Karpowership South Africa almost dead in the water, country’s first LNG terminal announced for Richards Bay: The state-owned power utility Eskom has stripped grid access rights from Karpowership following the Turkish company’s failure to meet a December 31 financial close deadline for its three gas-to-power projects proposed at South African ports. If Karpowership chooses to proceed with any of its plans, which have generated widespread controversy and opposition for several years including at Richards Bay on the country’s east coast, it will now have to compete with other projects for scarce transmission capacity. Eskom’s decision was swiftly followed by an announcement from South Africa's Transnet National Ports Authority that it has selected Dutch terminal operator Vopak and local public energy infrastructure firm Transnet Pipelines to develop and operate the country’s first LNG import terminal at Richards Bay for a period of 25 years. Nigeria-based Riverside LNG has recently said that it is in talks to supply the fuel to South Africa, with a deal being sought “probably very early in the year.” The government in Pretoria has also unveiled a new draft power plan that has been immediately criticized for containing gas-intensive scenarios presented as the most cost-effective options, while being highly lukewarm on renewables potential. The plan, open for public comment until February 23, 2024, outlines the ambition to build new gas-fired power plants with combined capacity of 6,000 megawatts (MW) by 2030. (Bloomberg, Independent Online, Reuters, Financial Post, The Conversation, Energy Voice) 

Joint agreement puts almost half of the EU’s power sector en route to being fossil-free by 2035: Foreseeing a scenario when “coal and gas-powered plants are no longer required,” a group of seven European countries has announced a joint agreement to decarbonize their electricity systems by 2035, five years ahead of the EU’s implied target of a near-to-complete decarbonization of its power sector by 2040. The countries making the commitment under the umbrella of the Pentalateral Energy Forum — Austria, Belgium, France, Germany, Luxembourg, the Netherlands, and non-EU member Switzerland — account for almost half of the EU’s electricity production. Stressing the benefits of the cross-border collaboration, Rob Jetten, minister for climate and energy policy in the Netherlands, said “We are well on our way with extensive offshore wind energy plans, solar power, hydropower, hydrogen and other energy sources to power our region.” Campaign group Beyond Fossil Fuels (BFF) said that the collective commitment solidifies the convergence around 2035 as the critical date for achieving fossil-free power in Europe. “All other European countries should follow suit and commit to phasing out coal and gas from their power sectors by 2035. Enhancing grids and expanding wind and solar deployment are crucial to ensure the energy transition is as sustainable, fair and smooth as possible,” commented BFF campaigner Tara Connolly. (Government of the Netherlands, Beyond Fossil Fuels)

U.S. gas plants “disproportionately vulnerable to failure”: A new study published by the Union of Concerned Scientists (UCS) has found that gas-fired power plants in the United States are “disproportionately vulnerable to failure” in extreme temperatures — both high and low — and accounted for most of the failed power capacity in five recent extreme winter weather events. Most strikingly, gas plants accounted for 56% of the generating capacity forced offline during Winter Storm Uri in 2021 when almost 250 people died in Texas amid rolling blackouts, and 63% of the capacity taken offline during Winter Storm Elliott in 2022. Elliott’s outage impact on other capacity sources was coal and lignite at 23%, oil at 4%, wind at 4%, and nuclear, solar and hydroelectric at 1% each. Calling for reduced reliance on gas-powered generation and a transition to renewables, UCS energy analyst Paul Arbaje said that further investment in new U.S. gas plants would continue “the vicious cycle of releasing heat-trapping emissions that exacerbate climate change impacts and in turn strain the electric grid.” UCS also flagged the excessive harm that power outages have on low-income communities, communities of color, and people living with disabilities, and recommended an end to new gas plant build in environmental justice communities altogether due to the air pollutants the plants emit. (Union of Concerned Scientists, Utility Dive)  

Groups turn to Supreme Court as first floating terminal in Greece nears completion: As the developers of a floating LNG import terminal at Alexandroupolis advance towards the commissioning stage later this month, at the turn of the year five environmental organizations submitted an application to the Greek Supreme Court calling for the annulment of the environmental approval granted in 2023 for the 5.5 billion cubic meters per year capacity project intended to be sited within an EU-designated nature protection site in the Thracian Sea. Greek biodiversity legislation prohibits the siting of potentially hazardous industrial installations within so-called Natura 2000 sites. The groups contend that this key point was overlooked in last year’s renewal of the project permitting that also breached EU law by being carried out without mandatory public consultation. The Supreme Court is required to hear the case, and the groups’ lawyers have applied for prioritized treatment in the hope of receiving a court date in 2024. The project’s FSRU vessel arrived in Alexandroupolis from Singapore on December 17. Greek firm Gastrade is now expecting delivery of an initial LNG cargo on January 20 to begin project commissioning, which would then see the start up of commercial operations in early March if no technical problems arise during commissioning. (WWF Greece, LNG Prime)

Fight over Danube LNG facility set to continue following government green light: Slovakia’s Ministry of Environment has rejected appeals from the NGOs Greenpeace Slovakia and Znepokojené matky (Concerned Mothers) and greenlighted the construction of a facility in the port of Bratislava that would produce LNG to fuel trucks as well as ships navigating the Danube. The groups had challenged the ministry’s approval of the €40 million (US$43.7 million) project in March 2023 following an environmental impact assessment process. The decision delivered by environment minister Tomáš Taraba can still be challenged in court and, in a statement, Greenpeace confirmed that it is planning further steps but did not want to specify them in more detail. “It is nonsense to continue investing in infrastructure that is destined to disappear,” said Katarína Juríková, the director of Greenpeace Slovakia. “The last COP28 climate conference sent a clear signal that the era of fossil fuels is ending.” (EURACTIV [registration required], Greenpeace (Slovak), GEM.wiki) 

Winter problems hit Kazakhstan’s gas infrastructure again, doubts remain over Azerbaijan’s export drive to Europe: Kazakhstan’s aging energy infrastructure, including a problematic gas pipeline, has again been disrupted by plummeting winter temperatures that knocked heating and power plants offline across at least eight cities. Government officials have sought to downplay the power outages as “technological disruptions” and instead point to investments of US$320 million made earlier this year for repairing heating and energy facilities in preparation for the heating season. Critics say that the hydrocarbon-rich state is misallocating funds for upgrades to energy infrastructure, around 80% of which is estimated to be in an advanced state of deterioration. Elsewhere in the Caspian region, hardline president Ilham Aliyev has expressed confidence that Azerbaijan is on track to double its piped gas exports to Europe to 20 billion cubic meters (bcm) a year by 2027. Data released by Baku in December show that overall national gas production and exports are both rising; exports to Europe were expected to hit 12 bcm by the end of 2023. However, European gas buyers have remained hesitant to enter into new long-term contracts with the Caspian state, likely due to an increase in LNG volumes secured with other exporting countries over the last 18 months. Following a tender in January for buyers to book additional capacity on the Trans Adriatic Pipeline, which received commitments for only an extra 1.2 bcm per year, a second tender planned for later in 2023 did not take place. (Eurasianet, Eurasianet)

Australia: Future oil and gas drilling has been banned in the rivers and floodplains of the Lake Eyre basin, a remote ecosystem in Queensland. Existing approved conventional gas development will continue under measures introduced by Steven Miles, the state’s new premier. 

Azerbaijan: Mukhtar Babayev, who worked for state-owned oil company SOCAR for almost 25 years before becoming minister of ecology and natural resources in 2018, has been selected as the COP29 president to lead November’s climate summit in Baku.    

Germany: €1.5 million (US$1.65 million) worth of damage to a 55-kilometer pipeline being built to link the Brunsbuttel import terminal near Hamburg with the country’s northern gas grid has caused project delays and is being investigated by federal authorities for sabotage. 

Japan: Kansai Electric Power has canceled a major 3,700 MW LNG-fired power plant that was planned for development in Osaka. Majority Japanese stakeholder Inpex has received approval to build the US$20 billion Abadi LNG export project in Indonesia. 

Lebanon: Amid heightened geopolitical and security tensions in the region, the energy ministry has launched a third oil and gas exploration licensing round. Bids are due by July 2024 for nine blocks, only three of which are newly offered acreage. 

Mozambique: Following comments in September from TotalEnergies’ CEO that the stalled LNG project in Cabo Delgado was planned to restart by the end of the year, an unnamed government source has said that it will restart this month while an unnamed financial source disclosed that the company is aiming for restart in the first quarter of 2024. 

Nigeria: A US$1 billion deal has been signed by two Chinese and Nigerian firms to capture flared gas and convert it into liquid forms as well as LNG for export.   

Norway: Equinor and German state-owned energy firm SEFE, known as Gazprom Germania until its nationalization in November 2022, have signed a long-term gas deal to supply Germany with around 10 billion cubic meters (bcm) of gas per year from 2024 until 2034, with an option for a further five years covering 29 bcm. Equinor said the €50 billion (US$55 billion) deal is its biggest long-term gas contract in nearly 40 years.

São Tomé and Príncipe: Brazil’s Petrobras is returning to Africa after a six-year absence with the acquisition of stakes in three offshore exploration blocks, under a deal with Shell. 

Tanzania: Long-delayed agreements for a US$42 billion LNG export facility may be finalized by the end of next month, according to local media reporting, and are set to involve amended production sharing agreements. 

UK: Finance minister Jeremy Hunt is under fire after a court verdict ruled against any further legal attempts to stop a controversial gas drilling project, planned by the energy company UK Oil and Gas, at a site in Hunt’s constituency near the Surrey Hills area of outstanding natural beauty. 

U.S.: AES Corporation has retired the ocean-cooled Redondo Beach gas plant in Los Angeles, California after 20 years of lobbying by local communities and authorities. 

U.S.: Due to their likely contribution to the growing severity of earthquakes in West Texas, state regulators have suspended 23 permits allowing wastewater injection at disposal wells by major companies including Chevron.

Vietnam: Hanoi has awarded Japan’s Tokyo Gas and partners an investment license to build a US$2 billion LNG-to-power plant in the northern province of Thai Binh. No details about the plant were provided other than that it will have a capacity of 1,500 MW and is thought to be one of a fleet of 13 LNG-fired plants with a combined capacity of 22,400 MW that the government is aiming to develop by 2030.

The Gas Graph


Via Global Energy Monitor’s latest analysis of global LNG infrastructure developments.

Production starts at Arctic LNG 2 despite project chaos and U.S. sanctions: The U.S. government’s ramping up of sanctions in November to “kill” Russia’s Arctic LNG 2 project took several weeks to bite but, in the space of a few days in late December as shares of lead investor Novatek fell in price by almost 3.5% and the US$25 billion project began to seemingly unravel, the new sanctions regime’s impact became clear. First, with Arctic 2’s first production train still slated to start up early in the new year, the company issued force majeure notifications to customers that it would not be able to meet all of its delivery obligations in 2024. It was then hit several days later by the project’s foreign shareholders — TotalEnergies and Chinese and Japanese companies — also declaring force majeure, thereby freezing their responsibilities for offtake contracts from and financing for the terminal. Russian newspaper Kommersant speculated that this could result in the project losing its long-term LNG contracts and leave Novatek having to go it alone to finance the project and instead sell future LNG on the spot market. Prior to the force majeure fireworks, China and Japan had been seeking sanctions waivers from the U.S. In the first week of January, though, it was reported that production has started up at the plant and that China recently shipped technical equipment destined for Arctic 2. (Reuters, Reuters, Reuters, Offshore Energy, High North News) 

Multilateral development bank passes up the opportunity to end support for gas: Under a new Energy Sector Strategy approved by its board of directors, the European Bank for Reconstruction and Development (EBRD) will put a top priority on the growth of renewable energy “from megawatts to gigawatts” in its regions of operations over the next five years but has opted to continue financing midstream and downstream gas projects. The London-based development bank said it will limit its involvement in the fossil-fuel sector to “increasingly rare instances.” Investment support for gas pipelines, LNG, and gas-fired power and heat generation will be considered if projects not only align with the goals of the Paris Agreement, the new strategy states, but also if they conform to a range of conditions, including the demonstration of “a low risk of carbon lock-in,” and do not “displace renewable sources or low emissions alternatives.” The EBRD will also not require its financial intermediaries, including commercial banks, to refrain from non-upstream gas financing. During the strategy’s consultation period, the bank received more than 6,000 emails from members of the public urging it to fully exclude financing for all fossil fuels. “The EBRD can’t support the Paris Agreement and invest in fossil energy at the same time,” commented Lisa Rose, associate director of 350 Europe, in reaction to the new strategy. CEE Bankwatch Network said it was “a missed opportunity for the EBRD to stop adding fossil fuels to the climate fire.” (EBRD [Pdf], EBRD, CEE Bankwatch Network)

Eni and partners run into problems with major Libyan deal: A US$4–5 billion deal for a consortium of majors led by Italy’s Eni to develop a gas block in western Libya is in jeopardy due to an outbreak of disagreements between senior officials and the country’s state institutions. Eni and partners TotalEnergies, Abu Dhabi’s Adnoc, and Turkish Energy had appeared close to finalizing negotiations with Libya’s National Oil Corporation (NOC) and the Tripoli-based government, led by prime minister Abdul Hamid Dbeibeh, for development of the NC07 block in the the Ghadames Basin, with the foreign consortium poised to take a 40% share of production. Despite Dbeideh’s earlier championing of the deal, and while clarification discussions are reported to be ongoing, internal disputes have intensified recently amid claims that the consortium’s production share has been set too high and that it also stands to benefit from a grossly underestimated gas reserves figure used as the basis for negotiations. According to NOC, Eni estimates recoverable reserves of 2.7 trillion cubic feet, while the oil and gas ministry has said the block could contain as much as 13 trillion cubic feet. Libya, along with neighbors Algeria and Egypt, is viewed by Eni as a vital export country over the coming years. (Argus, Libya Herald)  

Japan’s top utility looks to drive LNG sector growth in the Philippines: An agreement signed between JERA and Japan’s Association for Overseas Technical Cooperation and Sustainable Partnerships is seeking to spearhead deeper adoption of LNG in the Philippines, which began importing the fuel only last year. The initiative provides JERA, Japan’s biggest utility, with wide-ranging influence, including the provision of support to the archipelago nation for the construction and management of facilities as well as for drafting national standards related to LNG and gas. In 2021, JERA paid US$1.46 billion for a 27% stake in the major Filipino utility AboitizPower, with the joint development of LNG-to-power projects central to the acquisition alongside fuel sourcing and LNG management. This latest JERA move follows the signing last November of a memorandum of understanding between the Japan Bank for International Cooperation and AboitizPower that seeks to boost the development of both LNG and renewables in the Philippines. (Argus, SolarQuarter)

Cedar LNG eyes FID in Canada as Ksi Lisims LNG signs supply deal with Shell: Two proposed floating export terminals in the province of British Columbia have made significant advances. The partners in the Cedar LNG project are confident of taking a final investment decision by the end of March this year following their awarding of a US$1.5 billion engineering, procurement, and construction contract to Samsung Heavy Industries and Black & Veatch. At the Ksi Lisims LNG project, the first offtake agreement has been signed with Shell, which has agreed to buy 2 million tonnes per year (mtpa) of LNG over 20 years, one-sixth of the facility’s planned capacity. The smaller, 3 mtpa Cedar project is aiming to come online in 2029, while the far less advanced Ksi Lisims is due to be operational in 2027–2028. (Cedar LNG, Ksi Lisims LNG, GEM.wiki, GEM.wiki)   

Global gas pipeline expansion: Nearly US$200 billion under construction, with Asia building over 80%, Global Energy Monitor, December 6, 2023. (Pdf)

This 18-page briefing records how Asian countries are pumping close to US$120 billion into gas pipeline construction, spearheaded by China and India that are alone responsible for 65% of global construction. 

Taking stock of supply: Where next for fossil fuels after COP28? University of Sussex, December 14, 2023. (Pdf)

This 12-page policy briefing surveys the implications of the COP28 summit outcomes and what they mean for international efforts to scale-up supply-side policies and deliver the phase out of fossil fuels.

LNG 2023: Last year’s energy shock still reverberates, as the world builds towards LNG oversupply, Global Energy Monitor, December 18, 2023. (Pdf)

This 20-page briefing finds that an estimated US$1 trillion in investments is driving the development of 917 mtpa of new export capacity and 705 mtpa of new import capacity, an 18% and 4% year-on-year increase, respectively.

UK electricity from fossil fuels drops to lowest level since 1957, Carbon Brief, January 3, 2024.

This analysis documents how rapid growth in renewables and lower energy demand resulted in fossil fuels accounting for only one third of the UK’s power generation in 2023, the lowest level in 66 years, with gas comprising 33% of the total compared to 56% from low-carbon sources.