August 17, 2023
Issue 49  |  View Past Issues
Inside Gas
Published by Global Energy Monitor

Editor's Note

A year on from the carnage that roiled European gas markets, the latest reminder of the sector’s now baked-in fragility and proneness to volatility emerged on the mere possibility of strike action disrupting Australian LNG cargoes. Negotiations between labor unions and two major exporters over pay and conditions are due to continue next week. Less dramatically, Thailand has been forced into LNG-evasive action. Domestic gas production at existing fields is set to more than double after state coffers were hammered due to last year’s astronomical LNG import prices. 

The Commonwealth Bank of Australia, the nation’s biggest commercial bank, has become the latest significant financial institution to roll back some financing for oil and gas extraction projects. Sharp flaring practice at a petrochemical facility in Scotland has landed Ineos in regulatory trouble. The Southern California Gas Company, a major U.S. player, has been fined and ordered to issue a public correction to its widely-broadcast claim that gas is “renewable.”  

Inside Gas will return on August 31.

Grieg Aitken


U.S. LNG exports: built on environmental racism and structural pollution

For a European visitor to the harrowing industrial zones of Louisiana and Texas, where German and other international banks are bankrolling the development of several new LNG export terminals, the impacts on local communities and the environment resemble what might be expected in the Global South, writes Andy Gheorgiu in Energy Transition

Australian strike threat spooks gas markets

The sharp jump in benchmark European gas prices after reports emerged of possible strike action interrupting Australian gas exports shows how the LNG market is vulnerable to even the suggestion of a supply shock, writes Clyde Russell in Reuters

Alaska doesn’t need another fossil fuel megaproject

An 800-mile pipeline and the Alaska LNG export terminal are being pushed forward with very little attention being paid to the environmental and financial consequences, write Andrea Feniger and Arleigh Hitchcock in Anchorage Daily News.

Top News

Queensland government’s green light for coal seam gas drilling threatens koalas and climate: Grassroots environmental group Environmental Advocacy in Central Queensland (EnvA-CQ) has launched legal action in the Land Court of Queensland that aims to overturn the state government’s approval of Blue Energy’s Bowen Basin gas project, which involves the installation of 530 gas wells across roughy four square miles of bushland in Central Queensland. The group contends that the decision earlier this year was made after a shoddy assessment process from the Queensland government and is flagging the risks posed by the project to koalas and other threatened species on Western Kangoulu and Barada Barna Country. The Environmental Defenders Office is to represent EnvA-CQ, and one of its lawyers, Revel Pointon, pointed the finger at Blue Energy’s project submission. “Our client believes the Department of Environment and Science was not able to properly assess Blue Energy’s development proposal because the evidence the company provided was wholly inadequate,” said Pointon. “The proposal will have a very significant negative impact on a range of environmental values, from water volume and quality, threatened species habitat, and the climate.” (Lock the Gate, InQueensland)

Developed oil and gas fields alone break the 1.5°C budget — new analysis: In an update to its groundbreaking “The Sky’s Limit” study, and ahead of two major UN-convened climate summits in the second half of the year, the U.S. based nonprofit Oil Change International (OCI) has calculated that meeting the 1.5°C temperature rise limit now requires that 60% of the world’s coal, oil, and gas reserves remain in the ground. Just five years ago the group put that figure at 40%. On oil and gas reserves alone, OCI’s new data finds that meeting the 1.5°C target necessitates the closure of almost 20% of existing oil and gas fields with the assumption that no new new fields are developed and coal extraction stops immediately. Current projections for developed oil and gas reserves, if fully extracted, would cause cumulative carbon emissions nearly 25% greater than the world’s remaining 1.5°C carbon budget, the group calculates. (Oil Change International [Pdf]) 

Workers and LNG companies remain at loggerheads in Australia: Potential strike action over pay and conditions by workers at facilities owned by Woodside Energy and Chevron remains on the table after trade union officials and the companies failed to reach agreement. The possibility of a disruption to LNG supply at three of Australia’s major export terminals, which together account for roughly 10% of global supply, has caused renewed gas price havoc chiefly in Europe but also in North Asia since the prospect of industrial action emerged last week. Fresh talks are now scheduled for next week. The dispute involves approximately 700 workers attempting to bargain with two companies that have recently made sky-high profits due to last year’s vastly inflated LNG prices. Offshore Alliance, which is negotiating with Woodside on the behalf of workers, said that so far the company was “well off the pace on key bargaining issues including job security and remuneration.” (Bloomberg, Reuters, Bloomberg)

Thailand to boost domestic production as fears over LNG risk grow: Facing persistent LNG price turbulence, and still reeling from the handout last year of roughly US$3.8 billion in state subsidies to cap electricity prices that spiraled due to excessive dependency on LNG imports, Thailand now intends to ramp up domestic gas production. Alongside efforts to boost renewable energy production, state-controlled PTT Exploration and Production (PTTEP) has announced plans to double gas production at Erawan, its biggest field, to 800 million cubic feet a day in early 2024, with production at its second-largest field — Bongkok — also set to rise by approximately 10% next year. The southeast Asian country currently derives around 60% of its power generation from gas, and imported LNG made up 29% of this last year, a 100% increase since 2018. PTTEP boss Montri Rawanchaikul said that the recent rapid jump in European LNG prices had provided additional stimulus to increase domestic production in order to improve the country’s energy security. (Bloomberg)

Sprawling U.S. pipeline plans intensify fears among vulnerable communities: Indigenous leaders and community activists in Louisiana and Texas are expressing alarm over, and mounting challenges against, a host of in-development gas pipelines that are sprouting up as developers push to provide feed gas to LNG export terminals on the U.S. Gulf Coast. New data from Global Energy Monitor finds that 2,900 miles of pipeline are currently being developed across the U.S., of which more than 1,200 miles has already been approved by the U.S. Federal Energy and Regulatory Commission (FERC). The slated infrastructure also includes the 800-mile Alaska Nikiski LNG project that would serve a US$16.8 billion export terminal proposed for development just south of Anchorage. One of FERC’s most egregious recent approvals went to Enbridge’s Rio Bravo pipeline that is poised to run through land sacred to the Carrizo/Comecrudo Tribe in southern Texas. “Anywhere they go, they’re going to find some kind of a village or sacred site of ours,” said Juan Mancias, chairman of the Carrizo/Comecrudo Tribe. Separately, and in a rare move, a federal safety agency has raised concerns about the safety of the contested Mountain Valley pipeline in West Virginia and Southwest Virginia. The U.S. Pipeline and Hazardous Materials Safety Administration has identified potential issues with pipe corrosion, installation, and exposure to the weather as a result of the project’s protracted development following legal challenges. (DeSmog, The Roanoke Times)

“This policy sends a stark warning to the fossil fuel industry: funding for your climate-wrecking expansion plans is drying up faster than a puddle in a heatwave,” 

said Will van de Pol, the acting CEO of environmental group Market Forces, about a newly announced climate policy from the Commonwealth Bank of Australia. 


Bangladesh: After delivering two spot LNG cargoes already this year, U.S. LNG company Excelerate Energy will supply Bangladesh with two further spot cargoes in the third quarter. 

Iran: After a series of delays spanning two decades, Phase 11 of the South Pars gas field has started production and is being developed by domestic companies after TotalEnergies and China National Petroleum Corporation dropped out of the US$4.8 billion project. 

Oman: German Securing Energy for Europe (SEFE) has agreed to a four-year, 0.4 million tonnes per year (mtpa) LNG supply deal with Oman LNG starting from 2026.

Romania: Gas transmission operator Transgaz has submitted applications to the national Energy Ministry for seven gas infrastructure projects to receive over half a billion euros of subsidies from the EU’s Modernisation Fund. 

Russia: A 640,000 ton platform housing the first production line for Novatek’s Arctic LNG 2 export terminal, the largest floating structure in the world, arrived at the project site in the Russian Arctic; production is expected to begin before the end of the year. 

South Africa: Australian gas explorer Kinetiko Energy has made a substantial discovery, rumored to be up to 10 trillion cubic feet (Tcf) in volume, at Secunda in the eastern province of Mpumalanag.

U.S.: Efforts by Commonwealth LNG to take a final investment decision on a 9.3 mtpa export terminal in Louisiana have been boosted after it secured development capital from private equity firm Kimmeridge Energy Management that has taken an undisclosed stake in the project.

Companies + Markets

Australia’s biggest bank commits to rein in oil and gas project finance: In a newly updated climate policy, the Commonwealth Bank of Australia (CBA) has pledged to stop directly financing new and expanded oil and gas extraction projects and will also require, from 2025, its fossil fuel clients to release independently verified emissions reduction plans. CBA, Australia’s biggest commercial bank, said it will cut off financing for coal, oil, and gas companies that do not have plans to cut their emissions by this date. CBA’s policy tightening was largely welcomed by campaign groups. However, Melbourne-based Market Forces expressed concern that new or expanded LNG projects were still not ruled out for financing by CBA and that the bank had also failed to restrict corporate finance for companies developing oil and gas projects. (Commonwealth Bank of Australia [Pdf], Market Forces) 

Regulator sends Ineos final warning over Grangemouth flaring: Multinational petrochemical company Ineos has been accused by the Scottish Environment Protection Agency (SEPA) of falsifying a record and flaring a significant amount of gas at a facility in Grangemouth last December. According to a letter sent by SEPA to the company last month, the flaring incident, which lasted for for over five hours on the night of December 1, 2022 from two stacks at a plant making ethylene for plastics, resulted from a valve being left open for over two months while Ineos had “falsely” recorded it as shut. SEPA noted that the flaring was “preventable” and “unacceptable,” and outlined eleven alleged breaches of pollution regulations. The seven-page warning letter also threatened Ineos with prosecution if further breaches take place. A total of six flaring incidents were recorded at the Grangemouth site in 2022 (The Ferret)

Major Californian utility rapped for “renewable” gas disinformation: In a settlement agreement announced by California Attorney General Rob Bonta, Southern California Gas Company (SoCalGas) has been censured and fined US$175,000 over marketing claims made in 2019 that gas is "renewable." An investigation by the Attorney General's office found that SoCalGas, the largest gas distribution company in the U.S., made the “unqualified environmental marketing claims” across a wide range of media. “SoCalGas should have known better than to broadcast unqualified claims suggesting that all natural gas is ‘renewable,’” said Attorney General Bonta in a written statement. “Truth in marketing matters, and it’s required under state law.” (Office of the Attorney General, California Department of Justice)

Karpowership sees end in sight to South African powership saga: Despite two years of delays, Karpowership’s director for South Africa, Mehmet Katmer, has said he is confident of advancing the company’s three floating gas-to-power projects through a third public participation process. The proposals at the ports of Richards Bay, Saldanha Bay, and Ngqura that would involve the importing of LNG have so far failed to gain environmental clearance, with NGOs raising concerns over adverse impacts on fishing and marine life. However, Katmer believes that environmental licenses for all three projects could be issued by the Department of Forestry, Fisheries and the Environment within months, and Karpowership would be ready to implement them before the end of next year. The state-run power utility Eskom has also recently granted the company an extension to access to the South African grid until the end of 2023. (Engineering News, Newsbase)

Nigeria seeking to realize “Decade of Gas” plan: Despite ongoing issues disrupting cargo shipments at the Nigeria LNG terminal, which has now been in operation for more than two decades, the West African country is taking strides to deploy new offshore LNG infrastructure in a bid to make good on a gas development plan hatched in 2021 called “The Decade of Gas.” Earlier this month, state-owned Nigerian National Petroleum Corporation (NNPC) entered into an initial agreement with Golar LNG for the potential development of a floating LNG export facility. This followed NNPC’s decision last month to take a 20% stake in the UTM Offshore floating LNG terminal, a proposed project that is reportedly in the running for US$5 billion funding from the African Export-Import Bank. Alongside these projects, the Nigerian government is also reported to be targeting full development of the country's estimated 203 Tcf of existing proved gas deposits and aiming further to unlock up to 600 Tcf in unproven gas resources. (S&P Global,