February 2, 2023
Issue 29  |  View Past Issues
Inside Gas
Published by Global Energy Monitor

Editor's Note

The developers of two major gas pipelines are experiencing significant headaches with their investment projects. In Canada, TC Energy is conservatively predicting a doubling of the price tag for the Coastal GasLink to almost US$11 billion. Santos has been ordered by a national regulator, in what is becoming a problematic trend for the Australian energy giant, to look again at the potential impacts of its pre-construction Barossa pipeline on Indigenous heritage sites. A multilateral public lender never shy about promoting its green credentials appears ready to finance another gas pipeline in the Balkans, but is being awfully shy in its published due diligence about the project’s greenhouse gas emissions. 

As Italy doubles down on gas, national grid operator Snam is openly boasting about raiding the EU’s public coffers in order to subsidize its new expansion plans. LNG importing is back on for now in Bangladesh and other Asian countries as a result of a probable blip in price levels, with all eyes on what happens next with Chinese LNG demand. Record profits in 2022 for the world’s fossil fuel giants have inevitably been registered, but a complaint to the U.S. financial regulator threatens to rain on Shell’s party. Similar scrutiny and actions are expected to ramp up as public disquiet concerning the majors’ profiteering – and their dismal energy transition efforts – grows louder.

Grieg Aitken


How many elephants does it take to build a gas pipeline?

Despite claims from the European Bank for Reconstruction and Development that all of its activities are aligned with the Paris Agreement, thousands of pages of the bank’s documentation for the proposed Greece-North Macedonia pipeline fail to consider the project’s potentially massive greenhouse gas emissions, write Pippa Gallop and Davor Pehchevski for CEE Bankwatch Network

Light-touch Texas regulators are sanctioning new wave of fracking pollution threats  

Historically high oil and gas prices are driving a resurgence of fracking activities in Texas, and the city of Arlington has approved a swath of permits for new gas wells near homes without holding public hearings, write Amal Ahmed and Haley Samsel in Grist.

Europe’s gas power economics don’t add up in the long term

The sudden fall in European gas prices in the depths of winter during a wartime energy crisis has torn up prevailing narratives and returned gas plants to profitability, but the underlying economics still favor a switch from coal to wind or solar power plus battery storage, writes Seb Kennedy for TransitionZero.


Communities urge government action on the health impacts of gas in Batangas

Filipino communities and NGOs are calling for official investigations into the “abnormally high levels of respiratory infections and cardiovascular diseases” that have emerged in recent years in the province of Batangas south of the capital Manila. Batangas is the center of gas infrastructure in the Philippines, and the groups petitioning government agencies suggest there is likely to be a link between a rise in these health issues between 2017 and 2021 and pollution from gas plants in the province. The groups also called for all permitting applications to be denied for new gas projects under development in Batangas City. (Balisong Channel)

Top News

U.S. financial regulator urged to investigate Shell’s alleged annual report greenwashing: Shell, which this week posted record profits of US$39.9 billion in 2022 (a doubling of its profits in 2021), has been slapped with a complaint lodged with the U.S. Securities and Exchange Commission (SEC) alleging that it is misleading investors by classifying some of its gas investments as spending on renewable energy. The non-profit group Global Witness has requested the U.S. financial regulator to open an investigation into whether the oil and gas major has violated relevant U.S. securities laws by stating in its most recent annual report that 12% of its capital expenditure in 2021 went to its Renewables and Energy Solutions division. According to the non-profit’s calculations, the company invested US$288 million – or only 1.5% of total capex – in wind and solar investment that year. It is thought that a lot of this Shell division’s spending goes to the trading and marketing of gas. “I hope the SEC opens an investigation and imposes appropriate penalties to stop this greenwashing,” commented Zorka Milin, a senior adviser at Global Witness. (The Guardian)

Libya’s oil ministry says new US$8 billion gas deal with Eni is illegal: A major offshore gas development deal signed in Tripoli on January 28 by Libya’s National Oil Corporation (NOC) and the Italian major Eni – in the presence of the United Nations-backed Government of National Unity’s Prime Minister Abdul Hamid Al-Dbeibah and his Italian counterpart Giorgia Meloni – has been swiftly rejected by the GNU’s oil ministry. The terms of the deal, which the ministry says violate the law and were reached without its approval, were criticized by oil minister Mohammed Aoun who said Eni should take on more of the investment costs. These are currently shared equally between NOC and Eni. Fathi Bashagha, the head of Libya’s parallel, eastern-based Government of National Stability, also dismissed the agreement. A reaction from Eni has so far not been reported. (Eni, Argus, Energy Voice)

Coastal GasLink pipeline delayed and set to cost more than double its original budget: TC Energy has disclosed that the overall cost of its 83% complete Coastal GasLink pipeline has ballooned to CA$14.5 billion (US$10.9 billion), more than double the original estimate for the project that is designed to supply the LNG Canada project in Kitimat, British Columbia. The 670 kilometer project, planned to be operational this year, has faced construction disruption due to Covid-19, a shortage of skilled workers, and protests by environmentalists. The Canadian pipeline operator also raised the possibility of costs rising by a further CA$1.2 billion if more delays extend construction into 2024. A new report from the Institute for Energy Economics and Financial Analysis has warned that Coastal GasLink’s financial difficulties point to systemic, longer term challenges and risks for other major gas infrastructure proposals in western Canada. (Bloomberg, Institute for Energy Economics and Financial Analysis) 

Uncertainty over Colombia’s phase-out intentions: Comments made by Colombia’s minister for mining and energy, Irene Veléz, at the World Economic Forum last month appeared to be unambiguous. “We have decided not to award new oil and gas exploration contracts, and while that has been very controversial, it’s a clear sign of our commitment in the fight against climate change,” said Veléz on a panel discussion at the Davos meeting, during which Colombia’s new president, Gustavo Petro, was also outspoken about the need to halt the climate crisis through clamping down on oil and gas. The comments sparked widespread criticism in Colombian media with some commentators suggesting that the minister had been compelled to U-turn. Veléz has sought to clarify on social media that the government’s intention is not to end existing contracts for exploration and production. In a sign that the debate on how and when Bogota will transition out of oil and gas is far from over, director of public credit Jose Roberto Acosta was reported to have said subsequently that the country will continue to sign new oil and gas contracts. (The Guardian, Argus)

Australian regulator halts Barossa pipeline construction start: Just weeks ahead of scheduled construction work getting underway on the offshore Barossa export pipeline, the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) has instructed the project developers to work with independent experts to assess if there are any sites along the pipeline route that may have spiritual or cultural importance to Indigenous people and then, if necessary, adjust their plans. This latest setback for Australian energy giant Santos and its Barossa development follows last October’s legal defeat to Tiwi Islands traditional owner Dennis Tipaklippa that resulted in the shutting down of drilling operations in the gas field. NOPSEMA was prompted to intervene after a report from a subsea archaeology expert concluded there was a significant chance of sites along the 262-kilometer-long route being of significance to local Indigenous people. (The Sydney Morning Herald)

Dutch government sticks to its guns on Groningen closure, despite industry pressure: After announcing its intention to stick to a planned closure date of October 1 this year for the earthquake-prone Groningen gas field, the Dutch government received pushback from the national gas grid operator Gasunie arguing for maintaining production at the field at least into next year. The government’s plan had included an option to keep Groningen open next year should there be a gas shortage after the 2023 heating season. In response to Gasunie’s advice, the government is sticking to the outlined closure timetable but will now take a decision in June on the 2024 production level. (Reuters, Reuters)

“The truth is, there won’t be enough in the next three to four years of LNG production capacity in the world to meet the growing demand … So the unspoken strategy is that Germany will continue to pay crazy prices and other, less rich countries go empty-handed,” 

said Christian Leye, a member of the German federal parliament for Die Linke (Left Party). 


Azerbaijan: BP has started drilling two new exploration wells in deep gas reservoirs in the Caspian Sea as the regime in Baku seeks more gas to send to Europe. 

Canada: FortisBC Holdings has signed a cooperation deal with the Snuneymuxw First Nation on the proposed expansion of the Tilbury Island LNG export terminal in British Columbia. 

Colombia: The owners of the floating Cartagena LNG import terminal are assessing market appetite for expanding the facility’s current 3.8 million tonnes per annum (mtpa) capacity. 

Democratic Republic of Congo: Congolese campaigners have called on Pope Francis to speak out during his tour of the country against plans for an oil and gas license offering that would impact sensitive ecological areas. 

Germany: London-based Neptune Energy has started drilling a fourth well at the onshore Adorf gas field in the municipality of Georgsdorf, close to the border with the Netherlands. 

Ireland: A planning decision on the long-delayed Shannon LNG import terminal proposal is not expected “in the near future,” according to the Irish planning body An Bord Pleanála. 

Japan: Shipping giant NYK Line has ordered its fifth dual-fuel, large-scale LPG/liquefied ammonia gas carrier, due for delivery in 2026.

Mozambique: TotalEnergies CEO Patrick Pouyanne is due in Cabo Delgado province this week to assess the potential for restarting the Mozambique LNG export project put on hold in 2021 as a result of Islamic State-linked violence.

Trinidad and Tobago: The mothballed liquefaction train at the Atlantic LNG export terminal may be able to recommence operations following U.S. government backing for new gas flows from Venezuela’s Dragon field and the cross-border Manatee field. 

Turkmenistan: The Central Asian nation, home to one of the world’s most serious methane gas emissions problems, has been told by the United Nations Environment Programme that half of these emissions could be reduced at no net cost.

U.S.: Seven months into a production outage caused by an explosion, Freeport LNG, the operator of a 15 mtpa LNG export terminal in Texas, has asked U.S. regulators for approval to start introducing gas into one of the facility’s liquefaction units. 

Companies + Markets

Price decline brings emerging Asian economies back cautiously to the LNG market: After more than six months of astronomical Asian LNG prices, energy companies in Bangladesh, India, and Thailand have again started to place bids for and purchase LNG cargoes on the spot market. From a record high price level in August last year of US$70 per million British thermal units (mmBtu), Asian spot LNG prices fell to US$19.50/mmBtu in late January. A decision by the Bangladesh government to halt spot purchases has been loosened for the time being, with a shipment purchased for February delivery and more cargoes being eyed for the first half of the year. These are regarded as cautious initial steps by Asian buyers, which may not last long if Chinese demand picks up significantly and pushes prices higher again. The data and analytics firm Kpler views an Asian spot price of less than US$15/mmBtu as the level at which less wealthy economies in the region could return with confidence to LNG purchasing. (Reuters, Bloomberg) 

Snam targets EU public money to support major gas expansion plans: After almost a year in post, Snam’s chief executive Stefano Venier has laid out a €10 billion (US$10.8 billion) investment plan for the Italian energy infrastructure company over the next four years. €9 billion is to be pumped into the construction of the Adriatic Line gas pipeline (estimated to cost €2.5 billion), two new LNG terminals, and an expansion of gas storage facilities. These expansion plans appear to be dependent on an undisclosed sum of EU public money. According to Venier, “Once I have all the green lights in Italy, I will go to Brussels and ask for funds.” Venier also disclosed that Snam aims to have its controversial five billion cubic meter capacity floating import terminal in the Tuscan port town of Piombino up and running by May. (Reuters, Reuters, Upstream)

Buyers in Japan and South Korea renew long-term deals with Russian Far East LNG project: According to analysts cited by Reuters and the media outlet’s own calculations, the Sakhalin 2 LNG project in the Russian Far East could see its revenues double in 2023 due to a combination of inflated prices and long-term Asian buyers renewing their deals with the export terminal. In particular, Japanese and South Korean energy companies, amid energy security concerns and with the approval of their governments, have recently signed up to new long-term supply deals with Sakhalin 2, in which Gazprom is now the majority shareholder. (Reuters)

Berlin sensitive to Russian LNG importing: As data from Refinitiv Eikon revealed that Russian LNG volumes supplied to Europe rose by 20% in 2022 to 17 million tonnes, a German government document seen by Bloomberg suggests that Berlin intends to minimize the importing of Russian LNG at its ports at least. According to documented comments from deputy energy minister Patrick Graichen in response to questions from members of the Bundestag, “The federal government does not support the procurement of Russian LNG … The federal government has informed companies that it will take appropriate measures to exclude purchases of Russian LNG if possible.” (Reuters, Bloomberg) 

Poland’s PKN ORLEN signs deal for U.S. LNG cargoes out to 2047: U.S. LNG company Sempra Infrastructure has signed a 20-year sale and purchase agreement to supply PKN ORLEN with 1 mtpa of LNG from the proposed first phase of the Port Arthur LNG terminal in Texas. Deliveries are expected to start in 2027 and, according to Sempra, the agreement should allow a final investment decision to be taken for the multi-billion dollar phase one project in the coming weeks. Sempra signed a provisional agreement with Poland’s PGNiG last year for 20 years supply of 3 mtpa, also starting in 2027. (Offshore Energy, Upstream, PGNiG)

“There is tremendous uncertainty remaining in the LNG market as we look at factors like Chinese economic activity … I think after Chinese New Year, we’ll start to see what happens in China, and what that means for LNG demand,”

said Meg O’Neill, CEO of Woodside Energy, Australia’s biggest LNG exporter.


EU Gas Summary, Carbon Tracker Initiative, January 25, 2023 

This 15-page corporate research notes surveys the state of play at Europe’s three Climate Action 100+ gas utilities – Centrica, Engie, and Naturgy – and recommends the need for government policy intervention to accelerate reductions in portfolio emissions.

Fossil Hyena: How Daniel Křetínský’s EPH Destroys the Climate, Profits from Energy Poverty and Threatens Democracy, re-set, January 26, 2023

This 36-page report outlines the massive gas power development plans of the Czech Republic-based EPH, Europe’s most unambitious energy company in terms of portfolio decarbonization plans.