Gas traders say thank you very much as EU leaders squabble over false solutions
If the time and effort put into the never-ending debate over a pointless gas price cap had gone instead into doubling down on renewables and no-regrets efficiency measures, Europe would be much less at the mercy of punishing market conditions, writes Seb Kennedy at Energy Flux.
High price gas squeeze in India puts solar gains in the shade
Despite a rapid rise in solar power production capacity in recent years, coal has driven emissions in India’s power sector to record levels this year as a result of unaffordable LNG prices, writes Gavin Maguire for Reuters.
Troubled mega-pipeline may benefit from Putin’s Central Asian gas maneuvers
A possible “tripartite gas union” between Russia, Kazakhstan, and Uzbekistan could have positive knock-on effects for the stalled Turkmenistan-Afghanistan-Pakistan-India gas pipeline, though it’s complicated, writes Eurasianet in its weekly column on Turkmenistan.
|
|
|
Major Pennsylvania methane leak reveals deeper problems: Following a massive leak at an Equitrans Midstream gas storage well in a remote corner of Western Pennsylvania, sealed shut by the company in November after two weeks of venting an estimated 1.29 billion cubic feet of methane into the atmosphere, follow-up investigations and pronouncements from the state’s Department of Environmental Protection (DEP) indicate that last month’s incident is an overdue wake-up call for the state’s aging and widespread gas storage sites. The DEP has subsequently found gas leaks at ten other Equitrans storage wells close to the main leakage site, and has issued the company with three orders after identifying a range of violations. Other than the direct environmental health and safety threats from methane links, Bloomberg estimates that the single leak in November effectively erased emissions gains from about half of the 656,000 electric vehicles sold in the U.S. last year. (Pittsburgh Post-Gazette, Associated Press, Bloomberg)
IEA emphasizes renewables, efficiency as EU gas shortage remains a possibility in 2023: In a new report, the International Energy Agency believes that a shortfall in EU gas supply can not be ruled out next year but, with tightness in LNG markets set to continue, a potential shortage of 27 billion cubic meters of gas can be overcome if investment focus is placed principally on more energy efficiency measures and renewable energy deployment. Capturing methane and gas flares would also help significantly, the IEA said. The estimated cost for implementing this action next year is just under €100 billion (US$106 billion) though, according to IEA Executive Director Fatih Birol, this sum could be clawed back by 2025 due to the resulting savings on gas import bills. (International Energy Agency [Pdf], Reuters)
“Massively oversized” German LNG boom brings climate and economic risks – study: New analysis from Cologne-based nonprofit New Climate Institute finds that Germany’s proposed fleet of floating and onshore LNG terminals are destined to become stranded assets, with German taxpayers in line to be on the hook for substantial losses. The total capacity of the planned terminals, being advanced with billions of euros of federal subsidies, would allow for an approximate 50% increase in gas imports over what was purchased from Russia before the outbreak of war in Ukraine. Instead, the researchers project, to keep on track to meet national climate targets, energy efficiency measures would continue the decline in German gas consumption witnessed this year and could be matched with efforts to maintain and secure high piped gas imports from neighboring countries in the short term. (New Climate Institute)
Spain and France ditch MidCat and greenlight subsea hydrogen pipeline: A 455-kilometer subsea pipeline to transport green hydrogen between Barcelona and Marseille from 2030 is moving forward as part of the H2MED hydrogen corridor, which is being touted as a key part of a “European hydrogen backbone”. The €2.5 billion (US$2.6 billion) project is expected to be put forward as an EU Project of Common Interest, which would allow accelerated permitting and access to EU funding, and would transport up to 2 million tonnes per annum of hydrogen, the equivalent of 10% of forecast annual consumption in the EU by 2030. In a briefing outlining concerns and uncertainties about H2MED, the Institute for Energy Economics and Financial Analysis pointed to an October 20 joint communique from France, Portugal, and Spain, that discusses H2MED initially transporting gas. (Reuters, Institute for Energy Economics and Financial Analysis, Government of France [French])
UK government faces further legal challenge to North Sea expansion plans: Campaign groups Greenpeace, Friends of the Earth, and Uplift have written to the UK government warning that its plans to award up to 130 licenses for North Sea oil and gas exploration are out of line with UK and international climate obligations. Calling for the licensing decision to be reversed ahead of potential legal action, Phil Evans at Greenpeace said: “Ministers keep greenlighting new fossil fuel projects without fully considering the climate-wrecking emissions from burning those fuels. It’s like giving an unlit cigarette a quick sniff and concluding that it can’t do much harm.” (The Guardian)
“Now that Russia has proven once and for all that it is an unreliable energy supplier, Greece’s role as an energy hub in Southeastern Europe, with access to supplies from around the world, is more critical than ever,”
said Geoffrey Pyatt, U.S. Assistant Secretary of State for Energy.
|
China: Due to fully booked shipyards in South Korea, Chinese shipbuilders have seen orders for LNG tankers surge this year from both local and foreign shipowners.
Egypt: Data from the national electricity regulator show that as Egypt looks to ramp up its exporting of gas, the burning of carbon-intensive mazut fuel oil in power stations has reached five-year highs.
Israel: Chevron and its partners have taken a US$673 million final investment decision (FID) to expand the offshore Tamar field in order to meet growing domestic demand and for eventual export to Egypt.
Netherlands: Energy companies Gasunie and VTTI have said they are working on plans to build separate LNG import terminals, with the Dutch government stating also that it could provide support for new projects to further boost import capacity.
Norway: Germany's Wintershall Dea and local partners Petoro and Sval Energi are investing roughly US$800 million to develop the Dvalin North gas field in the Norwegian Sea, with expected startup at the end of 2026.
Poland: The proposed Polish Baltic Sea Coast LNG terminal has been awarded a €19.6 million (US$20.7 million) grant from the EU's Connecting Europe Facility.
Saudi Arabia: U.S. investment bank Evercore is advising state-controlled Aramco on raising funding for development of the US$110 billion Jafurah project, one of the world’s largest unconventional gas fields.
South Africa: The Eastern Cape High Court has given Shell the opportunity to appeal a ruling that stopped it carrying out seismic testing in the ecologically sensitive Wild Coast region.
United Arab Emirates: Abu Dhabi National Oil Co. has reportedly chosen Goldman Sachs, Bank of America, and First Abu Dhabi Bank as the joint global coordinators for an initial public offering of its gas business slated for next year.
|
HSBC to stop direct finance for new oil and gas fields: In a review of its energy policy, HSBC has become the latest major international bank to follow International Energy Agency guidance by committing to end direct lending for new oil and gas field projects where an FID was taken after 2021. The bank will continue to provide balance sheet financing for companies planning to develop new fields, and will also assess its oil and gas clients’ transition plans against specified, though undisclosed, criteria by assessing company strategies annually. The world’s largest sovereign wealth fund, Norges Bank Investment Management, has also strengthened the climate dimension of its investment strategy where it will ask companies in its portfolio “to commit to business activities aligned with net zero emissions by 2050 and to set short- and medium-term reduction goals for direct and material indirect emissions.” (HSBC Energy Policy [Pdf], Reuters, ShareAction, Norges Bank Investment Management Strategy [Pdf])
TotalEnergies takes financial hit in latest effort to distance itself from Novatek: The French energy giant has said that a write-down of its 19.4% stake in the Russian LNG producer Novatek will cost it US$3.7 billion, and that it was also immediately removing its two directors from the company’s board. Selling its stake in Novatek was not possible, the company said, “as it is forbidden for TotalEnergies to sell any asset to one of Novatek's main shareholders who is under sanctions”. At Novatek’s major Arctic LNG 2 project, in which TotalEnergies maintains a 10% stake, a senior company official has insisted that the three train project remains on schedule overall in spite of Western sanctions, with the first train expected to start up in December 2023. (Reuters, Business New Europe)
Vaca Muerta pipeline financing secured as gas confidence grows in Argentina: Over US$1.2 billion in financing from the Brazilian National Development Bank and Corporacion Andina de Fomento has been secured by the Argentinian state for the second phase of the Néstor Kirchner gas pipeline. With the initial phase of the project to take gas from the Vaca Muerta shale fields due to start up next year, energy secretary Flavia Royon flagged growing unconventional gas production this year from the world’s second largest shale reserve. The pipeline is essential to government plans for becoming an LNG exporter. Royon also talked up the offshore Argerich project, which “could mean another Vaca Muerta for our country.” (Natural Gas Intelligence, Reuters)
Energy trader attracts more banks and financing for gas storage in Europe: Gunvor has secured a €570 million euro (US$597.65 million) loan facility for its gas storage activities in Europe. The Geneva-based energy trader said that a doubling of interest from banks in the credit scheme will allow the financing to cover eight gas storage locations, up from three previously. Rabobank of the Netherlands is the coordinating agent of the facility with seven other banks participating, including ING, UBS, and Mizuho. (Gunvor Group)
Last minute battle threatens credibility of EU methane emissions law: As EU member states enter final negotiations to agree to a position by next week on reducing methane emissions from infrastructure across the bloc’s oil and gas sector, according to Reuters reporting, Hungary and Romania are striving to weaken the proposed legislation. Negotiating texts reveal claims from Hungary that plans to immediately end routine gas flaring would represent a “cost and timing issue for the industry,” and should be delayed to 2030. The legislation proposed by the European Commission last year does not apply to facilities exporting oil and gas to the EU, though Germany is reported to be pushing for such an extension of the new rules to be introduced. A group of ten NGOs have written to EU ministers with “serious concerns about the watering down of the EU Methane Regulation by member states.” (Reuters, Clean Air Task Force)
Shuttered Texas terminal must respond to 64 point safety list before restart: The U.S. Federal Energy Regulatory Commission (FERC) will authorize the 15 million tonnes per year Freeport LNG terminal to start operating again following an explosion in June once it receives evidence from the project operator “that acceptable measures have been put into place to safely return the facilities to operation.” Following a site visit at the end of November, FERC issued its safety requirements notice on December 12, throwing fresh doubt on the company’s hopes of partially restarting operations by the end of December. (Reuters)
“If we’re going to transport it around the world as liquid hydrogen, that’s problematic because 1 per cent of the hydrogen per day is lost to the atmosphere…This means it is better to burn natural gas than it is to transport hydrogen around the world and then consume it later. And this is the reason why when we look at hydrogen, we’re going to produce it where we consume it,”
said Nigel Steward, chief scientist of the multinational mining company Rio Tinto.
|
The scramble for Africa’s gas, Global Energy Monitor, December 13, 2022.
This 12-page briefing (available in English, French, Portuguese, and Swahili) draws from Africa Gas Tracker data to show that US$245 billion in planned gas infrastructure investments across the continent are a significant stranded asset risk, as much of this gas is intended not for domestic consumption but to correct for Europe’s short-term energy crisis.
South East Europe gas markets – reconfiguring supply flows and replacing Russian gas, The Oxford Institute for Energy Studies, December 2022. (Pdf)
This 37-page paper provides an overview of the region’s recently introduced and also planned gas infrastructure, concluding that sufficient import capacity is almost in place to replace Russian imports if alternative supplies are available and acceptably priced.
Amid market turmoil, Asia’s liquefied natural gas plans reach a fork in the road, Global Energy Monitor, December 15, 2022. (Pdf)
This 9-page briefing assesses the region’s proposed US$119 billion LNG import capacity buildout that, at 442 million tonnes per annum, would be enough to absorb the entire global LNG trade of 2021, and discusses the market headwinds that threaten these plans.
|
|
