little interest in paying a green premium.Stakeholders say hydrogen has defied market principles, with green and blue hydrogen developers targeting international customers and novel end uses while the majority of US customers buy gray hydrogen."I’m really surprised at how quickly people are developing real projects for the intercontinental shipping or transport of energy, largely in ammonia form," Raffi Garabedian, CEO of electrolyzer technology developer Electric Hydrogen Co., said in an interview.The trend has taken off on the Gulf Coast, which is already a major worldwide energy exporter. One corporate coalition that includes Chevron Corp. and L’Air Liquide SA hopes to establish Houston as the center of the global clean hydrogen economy. The project was one of dozens earlier this year to apply for funding from the US Energy Department’s $8 billion hydrogen grant program. Other contenders along the coast of Texas and Louisiana, including one application led by the Port of Corpus Christi, have announced similar plans.Canadian developers on both coasts are also laying the groundwork to ship out clean hydrogen, driven in part by political commitments. In August 2022, Nova Scotia company EverWind Fuels LLC signed a tentative agreement to export 500,000 metric tons of green ammonia per year to help Germany shore up its energy supply. Meanwhile, Alberta’s fossil fuel industry is advancing plans to send blue ammonia, produced from natural gas using carbon capture technology, to Asian customers via Canada’s west coast.At first glance, the development pattern is "one of the last things that should happen, because you’re competing against other resources that are established and cheap," Garabedian said. "But it turns out that for various reasons, that’s part of the business that will probably emerge fairly quickly and drive much, much larger scale than other industrial or chemical use cases."One reason is geopolitical, as the Russian invasion of Ukraine has caused energy prices to skyrocket in Europe. Other projects plan to target countries with high native energy costs, including Japan and South Korea, which are already importing North American LNG. Those same import regions are "very committed to decarbonizing their economies in a way that here in the US, we’re just starting to realize," Garabedian added.Slow adoption in agriculture sectorThe "obvious use case" for hydrogen — the agriculture industry — has been slow to decarbonize by switching to clean hydrogen, Garabedian said. "It’s not mobilizing quickly, and there’s really not much willingness to pay any green premium whatsoever for low-carbon or zero-carbon fertilizer," he added.About 43% of hydrogen sold worldwide in 2021 went to ammonia producers, according to S&P Global Commodity Insights’ March Hydrogen Market Monitor. The rest of the demand came from refining, petrochemicals and other incumbent offtakers, with "new sectors," such as transportation and the power sector, accounting for virtually 0%. Nearly all demand was met by gray hydrogen, produced using fossil fuels without carbon capture.But as green and blue hydrogen production scale, the majority of that supply through 2030 will go toward novel or unknown end uses, according to the quarterly analysis.As of early June, electrolytic hydrogen was selling at around $12/MMBtu on the Gulf Coast, according to S&P Global Platts pricing data. Hydrogen produced by the carbon-intensive steam methane reforming process hovered at around $2.50/MMBtu.Industry watchers say clean hydrogen’s price premium is not the only factor preventing incumbent customers from decarbonizing. Industrial gas companies may be locked into long-term contracts with natural gas suppliers, while fertilizer plants that produce their own gray hydrogen on-site would have to write off the cost of equipment. "Breaking into that ecosystem is a very slow, involved and lengthy process with relatively little motivation on the part of the consumers to make the change," Garabedian said.Suppliers of gray hydrogen or ammonia, now branching into lower-carbon products, also note different sources of demand for the otherwise identical molecules. CF Industries Inc. executive Bert Frost, when asked about low-carbon ammonia demand at a May 18 investor conference, cited maritime and the Japanese power sector as prospects. Both would be for novel use cases — alternative fuels,and ammonia co-firing with coal.However, "when we talk to farmers and retailers, they’re like, ‘great, we would love to have your blue and green products. But we’re not going to pay a dime more than conventional,’" Frost, senior vice president of sales and market development, said at a conference in February. "And I understand that. Just like you choose your gas station and what gas you put in your car, all of these are economic decisions."The agriculture industry’s reticence has not stopped CF Industries, the world’s largest ammonia manufacturer, from preparing for demand from the sector in the long run. The company plans to invest nearly $200 million to install carbon capture equipment at its Donaldsonville, Louisiana, plant, enabling the production of up to 1.7 million metric tons per year of blue ammonia. And in April, CF Industries partnered with NextEra Energy Resources LLC to develop a 100-MW green hydrogen plant in Oklahoma, supplying the production of up to 100,000 metric tons per year of ammonia for fertilizer products.Paths expected to convergeOther hydrogen producers are optimistic that government incentives, along with technological development, will make the clean version cheap enough to attract gray hydrogen offtakers. The US Inflation Reduction Act of 2022 authorized tax credits worth up to $3/kg of low-carbon hydrogen produced. The spending package also nearly doubled federal tax credits for companies that capture and store their carbon emissions, supporting the production of blue hydrogen."Most companies around the world, left to their own accord, are going to buy the cheapest product possible," Andy Marsh, President and CEO of Plug Power Inc., said in an interview. According to Marsh, the Inflation Reduction Act subsidies alone are enough to make green hydrogen cheaper than gray in the US, "if there is green available." The main cost barrier is the transportation of the gas, he added.Unlike CF Industries, Plug Power is both a hydrogen producer and an electrolyzer manufacturer, serving mostly new use cases for hydrogen. The company in August 2022 announced an offtake deal with Amazon.com Inc. for 10,950 metric tons per year of liquid green hydrogen, which will fuel the retail giant’s forklifts and heavy-duty trucks starting in 2025.Looking ahead, however, Marsh said hydrogen-powered vehicles — despite being one of the more visible use cases of clean hydrogen today — will make up a fraction of the market."It’s actually going to be used in applications where gray hydrogen is used today," Marsh said. "Things like fertilizer manufacturing; it’s going to be used in concrete manufacturing; it’s going to be used as substitutions for natural gas in many applications."For more hydrogen and clean energy news check www.chemweek.com

After three years of stringent pandemic-related restrictions, China’s economy is back and is expected to drive global oil and gas demand. By Oceana Zhou and Cindy Liang.China, finally unleashed after three years of stringent COVID-19 restrictions, is expected to drive global oil and gas demand growth in 2023.S&P Global Commodity Insights forecasts global oil demand to grow by 2.1 million b/d in 2023, and around 40% of this is expected to come from China, assuming the country’s GDP rises by 5.3%. China is also estimated to contribute 84% of the 7.9 Bcm or 1.4% year-on-year growth in global natural gas demand.China’s first-quarter GDP growth stood at 4.5%, according to the National Bureau of Statistics, stronger than the 2.9% growth in Q4 2022 and higher than the market consensus of 4%."We expect China to see a 6% oil demand growth in 2023, but we need to be aware of the uneven recovery from different end-users, with a slower growth pace in H1 than in H2," said Zhuwei Wang, Asia oil analytics manager at S&P Global. He added that services — especially catering, tourism and transportation — are rebounding sharply due to the strong leisure demand after three-year controls, but the industry and manufacturing sectors are lagging amid slow exports.GDP growth in the tertiary sector rose 5.4% year on year in Q1 from 2.3% in Q4 2022, with the volume of passenger turnover jumping 61.8% on the year in the first three months, NBS data showed.These indicators were also reflected in stronger transportation fuel demand recovery among oil products, with gasoline and jet fuel rising about 320,000 b/d and 180,000 b/d, respectively, in Q1 from Q4 2022, according to S&P Global estimates.Transportation demand for gasoline, jet fuel, gasoil, bunker fuel oil and LPG generally accounts for 48% of China’s oil product consumption. S&P Global estimates 2023 demand from the transportation sector to rise 8.6% on the year.Industrial production grew 3% year on year in Q1, only slightly faster than the 2.4% increase in the previous quarter. Fixed asset investment growth in March was 4.8% year on year, down from 5.5% in January-February, due to slow growth in the property, infrastructure and manufacturing sectors."We see fairly modest growth in industrial production as a result of the drag imposed by weakening external demand in the US and Europe," financial institution ING said in an April 18 report.Oil consumption from industry, mainly gasoil and light ends as feedstocks for petrochemical production, accounts for about 35% of China’s oil demand. S&P Global projected China’s 2023 industrial demand to grow about 4% on the year.Swing factorChina will not regain its position as the largest LNG importer in 2023 due to demand constraints, said Jenny Yang, senior director for gas, power and climate solutions at S&P Global."The end of the zero-COVID policy in December 2022 promises an economic rebound, with stronger energy and natural gas demand to follow. However, multiple factors are expected to limit Chinese gas and LNG demand growth in 2023 to single digits instead of the double-digit levels seen in the recent past," Yang said.Based on S&P Global’s forecast as of end-April, China’s natural gas demand is estimated to rebound by 7% year on year in 2023. The country’s apparent natural gas consumption was about 366.3 Bcm in 2022, down 1.7% on the year. This was the first year-on-year decline on record, according to data from China’s National Development and Reform Commission."Economic recovery will still be under pressure from the real estate market downturn and weak export demand," Yang said. "Current policy priorities are economic growth stability and energy supply security. The coal-to-gas policy, the key driver behind Chinese gas demand growth in recent years, is no longer a top priority given the higher cost of natural gas compared with alternatives."In order to ensure the stability of energy supply and achieve the country’s decarbonization goal, more domestic coal and renewable resources will be made available for energy consumption this year. Analysts said this move will also cap the growth of natural gas demand.Chinese LNG imports are anticipated to rebound as well in 2023, but are expected to rise by only 5 million mt year on year, with most of the growth coming from new long-term contracted volumes, according to S&P Global’s forecast.Nonetheless, China will remain a key swing factor in the global LNG market. Yang said uncertainty in China’s LNG demand stems from economic growth, particularly industrial activities, as well as spot price levels, government policies and even the weather."LNG imports may represent only 3% of China’s energy consumption, and spot LNG purchases much less than 1% of total energy demand, but China’s LNG demand and spot purchases could have a significant impact on global trade," she added.Rising Russian importsDomestic production growth and the Power of Siberia gas pipeline will add more lower-priced gas supply to the domestic market, which is expected to limit LNG demand.China’s natural gas production is expected to reach 234.6 Bcm in 2023, up 5.4% on the year, state-owned oil and gas company CNPC’s Economics & Technology Research Institute said.Natural gas inflows via the Power of Siberia pipeline, the Russia-China eastern route, are expected to reach 22 Bcm in 2023, 30 Bcm in 2024 and 38 Bcm in 2025, from 15.4 Bcm in 2022, according to the supplier Gazprom. With deeply discounted oil and Moscow’s closer diplomatic relations with Beijing, Russia has become a key source meeting China’s growing appetite for imported crudes.China’s imports of Russian crude oil jumped 12.9% to 2.27 million b/d in March from the previous record in February, data from the General Administration of Customs showed. It also marked the first time a single supplier’s monthly crude deliveries to China crossed 2.2 million b/d, against the previous monthly high by a single supplier of 2.17 million b/d, GAC data showed.The cost of Russian crude imports averaged $72.30/b in March, $1.23/b lower than $73.53/b in February, while cargoes from Saudi Arabia averaged $82.22/b in March.As a result, crude imports from Russia surged 32.7% or 508,000 b/d on the year to 2.06 million b/d in Q1, while the country’s total crude imports hit 11.11 million b/d in the same period with a 6.3% or 694,000 b/d year-on-year increase, GAC data showed.Still, there are multiple factors at play that could eventually change the direction of China’s appetite for oil and gas demand balance for the remainder of 2023. The way of the dragon remains unpredictable.Article included in Commodity Insights Magazine. View full issue

India Hydrogen Alliance (IH2A) has submitted to the government a funding plan for five renewable hydrogen hubs worth a combined $5 billion.IH2A, which counts Chart Industries Inc. (Ball Ground, Georgia), Reliance Industries (Mumbai) and JSW Group (Mumbai) as members, is seeking private-public partnerships to progress the hubs."The plan seeks public finance support for green hydrogen production and offtake to create the necessary infrastructure in the initial 2024-2030 period," said IH2A.As a reference project, IH2A has proposed a Green Kochi Hydrogen Hub (GKH2) in Kerala State, as a 50/50 public-private special-purpose vehicle with a 150 megawatt (MW) electrolyzer, as well as storage and transit infrastructure and renewable energy link ups.The Kochi hub would incorporate renewable ammonia plants and likely offtake agreements with industrial and mobility users, with a $468 million capital expenditure outlay over a 20-year period.IH2A said it recommended similar large-scale renewable hydrogen hubs to be developed in Gujarat, Maharashtra, Karnataka, Tamil Nadu and Andhra Pradesh. It has submitted proposals to the respective state governments in this regard."The model is replicable and demonstrates that a financially viable green hydrogen can be designed and built," IH2A it said. "The model can be supported with techno-commercial studies and should accelerate project development."PriceLarge-scale hubs will be commercially viable with offtake prices between $6 per kg and $4.25 per kg during 2024–30 at offtake point, as per preliminary estimates, IH2A said."Hydrogen Hub production, storage and evacuation infrastructure development will require government participation as equity partner, inducing demand by enabling guaranteed offtake for early defined volume, and incentives for infra development over [the] first seven years [2024–30]," it said.The government is to issue guidelines for renewable hydrogen producers and tenders for electrolyzer manufacturers to help disburse a $2.4 billion subsidy, government officials have said.The country's National Green Hydrogen Mission, released in January, announced the funding support for renewable hydrogen, with a goal of delivering 5 million metric tons per year of green hydrogen by 2030 and capturing a 10% share of the global renewable hydrogen trade.IH2A would join the ranks of Adani Group (Ahmedabad) and Reliance that have announced plans for large-scale hydrogen projects with backward and forward linkages.Reliance Industries, a partner in IH2A, said it was investing $10 billion over three years in the production of renewable energy and related businesses in 2021, projecting a cost of $2 per kg or less for renewable hydrogen within this decade.For more hydrogen and clean energy news check www.chemweek.com