Gas Matters Today | news roundup | w/c 28 March 2022

UK

Macquarie has strengthened its grip on UK gas transmission infrastructure after agreeing, along with British Columbia Investment (BCI), to purchase a majority stake in National Grid’s gas transmission and metering business. Following the close of the deal, National Grid will hold the 40% minority equity stake in NGG via a new holding company called GasT TopCo.

UK oil and gas regulator, the North Sea Transition Authority, has withdrawn its request to UK shale firm Cuadrilla to plug and abandon its two shale exploration wells in Lancashire. The announcement comes ahead of the publication of the government's delayed energy strategy, with UK prime minister coming under pressure from the Conservative party to lift the UK’s moratorium on fracking in order to raise domestic gas production. 

Europe

Russian President Vladimir Putin has announced that he has signed a decree on transitioning to payments for natural gas in rubles concerning “unfriendly countries” including EU nations. Buyers of Russian gas will need to open ruble accounts in Russian banks, such as Gazprombank, in order to pay for supplies from 1 April, Putin said, his strongest signal to date that Russian gas supplies to European customers will be cut off.

EU member states appear to be working with the European Commission on a common approach for currency payments concerning gas contracts with Russia, according to a senior official at the EC. This comes as Moscow announced it has set up a banking system to enable payments for gas from foreign companies in rubles from 1 April.

France - The French government has asked TotalEnergies and other stakeholders to examine the possibility of installing a 3.9 Bcm/year capacity floating storage regasification unit (FSRU) in Le Havre, in northern France. The FSRU could be France’s fifth LNG import facility and boost alternatives to Russian gas.

TotalEnergies is in talks with French authorities over mobilising one of its two floating storage regasification units (FSRUs) to serve at the Le Havre port in its home country.

Germany - Germany declared an early warning level for potential gas shortages, as outlined in the EU’s Security of Supply Regulation, owing to Russia’s demands for gas payments in rubles. The government says it is doing everything it can to guarantee security of gas supply, but has at the same time called on consumers to reduce consumption.

German utility EnBW signed a memorandum of understanding (MoU) with the developer of the 12 Bcm/year Stade LNG terminal, the Hanseatic Energy Hub (HEH), for what appears to be a 3 Bcm/year capacity agreement. The announcement comes shortly after HEH invited companies to submit an Expression of Interest (EOI) for capacity bookings at the planned terminal.

Ireland - Ireland’s Commission for the Regulation of Utilities (CRU) appears to have thrown its weight behind building a LNG terminal in Ireland despite the government’s temporary moratorium. CRU chairperson Aoife MacEvilly said the over-reliance on Britain for gas supply creates concerns over energy security and noted that LNG terminals could import green hydrogen in the future.

Latvia - Four groups of international investors, including firms from the US and Middle East, have expressed interest in construction of an LNG terminal in Latvia, according to reports. However, with regional neighbours looking to either expand existing capacity or install new terminals, questions remain over the need for a project in Latvia.

Norway - Norwegian fertiliser company Yara has pre-ordered 15 floating bunkering terminals from Norway-based Azane Fuel Solutions to supply green ammonia to ships at Scandinavian ports. The start-up date is scheduled for 2024, however scaling up green hydrogen production by then could prove challenging. Yara said the plan was to create the world’s first carbon-free bunkering network in the Nordic countries.

North America

The US - Lake Charles LNG developer Energy Transfer expects to take a final investment decision on the long-mooted liquefaction project by the end of this year. Energy Transfer confirmed on Tuesday that it signed long-term offtake agreements with two subsidiaries of China’s Enn Group.

New Fortress Energy (NFE) announced ambitious plans to launch the first floating liquefaction project in the US, with the firm aiming to have the facility in service by Q1’23. NFE0 confirmed it has simultaneously filed applications to multiple regulatory bodies to request all necessary permits to site, construct and operate the 2.8 mtpa capacity facility, located off the coast of Louisiana.

Mexico - Sempra is closing in on a second liquefaction plant in Mexico after long-time partner TotalEnergies provisionally agreed to offtake one-third of the production from the proposed Vista Pacifico LNG plant and take a minimum 16.6% stake in the project.

Mexico Pacific Limited (MPL) has firmed up capacity bookings for its maiden liquefaction project on Mexico’s west coast after China’s Guangzhou Development announced that it has agreed to purchase 2 mtpa of LNG from the facility under a 20-year deal. The volumes are indexed to US gas benchmark Henry Hub and the contract will start when the plant enters commercial operations – expected in 2026.

Central & South America

Chile - Belgian LNG terminal operator Fluxys and US energy investor EIG announced that they will acquire an 80% equity stake in GNL Quintero, Chile’s largest LNG terminal, from Enagás and affiliates of Canadian fund OMERS Infrastructure. The deal marks Fluxys' second investment in South American, with the firm stating that buying into Quintero “supports the import of hydrogen to Belgium”.

Asia

Japan - For the first time since the Fukushima disaster in 2011, a poll has shown majority public support for restarting idled nuclear power plants in Japan. The poll comes amid volatile gas prices and growing concerns over energy dependence on Russia.

Japan’s Saibu Gas has suspended talks with Novatek regarding transhipment of LNG to China via the Hibiki LNG terminal in Japan, according to reports. While talks have been paused, Saibu said it will continue to lift LNG from the Sakhalin-2 LNG plant in Russia.

Pakistan - Pakistan LNG (PLL) scrapped a spot LNG tender seeking cargoes for April and May after deeming the bid prices too high. Pakistan’s struggles to secure LNG imports is forcing the country’s industrial and power players to turn to coal and oil.