Gas Matters Today | news roundup | w/c 7 Dec 2020

International

A new consortium of seven large global energy and industrial companies is putting its weight behind efforts to roll out a ‘green’ hydrogen economy. The Green Hydrogen Catapult is aiming to drive a 50-fold scale-up in H2 capacity in just six years in the hope of halving costs to increase the competitiveness of the fuel against polluting alternatives.

The Asian spot LNG price hit a two-year high last week, with the Japan Korea Marker rallying above USD 9/MMBtu amid strong demand in Asia, congestion in the Panama Canal and a tight shipping market.

The oil and gas industry must shake off its investment fug to avert a supply shock, according to the International Energy Forum, which has said that failure to replace lost production from declining fields threatens to run into a post-Covid economic recovery.

Asia Pacific

Indonesia – The Inpex-led Abadi LNG project is lining up a third offtake deal after the project partners penned an MoU with Indonesian grid operator PGN for undisclosed volumes from the proposed 9.5 mtpa plant in Indonesia.

Vietnam – Leading independent LNG trader Gunvor has forming a joint venture with Dallas-based Energy Capital Vietnam, which has proposed an LNG terminal in Vietnam, under which the pair will trade and ship LNG to the south-east Asian country.

Australasia

Australia – Santos has signed what is believed to be the world’s first long-term supply deal indexed to Japan Korea Marker (JKM) spot LNG prices, after the Australian firm penned a 10-year supply deal with Mitsubishi’s subsidiary Diamond Gas.

Woodside CEO Peter Coleman is to retire in H2 2021 after more than 10 years in the role, the firm has confirmed, but the timing of his departure also raised eyebrows as a final investment decision on the long-delayed Scarborough field development is coming due.

Australian LNG company Transborders Energy is broadening its offerings after announcing plans to work with a coalition of companies, including various large Japanese gas buyers, to develop an offshore carbon capture and storage project.

Australia’s Viva Energy has signed preliminary agreements with LNG players Engie, Vitol and Mitsui to develop an LNG terminal as part of plans to convert its 65-year-old loss-making Geelong refinery into an energy hub with a solar farm and hydrogen manufacturing facility.

Europe

EU – The cost of emitting CO2 in Europe hit an all-time high last week, after EU leaders finally agreed an ambitious 2030 emissions reduction target for the bloc that will require a significant ramping-up of emissions prices to push heavy emitters out of the money.

EU leaders are scheduled to call for sanctions against Turkey over its actions in the East Mediterranean stemming from Ankara’s claims over the exclusive economic zones of Greece and Cyprus, but the weak measures are unlikely to prompt Ankara to change its confrontational stance.

Germany – Pipelaying on the Nord Stream 2 project was scheduled to restart last week, according to a German regulatory notice a year after work on the project stopped due to US sanctions.

Netherlands – Neptune Energy has kicked off a feasibility study into plans for a large-scale offshore CCS project in the Dutch North Sea using depleted gas fields, which the company believes could “safely” store 120-150 million tonnes of CO2.

UK – “Immediate action” is needed if the UK is to reach net zero emissions by 2050, according to the Committee on Climate Change, which recommends banning gas boilers and ending unabated gas-fired power generation by 2035 as part of measures set to cost around USD 67 billion a year.

Mediterranean

Cyprus / Israel / Turkey – Turkey is seeking a diplomatic reconciliation with Israel at the expense of Cyprus, according to reports claiming that Ankara wants to split the Cyprus exclusive economic zone with Jerusalem.

Middle East

Qatar – Qatar has become the latest Gulf state to feel the pinch of low energy prices after the world’s largest LNG exporter announced that in 2021 it expects to record the largest budget deficit since 2017 with fossil fuel revenues shrinking by nearly 28%.

North America

Mexico – Total, the world’s second largest LNG player, has acquired a 16.6% stake in the first phase of the Sempra-led Energia Costa Azul LNG project, with the move coming a month after the project became the first liquefaction plant to reach FID this year.

US – Oil and gas producers focussed on Appalachian shale lost over half a billion dollars in the third quarter despite making “drastic” cuts to their capital expenditure budgets that saw spending plummet to more than six-year lows, new analysis shows.

Newly-formed activist investor fund Engine No.1 has called for a shake-up of ExxonMobil and is backing four sustainability-focused candidates to sit on the Texan supermajor’s board.

Russia & CIS

Russia – Equinor has strengthened its presence in Russia’s hydrocarbon sector by securing a deal with Rosneft to purchase a 49% stake in KrasGeoNaC, which holds 12 conventional exploration and production licences in eastern Siberia.