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On 12 September 2022 it was reported by TradeWinds That China’s top shipbuilder, based in Jiangsu Province, was awarded a license enabling it to build new LNG carrier capacity with some new technological components.

The license agreement was made with Singapore-based GT with the purpose to use membrane technologies owned by GTT.

Upon the agreement between the two companies, chief executive of Yangzijiang, Ren Letian, said: “The awarded license will enable us to make strategic inroads into the large LNG carrier market, which we previously had not been able to penetrate into…This is a landmark achievement, and we are proud to be the first private shipyard in China to obtain the license.”

According to Llyod’s List Yangzijiang is the only privately-owned shipbuilder in China to recieve such a lucrative opportunity to expand on LNG carrier capacity.

Yangzijiang also has some major shipbuilding projects in the pipeline:

1. “TIGER MAANSHAN” — a shipbuilding construction project classified by the China Classification Society (CCS)
2. Tianyang Green Ship Technology (T-GET) — a manufacturing plant for LNG fuel tankers through a joint-venture of Yangzijiang and Mitsui Shipbuilding Company
3. Tiger Longkou — the world’s largest dual-fuel LNG tank carrier constructed by Yangzijiang for Hong Kong’s Tiger Gas

An uptick in liquified natural gas (LNG) demand revealed some new activity in the energy sector during the peak of oil and gas demand this summer. This included competition for LNG tankers Among the world’s largest energy companies — TotalEnergies, Shell, China Unipec — to stock up on LNG supplies ahead of the winter season in 2022.

Because of this trend the price of LNG carriers is to the highest levels in 10 years rising, at around $120,000 a day, as LNG import demand is expected to grow higher and higher for developed countries.

On 5 September 2022French President Emmanuel Macron announced to the public in Paris that the so-called France-Spain Midcat pipeline project should not go forward, indicating that current pipeline are only operating at about half capacity.

According to Spanish Energy Minister Teresa Ribera a gas pipeline from Portugal, through Spain, could be built in less than one year for the benefit of France, Spain and other European energy consumers. Calling it a “new interconnection” German Chancellor Olaf Scholz agreed that the pipeline would be beneficial to Europe’s energy supply dilemmas.

This is essentially an issue of increasing liquified natural gas (LNG) imports to Europe. With the capacity of Portugal to receive LNG at its terminals on the coastline, it is a perfect way for France to receive more imports of LNG. However, this plan has been in the works since 2019 as the Spanish grid operator Enagas called for the pipeline to be abandoned.

It’s essential to point out that even when the largest companies are pushing for ways to successfully carry out Energy Transition around the globe, that committments to natural gas production and exports via LNG will continue to grow over time. TotalEnergies even highlighted in its 2021 Energy Outlook that natural gas and renewable energy sources would play complementary roles to achieving the energy transition toward Net Zero.

One of the concerns is how geopolitics and international events are going to affect the global energy outlook and prospects.

For instance, Algeria and Morocco have both announced plans to source more gas reserves to the benefit of TotalEnergies, Eni and USA exporters. But political and territorial issues between those two countries are inevitably going to be a major problem. Algeria cut off Morocco’s access to its gas pipeline in 2021 after Morocco announced that it would develop LNG terminal capacity.

Upstream has been writing about energy companies that are exploring Africa’s potential for the LNG pipeline infrastructure as an alternative to Russia and Persian Gulf producers. Siva Prasad of Rystad Energy said “Asian and European importers will need to consider African priorities as they develop projects, as many African producers are focusing on supplying energy locally as well as to intra-African markets, along with catering to global markets.”

Prime examples include a natural proposed gas pipeline from Tanzania to Zambia.

All of this activity in the LNG sector is critical as governments prepare for their energy supplies for the upcoming winter season. It’s also a signal to the world that companies are searching for new sources of energy during such volatile times for the oil and gas markets.

Oil is also on the radar as of late. Warren Buffet has won regulatory approval to buy up to 50% of shares in the Houston-based oil and gas production company Occidental Petroleum. Analysts have reported on this story with fervor, but this prospect has been in the works since 2019.

There’s been a major comeback for the unsung heroes of the commodity markets: thermal coal and crude oil.

ExxonMobil’s offshore oil discovery in Guyana began exporting crude oil to European markets — around 49% — in 2022 — up from 16% in 2021.

Glencore’s thermal coal production has witnessed massive profits to the tune of $8.9billion in H1 2022.

Of course, this is all occuring under the backdrop of the Russian-Ukraine war which has put oil and gas supply and demand at the crux of sanctions on Russia and the geopolitics of global energy, fertilizers and metals.

If you ask me, though, it seems like the world is still desperate for the commodities that have been lambasted as a tool of influence for adversarial governments, bringing in some key concepts about the effect of foreign policy aims: For which commodities? Against Whom?

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