FPSOs with more ‘plant’ — A New FLNG Era?
Due to its technological complexity, floating liquefied natural gas (FLNG) often does not qualify as a low cost alternative to onshore LNG. So far, FLNG facilities both under development and planned tend to focus on smaller offshore gas fields. The FLNG approach will potentially unlock substantial volumes of gas otherwise stranded and add liquidity to the global LNG market, and by 2025, FLNG could add between 15.3mtpa (Low Case) and 64.8mtpa (High Case) of capacity or up to 17% potential LNG capacity growth over the coming decade.China Watch
China’s manufacture expanded for the first time this year with a PMI of 50.7 in June, up from 49.8 in May. Exports also improved, arguably supported by the Eurozone recovery. However, increasing lending, falling oil consumption, excess steel production and refinery capacity puts pressure on the Chinese economy.Oil Market Snapshot
Brent price rallied towards a 9-month high ($115/bbl) over concerns of potential oil supply outages from Iraq. Political risk premium of $5-6/bbl breaking the very low level of volatility in the past few months. We have revised our Short-Term Oil Price forecast upwards to $108.33/bbl (+$1.17/bbl) for 2014 and $105.25/bbl (+$1.89/bbl) for 2015, based on concerns of Iraqi supply disruptions. US condensate exports given the green light; potential for 300-500,000 b/d addition to international markets. North Sea is likely to increase production this year reversing the declining trend.
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