New analysis finds blue hydrogen project stampede for EU subsidies is on: A majority of candidate European hydrogen projects that are being put forward for financial support from EU public money involve blue hydrogen produced from gas, according to analysis from Food & Water Action Europe (FWAE). The research and advocacy group has looked into 147 hydrogen projects, submitted by gas network associations across Europe as well as by major energy companies, that are looking for the award of “Projects of Common or Mutual Interest” status from the European Commission by November this year, which would then make them eligible for EU funding support. Under recently enhanced rules, such designation ought to go to projects that support EU climate targets, but FWAE’s analysis finds that only 10% of the projects in the running for funding explicitly commit to using climate-friendly green hydrogen. Of the remaining candidate projects, 57% are designed to carry blue hydrogen, while 33% don’t rule out carrying fossil-based hydrogen or have no credible plans to source green hydrogen. (DeSmog)

IEA urges industry to wake up and accelerate methane abatement: In a new report intended to inform discussions ahead of this year’s COP28 climate conference in the United Arab Emirates, the International Energy Agency (IEA) has recommended that the oil and gas industry should commit US$77 billion to lower its methane emissions 75% by 2030. Approximately US$55 billion is needed for upstream oil and gas facilities, in the IEA’s view, and more than US$20 billion for downstream operations. Making these investments would yield revenues of roughly US$45 billion from the sale of captured methane, said the IEA. The agency criticized the industry for being “much too slow” to reduce global emissions “despite the record profits that the oil and gas industry saw in 2022.” The necessary investment outlay for the industry would amount to a mere 2% of the industry’s net income in 2022. While the IEA states that oil and gas companies “carry primary responsibility for abatement,” it also urged commercial and development banks, governments, and philanthropic initiatives to step up their financing efforts in order to accelerate action. (IEA [Pdf], Offshore Technology)

Dutch government confirms Groningen production closure by October: Following indications earlier this month, the Dutch government has confirmed that Shell and Exxon Mobil’s jointly owned Groningen gas field will be closed by October 1, with a view to its permanent closure in 2024. Seismic incidents related to the field’s drilling and growing protests from residents and campaigners have forced the government’s hand on the field, which has been in production since the 1960s. Continued reliance on Groningen could still be feasible in extreme circumstances until October 2024, according to government minister Hans Vijlbrief, but increased gas imports — via increased import capacity — and the general transition away from fossil fuels would make the dismantling of Groningen feasible by next year. (Reuters)

New international funding for Senegal’s clean energy drive draws concern about role for gas: One of the few concrete outcomes from the Summit for a New Global Financing Pact, a two-day meeting to discuss financing for Global South development aid and the climate transition, saw Senegal secure a Just Energy Transition Partnership (JETP) involving US$2.7 billion in financing to develop its renewable energy sector and speed up the transition to a low-carbon economy. France, Germany, the EU, the UK, and Canada will mobilize the financing — a mixture of grants, loans on better than market terms, investment guarantees, export credits, and technical assistance — over the next five years to enable Senegal to boost its renewables capacities to 40% by 2030, up from roughly 30% currently. The Don’t Gas Africa campaign coalition broadly welcomed the JETP announcement, though raised concerns that the deal’s language also sets out the Senegal government’s intention for gas to play a “transitional” role in the country’s energy mix. BP is working to start production at the Greater Tortue Ahmeyim field off the coast of Senegal with a view to exporting most of the resulting LNG to Europe from a US$4.6 billion floating terminal currently under construction. The German government, which has come under fire for potentially extending funding to support Senegal’s gas projects, said that gas would not be financed under the JETP deal. (Argus Media, Climate Home News, Don’t Gas Africa)  

Global gas demand down 3% as emissions from the world’s energy industry hit new highs — report: The 2023 Statistical Review of World Energy published by the Energy Institute details how overall global energy-related greenhouse gas emissions grew by 0.8% in 2022 in spite of record growth in solar and wind capacity. Amid a 1% rise in global energy demand last year, oil, gas, and coal together continued to account for almost 82% of global primary energy consumption, marginally down on their 2021 share. The report documents a 3% decline in global gas demand in 2022, although 24% of primary energy consumption continued to be derived from gas, down from 25% in 2021. Gas production remained stable year-on-year, while LNG production grew 5% to 542 billion cubic meters (bcm), driven by developments in North America and the Asia-Pacific region. Based on the 2022 data, the energy transition is “still heading in the opposite direction to that required by the Paris Agreement,” said the Energy Institute. (Energy Institute, Reuters) 

German energy security ramps up climate risks as another long-term supply deal is signed: A newly agreed, long-term U.S.-to-Germany LNG supply deal could result in the release every year of more than 13 million metric tons of carbon dioxide equivalent emissions, according to calculations from Greenpeace USA. The campaign organization said this equates to the annual emissions from roughly 3 million gasoline-powered cars. The 20-year sales and purchase agreement was signed between Venture Global LNG and the state-owned Securing Energy for Europe (SEFE), which will import 2.25 million tonnes per year of LNG from Venture Global's Calcasieu Pass 2 project in Louisiana when — as projected — it starts up in 2026. The deal makes Venture Global the country’s largest LNG supplier, adding to 20-year agreements made last year with energy firm EnBW despite Germany’s aim of becoming greenhouse gas neutral by 2045. (Greenpeace USA, LNG Prime)

Australia: Tamboran Resources has announced a potential pipeline contractor linked to its Beetaloo gas basin development in the Northern Territory along with potential LNG supply agreements with BP and Shell from its related LNG terminal project proposed for the Middle Arm Sustainable Development Precinct.

Germany: UK energy firm Ineos has signed charter deals with Japanese shipping firm MOL for two new LNG carriers to be built and used to send cargoes between Port Arthur in the U.S. and Brunsbuttel in Germany from 2027. 

Italy: Environment and Energy Minister Gilberto Pichetto Fratin has said he’s hopeful that the country's turn towards LNG will see the fuel accounting for 50% of national gas needs. 

Morocco/Nigeria: Four more countries — Côte d’Ivoire, Liberia, Benin, and Guinea — have signed memoranda of understanding to participate in the proposed 5,600-km Nigeria-Morocco gas pipeline project that aims to provide a new alternative export route to Europe.

Norway: As part of the country’s strategy to extend production for decades to come, Oslo has approved the development of 19 new oil and gas fields involving total investments of US$18.5 billion.

Saudi Arabia: Following a final investment decision taken in December, Saudi Aramco and TotalEnergies have awarded engineering, procurement, and construction contracts for the US$11 billion Amiral petrochemical complex that is expected to produce 1.65 million tonnes per year of ethylene and industrial gases.

South Korea: Hanwha Impact says it has achieved a 59.5% blend of hydrogen co-firing in a mid-to-large gas power plant near Seoul, although this only resulted in a 22% reduction of carbon dioxide emissions and a 30% reduction in nitrogen oxides as compared to pure gas combustion. 

Uzbekistan: Two public development banks, the Asian Infrastructure Investment Bank and the Islamic Development Bank, have provided loans totaling €325 million (US$355 million) for the construction of the 1,560 megawatt Surkhandarya gas power plant. 

Vietnam: South Korea’s Kogas has signed an initial agreement to develop LNG-to-power projects with Vietnamese investor and project developer T&T Group.

Finance doubts appear for Karpowership’s South Africa projects: As Karpowership’s plan to anchor gas-fired power ships at Richards Bay in KwaZulu-Natal, Ngqura in Eastern Cape, and Saldanha Bay in Western Cape continues to await authorization from the South African authorities, one potential financier of the projects is reported to have gotten cold feet. The CEO of Absa, one of the country’s largest commercial banks, recently commented publicly that the bank “was not involved in the funding of Karpowership,” despite Absa having been part of the company’s original funding process. The Development Bank of Southern Africa has disclosed that approval of a loan facility with the Turkish company has lapsed as a result of the delays with the port projects, but the state-owned institution is still said to be engaging with Karpowership. At its recent AGM, Standard Bank dodged a shareholder question asking for clarity on its funding relationship with Karpowership. The government has also said that it wants to reduce the duration of the power purchase agreement with the company from 20 years to five, a move which would have profound implications for Karpowership’s revenue potential. (Daily Maverick, Argus Media) 

Eni makes major gas acquisition: Italy’s Eni has agreed to acquire the UK-headquartered and private equity-backed Neptune Energy for US$4.9 billion in the largest deal in the European oil and gas sector for almost a decade. In the latest sign that Italy is doubling down on gas, the 30% state-owned company is aiming to conclude the deal early next year. It involves the purchase of Neptune for US$2.6 billion and Neptune’s Norwegian business for US$2.3 billion, the latter to be bought by Eni’s Norwegian-listed subsidiary Vår Energi. Analysts have noted that the acquisition would provide Eni with an additional four bcm of supply, while chief executive Claudio Descalzi emphasized the addition of “more gas production and carbon capture and storage (CCSU) opportunities to the remaining North Sea footprint, building on Eni's leading position in Algeria and deepening Eni's presence in offshore Indonesia.” (Reuters, The Guardian)

Another European state guarantee to boost gas imports: The Switzerland-based commodities trader Mercuria has received a guarantee from the Italian state to cover a €500 million (US$546 million) loan that will result in increased supplies of gas and LNG to Italy. European commercial banks UniCredit, Société Générale, Natixis, and UBS were joined in the five-year financing deal by Abu Dhabi Commercial Bank, with Italy’s export credit agency SACE providing the guarantee. The state-backed funding arrangement echoes the approach taken last year by the German government when it guaranteed a US$3 billion commercial bank loan to Trafigura for the supply of U.S. LNG. (LNG Prime) 

Malaysia’s Petronas expects domestic oil and gas output to peak by 2024: Speaking at this week’s Energy Asia conference, a senior official at Petronas outlined how the Malaysian state-owned energy company expects to see its domestic oil and gas production peaking at approximately 2 million barrels of oil equivalent per day (boepd) by 2024, while the company’s overseas gas portfolio is expected to increase by 700,000 boepd next year. This boost in overseas gas output would be derived from the LNG Canada export terminal in British Columbia, in which Petronas has a 25% stake alongside Shell and Chinese, Japanese, and South Korean investors. Gas constitutes 60-70% of the company’s production, a share that’s expected to be maintained out to 2030. Petronas is also partnering with TotalEnergies and Mitsui on a carbon capture and storage project in Malaysia intended to boost its own and other Asian industrial companies’ decarbonization efforts. (Offshore Technology, Upstream)

Israel’s export balance questioned by finance officials: Debate has been sparked between senior Israeli officials over how much gas the country should export amid concerns that there has been insufficient domestic growth of renewable energy in recent years. The finance ministry has called for an urgent review of the export policy citing the possibility that the country’s energy security could be threatened by excessive commitments to overseas buyers, even though national gas production is anticipated to double to roughly 40 bcm in the coming years. In 2013, 60% of reserves were set aside for domestic purposes, and since then major export deals with Egypt and Jordan have gotten underway and a framework agreement to supply Europe was signed last year. A report prepared for the Israeli Natural Gas Trade Association has also shown that Israel's gas reserves have grown by 40% over the past decade in spite of increased production. Between 2012 and 2022, reserves grew from 780 to 1,087 bcm, while 119 bcm was extracted over the same period. (Reuters, Reuters) 

Tanzania looks to China for more exploration: As long-delayed negotiations between the government and a consortium comprising Equinor, Exxon Mobil, and Shell are reportedly nearing completion for the US$42 billion Tanzania LNG export terminal, energy minister January Makamba has disclosed that the China National Offshore Oil Corporation (CNOOC) is on the brink of being welcomed into an exploration deal with the national energy company. “We believe that Tanzania has more gas, and possibly oil, to be discovered,” touted Makamba after talks with senior officials at CNOOC, “because only 30% of the area with potential for oil and gas resources has been explored so far.” A licensing round for two unassigned deepwater blocks offshore Tanzania in the Rovuma basin is being lined up for early next year, with CNOOC apparently in the box seat. (Bloomberg, Bloomberg)

The dark side of US LNG, ReCommon, June 2023. 

Filmed in Louisiana and Texas, this 7-minute video captures the growing ties between Italian financing and the build-out of export terminals in U.S. sacrifice zones.  

The outlook for China’s fossil fuel consumption under the energy transition and its geopolitical implications, The Oxford Institute for Energy Studies, June 2023. [Pdf]

This 29-page paper discusses different scenarios for China’s oil and gas consumption — currently making up 27% of the primary energy mix — and concludes that the country will likely remain the world’s largest consumer of oil and the second largest importer of gas (behind the EU) for the next two decades.