Gas Matters Today | news roundup | 20-24 Jan 2020

International

The world’s largest services firm Schlumberger put on a brave face after reporting a USD 10 billion loss for 2019 largely related to acquisitions in the slowing US shale market, saying it would continue to target revenue growth internationally over the coming year.

The oil and gas industry is squandering a crucial opportunity to capture vast volumes of CO₂ currently being vented from gas processing plants and liquefaction operations around the world, according to a report by the IEA.

IOCs might be better off listing their ‘new energies’ divisions separately in order to address the “triple challenge” of tapering demand, shareholder demands for sky-high dividends, and growing calls to decarbonise, Morgan Stanley said in a research note last week.

Africa

Nigeria – Nigeria LNG has re-contracted the lion’s share of contracted capacity at its Bonny Island LNG plant that is expiring by 2021, after NLNG stakeholder Total agreed a 10-year deal to lift 1.5 mtpa.

Asia Pacific

China / Malaysia – State-owned Shenergy Group has turned to Malaysia’s Petronas for a long-term LNG supply deal, just days after China and the US signed a first phase trade deal calling for a huge ramp-up in purchases of US energy exports.

Australasia

Australia – Resource minister Matt Canavan has claimed the Australian Domestic Gas Security Mechanism has helped lower prices, conveniently ignoring the real driver – the plunging Asian spot LNG price – as he published a review of the 2017 legislation.

Europe

EU – There will be no “new” funding for gas infrastructure under the EU’s EUR 1 trillion Green Deal finance proposals, even for projects that facilitate coal-to-gas switching, the European Commission has confirmed. Meanwhile, LNG industry executives hoping for insight into the EC’s vision for gas under the Green Deal were left none the wiser after attending an EC forum on the topic in Brussels.

Norway – Norwegian shipping firm Eidesvik has signed a five-year contract with long-term partner Equinor to convert offshore supply ship Viking Energy into the first ammonia-powered long-distance vessel in the world by 2024.

Mediterranean

Cyprus / Turkey – Cyprus last week accused Turkey of illegally obtaining seismic data on a potentially gas-rich offshore block licensed to Eni and Total, but then retracted the allegations.

Middle East

Israel / Jordan – Jordan’s lower house has passed a draft law prohibiting gas imports from Israel, but the bill may be obstructed by conditions in agreements between Jordanian companies and US operator Noble Energy.

Iran – Iran has cut back on pipeline exports to neighbouring Iraq as it is struggles to meet domestic demand, reports suggest, despite announcements from Tehran of rising production capacity from the South Pars field and a dip in exports to Turkey.

Iraq – The government has authorised the Ministry of Oil to sign six gas exploration contracts originally awarded almost two years ago, as the government seeks to renew its US sanctions waiver on vital Iranian energy imports.

UAE – Abu Dhabi National Oil Company has signed a framework agreement with key foreign partner Eni to explore collaboration in carbon capture utilisation and storage (CCUS) in order to improve hydrocarbon recovery.

North Africa

Egypt – Newly gas-rich Egypt needs outlets for surplus supply so Cairo is seeking 12-18-month LNG export deals to lock in prices at or above breakeven to shield against a cratering LNG spot market, Egyptian oil minister Tarik El Molla has said.

North America

US – Leading US shale services provider Halliburton racked up a net loss of USD 1.7 billion, after the company’s core North American revenues crashed amid an intensifying deceleration in fracking activity compounded by bearish commodity prices.

Houston-based engineering firm McDermott International has entered voluntary bankruptcy via a “prepackaged Chapter 11 process” that has the backing of more than two-thirds of creditors, the company has said.

The US oil and gas industry is set to hit record high production again in February, signalling further pain for gas producers already scrambling to switch from pumping gas to oil after front-month Henry Hub prices hit an almost four-year low.

Midstream outfit Enbridge has signed a preliminary deal to supply pipeline capacity to the Annova LNG facility in Brownsville, Texas, months after Enbridge provisionally agreed to help build a feedgas line to NextDecade’s Rio Grande LNG plant in the same town.

FERC commissioner Bernard McNamee has downplayed fears that the body might again lose its quorum after revealing he will leave in June, adding he will serve “later… if needed”.

Shale producers breathed a sigh of relief last week after the Pennsylvania Supreme Court struck down a ruling that a driller might have trespassed on neighbouring property, reinstating the so-called ‘rule of capture’ to defend such cases.

Russia & CIS

Russia – Russian LNG champion Novatek has reportedly delayed the launch of Yamal LNG’s fourth liquefaction train by several months due to alleged design errors that left pipelines unsuitable for use in sub-zero Arctic temperatures.

South Asia

India – Top distributor GAIL has achieved a first for the nation after trucking LNG from the west of the country to the gas-starved east, in a move that could help build regional demand ahead of a major pipeline to the east is completed.