Weekly news roundup (19-23 August 2019)

Analysis

US LNG projects have narrowly escaped being shut-in by persistently low global prices thanks to the collapsing feedgas prices, and shut-in risk will likely evaporate later this year as European and Asian forward curves indicate a modest recovery is coming.

International

Shell has agreed to charter a fleet of new LNG-fuelled crude oil and products tankers, as part of a drive to decarbonise shipping that suggests a new wave of dual-fuelled oil tanker orders may be about to break.

The Export-Import Bank of the US is lining up its largest loan in four years – a USD 5 billion package to support the Mozambique LNG project – in a deal expected to net US taxpayers a projected USD 600 million.

Africa

Mozambique – State oil company ENH is reportedly turning to Russia to help finance the Mozambique LNG project, in a deal that, if agreed, would eschew Mozambique’s limited access to western financing and remove a major impediment to building a first onshore liquefaction plant.

Asia Pacific

China – China’s coal demand will peak in 2025 and consumption will fall 39% over 2018-2050 as the country pivots toward gas and renewables, state oil major CNPC has said, despite Beijing continuing to approve and build new coal mines and coal-fired power plants.

Philippines – The race to build the country’s first LNG import terminal has taken another twist after the Department of Energy granted more time to the delayed Tanglawan LNG project and reportedly gave a competing scheme by Excelerate Energy notice to proceed.

Australasia

Australia – Shell is advancing its quest to become the world’s largest electricity supplier in the 2030s after offering USD 417 million for Australia’s second biggest energy retailer ERM Power – a move aligning with the Anglo-Dutch firm’s marketing and trading operations in the country.

Europe

Hungary – Hungary is no longer worried about supply disruption stemming from a potential ‘no deal’ scenario between Gazprom and Naftogaz over a new transit contract as the country has secured its gas supplies for 2020, Hungary’s foreign minister announced last week.

UK – Cuadrilla has hit out at a study suggesting the country’s economically recoverable shale gas reserves are significantly smaller than thought, with the company’s CEO stating those involved in the study “should be embarrassed”.

Mediterranean

Cyprus / Turkey / US – The US State Department issued its strongest statement to date over Turkey’s drilling in the territorial waters of Cyprus, with a spokesperson telling the Cyprus News Agency that the presence of a Turkish drillship is provocative and unlawful.

Cyprus – Public gas company Defa has chosen a Chinese-led consortium to build and install a FSRU-based LNG terminal at the island’s energy centre at Vassilikos.

Middle East

Saudi Arabia – Yemen’s Houthi rebels have hit an NGL plant at Saudi Aramco’s critical Shaybah oil field using bomb-laden drones in an audacious attack that underscores the Iranian-backed militia’s growing ability to hit remote targets inside the Saudi border.

North America

Mexico / US – The delayed Sur de Texas-Tuxpan gas pipeline could start operations imminently after Mexico’s president last week indicated that contract disputes between the government and several pipeline operators were nearly settled.

Canada – Liquefaction project developer Woodfibre LNG has been thrown onto the back foot after a potential Chinese customer quit talks to buy almost half the plant’s annual output, but the bad news was offset by an exemption for LNG projects in British Columbia to steel tariffs.

US – Venture Global LNG has closed the project financing for the Calcasieu Pass LNG facility and associated pipeline in Louisiana, indicating that its flagship 10 mtpa liquefaction project has achieved a positive final investment decision.

Certarus has won its first contract to source compressed natural gas from captured flared gas in the prolific Permian shale basin – where flaring hit a record high in Q1 – with the CNG to power the electric hydraulic fracturing operations of an unnamed US “energy supermajor”.

A second utility-scale gas-fired power project in Ohio has fallen victim to the state’s controversial decision to bail out uneconomic nuclear and coal-fired generators, after Clean Energy Future blamed “political tampering” for its decision to kill a 1170 MW CCGT development.

A federal court has potentially set a fresh legal precedent after denying a TC Energy subsidiary eminent domain rights to public land for the construction of a proposed gas pipeline running across Maryland to West Virginia.

Russia & CIS

Ukraine – Ukraine is boosting its import capacity by upgrading a 50 km pipeline to transport 1.5 Bcm/year from Romania through neighbouring Moldova, in a bid to mitigate the worst impacts arising from an anticipated halt to Russian gas transits on 1 January 2020.

South Asia

India – India’s largest hydrocarbon producer ONGC has launched its Energy Strategy 2040 outlining fundamental aims that remain the same as the previous Perspective Plan 2030 – which set a target of doubling oil and gas production and a three-fold increase in refining capacity.