August 4, 2022
Issue 8  |  View Past Issues
Inside Gas
Published by Global Energy Monitor

Editor's Note

Import dependent Bangladesh is facing the prospect of four years of blackouts thanks to the continuing price volatility roiling global gas markets, with some commentators now accepting that supply disruptions and high prices are here to stay in most regions for at least the next couple of years. A domestic energy crisis in Australia may add to these global difficulties in the coming months. It would be wise, according to one contributor below, for China and South Korea to look again at their 112 gigawatt gas plant expansion plans, not only because of their reliance on imports but also due to the consistently falling price of renewables plus storage. 

The extent of the U.S. Permian Basin’s leakage of methane emissions has been laid out, though Houston doesn’t appear to understand yet that we have a problem. This as the Democratic Republic of Congo has declared open season on its oil and gas reserves which, if exploited, could lift the lid on more than 14% of the world’s greenhouse gas emissions in 2021 at conservative estimates. Efforts to force gas project developers and permitting authorities to fully account for the climate-destructive impacts of gas will be made in a South African courtroom in the coming days. And the German government’s short-circuiting of environmental law to allow an LNG project stampede continues to be challenged.     

Inside Gas will return after a summer break on August 18. 

Grieg Aitken


Southeast Asian countries at risk from Japan’s CCS push

Astronomical cost implications, doubtful feasibility, and enhanced gas recovery deception are all undermining the credibility of Tokyo’s promotion of the Asia Carbon Capture, Utilisation, and Storage Network, writes Nithin Coca in Energy Monitor.

China and South Korea could save money by steering clear of gas

Revision of the two countries’ major gas plant buildout plans is in order, as falling costs for domestic renewables line up against high – and increasingly volatile – gas import prices, writes Warda Ajaz for Carbon Brief

The big money backing plastics boom needs to be held to account

The petrochemical and plastics industries are rolling out massive expansion plans across the plastics value chain, and the usual suspects are bankrolling them, writes Manon Stravens for Profundo.

Australia's gas cartel is putting their interests ahead of the nation's

Soaring domestic energy prices, which have motivated Australia's consumer watchdog to issue a stark report, are down to the grip which gas companies have held over successive national governments, writes former senator Rex Patrick in Michael West Media.


Groups to challenge Eskom gas plant in August court date 

The South Durban Community Environmental Alliance and groundWork are set to ask the North Gauteng High Court in Pretoria to overturn the authorization for South African power giant Eskom’s proposed 3,000 megawatt gas-to-power plant in Richards Bay, KwaZulu-Natal province. The groups charge that the project’s environmental impact assessment is flawed, including an inadequate assessment of the facility’s climate change impacts. (News24, GEM Wiki)

Greenpeace takes UK government to court over approval for new Shell gas field

As a final investment decision (FID) was being taken by Shell to drill the Jackdaw field in the North Sea, Greenpeace announced that it was taking the UK government to court due to what is being described as the “unlawful” permission granted to the company to develop the project. Greenpeace calculates that, if burnt, the gas from Jackdaw, which is located 155 miles east of Aberdeen, would produce more CO2 than the annual emissions of Ghana. This resulting climate damage was not checked by the government when issuing the approval, alleges Greenpeace, contrary to legal requirements. The legal challenge has been filed with the Scottish courts. (Reuters, BBC)

Top News

“Carbon bomb” licensing round underway in DRC: At the end of July, the Government of the Democratic Republic of Congo put up for auction 30 oil and gas drilling blocks across the world’s largest tropical peatlands, with bids for production-sharing contracts with the Kinshasa administration to be received over the next six months for oil blocks and three months for gas blocks. Serious concerns have been raised that drilling in the peatlands alone could release several billion tonnes of carbon, not even factoring in the greenhouse gas emissions from the actual burning of the fossil fuels produced. The auction’s prospects are unclear. Consulting firm Control Risks noted that “[T]he combination of environmental risks, regulatory uncertainty in the sector, the huge logistical challenges of highly remote exploration, and on top of it all Congo's higher political risk premium, will likely make many majors unwilling to commit.” (Reuters, National Geographic)

Massive Permian methane menace confirmed: The latest high-profile discovery of hidden methane emissions, following a collaboration between Carbon Mapper and the media outlet Associated Press (AP), has revealed the existence of 533 “super-emitters” across oil and gas infrastructure sites operating in the Permian Basin, with analysis showing that only ten companies owned at least 164 of these sites along the Texas-New Mexico border. AP’s investigation further found the U.S. Environmental Protection Agency (EPA) methane emissions monitoring regime in the Permian to be failing. More than 140 of the identified super-emitting facilities were on track to exceed emissions of 25,000 tons of CO2 equivalent per year, a threshold above which the EPA requires companies to report on emissions. Yet only a few dozen sites in the Permian report emissions above this threshold. (Associated Press)   

German LNG project rush approach challenged: While the approval processes for both a floating and an onshore LNG terminal at Brunsbüttel have yet to start, public consultation on two pipelines to connect the terminals to the German gas grid has been rushed through in the space of a week rather than the typical two-month timescale under national environmental law. German group Deutsche Umwelthilfe (DUH) has, though, submitted official comments calling for the longer of the two pipelines to be rejected for approval. DUH says this pipeline would serve the longer-term onshore terminal due online in 2025-6; however, the ability of this pipeline to avert the current gas emergency has not been proved. The shorter pipeline, they argue,  should only be permissible in the short-term gas shortage context. An earlier legal opinion from DUH described how the siting of the Brunsbüttel onshore terminal near a former nuclear power plant and petrochemical facilities would violate the EU’s Seveso Directive, designed to reduce the potential for major chemical accidents. (NDR, Deutsche Umwelthilfe, Gem Wiki) 

Manchin’s “climate nightmare” pipeline central to big ticket U.S. policy package: ​​As 27 Virginia state lawmakers and thousands of respondents lodged appeals with federal regulators to deny a project certificate extension for what one group dubbed “the climate nightmare known as the MVP,” U.S. Senator Joe Manchin disclosed that the proposed US$739 billion Inflation Reduction Act includes changing the federal permitting process for energy projects as well as steps to allow the Mountain Valley Gas Pipeline to complete construction work. Efforts are being made in Washington D.C. this week to sign off on the long-delayed climate, healthcare, and tax package before the summer break. Key U.S. Senate dealmaker Manchin has said that the 303 mile, US$6.6 billion MVP,  should “be at the top of the heap” of U.S. energy projects. Construction on the MVP, which crosses Manchin’s home state of West Virginia, has stalled after a federal court in January rejected a permit to cross a national forest following a challenge by environmentalists. (Augusta Free Press, West Virginia Metro News, Washington Post)

Forty year old Saharan pipe plan moves forward: Algeria, Niger, and Nigeria have signed a memorandum of understanding to advance the Trans-Saharan Gas Pipeline “as quickly as possible,” though no firm indication has been given about when the project might be completed. The 4,000+ kilometer project could send up to 30 billion cubic meters of gas per year to Europe. So far there is only speculation about how the estimated US$13 billion project will be financed. In the weeks leading up to the tripartite agreement, Nigeria’s Secretary of State for Petroleum expressed confidence that financing would come from Europe. (Reuters, Upstream)

FERC pass for Freeport LNG capacity expansion: An ongoing investigation to determine what caused an explosion – and a 450-foot-high fireball – at the Freeport LNG terminal in June failed to deter the U.S. Federal Energy Regulatory Commission (FERC) from approving a capacity expansion request at the Texas facility. “Liquified methane gas export facilities are risky, explosive, and expansion is absolutely not in the public interest,” said the Sierra Club’s Senior Director of Energy Campaigns Kelly Sheehan. “FERC has a duty to American communities and consumers, but instead they are helping to line the pockets of billion-dollar gas companies and their executives.” The Freeport terminal has been cleared to restart partially in October. (Daily Kos, Sierra Club, Reuters)


“Fossil fuel projects have neither solved energy poverty in Africa where 600 million people still live in energy poverty nor brought any socio-economic justice to African people,”

said Lorraine Chiponda, coordinator of the Africa Coal Network, about an expected pro-gas announcement by the African Union this week.

Angola: A consortium comprising BP, Chevron, Eni, TotalEnergies, and Angolan state firm Sonangol has taken a FID on the offshore Quiluma and Maboqueiro gas project, which is forecasted to be supplying the Angola LNG export terminal in 2026.

Bulgaria: The outgoing government has said that seven LNG cargoes from an unspecified U.S. supplier have been secured for delivery over the next 18 months.

Canada: TC Energy has disclosed that the cost estimate for the 670 km Coastal GasLink Pipeline, which will supply the LNG Canada Terminal, has almost doubled from C$6.6 billion to C$11.2 billion.

Colombia: Brazil’s Petrobras has discovered gas while drilling the Uchuva-1 deep-water exploratory well. 

France: Energy transition minister Agnes Pannier-Runacher has said that national strategic gas storage will be completely filled by the end of October.

Latvia: Gazprom announced it has cut off gas supplies to the Baltic state, though local media reported that energy company Latvijas Gaze is still purchasing Russian gas from an unnamed, non-Gazprom source.

Romania: Romgaz has completed the acquisition of ExxonMobil's 50% stake in the Black Sea offshore Neptun Deep project (42 to 84 billion cubic meters) for a fee of €1 billion.

Russia: Gas exports to China via the Power of Siberia pipeline rose by 61% between January and July, according to Gazprom.

Spain: Prime minister Pedro Sanchez believes that Spain is equipped to become a gas hub for Europe, noting that 20% of its LNG imports were re-exported to other EU countries in June.

UK: Shell and Deltic Energy have taken a FID on drilling a high-impact well targeting the Selene prospect in the North Sea off the northeast coast of England.

Companies + Markets

Years of blackouts ahead as Bangladesh sees LNG shortage until 2026: Following recent announcements from the government that it could no longer afford to buy LNG cargoes at spot market prices, analysts and traders are predicting that reliance on existing contracts from Middle East suppliers will not be enough to prevent power outages and economic turmoil until 2026. Before then, producers such as Qatar are indicating they are not able to provide contracted volumes. BloombergNEF calculates that Bangladesh relied on spot volumes for 40% of its LNG imports last year and for 30% this year until historic market volatility priced the Southeast Asian country out of spot markets. (Bloomberg)

State guarantee for Estonian LNG terminal to ensure economic viability: As work continues to install a floating LNG import terminal at the port of Paldiski, one of several such projects being deployed as European countries race to wean themselves off Russian gas, a €38 million state guarantee has been organized for the project. Heated debate in Estonia about the Paldiski floating terminal, which is to be shared with a Finnish port, had previously ruled out public backing for the project’s private sector developers. According to an Estonian official, “We know that Finland is constructing its mooring infrastructure. In short, there is not enough business in the region to cater to two locations where LNG can be received as gas consumption is modest and there is considerable risk that one of the locations, the quay in Paldiski in this case, might not be economically feasible.” (ERR News, ERR News, Gem Wiki)

Australia’s energy crisis could further aggravate global gas markets: A striking report from Australia’s consumer watchdog, which all but called out in name longstanding cartel behavior from some of the country’s major gas players, has urged the Canberra government to consider curbing gas exports to safeguard domestic supplies. A decision on whether to cut back a relatively small number of LNG cargoes is expected in October after ministerial consultation with exporters and Australia’s trading partners. The timing is far from ideal as a ruling in favor of supply cuts risks further increasing global prices that have been driven up by Russia’s invasion of Ukraine. (Reuters, Renew Economy)

LNG expansion in British Columbia grinds on: Canadian energy firm Enbridge has announced it is investing C$1.5 billion to take a 30% stake in the Woodbridge LNG Terminal. The 2.1 million tonne per annum export facility is several years behind schedule and has not yet broken ground at the project site, though its completion is now slated for 2027. Plans to expand the Tilbury Island LNG terminal, operating in B.C. since 1971, continue to meet with opposition from the regional authorities. (Reuters, Vancouver Sun) 

Shell looking to further boost European LNG portfolio: Two recent moves to book capacity at newly proposed LNG terminals in Germany and the Netherlands are to be followed by further capacity deals, according to Shell’s CEO Ben van Beurden, as well as other potential global LNG project opportunities. It was also revealed that although the company wrote off its assets in Russia earlier this year, it had still booked a US$165 million dividend in April from the Sakhalin 2 oil and gas project in Russia in which it continues to hold a 27.5% stake. Van Beurden also believes that high gas prices are set to make green hydrogen more competitive than blue hydrogen for some time to come. (LNG Prime, Reuters, Recharge)

Australia’s number 3 bank falls short of Paris compliance with new oil and gas restrictions: Westpac announced in late July that it had joined the UN-convened Net-Zero Banking Alliance, and told investors that it was leaving its doors open to fossil fuel finance by continuing to provide corporate loans to existing oil and gas clients if they have a “credible transition plan” by 2025. The bank also confirmed it would consider financing new oil and gas projects if governments in Australia and New Zealand were to instruct that such projects were needed for energy security. (The Sydney Morning Herald, Westpac media release)


“We want a rapid transformation of their model … our benchmark is not comparing them to rivals, it’s climate change,” 

said Nicolas Théry, chair of French bank Crédit Mutuel, of TotalEnergies’ intentions to continue developing new fossil fuel basins, particularly gas, for at least the next decade.

African gas supplies to Europe: between hopes and hard realities, The Oxford Institute for Energy Studies, July 2022. (PDF)

This 6-page briefing examines how Europe’s sudden turn to Africa to tap gas imports finds various African countries unprepared to provide significant supply in the short- to medium-term, and how Europe’s longer-term decarbonization agenda ought to be deflating the hype over longer-term gas investment relationships.  

Global Gas Plant Tracker, Global Energy Monitor, July 2022. 

This new update extends the tracker’s coverage to more than 9,000 gas units, including nearly 692 GW of new capacity under development around the world.

How Russia Engineered the Perfect Gas Crisis, Silverado, July 29, 2022.

In this 54-minute podcast,
Russian oil and gas sector expert Sergey Vakulenko provides technical insights into the gas standoff between Europe and Russia and offers suggestions on how the crisis may play out. (See also Vakulenko’s recent opinion piece.)