Modelling Europe’s gas balances currently feels like grasping at straws. Yet this 10-page note makes five predictions through 2030. We have revised our views on how fast new energies ramp, which gas gets displaced first, which energy sources are no longer ‘in the firing line’, and gas pricing.
This data-file summarizes our latest thesis on ten leading commodities with upside in the energy transition. We estimate that the average commodity will see demand rise by 3x and price/cost appreciate or re-inflate by 100%.
The data-file contains a 6-10 line summary of our view on each commodity, and ballpark numbers on the market size, future marginal cost, CO2 intensity and pricing.
Covered commodities include aluminium, carbon fiber, cobalt, copper, lithium, LNG, oil, photovoltaic silicon, sulphuric acid, uranium.
Dispersion in global gas prices has hit new highs in 2022. Hence this 17-page note evaluates two possible solutions. Building more LNG plants achieves 15-20% IRRs. But shuttering some of Europe’s gas-consuming industry then re-locating it in gas-rich countries can achieve 20-40% IRRs, lower net CO2 and lower risk? Both solutions should step up. What implications?
The North Field is now the most important conventional energy asset on the planet. It produces 4% of world energy, 20% of global LNG and aims to ramp another 50MTpa of low-carbon LNG by 2028. But what if Qatar’s exceptional reliability gets disrupted by unforeseen conflict with Iran? Without wishing to catastrophize, this 18-page note explores important tail-risks for near-term energy balances and long-term energy transition.
This data-file aggregates production from Qatar’s North Field (aka Iran’s South Pars), plus associated data, based on technical papers and other commentaries that have crossed our screen, covering this enormous 1,260 TCF resource, which straddles the Qatar-Iran border.
We think total production at the North Field has more than doubled to 43bcfd in the past decade, including a 3x ramp-up from the Iranian side to 25bcfd, which is now more than total production from the Qatari side.
Intensifying, competition seems to coincide with Qatari plans to ramp up their own production from the field, but also with lower well productivities.
Backup data are also presented on the relative military strengths of GCC nations and Iran, as tail risks are increasingly important to decision-makers in global LNG markets.
Some of the top public companies in energy transition are aggregated in this data-file, looking across over 1,000 items of research into the energy transition published to date by Thunder Said Energy.
The data file should be useful for subscription clients of Thunder Said Energy, if you are looking for a helpful summary of all of our research to-date, how it reflects upon public companies, and links to explore those companies in more detail, across our other research.
Specifically, the file allows you to filter different companies according to (a) listing country (b) size — i,e., small-cap, mid-cap, large-cap, mega-cap (c) Sector — e.g., energy, materials, capital goods, OEMs (d) TSE resarch — and whether the work we had done made us incrementally more optimistic, or cautious, on this company’s role generating economic returns while advancing the energy transition.
A back-up tab then reviews all of our research to date, going back to 2019, and how we think that specific research conclusion might impact upon specific companies. This exercise is not entirely perfect, due to the large number of themes, criss-crossing a large number of companies, at a large number of different points in time. Hence the observations in this data-file should not be interpreted as investment recommendations.
The screen is updated monthly. At the latest update, in September-2022, it contains 285 differentiated views on 148 top public companies in energy transition.
Spot markets have delivered more and more ‘commodities on demand’ over the past half-century. But is this model fit for the energy transition? Many markets are now desperately short, causing explosive price rises. And sufficient volumes may still not be available at any price. So this 13-page note considers a renaissance for long-term contracts and who might benefit?
This global LNG market data-base tabulates the details of over 300 offtake contracts across the LNG industry, tracking buyers, sellers, facilities, contract durations and destination flexibility. And by extension, this shows what portion of the market was traded “spot”.
Back in the year 2000, the global LNG market was just 100MTpa, c90% of the market was traded on long-term contractions with >10-years’ duration, and the weighted average cargo was on a 22-year contract.
By 2021, the LNG market had almost quadrupled to over 370MTpa. c55% is still sold on >10-year contracts. Conversely, c45% was traded on a short-term basis, of which c20pp were portfolio cargoes, c3% were sold on 1-10 year contracts, c1% was imported on a contract then re-exported, and c20pp was totally uncontracted and sold on a spot basis.
What has not changed is that facilities still tend to sell their initial output on >15-year long-term contracts, to de-risk their financing. Full data on individual contracts, which can be added by country or supplier, are given in the data-file.
This data-file on looks through 17 major nuclear plants in Japan with 45GW of operable capacity, covering the key parameters and re-start news on each facility.
In 2010, before the Fukushima crisis, Japan produced 292 TWH of nuclear electricity, which would have required about 40MTpa of LNG imports if it had all been generated by gas instead.
With all its nuclear plants shut down in 2011-12, LNG imports jumped by around 20MTpa, while the remaining shortfall was covered by ramping oil-fired power back upwards by c600kbpd.
In early-2022, we estimate there is 30TWH of upside from ramping up facilities that have partially restarted (saving 5MTpa of LNG). There is another 100TWH of upside from ramping relatively safe but idle facilities (saving 15MTpa of LNG). There is another 100TWH of upside from ramping more controversial facilities, where debates still linger over their integrity amidst the tail-risk of a direct hit from a massive earthquake (another 15MTpa of LNG), although these facilities could in principle re-start temporarily amidst a war or energy crisis.
Total global nuclear generation is around 2,800 TWH pa, so this scenario also presents meaningful uranium upside.
Perceptions in the energy transition are likely to change in 2022, amidst energy shortages, inflation and geopolitical discord. The biggest change will be a re-prioritization of US LNG. At a $7.5/mcf delivered price, there is 200MTpa of upside by 2030, which could also abate 1GTpa of global CO2. This 15 page note outlines our reasoning and conclusions.