Secret, industry-only consultation leads to ditching net zero policy for new gas projects in northern Australia: In the latest revelation showing the Northern Territory (NT) government’s willingness to bend to the Australian gas industry, documents released under freedom of information laws show how pressure from companies forced a significant rethink from the state’s authorities on a proposed net zero policy to restrict direct emissions from onshore gas production. Last September, NT officials chose to consult on the policy discreetly with industry but excluded all other external stakeholders. Companies including Santos and INPEX, documents show, pushed back strongly against the proposed policy that would have required drillers to submit a comprehensive greenhouse gas abatement plan before commencing projects in the state, including fracking in the Beetaloo basin. In May this year, and without the climate safeguard fully in place as recommended by a scientific inquiry into fracking, the NT government gave the greenlight for companies to apply for approval to start exploitation of the Beetaloo basin. “This isn’t an abstract issue for the people of the Northern Territory,” commented Kirsty Howey, the executive director of the Environment Centre of the Northern Territory. “We are facing unliveability due to climate change, supercharged by carbon bombs like fracking in the Beetaloo basin.” (The Guardian, The Guardian)

New assessments highlight huge CCS risks, Total’s CEO agrees: Speaking at the COP28 climate summit, TotalEnergies boss Patrick Pouyanné has backed a new international pledge to triple renewable energy generation while also offering insights into how the French energy company views the deployment of carbon capture and storage (CCS) technologies. Pouyanné disclosed that Total’s research and development unit has been looking into commercial uses for carbon rather than storing it, which is still deemed to be too expensive, while “decarbonisation is all about electricity and electrification,” he said in comments to Reuters. As debate rages at the conference in Dubai over the feasible size of CCS’s role in global efforts to reach net zero emissions, the Frenchman’s views concur with two new reports that add to longstanding concerns over the nascent technology’s ability to only capture minimal emissions at high cost. Reliance on large-scale CCS combined with the technology’s notorious underperformance, Climate Analytics points out, could lead by 2050 to 86 billion tonnes of excess carbon escaping and thus push the 1.5C warming limit out of reach. A detailed report from Oxford University’s Smith School finds that heavy use of CCS — or abated fossil fuels — is US$1 trillion per year more expensive than a low usage scenario that instead focuses on eliminating fossil fuel use via renewable energy, energy efficiency, and electrification. (Reuters, Climate Analytics [Pdf], Oxford University’s Smith School of Enterprise and the Environment [Pdf], Reuters)

Red Sea vessel attacks spark fears of more disruptions to global fossil fuel supplies: In the developing regionalization of the Israel–Hamas war, recent attacks by Yemen’s Houthi rebels on three commercial ships and a U.S. warship have lead to calls from shipowners for more military protection along the region’s maritime routes. Of equal concern is the potential for disruption to hydrocarbon supplies through the Red Sea and key Middle East shipping straits, with European oil and LNG markets seen as the most vulnerable to a further escalation in attacks. Bob McNally, the founder of Rapidan Energy and a former adviser to the George W. Bush White House, believes that the industry has been overly complacent about the risks of the Gaza conflict expanding regionally and puts the odds of a “material interruption in regional energy flows” as high as 30%. Marine insurers have reacted more rapidly and are imposing significantly higher rates on shipowners operating in the region. U.S. Energy Information Administration (EIA) data and mapping shows that most exports of petroleum and gas from the Persian Gulf to Europe and North America pass through multiple so-called “chokepoints” surrounding the Red Sea. LNG shipments, both exports and imports through the Suez Canal, accounted for roughly 8% of worldwide LNG trade in the first half of 2023, the EIA notes. (U.S. EIA, Financial Times [Paywall]) 

Nigeria touts gas expansion ambitions at COP28: During a COP28 panel discussion convened by the consultancy firm McKinsey, the head of the Nigerian National Petroleum Company (NNPC), Mele Kyari, described a range of the company’s gas expansion ambitions including plans to create a regional pipeline network to supply gas across Africa. Kyari provided no details about the regional network plan, discussion of which has persisted for years and led to industry skepticism that NNPC has neither the capital nor the technical ability to proceed. Nevertheless, a construction start in 2024 has been announced for the 5,600 kilometer Nigeria-Morocco gas pipeline, which involves NNPC and aims to supply Nigerian gas to Morocco, ten other African countries, and potentially Europe. A final investment decision (FID) for the long-awaited, US$25 billion mega-project has not been announced, though a memorandum of understanding on investment cooperation for the pipeline was signed between Morocco and the UAE during the climate summit in Dubai. Newly released research from Global Energy Monitor into gas pipeline buildout around the world has found relatively little construction underway in Africa. In terms of the number of kilometers under construction, the group’s analysis shows that Asia is the current hotspot, with China and India alone overseeing 65% of global construction. (Voice of Nigeria, Atalayar, Middle East Online, Global Energy Monitor [Pdf])

Norway sends industry mixed messages on gas extraction expansion: Following recent mapping of the country’s gas resources, the Norwegian Petroleum Directorate (NPD) has said that around 65% of the resources on the Norwegian continental shelf have not yet been produced as it urged companies to find ways of extracting it despite technological challenges. Kjersti Dahle, NPD's director for technology, analyses, and coexistence, said that companies such as Equinor, Aker BP, and Shell were already striving to maximize recovery rates, adding, “It makes sense to think that higher gas prices can drive necessary technology development, coordination and new infrastructure in order to realize this gas, as long as there is the will and ability to do this.” In 2022, Norway replaced Russia as Europe’s main gas supplier and saw extraction rising by 9 billion cubic meters (bcm) to a near-record 122 bcm. While the directorate expects production to be maintained at a high level over the next five years based on current plans and projects, it also said that output was projected to decline rapidly from around 2030. A major unknown is what to do with an estimated 860 bcm of gas contained in hard to get at tight reservoirs, with limitations on available gas infrastructure capacity viewed as a challenge for developers. (Upstream [Paywall], Reuters)

Finland ups the stakes in Baltic pipeline intrigue: A month on from Finland’s prime minister commenting that “cooperation with Chinese authorities” had started in an investigation into the role of a Chinese container ship in the October 8 rupturing of the Balticconnector gas pipeline, and with the same vessel still suspected as the culprit, Finland’s Minister of European Affairs Anders Adlercreutz has opined that “everything indicates that it was intentional.” It remains unclear how cooperative China is being after Finland and Estonia jointly submitted a formal legal notice to Beijing in mid-November, though relations between Estonia and China have become tense in recent weeks due to the Baltic country’s willingness to let a representative office be set up in Tallinn by the Taiwan government. Finnish authorities believe that the Chinese ship’s 6,000 kilogram anchor, which was retrieved a few meters from the site of the damage, cut through two telecoms cables and the Balticconnector after being dragged across the Baltic Sea seabed. Stopping short of accusing the Chinese government of directly approving the ship’s actions, in his latest remarks Adlercreutz said: “I'm not the sea captain. But I would think that you would notice that you’re dragging an anchor behind you for hundreds of kilometers.” (Politico, Reuters, Politico) 
 

Australia: Under newly passed legislation, the so-called “water trigger” will now apply to all types of unconventional gas development meaning that the federal government will be required to consider the impact of fracking projects on local water resources. 

Australia: Woodside Energy has confirmed the start of merger talks with compatriot energy company Santos. Should a deal be reached by the companies, which have both seen their share prices fall this year, it would create a company valued at US$52 billion.  

Brazil: The state environmental protection agency Ibama is expected to decide in early 2024 if Petrobras, following a previous rejection, can drill in a basin near the mouth of the Amazon River that the company considers to be its most promising new frontier for oil and gas exploration.

Canada: The federal and Nova Scotian governments have vetoed a regulator’s decision to issue an offshore oil and gas exploration license to UK company Inceptio.

Pakistan: The China National Chemical Engineering Company and a UAE company have made an initial investment of US$500 million for two new LNG import projects in Karachi.

Russia: After more than a year of negotiations, the Italian engineering and construction firm Saipem has exited the Novatek-led Arctic LNG 2 project.  

U.S.: According to data from Pennsylvania’s Department of Environmental Protection, despite an increased number of wells drilled, gas production dropped in the state in 2022, the first annual decline since the start of the fracking boom over a decade ago.  

U.S.: Following challenges by U.S. groups, the struggling Magnolia LNG project withdrew its application for a second extension to its export permit but has since lodged a new request with the U.S. Department of Energy.

U.S.: Data from the U.S. EIA show that associated gas production has tripled since 2018 in the three top-producing oil plays in the Permian region. 

The Gas Graph

Via Global Energy Monitor’s new analysis of global gas pipelines.

Venture Global courts more controversy in increasingly ugly export contract disputes: U.S. LNG company Venture Global’s announcement that its Plaquemines export facility in Louisiana, due to start operating in 2024, will require a lengthy commissioning period similar to that at its Calcasieu Pass (CP) terminal stirred fresh controversy until a company spokesperson intervened. Amid an intensifying war of words between Venture Global and an array of high-profile international customers over alleged contract defraudment at CP, the company’s chief executive Mike Sabel confirmed to Reuters that the Plaquemines terminal would also see a 36-month commissioning period. The project’s signed-up, long-term contract customers are not due to receive LNG cargoes until 2026 or 2027, thus raising alarm bells following Sabel’s reported comments. A spokesperson, however, rowed back on the timeline to say that the commissioning period would be 24 months. As BP, Shell, and other European buyers continue to accuse Venture Global of profiteering at CP — it has pulled in an estimated US$18 billion through spot market cargo sales since early 2022 — and seek arbitration for what they say is a failure to fulfill contracts, Sabel has lashed out in turn, saying his company is “a catastrophe” for the established majors. “The supermajors have not successfully executed development and construction of a large-scale project maybe ever,” he told the Financial Times. “So in order for them to grow their portfolio, they’ve been having to grow the trading books, not the production.” (Reuters, Financial Times [Paywall])

Indonesia and Malaysia focus on gas and CCS in Dubai: The state-owned oil and gas companies of two of Southeast Asia’s biggest economies have reiterated their hydrocarbon expansion plans at this year’s UN climate summit. Indonesia’s Pertamina, which is at the forefront of recently announced US$20 billion per year investment ambitions for domestic upstream oil and gas industry, chose to focus in Dubai on various potential CCS initiatives underway to offset rising production plans and pointed out it had recently made its first successful injection at an oil field in west Java. The country’s Special Task Force for Upstream Oil and Gas Business Activities has also nominated the Geng North — operated by Italy’s Eni — and Asap Kido Merah oil and gas blocks as national strategic projects to serve the LNG and fertilizer industries. Meanwhile, the head of Malaysia’s Petronas was insistent that gas holds the key for the country’s just transition away from coal, with a necessary buildout of renewables still being viewed as too costly. “If we're going to actually put up all this renewable energy to displace fossil fuels, grids must come along at the same time or slightly leading, and this will cost around US$180 billion in Malaysia alone,” said Petronas’ CEO Taufik Muhammad. (Argus, Antara, Kompas, Argus)

Mountain Valley Pipeline company may look to sell controversial project: Oil and gas pipeline firm Equitrans Midstream, the lead owner of the Mountain Valley Pipeline (MVP), is reported to be in the early stages of considering a sale of the long-delayed and over-budget gas project. The company’s latest projection — from October — for completing construction on the 303-mile pipeline, which is set to run from the U.S. state of West Virginia to southern Virginia, is the first quarter of 2024; selling the now US$7.2 billion project early next year could attract industry buyers, according to sources familiar with the matter. An analyst at Citibank also said that a sale at this stage would make sense for Equitrans, which has remained tight-lipped but seen its share price rise by roughly 10% since the speculation emerged. The Pennsylvania-based company has recently posted good construction progress on its website. An emergency injunction request for a construction pause has been denied by the U.S. Supreme Court after being lodged by three sets of landowners who are contesting in the lower U.S. Court of Appeals for the District of Columbia MVP’s use of eminent domain to take their land. (Bloomberg, The Roanoke Times, The Roanoke Times)

New initiative to tackle methane emissions lands with a thud and crucial gaps: Trailed in advance for months and the centerpiece initiative of the Sultan Al Jaber-led COP28 presidency, the non-binding Oil and Gas Decarbonization Charter (OGDC) was launched at COP28 with 50 oil and gas company signatories — including 29 national oil companies — but also to the sound of widespread disappointment. Voluntary pledges from the companies involved in the new initiative include the reduction of methane leaks to near zero and the elimination of routine flaring, both by 2030. Skeptical analysts and campaigners have pointed out that the OGDC’s emissions reduction targets are hugely unambitious by being limited to operational emissions, with Scope 3 emissions from consumption not included in the deal alongside the glaring omission of any commitments to reduce oil and gas production. “The global methane agreement the world needs to see has not yet come,” commented Barbados Prime Minister Mia Mottley at COP28. “We need strong regulation and compliance.” (Zero Carbon Analytics, Argus)  

Revised Aphrodite deal continues to elude Cyprus and Chevron-led consortium: An announcement on December 1 from the government of Cyprus that it had agreed terms with Chevron on how to exploit the Aphrodite gas field, which contains an estimated 124 billion cubic meters of recoverable gas and is located offshore 160 kilometers south of Limassol and 30 kilometers from Israel’s Leviathan field, proved to be premature. It has emerged that the Aphrodite consortium continues to seek the formulation of “an optimal development plan” with the government and has requested the postponement of front-end engineering and design work — essential for taking FID — that was due to start by November 2023 under the terms of a 25-year production sharing contract agreed in 2019. Negotiations have been ongoing since August this year when the Cypriot government rejected a revised development plan from the U.S. company and partners, who are seeking a less capital intensive approach that would not include the government’s preferred — and potentially more lucrative — use of a floating processing, storage, and offloading facility. Chevron is the project’s operator and holds a 35% stake in a consortium with Shell (35%) and Israel’s NewMed Energy (30%). (Cyprus Mail, Cyprus Mail, Rigzone) 

Public power producer TVA leans further into gas with eighth new plant proposal in three years: The Tennessee Valley Authority (TVA), already the object of environmental and social justice campaigns, has announced it is further doubling down on gas power with plans for a new 500 megawatt (MW) facility in the U.S. state of Mississippi. The proposed brownfield site project in Lowndes Country becomes TVA’s eighth new gas plant proposal since 2021, involving 6,600 MW of new generation. A public comment period on this latest project runs until January 19. The federally-owned utility’s planned US$15 billion spending spree over the next three years, the largest gas expansion plans announced this decade by any U.S. utility, has received pushback from ten members of the U.S. Congress, the U.S. Environmental Protection Agency, as well as local officials. Concerns over TVA’s continuing pursuit of gas dependency are also mounting due to the rolling power blackouts it was forced to order last December because it couldn’t fully operate two-thirds of its fossil fuel plants in plunging temperatures brought by Winter Storm Elliott. TVA has spent US$8 million in recent months to weatherize its gas plants, but federal officials are warning that areas across the Eastern U.S. that are reliant on gas power remain vulnerable. (WPLN News, Congress of the United States [Pdf], WPLN News) 

Methane Watch map, Kayrros, November 30, 2023. 

This open-access tool uses satellite technology to give users insights into regional and facility-level methane emissions and to allow tracking of global gas trades and their emissions.  

An equitable phaseout of fossil fuel extraction, Civil Society Equity Review, December 4, 2023. [Pdf]

This 40-page report sets out principles for developing a framework through which different countries should end coal, oil, and gas extraction to limit warming to 1.5C, and argues that substantial amounts of international support are needed to make this possible in poorer countries.

Brookfield’s Climate Paradox: Climate Pledges vs. Fossil Fuel Reality, Americans for Financial Reform Education Fund, Global Energy Monitor, and the Private Equity Stakeholder Project, December 5, 2003. 

This online report reveals how the vast fossil fuel investments of Canadian private equity giant Brookfield Corporation undermine its commitment to tackle climate change, despite Mark Carney — the UN’s Special Envoy for Climate Action and Finance — serving as the head of the firm’s transition investing.