Strong performance in changing markets  

Overall Outlook 

As we look to the future, we anticipate a decrease in volatility over the coming year. Nonetheless, we are mindful of the uncertain times ahead and the importance of vigilance. Factors such as low inventories, geopolitical threats, a significant number of elections in the democratic world in 2024, and fragile supply chains contribute to market sensitivity and potential for sudden price fluctuations. 

Our recent experiences underscore the need for a multifaceted skill set to manage complex supply chains effectively, especially under stress.  

On a personal note, I extend my deepest gratitude to all our staff for their relentless dedication and hard work throughout the past year. Their commitment and the support of our team have been instrumental in our continued growth and expansion into new markets. This collective effort speaks volumes about our team’s resilience and dedication. 

Looking ahead, I am confident in our ability to seize the opportunities that arise as we navigate the global shift towards decarbonization while addressing the affordable energy needs of an expanding population. With our talented team, extensive global network, and forward-looking vision, we approach 2024 with optimism for our medium and long-term prospects. 

Global Refining Outlook 

Following two years of decline in 2020 and 2021, the refining industry experienced a resurgence in capacity starting in 2022. Notably, there are substantial capacity expansions projected, amounting to approximately 3.0 million barrels per day (b/d) for the period of 2023 to 2025. While 2023 has witnessed the launch of some large-scale refineries, several others are facing postponements. For instance, the commencement of the 650,000 b/d Dangote refinery in Nigeria is now expected in the latter half of 2024. Similarly, the 400,000 b/d Yulong Petrochemical Yantai refinery in China is likely to be delayed until the end of the fourth quarter of 2023, or potentially into early 2025. 

Global LNG Outlook 

At the onset of the new year, robust global production of Liquefied Natural Gas (LNG) coupled with relatively mild weather conditions has resulted in a surplus in global energy balances.

In-depth Analysis: In December 2023, the increased demand in the „Other Asia“ region absorbed the excess global LNG supply, indicating a potential uptick in demand for 2024.

In the Asia-Pacific region, the aftermath of an earthquake in Japan may pose challenges to the planned restarts of nuclear facilities in 2024. Additionally, it is anticipated that Russia’s Arctic LNG-2 Terminal 1 will operate at only about 50% capacity throughout 2024.

In the Asia-Pacific region, the aftermath of an earthquake in Japan may pose challenges to the planned restarts of nuclear facilities in 2024. Additionally, it is anticipated that Russia’s Arctic LNG-2 Terminal 1 will operate at only about 50% capacity throughout 2024.

Within the Atlantic Basin, Germany’s expansion of LNG regasification capabilities is expected to encounter further delays. On a positive note, Argentina has successfully completed the Mercedes-Cardales pipeline project.

Turning to the Middle East and Africa, although the Damietta facility has resumed operations, the recovery of Egypt’s LNG production continues to lag, primarily due to disruptions caused by wartime conditions.

Regarding LNG prices, significant volatility has been observed between the Title Transfer Facility (TTF) Day-Ahead and Month-Ahead prices. This volatility is steering flexible LNG cargoes from the Atlantic Basin towards Asia, despite the current unfavorable forward netbacks.