Landmark ruling as Tiwi Islanders defeat Australian energy giant in court: Gas company Santos has been ordered to stop drilling at its Barossa gas project in the sea north of the Tiwi Islands following an Australian Federal Court judge’s verdict that the company failed to consult impacted traditional owners adequately on the A$4.7 billion (US$3.2 billion) project. Justice Mordy Bromberg ruled that federal offshore gas regulator NOPSEMA had approved the project’s environmental plan without verifying whether Santos had carried out adequate consultation with all relevant parties, including Dennis Tipakalippa, the plaintiff, and other Tiwi Islanders. Alina Leikin, special counsel with the Environmental Defenders’ Office, which represented Tipakalippa, said the ruling had “national and global implications for consultation with First Nations peoples on mining projects.” Santos said that it intends to appeal the decision. (The Australian Financial Review, The Sydney Morning Herald)
 
Cyprus and Israel seeking swift resolution on East Mediterranean field: Hot on the heels of the developers of the Aphrodite gas field announcing a US$192 million investment decision to begin initial drilling, the energy ministers of Cyprus and Israel released a joint statement signaling their intention to compromise on a long-running dispute over territorial waters that has hampered the deposit’s development. The growing cooperation has been ramped up as Europe seeks to urgently tap new, non-Russian gas supplies. The project partners – Israel’s NewMed, which holds a 30% stake, and Chevron and Shell, each with a 35% stake – intend to initially drill in the coming months to establish the size of Aphrodite, which is estimated to contain 124 billion cubic meters (bcm) of gas, less than the 155 bcm delivered to Europe by Russia in 2021. (Associated Press, Reuters)

Questions over payments to authorities as Shannon LNG terminal deemed not necessary for Ireland’s energy security: A long-awaited, government commissioned review outlining options to secure Ireland’s energy supply to 2030 does not include the proposed onshore LNG terminal on the Shannon Estuary in County Kerry. The review, open to public consultation until October 28, includes as a mitigation option a floating LNG facility that would only operate during periods when there is material risk of demand disruption. Irish media has also reported that between 2009 and 2021 the Shannon LNG company, owned by the U.S.’s New Fortress Energy, made payments totaling €4.1 million (US$4 million) to Kerry County Council. Campaign group Safety Before LNG has written to the Irish government requesting an investigation into the payments. (RTÉ, The Irish Independent, The Irish Independent)

Egypt eyes major new oil and gas investments: According to Tarek El-Molla, Egypt’s Minister of Petroleum and Mineral Resources, investments from partnerships with foreign oil and gas companies are expected to reach up to US$8 billion by the end of Egypt’s current fiscal year in June 2023. The minister highlighted the government’s ongoing cooperation on exploration across a number of concessions in the Mediterranean and the Red Sea with QatarEnergy; Egypt’s ambition to ramp up its gas exports was also cited. (ZAWYA)

Finland importing Russian LNG reveals Greenpeace protest: Despite Gazprom’s halting of gas deliveries to Finland in May and tough talk from Prime Minister Sanna Marin’s government, a Greenpeace protest at the Tornio Manga LNG import terminal has revealed that the national gas importer Gasum has been importing an average of two cargoes per month from the Vysotsk LNG terminal located in the Leningrad oblast. A further Russian LNG vessel has arrived at the soon-to-be-operational Hamina import terminal, according to a Gasum spokesperson. This is likely, though not guaranteed, to be the only Russian contracted cargo at Hamina as further deliveries will come from the spot market. Greenpeace commented: “Finland must immediately ban the import of Russian fossil fuels and direct Gasum to stop importing gas from Russia.” (Upstream, LNG Prime)

Legal challenges launched against EU’s “fake” green label for gas: Two separate legal challenges brought by a total of 12 environmental organizations are demanding an internal European Commission review of its backing for the insertion of gas on the EU’s list of sustainable activities, a position that was approved by the European Parliament in July and means that gas-fired power plants are now to be labeled as “sustainable” for investors. The Commission has up to 22 weeks to reply after which the groups will seek to repeal the underpinning law at the EU’s Court of Justice if the Commission doesn’t move first. (Associated Press)   
 

Argentina: TotalEnergies and partners Wintershall Dea and Pan American Energy have taken a US$700 million final investment decision (FID) to develop the Fénix field off the coast of Tierra del Fuego.

Australia: Woodside Energy has backed away from previous commitments to use carbon capture and storage “from day one” at its proposed A$30 billion (US$20.5 billion) Browse offshore project.

China: Typhoon Muifa caused the floating production, storage, and offloading vessel destined for BP’s Greater Tortue Ahmeyim LNG terminal in Senegal to drift 200 meters off the quayside at a shipyard in Qidong, China. 

Germany: Chancellor Olaf Scholz will travel to the Gulf region this weekend, with sources predicting he will sign a long-term LNG purchase agreement at least with the United Arab Emirates.

Germany: Uniper has been fully nationalized, with Berlin taking a 99% stake in the energy supplier and injecting a further €8 billion (US$ 8 billion) in new equity.

Pakistan: The nation’s largest fuel importer and retailer, Pakistan State Oil Company, has said it has begun initial preparations for building a new US$500 LNG import terminal near Karachi.

Russia: Using domestic technologies, Gazprom is planning to add another liquefaction unit at its recently launched Portova LNG terminal in the Leningrad oblast.

South Africa: TotalEnergies is maintaining its interest in developing the huge Brulpadda and Luiperd gas fields off the southern coast. 

South Korea: With backing from the government, high gas prices and tightness of supply are driving various companies to expand LNG storage and import terminal capacity. 

UK: Delays to what is claimed to be the world’s first green hydrogen for domestic heating trial project in the Scottish region of Fife are causing concerns about the scheme’s viability. 

U.S.: High prices are motivating various predominantly oil players in the Permian Basin to step up exploratory drilling for gas in the region. 

Origin U-turns and exits shale gas exploration in Australia: Origin Energy, Australia’s second-largest power producer, will sell its 77.5% stake in the early stage Beetaloo Basin gas project at a loss, and is looking at exiting its other gas exploration permits in the country as it focuses more on renewable energy. In April, Origin said it was pushing on with drilling in the Northern Territory shale basin. In spite of the sale, the company has agreed to buy any gas the field produces from its new owner, a group backed by Texas oilman Bryan Sheffield. Gavan McFadzean at the Australian Conservation Foundation said Origin’s move showed that “Big new coal and gas projects are material risks, so clever companies are divesting before they find themselves landed with stranded assets.” (Reuters, The Guardian)

Norwegian financial giant ups the climate action pressure on portfolio companies: A new climate action plan from Norges Bank Investment Management (NBIM), the world’s biggest owner of publicly traded companies with holdings of roughly 1.5% of all shares on the global market, has set out concrete steps for how it intends to propel the more than 9,000 companies it invests in to reach net-zero emissions by 2050 at the latest. NBIM’s new “engage to change” approach will see it compel portfolio companies to provide science-based short-term, medium-term and 2050 net zero targets, credible transition plans, and improved disclosures on emissions reduction performance. Backing this up, NBIM intends to play a responsible shareholder role by intervening with shareholder resolutions as necessary. (Norges Bank, Bloomberg) 

Shareholder interests trump green investments for mega-profiteering majors: New research from Italian NGO ReCommon and Meridian research estimates that Europe’s six largest oil and gas companies – BP, ENI, Equinor, Repsol, Shell, and TotalEnergies – have raked in profits of US$75 billion in the first six months of 2022 off the back of a surge in prices provoked by the war in Ukraine. Norway’s Equinor was out in front, generating US$28 billion. This, suggested ReCommon, explains why the Oslo government has come out “sharply” against the EU’s proposed imposition of a cap on gas prices. Awash with cash, the majors have opted for an “avalanche” of dividend payments and share buyback schemes. For the first half of 2022, according to the researchers, US$31 billion in profits has been channeled back to shareholders, set against the US$9 billion that the six companies have earmarked for “green” investments this year. (ReCommon)

Latest financing embarrassment suggests major US LNG terminal concept is drifting further off course: Following a desperate and, ultimately, aborted attempt to raise US$1 billion on the bond markets to finance construction of the still pre-FID Driftwood LNG terminal in Louisiana, beleaguered Tellurian executive chairman Charif Souki has said that his new focus for getting the project off the ground is to find a strategic investment partner, the search for which has already been underway since the beginning of the year. Souki conceded that sticking to the initial start-up schedule of 2024 for the project was now “more difficult”. Shares in Tellurian crashed 24% to less than US$3 on the news that the company had scrapped the bond issue. The prevailing financing issue for Tellurian continues to be that banks are not prepared to lend to a multi-billion dollar project that has only relatively short-term, volatile contracts in place, primarily with LNG traders. (LNG Prime, Houston Chronicle, GEM.wiki)

European Investment Bank head stands firm against gas: In surprisingly outspoken remarks, and despite growing pressure from developing countries for the EIB to reverse its ban on lending for gas infrastructure projects, the bank’s president Werner Hoyer has told the Financial Times that the dressing up of fossil fuel projects as “transitional” is often merely “a perpetuation exercise for gas.” Hoyer also called for scrutiny of blue hydrogen project proposals, and said that the way forward for the Africa-Europe energy partnership lay in more rapid technology transfer and funding for renewable energy sources and biofuels, rather than financing for gas projects. (The Financial Times)

Further pressure on gas markets incoming as cold Japanese winter is forecast: The official declaration of a rare third in a row La Niña weather event in the Pacific this year has prompted the Japan Meteorological Agency to forecast colder than average temperatures in the country this winter. Increased winter season heating requirements for the world’s number two LNG importer would increase demand for the fuel and pile on the pressure for already very tight global gas markets. (Bloomberg)

Progress on LNG imports, but Europe not out of the woods yet: The Timera Energy consultancy has charted continued historical monthly highs for European LNG imports through August, chiefly as a result of demand destruction in other regional markets, but warns “Europe’s big risk remains a cold winter in NE Asia which would drive fierce competition for cargoes.” Despite progress on import capacity delivered by a newly operating floating LNG terminal in the Netherlands, forward price signals remain starkly elevated in Europe for at least the first quarter of 2023. (Timera Energy)

Global Registry of Fossil Fuels, Carbon Tracker, September 20, 2022.

This interactive database and dashboard provides fully open-source data to assist governmental decision-making on aligning fossil fuel production with the Paris Agreement’s 1.5C temperature goal. It also enables investors, civil society, and other stakeholders to assess production decisions in the context of the carbon budget and climate policies. 

Greenhouse Gas Emissions from LNG Trade: from carbon neutral to GHG-verified, The Oxford Institute for Energy Studies, September 2022.

This 12-page paper argues for rigorous, verifiable, and transparent methodologies to underpin the “carbon neutral” LNG schemes that are being touted by the gas industry.  

Gas in Spain: Oversupplied and Overcompensated, Institute for Energy Economics and Financial Analysis, September 18, 2022.

This 32-page report examines how Spain’s monopoly gas transmission system operator, Enagás, has exploited a “security and diversity of supply” strategy to build out excess gas infrastructure, which has in turn resulted in some of the highest consumer gas bills of any European nation.

Correction note: In Issue 13, it was mistakenly stated that Singaporean bank DBS is part of a banking consortium that has funded the construction of a floating production storage and offloading vessel at ExxonMobil’s Yellowtail oil development offshore of Guyana. This is not the case and has been reflected here in the published version of Issue 13.