June 15, 2023
Issue 42  |  View Past Issues
Inside Gas
Published by Global Energy Monitor

Editor's Note

Now in its third annual edition, the Net Zero Stocktake’s verdict on the decarbonization commitments of the world’s largest fossil fuel companies is that they remain “largely meaningless.” Two notable developments have immediately backed up this conclusion.

TotalEnergies has overlooked the departure earlier this year of French bank Société Générale from the Rio Grande LNG terminal in Texas by not only investing in the project but also signing up to a supply contract out to the mid-2040s for rather a lot of methane. A recalibration of Shell’s business model towards more production, supply, and sales of methane has been hailed by some as a return for the company to the “real world.” The company’s new CEO unveiled the carbon-intensive strategy to investors in New York just a week after stunning smogscapes, the result of historically devastating forest fires in the heart of Canada’s oil and gas industry, revealed what the real world has become as the legacy of fossil fuel burning deepens.   

There continues to be push back against resistance to the role of complicit companies. In Australia, peaceful protest against Woodside Energy’s expansion plans is on the brink of being officially registered as a terrorist offense. However, an end to the decades-long terror of living next to a major gas field in the Netherlands appears to be in sight for tens of thousands of people in the Groningen region. 

Grieg Aitken


Don’t expect Ukrainian gas transit contract to be extended

A five-year transit contract for Russian gas to flow through Ukraine to Europe will expire at the end of 2024, and the prospects for its renewal are slim given the continuing military conflict, write Anne-Sophie Corbeau and Tatania Mitrova for Columbia University’s Center on Global Energy Policy.  

Regulatory and finance hurdles may impede Vietnam’s embrace of LNG

Big new LNG ambitions stole the headlines at the unveiling last month of Vietnam’s power development plan, but gaps in the country’s power sector regulations are poised to make the financing of 15 major power plants by 2030 a tricky business, writes Clara Tan in Energy Intelligence

Australian government under siege for “sustainable” gas development subsidy 

With the announcement of plans for another major fracked export terminal in the Northern Territory, the government of Anthony Albanese is taking evasive action to avoid scrutiny of its A$1.5 billion public subsidy for the Middle Arm Sustainable Development hub on Darwin harbor, writes Rachel Withers in The Monthly.

Top News

Sources suggest permanent closure of Dutch Groningen field is — almost definitely — a done deal: A meeting of the Dutch government later this month to decide the fate of Europe’s biggest gas field is expected to officially confirm October 1 as the closure date. The Groningen field has been notorious since the 1980s when a drop in pressure in an underground reservoir set off hundreds of earthquakes with magnitudes of up to 3.6 that have damaged roughly 40% of the region’s homes over the decades. A €22 billion compensation package for Groningen residents announced earlier this year has not taken the heat off the government. Last week, Prime Minister Mark Rutte barely survived a parliamentary vote of no confidence over his handling of the issue. Sources told Bloomberg that while a decision to permanently close the field is assured, this could be overturned in the event of an energy crisis or extreme winter where emergency gas supplies are acutely needed. In the latest indication of European gas market nervousness, the price of gas futures jumped by 30% on news of the Groningen shutdown. (Bloomberg, NL Times)

Europe looks to Ukraine for gas storage to prevent another winter crisis: Support is building across European governments and industry for a plan to rely on some of Ukraine’s underground gas storage facilities in the coming months as part of measures to avert another EU winter energy crisis. Gas stockpiling in the EU is ahead of schedule this year with sites already more than 70% full and on schedule to reach capacity limits by September. National operator Ukrtransgaz is prepared to make available 10 billion cubic meters of storage capacity at sites deemed to be far enough away from conflict zones, in the west of the country. Ukrainian storage, therefore, would help to “balance supply and demand during the second half of the summer 2023, given their excellent connection to EU gas markets,” believes German utility RWE, as concern continues to center on the price fragility of European gas owing to the drying up of piped gas from Russia. Finding an insurance work-around, for what would still be a risky scheme in war-torn Ukraine, remains a sticking point. The European Commission has said it is investigating ways for public institutions to guarantee the initiative that would add an additional buffer of stored gas to cope with a cold winter. (Bloomberg) 

Turkmenistan starts to move on methane emissions: President Serdar Berdimuhamedov is reported to have responded to growing international pressure by formally launching two initiatives aimed at cutting the huge leaks of methane from the Caspian nation’s oil and gas industry. While a partnership deal with the U.S. government potentially involving financial and technical expertise for clean-up operations has yet to emerge, earlier this month Berdimuhamedov approved measures to improve relevant national legislation and enhance collaboration with the UN’s International Methane Emissions Observatory. A 2023/2024 roadmap has also been approved that foresees Turkmenistan joining 150 other signatory countries to the Global Methane Pledge, set up in 2021 in order to catalyze action to cut world methane emissions by 30% by 2030. (The Guardian, E&E News)

U.S. Senate committee launches investigation into insurance companies’ support for fossil fuels: Seven major U.S. insurance companies have been pressed by Democratic senators on the House Budget Committee to disclose how they evaluate climate-related risks and how they decide to invest in or underwrite fossil fuel expansion projects that drive such risks. Attracting scrutiny are AIG, Berkshire Hathaway, Chubb, Liberty Mutual, Starr, State Farm, and Travelers, which have been asked to respond to questions and provide documentation related to their fossil fuel dealings before the end of this month. Clarity is also being sought on whether the insurers have policies in place to ensure respect for Native sovereignty and other human rights when investment or underwriting decisions are made on infrastructure projects. “Given the threat that climate change poses to both the insurance industry and its policyholders,” write Senators Sheldon Whitehouse, Ron Wyden, and Bernie Sanders in letters to the companies, “it is difficult to understand how the industry can carefully price and manage climate risk in some areas of its business while simultaneously having no apparent plan to phase out its underwriting of and investment in the projects and companies generating the emissions that are causing these very harms.” As a whole, U.S. insurers are estimated to have approximately US$582 billion currently invested in the fossil fuel sector. (Reuters, Reinsurance News) 

Western Australia police brand protest at gas company HQ a “form of terrorism”: A protester from the Disrupt Burrup Hub campaign, who was arrested after releasing nontoxic “stench gas” at the headquarters of Woodside Energy earlier this month, may have charges against her escalated by police prosecutors due to claims by four of the company’s staff that they sustained bodily harm injuries during the hoax incident. The Western Australia Police Force said it was acting on these injuries — reportedly including dizziness and respiratory issues — following what it described as a “form of terrorism” carried out by Kristen Morrissey, who was placed under house arrest for two weeks prior to an initial court hearing in Perth. Direct action is being stepped up against Woodside due to its lead role in the Burrup Hub gas export plans that campaigners say would be the most polluting project ever to be developed in Australia. (WAtoday, Disrupt Burrup Hub)

Another study identifies major warming implications of hydrogen leakage: A new study from Norway’s Climate for International Climate Research (CICERO) shows that the global warming effect of leaked hydrogen is almost 12 times stronger than that of CO2. As industry enthusiasm and governmental backing for hydrogen continues to ramp up, researchers say these latest findings emphasize the need for stronger safeguards to prevent leakages during the production, transportation, and usage of the energy carrier. While hydrogen itself is not a greenhouse gas, as another study from Princeton University and the National Oceanic and Atmospheric Association also determined earlier this year, when quantities of hydrogen are leaked above a certain threshold, a chemical reaction is triggered whereby excess methane accumulates in the atmosphere. This effect, coupled with the fuel’s corrosive properties, is posing challenges for the promoters of long-distance hydrogen pipelines. “We lack the technology to monitor and detect hydrogen leaks at the scale needed, but new technology is being developed as the industry adapts,” said Dr Maria Sand, a senior scientist at CICERO. (Renew Economy)

“To make the most of our country’s potential, we must now get serious about making the shift to clean power. Let me be clear: those who think we should somehow simply end domestic oil and gas production in Britain are wrong. Under Labour’s plans, they will play a crucial part in our energy mix for decades to come. We will not be revoking any licences,” 

wrote Sir Keir Starmer, the leader of the UK’s opposition Labour party, ahead of a net-zero energy policy launch next week and after a recent barrage of media and cross-party political criticism following reports that a future Labour government would block new licences for North Sea oil and gas extraction. 


Argentina: Starting in the next few weeks, Chevron will invest more than US$500 million to develop a block in the Vaca Muerta shale basin.

Iran: The National Iranian Oil Company is confident that current reserves will allow for oil and gas production for the next 100 years. 

Mauritania/Senegal: BP’s US$4.6 billion Greater Tortue Ahmeyim LNG export terminal is facing further delays due to what are reported to be “major problems” with the project’s deep-water pipelaying. 

Mexico: As part of its renewables investment drive, Spanish utility Iberdrola has agreed to sell off 13 gas-fired power plants in Mexico in a deal worth US$6 billion. 

Nigeria: Security issues — including attacks on gas pipelines — and fall offs in associated gas production at oil fields were major factors behind plunging LNG exports in the first quarter of 2023. Nigerian LNG made up 7% of European imports in 2022.

Pakistan: A Joint Implementation Plan has been signed with Turkmenistan in an attempt to advance work on the long-delayed, 1,843-kilometer TAPI pipeline.

Romania: OMV Petrom has discovered new oil and gas deposits in southern Romania equal to roughly three quarters of its overall 2022 production, or more than 30 million barrels of oil equivalent (boe) of recoverable resources.

U.S.: In line with rising crude oil prices, gas production in the Permian Basin reached an annual record high in 2022 of 21.0 billion cubic feet per day, according to U.S. Energy Information Administration data.

U.S.: Delfin Midstream said it expects to reach FID on two floating LNG vessels at its deepwater LNG export facility in the Gulf of Mexico following an investment secured with Japanese shipping company MOL. 

Companies + Markets

Shell tells investors it will grow gas and LNG business: Shell CEO Wael Sawan has laid out a revised strategy to investors gathered at the New York Stock Exchange that sees the company planning to devote a higher proportion of spending to oil and gas as part of efforts to cement its position as the world’s top LNG player. Alongside increased payouts to shareholders, Shell’s less lucrative low-carbon business is to take a back seat despite bullish claims that it remains committed to net-zero emissions by 2050. Short-term spending plans to 2025 will see US$40 billion go to oil and gas production and trading, compared with US$35 billion for downstream, renewables, and low-energy ventures. Prior to the capital markets presentation, Bloomberg published an internal memo from executive vice president for LNG at Shell, Cederic Cremers, that made clear the intention is to double down on gas: “We have always known that gas is crucial for the energy transition, but our new strategy is built around a new belief — that gas will continue to play a key role in the energy mix.” China and India have also been pinpointed as target markets for the company’s ramped up LNG ambitions, with higher bonuses reportedly available for deals struck in those and other target countries. (Reuters, Bloomberg)

TotalEnergies steps in to bring Rio Grande LNG close to sanctioning: U.S. LNG company NextDecade has signed framework agreements with TotalEnergies and investment fund Global Infrastructure Fund (GIF) that are expected to accelerate a final investment decision (FID) for the first phase of the Rio Grande LNG project in Brownsville, Texas. NextDecade said that the FID for the delayed project’s first three liquefaction trains should now be confirmed by the end of this month, with GIP set to become a majority investor and TotalEnergies a 16.67% investor. The companies may further choose to invest in the terminal’s fourth and fifth trains as well as the attached carbon capture and sequestration (CCS) project that is also planned. The French energy major, the world’s third largest LNG player, also agreed to buy a 17.5% stake in NextDecade for US$219.4 million and to purchase a notably large 5.4 million tonnes per annum (mtpa) of LNG from phase 1 for 20 years. Patrick Pouyanné, chairman and CEO of TotalEnergies, said that the investments would strengthen the company’s ability “to ensure Europe's gas supply security and to provide Asian customers with an alternative fuel that emits half as much as coal.” (NextDecade, Reuters)

Report finds fossil fuel company net-zero plans are “largely meaningless”: Despite a sharp uptick in the number of major polluting companies that have set official goals to achieve decarbonization, the latest annual assessment of net-zero target intent and integrity from Net Zero Tracker, Oxford University, and the Energy and Climate Intelligence Unit has found that credibility gaps are undermining progress. Up from 51 last year, the report documents that 75 of the world's largest 112 fossil fuel companies now have commitments in place to reach net-zero. However, these are described as “largely meaningless” due to a lack of short-term emissions reduction plans as well as inadequate attention given to Scope 3 — or end use — emissions. The report authors said that there was so far little evidence of companies taking up recommendations issued last year by the UN on how to credibly realize net-zero pledges, including the need to stop investments in new fossil fuel infrastructure. (Net Zero Tracker, Reuters)

Methane leaks at retired Santos wells come to light: An unknown number of decommissioned gas wells owned by Santos off the West Australian coast have been leaking gas for at least ten years and are impossible to fix, according to the energy company. The leaks at the Legendre field, 105 kilometers north of the Pilbara port of Dampier, were first spotted by an underwater remotely operated vehicle in 2013, two years after work was done to seal them permanently. Australia’s offshore environment regulator, which has recently published documents containing information about the case, has instructed Santos to get to the bottom of the reported seepage and to submit an environmental management plan. The company has insisted that the early indications are that the leaks, described only on the regulator’s website as “small bubbles,” are nontoxic and “unlikely to present an environmental hazard,” and that it is setting up a monitoring program. (The Guardian)

Far Eastern Route to China ratified by Russia as eastern diversification efforts gather pace: Although a timeline for project implementation remains unclear, a cross-border pipeline agreement for the supply of 10 billion cubic meters per year over 25 years of Russian gas to China has been signed into law by Moscow. The ratification follows the signing of an intergovernmental agreement between the two countries in January this year. In further efforts to diversify its gas business away from Europe, Deputy Prime Minister Alexander Novak has disclosed that Russia is engaging with unspecified Asia-Pacific countries over new long-term LNG contracts as well as possible investments in Russian LNG projects. This tallies with other reported efforts from gas producer Novatek aimed at enticing Chinese investors into the recently proposed 20.4 mtpa Murmansk LNG project. The quasi-independent energy company is seeking the Kremlin’s consent for tax exemptions to be granted to China’s Silk Road Fund and China National Petroleum Corporation, both significant shareholders in the Yamal LNG terminal, so that in turn the Chinese investors will re-invest in new projects such as Murmansk. (China Daily, Reuters, The Barents Observer)

More state guarantees for U.S. LNG are possible, says Berlin: Germany’s federal government is mulling a “preliminary request” to underwrite bank loans that would enable more purchases of U.S. LNG. The disclosure, following a request for information from Bundestag member Ralph Lenkert, suggests a possible repeat of last year’s state guarantee of a US$3 billion loan that was provided by Deutsche Bank and other commercial banks to the commodities trader Trafigura for the purchase of a substantial amount of U.S. LNG that was then supplied to the German energy company SEFE. That state guaranteed deal was flagged recently by Trafigura as it reported record half year profits of US$5.5 billion. Berlin may be emboldened to do the same again having pushed hard last month, alongside Japan, to secure G7 endorsement for publicly funded gas investments. (Spiegel [German], Bloomberg)


Will San Miguel Corporation power a world made better? Center for Energy, Ecology, and Development, June 12, 2023. 

This 108-page report provides a comprehensive overview of the Philippines conglomerate’s energy business on the occasion of its annual stockholder's meeting and details how its coal and gas expansion plans could inflict further damage on public health and the environment. 

Beyond Spot vs. Long Term: Europe’s LNG Contracting Options for an Uncertain Future, Columbia University’s Center on Global Energy Policy, June 14, 2023

This online commentary lays out four possible compromise routes for European LNG buyers to navigate between the extremes of long-term contracts, which are incompatible with the EU’s decarbonization goals, and spot market purchases that offer no guarantee of affordable energy security in the short term.