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2022

Gas Matters Today | news roundup | w/c 10 January 2022

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South Asia

Pakistan – The country’s textile industry suffered a big loss of export revenues amid a shortage of gas and power supplies, according to its national industry association. A cut in gas supplies to power plants that continued for 15 days in the province of Punjab impacted export revenues by USD 250 million in December 2021.

North Africa

Egypt – Eni emerged as the major winner in Egypt’s latest upstream licensing round, as it was awarded stakes in five blocks, four as operator, covering an area of 8,410 sq km. Out of a total of 21 blocks offered, only eight block were awarded.

Russia & CIS Region

Russia – Novatek made it three long-term supply deals with Chinese firms for volumes from its Arctic LNG 2 project after announcing the signing of sales and purchase agreements (SPAs) with ENN Natural Gas and Zhejiang Energy. The latest deals mean the Russian firm will export 4.6 mtpa of its ~12 mtpa equity volumes from Arctic LNG 2 to China.

Africa

Mozambique – TotalEnergies is likely to resume construction work on its Mozambique LNG plant in the next six months to allay shareholders’ and partners’ concerns that the delay to project is indefinite, according to a research note by Verisk Maplecroft. However, the threat posed by the Islamic State affiliated Al-Sunna wa Jama’a (ASWJ) in the province of Cabo Delgado is evolving and means the resumption of work at the project site might be outside the company’s control, the report added.

North America

US – Excelerate Energy filed a registration with the US Securities and Exchange Commission (SEC) for a proposed Initial Public Offering (IPO) on the New York Stock Exchange (NYSE). The proposed IPO comes against the backdrop of a positive outlook for LNG prices, however, there are signs of growing investor concerns over fossil fuel investments.

US oil and gas production is on track to hit record highs in 2023, with record gas exports this year and next, according to the US Energy Information Administration’s latest Short-Term Energy Outlook (STEO). Strengthening hydrocarbon prices will back further drilling this year and help increase oil and gas production over 2022 and 2023.

ExxonMobil  has launched the sale process for shale assets in the Appalachian basin of Ohio, according to Reuters, with the move coming after the firm removed gas assets in the shale basin from its development plan – focused on “high value assets” in the Permian basin, Guyana and offshore Brazil.

The Biden administration will launch the US’ largest ever offshore wind auction in February, which will offer acreage offshore New York and New Jersey. News of the auction comes 10 months after the Biden administration revealed its ambitious target to install 30 GW of offshore wind power generation by 2030.

The US Senate narrowly rejected a bill introduced by Texas senator Ted Cruz that would have introduced further sanctions on the Nord Stream 2 (NS2) pipeline project. However, another bill, by New Jersey Senator Robert, which targets sectors including NS2 and the Russian oil and gas industry with new sanctions is being considered.

M&A activity in the US upstream sector increased by 25% year-on-year in 2021 hitting USD 66 billion, but the figure still falls short to the pre-pandemic average, according to data compiled by Texas-based analytics firm Enverus. The uptick in M&A activity last year was concentrated in the US shale patch and was driven by public firms snapping up private equity-backed E&P firms.

Australasia

Australia – The Australian Renewable Energy Agency (ARENA), announced up to AUD 40 million (USD 28.6 million) in funding for research and development (R&D) in solar technologies as part of Canberra’s push to reduce production cost of green hydrogen below AUD 2/kg. However, some market observers are hesitant whether the funding could reduce  the cost of green H2.

Train 4 at the Woodside-operated North West Shelf (NWS) LNG plant was taken offline amid record high temperatures across Western Australia (WA), as reported by Bloomberg. The extreme heat tripped the electrical system at the NWS LNG plant as scorching weather led to several bushfire alerts across the state, including near the Wheatstone LNG plant.

Europe

The European Commission blocked the planned acquisition of South Korean shipbuilder Daewoo Shipbuilding & Marine Engineering (DSME) by Hyundai Heavy Industries Holdings (HHIH) amid fears over reduced competition and rising prices in the market for building large LNG carriers. The EC said that the two shipbuilding companies had not formally offered remedies to address competition concerns during its investigation.

Greece – A statement issued by the US embassy in Athens on East Mediterranean energy cooperation omitted the EU-backed EastMed gas pipeline from the list of projects supported by Washington. At the same time, the statement said the US continues to “strongly support” regional efforts, including the 3+1 mechanism which Cyprus, Greece, Israel and the United States collaborate in.

Norway – Equinor will report mark-to-market losses of around USD 1.4-1.5 billion in its Q4’21 results as the company’s long-term gas supply contracts were priced “well below market prices” in the quarter, the company said in a results preview. The firm said its gas sales are mostly spot based, but a share of its long term piped gas contracts are based on longer-dated indices.

Denmark – Shipping giant Maersk revised its greenhouse gas (GHG) emissions goals bringing forward its net zero target to 2040, instead of 2050. Maersk also said that the Scope 1 and 2 emissions reduction targets for vessels and terminals will lead to absolute emissions reductions between 35% and 50% by 2030 from a 2020 baseline.

Netherlands – Milieudefensie, the Dutch arm of Friends of the Earth which defeated Shell in a 2021 court case, has called on 30 large organisations with operations in the Netherlands to present plans to bring down emissions by 45% by 2030 compared with 2019 levels. The NGO said it is prepared for legal action if the firms, which include BP, ExxonMobil, Uniper and RWE, do not present “concrete and equitable climate” plans.

France – EDF’s share price tanked on Friday after the firm warned it could take a EUR 8.4 billion (USD 9.5 billion) hit due to the French government imposing measures to limit the impact of soaring power prices on consumers. The company has also revised down its nuclear power production forecast by almost 10% due to extended outages at five of its reactors in France.  

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