China’s bounce back might not weigh heavily on Europe’s LNG supply needs
Data provider OilChem China is forecasting that Chinese LNG imports will rise by only 7% this year, 14% below their peak in 2021, as Beijing looks to cover post-COVID energy needs by focusing on increased coal use, hiking pipeline imports from Russia, and boosting domestic gas production, writes Yawen Chen in Reuters.
The green gas market: a Wild West frontier where the gunslingers are deciding the rules as they go along
Under mounting pressure from investors and regulators, industry is scrambling to curb greenhouse gas emissions across all links in the LNG supply chain, but the fast evolving and unregulated green gas market has questionable environmental legitimacy so far, writes Jeffrey Ball in a Canary Media long read.
“Hydrogen-ready” boilers: the fossil fuel heating industry’s latest attempt to slow down clean heating
More than 30 independent studies have shown that heating homes with hydrogen is a more expensive, less efficient and more environmentally harmful option than deployment of heat pumps and district heating, yet industry’s greenwashing of fossil fuel boilers is turning some politicians’ heads, writes Jan Rosenow in EURACTIV.
Texan LNG terminal’s carbon capture add on would be a “band-aid on a bullet hole”
NextDecade is relying on carbon capture and storage technology to make its unsanctioned, US$15 billion Rio Grande LNG export terminal “the greenest LNG project in the world,” but community activists insist that these claims don’t add up, writes Matthew Green in The Guardian.
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India planning big turn to LNG says Modi: Speaking at the India Energy Week conference in Bengaluru, Prime Minister Narendra Modi laid out plans for boosting LNG import capacity as part of wider efforts to expand India’s oil and gas sectors. Increased import capacity will be required to lift the share of gas in the coal-dominated national electricity mix from 6% currently to 15% by 2030, according to Modi. Among various pronouncements from Indian companies signaling their intent to go after more long-term LNG import deals, there are strong indications that new LNG agreements are close to being concluded with Russian suppliers, including Novatek, whose CEO and chairman Leonid Mikhelson said that the company would consider taking payments in Indian rupees. (Bloomberg, Bloomberg, Reuters)
U.S. and Norway colluded to blow up Nord Stream pipelines, claims new account: Citing one unnamed source, multi-award winning investigative journalist Seymour Hersh has published a detailed account of a covert operation, allegedly authorized by President Joe Biden, involving U.S. Navy divers that resulted in the destruction of three of the four Nord Stream pipelines in the Baltic Sea. The veteran American journalist’s article carries two firm denials from both the White House and the CIA, and the White House quickly issued a further denial after the story appeared online, stating that Hersh's account was “utterly false and complete fiction.” According to Hersh’s source, last June, during a NATO exercise, and with assistance from the Norwegian navy, the American divers planted remotely triggered explosives that then blew up the pipelines three months later. In the days prior to Hersh’s revelations, Germany’s prosecutor general Peter Frank chose to break cover on the Nord Stream investigation, telling Die Welt that German investigators currently have no evidence that Russia is behind the explosions. (Seymour Hersh Substack, Reuters, Yahoo)
EU climate goals frustrating some U.S. LNG suppliers: Two U.S. gas executives, speaking to The Financial Times, are unhappy that EU decarbonization targets are impeding the signing of long-term LNG contracts with European buyers. In turn, this is jeopardizing the sanctioning of U.S. export terminals that require multi-decade supply contracts in order to secure billions of dollars in project financing. “[European] buyers are fearful of their governments telling them they can’t buy hydrocarbons 15 or 20 years from now,” said Nick Dell’Osso, chief executive of Chesapeake Energy, one of the largest U.S. gas producers, “[Things] are at a bit of a loggerheads right now.” These complaints were echoed by Paul Varello, the CEO of Commonwealth LNG. The company is trying to secure buyers for its proposed US$4.8 billion, 8.4 million tonnes per year export terminal on the U.S. Gulf Coast that has been slated to start operating next year but has still not reached a final investment decision (FID). (The Financial Times [paywall], GEM.wiki)
Major challenges for BP’s West African LNG expansion ambitions: The delayed and massively over-budget phase one of the 2.5 million tonnes per year (mtpa) Greater Tortue floating export terminal straddling Mauritania and Senegal may be due to start operating by the end of this year, but BP has been forced to delay a FID on the larger, 7.5 mtpa phase two project until the beginning of 2024 at least. Sources close to the project have disclosed that the oil and gas major is now caught in the middle of deteriorating relations between the countries and an attendant range of unresolved technical, commercial, and security issues. Among the issues facing the phase two project, potentially to be sited onshore, are poor border controls — particularly in Senegal — that would make the project extremely vulnerable to Islamist militants in neighboring Mali. Sources have suggested that BP will only take a FID on phase two at best after phase one of the project comes online. (Upstream [paywall])
UK government paid polluters £1 billion to pollute last year: London-based independent media platform openDemocracy has revealed that the UK government’s giveaway of free pollution permits last year helped stoke the record profits of oil and gas majors such as BP, ExxonMobil, and Shell, as well as benefiting state-owned overseas oil companies to the tune of tens of millions of pounds. The UK government is considering ending the free allocation of these permits by 2025, but continues to provide them — at a total value of £1.1 billion (US$1.3 billion) in 2022, according to data sourced by openDemocracy — on the rationale that fossil fuel companies would otherwise relocate from the UK to countries that do not have carbon pricing mechanisms. Harriet Fox, an energy analyst at the think tank Ember, commented that “stringent climate conditions” should be attached to free permits to ensure they “incentivise industry to reduce their greenhouse gas emissions, not line the pockets of some of the largest emitters in the UK already making billions from the energy crisis.” (openDemocracy)
U.S. federal agency forecasts dwindling global LNG export capacity additions for next three years: Four LNG export projects with combined capacity of roughly 7.5 mtpa are tipped by the U.S. Energy Information Administration (EIA) to come online around the world this year, the lowest level of export capacity additions in a decade. Writing in a recently published report, EIA researchers describe 2023 as likely the beginning of a three-year streak of “fewer global LNG export capacity additions than in previous years.” This outlook further confirms expectations of a tight — and likely highly volatile — global gas market until 2026 at least. (Natural Gas Intelligence)
Transparency demanded on exorbitant gas power ship plans in South Africa: Non-profit group the Organisation Undoing Tax Abuse (OUTA) plans to take the National Energy Regulator of South Africa (NERSA) to court over licenses granted to the Turkish gas-to-power company Karpowership to operate power ships in the ports of Saldanha Bay, Coega, and Richards Bay. The three proposed floating gas power plants await environmental authorization from the South African authorities, but OUTA is concerned about the secrecy surrounding the twenty-year, R200 billion (US$11 billion) deal and has filed an application to force NERSA to provide a “a complete, unredacted record” of its relevant decision-making. The South African government is under immense pressure to take urgent action as a historic electricity crisis stemming from the faltering coal power sector grips the country. In these circumstances, critics argue, a rushed and hugely expensive agreement could be entered into with Karpowership. (Engineering News)
“I heard someone say ‘give them one winter freezing their asses off in the dark, and they’ll think better of natural gas’ and I think that will be the case,”
said Paul Varello, chief executive of the proposed Commonwealth LNG in Louisiana, about the prospects for European LNG buyers to change their minds and buy his company’s product.
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Bulgaria: The country’s first offshore wind turbine, which has received a grant from the European Commission, will be used to power an existing gas platform in the Black Sea.
Italy: Prime Minister Giorgia Meloni said that Italy intends to use REPowerEU public funding to completely end importing of Russian gas and turn the country into a gas-based energy hub for the EU.
Italy: The Italian trade union USB filed a legal complaint — on environmental safety grounds — at the Livorno prosecutor's office against gas grid operator Snam’s LNG import terminal development in the Tuscan port of Piombino.
Mexico: ExxonMobil LNG Asia Pacific has signed two long-term deals to buy 2 mtpa of LNG from a proposed export terminal in Puerto Libertad, Sonora.
Philippines: A US$67 million small-scale LNG import terminal has been greenlighted for development in Bataan Province by the Department of Energy, the seventh such facility to receive approval.
Romania: Romgaz has signed a new contract with Azerbaijan’s Socar for the delivery of up to 1 billion cubic meters (bcm) of gas over 12 months starting in April.
Türkiye: The magnitude 7.8 earthquake that rocked southeastern Türkiye caused explosions and damage to two separate parts of a gas pipeline in Hatay province.
Ukraine: EU Commission President Ursula von der Leyen and Ukraine Prime Minister Denys Shmyhal have signed a “Strategic Partnership on Biomethane, Hydrogen and other Synthetic Gases”. The agreement does not “create rights or obligations,” nor does it represent “a commitment of financing for either side.”
U.S.: Following an explosion last June, production at the Freeport LNG terminal’s third liquefaction train is expected to restart this week.
U.S.: Twenty-two year old Ryan Blake McKinney was sentenced to five years in prison for attempting to blow up part of the Permian Highway Pipeline in Texas, described as “part of his ideological fight against capitalism and climate change.”
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“Beyond Petroleum” stalls again: As it announced record profits of US$27.7 billion in 2022, compared with US$12.8bn the year before, BP also revealed that it is scaling back its commitments to cut oil and gas production. The change of course outlined by CEO Bernard Looney means that the company will now lower fossil fuel production by just 25% by 2030 compared with a previous target of 40%, with 10% of this reduction to come from its divestment from Russia’s Rosneft. The company plans to increase oil and gas investments by US$8 billion by 2030. Tessa Khan of UK group Uplift commented: “What's it going to take for the UK Government to have the guts to properly regulate an industry whose investment decisions are destroying the planet and keeping us hooked on energy we can't afford.” (BBC, Bloomberg)
Humanitarian expert appointed to advise on possible Mozambique LNG construction restart: TotalEnergies, which posted record net profits of US$36.2 billion for 2022, has tasked France’s former ambassador to Senegal and Gambia, Jean-Christophe Rufin, with assessing the humanitarian situation in the province of Cabo Delgado where a militant insurgency and the outbreak of widespread violence compelled the French energy giant to declare force majeure at its major Mozambique LNG project in 2021. Rufin, who has also previously advised the French state on peacekeeping and worked for Médecins Sans Frontières, is expected to report back by the end of February on “whether the current situation allows for a resumption of activities while respecting human rights,” according to TotalEnergies chairman and CEO Patrick Pouyanné. (Energy Voice, Reuters)
Chevron thought to be closing in on shale gas deal with Algeria: A recent uptick in visits to Algiers by Chevron representatives has led to growing speculation that the U.S. company is close to sealing an energy exploration deal with Algeria. The north African country holds an estimated 707 trillion cubic feet of technically recoverable shale gas resources, a greater volume than remains in the U.S. Chevron has also reportedly hired consultants to assess Algeria’s shale and non-shale gas resources and to consider its contractual terms. A lack of substantial volumes of water necessary for fracking is viewed as one difficulty, as is the presence of local opposition to the development of shale gas. (Energy Voice)
Woodside and partners to study sending Sunrise gas to LNG terminal in Timor-Leste: Australian LNG player Woodside Energy and its partners Timor Gap and Japan’s Osaka Gas have announced that they are to study the feasibility of sending gas from the long-stalled Greater Sunrise field in the Timor Sea to an LNG terminal in Timor-Leste. Antonio de Sousa, president of the national petroleum company Timor Gap, expressed confidence that Woodside would be persuaded to advance the plan owing to less strict rules for approving gas projects in East Timor than in Australia. The partners in the Greater Sunrise field, which holds 5.3 trillion cubic feet of gas, will also weigh the option of taking the gas to Darwin and will evaluate which option “provides the most meaningful benefit for the people of Timor-Leste,” according to a statement. Timor-Leste is entitled to at least 70% of Greater Sunrise royalties, estimated at US$50 billion. The International Monetary Fund has warned that the island nation faces a “fiscal cliff” if the field is not developed soon. (Reuters, The Australian Financial Review)
Goldman Sachs to make €1 billion biomethane bet in Europe: The U.S. investment bank is lining up a major investment in biomethane company Verdalia Bioenergy as demand for the renewable gas has been boosted by a raft of European government incentives. Verdalia is buying five biomethane plants in Spain and may expand further into Italy and other European countries where the industry is beginning to get off the ground. (Bloomberg)
Shell boss rejects Global Witness greenwashing allegations: CEO Wael Sawan has rejected suggestions from Global Witness that Shell’s Renewables and Energy Solutions division has been focusing most of its capital expenditure on gas. Questioned by reporters on the challenge from the campaign group, which has lodged a complaint on the matter with the U.S. Securities and Exchange Commission, Sawan claimed: “We’ve been very clear that gas and power are symbiotic, you can’t separate the two because there is significant overlap in the way we run the businesses.” Global Witness alleges that of the US$2.4 billion Shell attributed to renewables capital expenditure in its most recent annual report, only US$288 million was directed towards wind and solar power generation. (Upstream)
TAP confirms first capacity expansion in line with EU energy security goals: The operators of the Trans Adriatic Pipeline (TAP) running between Türkiye and Italy have launched the first in a series of expansion plans to increase its flow capacity, in line with European Union intentions to import more gas from the Caspian Sea. The company confirmed it has embarked on the first stage of capacity expansion involving the allocation of an additional 1.2 bcm per year through long-term contracts that will begin in January 2026. A second open season to gauge further market interest is expected later this year. (CEENERGYNEWS)
“It's easy to say that things change — that we need to adapt and get with the times. But what the gas exporters are doing here isn't anything new. They're kicking people out of their homes the same way oil and railroad barons did more than a hundred years ago, and they're doing it to sell a fossil fuel that's due to go extinct,”
said Travis Dardar, a Louisiana fisherman and oysterman, on the impacts of more LNG infrastructure buildout on the U.S. Gulf Coast.
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