September 15, 2022
Issue 13  |  View Past Issues
Inside Gas
Published by Global Energy Monitor

Editor's Note

The largest Southeast Asia-based commercial bank, DBS, has announced decarbonisation targets for its exposure to emissions intensive industries, including oil and gas. The bank’s policy move reflects the growing global pressure lenders are coming under to stamp out their role in accelerating climate change. Private equity firms for now remain a lot more in the financial shadows, although new research ups the pressure on the sector’s heaviest fossil fuel asset holders to stop jeopardizing the billions of dollars they hold via pension funds.   

The European Union continues to scramble – albeit slowly – to deal with the dire consequences of its historic dependence on Russian gas. A raft of new emergency proposals is to be haggled over by Europe’s capitals in the next two weeks. A dedicated “Hydrogen Bank” has also been announced by the European Commission to kickstart the bloc’s hydrogen ambitions with €3 billion in capital, although concerns have immediately been raised that public money should not go to subsidize the gas industry’s economically dubious blue hydrogen aspirations. Similar concerns are being raised in South Korea, with new report findings detailing the huge carbon lock-in potential of the Seoul government’s hydrogen initiative.

Grieg Aitken


Bullet through the heart of Russia’s gas business in Europe

Far from winning the energy war, Vladimir Putin’s invasion of Ukraine has undermined decades of oil and gas industry modernization and looks set to fatally wound Russia’s long-term competitiveness, says Thane Gustafson, a Russian energy specialist, in an interview with Bloomberg.

The winners and losers of the UK’s energy crisis relief package

No windfall tax but instead a state safety net for energy suppliers, coupled with a new dash for gas and fracking, mean that taxpayers and the climate are on the hook for the UK’s government’s misguided £200 billion policy intervention, writes Sandy Hager of the University of London in The Guardian.

Troubled road towards green hydrogen

Keen to develop itself as a green hydrogen export hub for developed nations, Argentina’s parallel investment plans for oil, gas, and silver extraction are set to jeopardize its clean energy ambitions, as well as raising a host of other problematic issues, writes Julián Reingold for Energy Monitor.

Top News

Emergency plans set to shake up Europe’s energy markets: A new set of proposed measures aimed at helping the EU cope with the possibility of acute gas shortages and punishing electricity bills has been outlined by European Commission President Ursula von der Leyen and kickstarts negotiations between the bloc’s member states ahead of another emergency meeting of energy ministers on September 30. Electricity demand reduction targets hope to reduce gas use for power by around 4% this winter, along with the temporary imposition of levies on fossil fuel companies that have been accruing excessive profits. In other words, a windfall tax, though the Commission has been at pains to avoid the term, with the estimated €140 billion (US$140 billion) proceeds to go into a solidarity kitty for countries to channel to vulnerable consumers. Deeper and longer-term tinkering with Europe’s benchmark gas market pricing mechanism, the Netherlands-based TTF, is also proposed but is expected to take up to a year to realize due to the technical complexities involved. (European Commission, Politico)
South Korea’s “clean” hydrogen drive heavily reliant on gas finds study: The Seoul-based non-profit Solutions for Our Climate (SFOC) has criticized South Korea’s ambitious plans for hydrogen development that are over-reliant on gas derived blue hydrogen as well as imports from the likes of Australia and Canada where concerns are growing over major hydrogen export plans based on the ramping up of new upstream gas projects. As South Korean industry starts to get behind the government’s hydrogen roadmap that foresees close to 90% of domestic production coming from fossil fuels by 2030, new SFOC research calculates that in the process the country will emit over 30 million tons of greenhouse gas emissions in 2030 alone, equivalent to the emissions of approximately six million passenger vehicles. (Solutions for Our Climate [pdf]) 
Questions mount over “responsibly sourced gas” certification: New analysis by Global Witness points out the discrepancy between how the U.S.’s leading gas certifier MiQ has been able to award ExxonMobil and other companies “Grade A” ratings for certain methane emissions management schemes despite the companies also attracting worst in class rankings for their pollution impacts on communities of Color in the U.S. The pressure group notes that there are endemic problems accompanying the growth of responsibly sourced gas certification, including a lack of regulation, common metrics, and transparency, that risk misleading investors and purchasers of gas. (Global Witness)
Pipeline fight descends on Washington D.C.: More than 600 Appalachian, Indigenous, southeastern, and other activists from across the U.S. convened for a rally in front of the U.S. Capitol on September 8 to protest proposed legislation that would accelerate permitting for projects such as the Mountain Valley Pipeline and other fossil fuel projects. Their central objection continues to be that communities are being sacrificed as a bargaining chip in order to pass a US$370 billion climate spending package. (Protect Our Water, Heritage, Rights press release, The Washington Post)
New European Hydrogen Bank announced: In the annual State of the Union speech, Ursula von der Leyen announced the creation of a European Hydrogen Bank, part of a “green pact for Europe.” Few details have so far been provided other than that the new institution will be equipped with €3 billion (US$3 billion) derived from the EU’s Innovation Fund. Green MEP Grace O’Sullivan reacted to the announcement on Twitter, commenting: “Good news, but it will need to be defended from the fossil gas industry and lobby to ensure it is actually green.” German Chancellor Olaf Scholz also told a business audience this week that the German government wants to “trigger a big boom” in the hydrogen industry. (CEENERGY NEWS, Twitter, Reuters)

First European crisis FSRU starts up in the Netherlands: The race to build and open Europe’s first floating LNG import terminal since a rush of new projects was announced this spring has been won as expected by Gasunie’s new eight billion cubic meters per year Eemshaven facility in Groningen. The first LNG shipment arrived on September 8 from the Sabine Pass LNG terminal in the U.S., and the Dutch terminal is scheduled to be operating at full capacity before the end of the year. Czech company ČEZ has secured some of Eemshaven’s capacity, and the country has announced further LNG diversification plans with construction work to restart on the Stork II pipeline, which would bring gas from Poland’s Swinoujscie LNG terminal across the border to the Czech Republic’s northern Moravian region. (S&P Global, Business New Europe)


Mozambique: The EU will provide €15 million (US$15 million) in additional military aid to the Southern African Development Community mission to Mozambique’s Cabo Delgado province near LNG projects worth billions of dollars.

Nigeria: During a recent visit by President Andrzej Duda, Poland reached an agreement to increase its imports of Nigerian LNG. 

Russia: Details have emerged on how Equinor arranged its pull-out from Russia, with Reuters reporting that the Norwegian company sold its main assets to Rosneft for one euro.  

Senegal: LNG from BP and Kosmos Energy’s Greater Tortue Ahmeyin project due to start operating in the second half of next year will likely supply European and Asian markets, according to Senegalese President Macky Sall.

Slovakia: National gas importer SPP has signed a contract (terms undisclosed) with ExxonMobil to purchase LNG.

UK: Without an immediate plan to insulate housing stock and reduce demand for gas, the Institute for Government think tank has warned that Britain will face an even worse energy crisis next year.

U.S.: An analysis by the Federal Energy Regulatory Commission has concluded that if the proposed US$4.8 billion Commonwealth LNG terminal in Louisiana is completed, it would result in “disproportionately high and adverse” impacts for neighboring environmental justice communities.

U.S.: Oil and gas officials in Louisiana have praised a federal judge’s ruling that reverses President Joe Biden’s January 2021 ban on new oil and gas lease sales in the Gulf of Mexico.

Uzbekistan: Greater cooperation between Azerbaijan and Uzbekistan is furthering hopes that the former’s Socar will be able to take forward gas exploitation plans in the vast Ustyurt plateau. 

“Please do not give the impression that Shell is willing to reduce carbon dioxide emissions to levels that do not make business sense,”

noted an internal Shell memo from 2020 offering guidance to employees about the company’s net-zero emissions planning.   

Companies + Markets

Southeast Asia’s largest bank sets interim target for reducing oil and gas financing: Singapore-based DBS is aiming to reduce its full, Scope 1-3 financed emissions across the oil and gas sector by 28% by 2030 on a pathway to achieving net-zero emissions by 2050. The interim target was part of a raft of decarbonization measures announced across seven emissions-intensive sectors. (DBS, Eco-Business)

Private equity and fossil fuels – top funders ranked: A new report from the Americans for Financial Reform Education Fund and the Private Equity Stakeholder Project has for the first time ranked the worst performing private equity firms in terms of exposure to climate risk via their investments in coal, oil, and gas. Carlyle, Warburg Pincus, and KKR were the worst offenders of the eight firms reviewed. Over 60% of Carlyle’s first half year profits in 2022 have come from its subsidiary NGP Energy Capital, which focuses almost exclusively on oil and gas projects, the groups’ research found. KKR has said it intends to continue investing in fossil fuel projects despite publishing a climate action strategy. (Private Equity Stakeholder Project, The Guardian)

International funding support for Egyptian gas plant decommissioning: The European Bank for Reconstruction and Development (EBRD) has announced that it intends to raise US$300 million from governments to assist with the closure, starting in  2023, of inefficient Egyptian gas power plants with total capacity of 5,000 megawatts (MW). As Egypt looks to export more of its gas to Europe, it is intent on cutting domestic demand. The EBRD also plans to provide Egypt with up to US$1 billion in loans for renewable energy development, with potentially 3,000 MW of the overall planned 10,000 MW in mostly wind power to be lined up for green hydrogen production. (Reuters)

Russian gas supplies to Europe slashed, but Gazprom profits soar: According to figures published in the Financial Times, as of this month Russia's daily deliveries of gas to Europe are now standing at 17.5% of last year's average. This steep supply reduction has however forced price levels up. As a result, Gazprom recently announced net profits of US$41.75 billion for the first half of 2022, compared with US$29 billion in profit earnings for all of last year. (The Financial Times)

ECA-backed gas deals thin on the ground in 2022: For the first half of the year, export finance data firm TXF Research has recorded only one oil and gas finance transaction backed by an export credit agency (ECA), a refinancing debt deal for the operating Ichthys LNG terminal in Australia. This sparsity of ECA involvement is contrary to some market expectations of a post-pandemic surge in global gas infrastructure that would require state-backed financial guarantees and the spate of major new gas projects announced since Russia’s invasion of Ukraine. (Proximo, 

One year delay confirmed for flagship Russian LNG project: The impact of western sanctions on Russia and the subsequent withdrawal of key contractor companies has forced Novatek, the lead company on the US$21 billion Arctic LNG 2 project, to concede that start-up of the terminal’s first liquefaction train will be delayed by a year, potentially into 2024. The 20 million tonnes per annum (mtpa) project has been poised to be one of the most significant entrants to the global LNG export market. Progress on the project’s two other trains, each proposed to have 6.6 mtpa capacity, remains unclear. (Upstream)

Nationalization looms as Uniper’s troubles deepen: Germany’s biggest gas supplier has confirmed that it is in discussions with the national government for potentially “a straight equity increase that would result in a significant majority participation by the German government in Uniper.” In recent months the company has burned through 19 billion euros (US$19 billion) in state bailout money, and sources believe that adequate security for the company’s workforce can only be provided via Berlin taking a majority stake. (Reuters)


Factcheck: Why fracking is not the answer to the UK’s energy crisis, CarbonBrief, September 9, 2022.

This analysis confirms that new prime minister Liz Truss’s ambition to “get gas flowing in as soon as six months” via fracking is driven by ideology rather than evidence.

The Dirty Truth About “Clean” Gas, Global Energy Monitor, September 2022. 

This three-page briefing outlines how Bangladesh’s plans for a major turn to gas are facing stiff headwinds as witnessed by the government’s recent cancellation of a 3,600 MW gas plant and accompanying LNG terminal.