ASIAN LNG DOWN 5%
Total imports of liquefied natural gas (LNG) by Japan, South Korea, and China, the three largest global LNG importers, all located in North Asia, declined by an average of 1.0 billion cubic feet per day (Bcf/d) (5%) in 2015, as compared to 2014, and averaged 18.5 Bcf/d. This was the first annual decline in the combined LNG imports in these countries since the global economic crisis of 2009. Reduced demand for natural gas by the power generation sector, driven by slower economic growth and lower-priced competing fuels, resulted in reduced LNG consumption. In Japan and South Korea, nearly all of the gas consumed is supplied via LNG imports, whereas China receives a significant percentage of natural gas from domestic production and pipeline imports.
South Korea accounted for the largest annual decline (0.5 Bcf/d, or 10%), as greater use of coal-fired and nuclear power plants displaced gas-fired generation. This was the second consecutive year of decline in LNG consumption, with LNG imports averaging 4.5 Bcf/d, almost the same level as in 2010.
LNG imports in Japan averaged 11.4 Bcf/d in 2015, 0.5 Bcf/d (4%) lower than in 2014, primarily because of lower demand for gas-fired generation in the power sector. LNG consumption in power generation declined by 6% in 2015 year-on-year, while consumption of crude oil and heavy fuel oil also declined, by 27% and 23%, respectively, according to data from the Federation of Electric Power Companies of Japan, despite a significant decrease in crude oil prices over this period. The power generation sector experienced the fifth consecutive year of declines, with total generation being 12% lower in 2015 than in 2010, because higher electricity prices and lower electricity demand from lackluster economic activity drove down electricity consumption. Higher-cost thermal generation was substituted for nuclear generation that was shut down after the March 2011 tsunami, driving up the price of electricity. Nuclear generation is gradually returning to service (as of December 2015, it accounted for 2% of the total electricity generation) and is expected to further reduce demand for generation from fossil fuels in the coming years.
In China, annual LNG imports declined by 1% in 2015, the first annual decline since LNG imports began in 2006. The overall natural gas supply in China grew by 0.5 Bcf/d (3%) in 2015 to 17.9 Bcf/d as compared with the previous year, with domestic production accounting for 67%, pipeline imports for 18% and LNG imports for 15% of the total. While domestic production grew by 0.3 Bcf/d (2%) year-on-year, its annual growth rate in 2015 was considerably lower than the cumulative aggregate growth rate of 11% in 2011-14. The decline in LNG imports was driven by a slowdown in the growth of the Chinese economy, lower prices of competing fuels, and higher pipeline imports, which increased by 0.2 Bcf/d (7%). An increase in pipeline imports was driven by lower pipeline import prices, which averaged $7.50 per million British thermal units (MMBtu), about $1/MMBtu lower than LNG import prices, which averaged $8.70/MMBtu in 2015, according to statistical data by China's Customs.
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Libya’s oil production increased steeply to the current level of 850,000 b/d from a low point in August 2016 of below 300,000 b/d. Production surpassed 1 million b/d in July.
- Revenue of $7.9 billion increased 6% sequentially - Pretax operating income of $1.1 billion increased 11% sequentially - GAAP EPS, including Cameron integration-related charges of $0.03 per share, was $0.39 - EPS, excluding Cameron integration-related charges, was $0.42 - Cash flow from operations was $1.9 billion; free cash flow was $1.1 billion
“The combination of GE Oil & Gas and Baker Hughes closed on July 3, and we are pleased with our progress during our first operating quarter. Despite the continuing challenging environment, we delivered solid orders growth and secured important wins from customers, advanced existing projects and enhanced our technology offerings in the quarter. We also achieved key integration milestones and made significant progress working as a combined company. I am now more convinced than ever that we combined the right companies at the right time,” said Lorenzo Simonelli, BHGE chairman and chief executive officer.
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