Gas Matters Today | news roundup | 11-15 Nov 2019

Analysis

Saudi Aramco will not set the final price and volume of shares in its IPO until after the next OPEC meeting, when cartel members are expected to extend production cuts beyond March 2020, which should support the value of the world’s most profitable company.

International

Climate policies being enacted around the world today will fall way short of what is needed to avoid the worst effects of catastrophic runaway climate change and severe air pollution, according to a stark warning set out in the IEA’s annual World Energy Outlook.

Asia Pacific

Philippines – Filipino firms PXP Energy and Udenna confirmed they are separately holding talks with Chevron to purchase its 45% stake in the offshore Malampaya gas field. Days later, PXP Energy’s hopes of developing offshore gas were dashed after Chevron agreed to sell Udenna its stake in the maturing field.

Central & South America

Argentina / Bolivia – Bolivia’s national energy company YPFB has warned of possible force majeure on pipeline supplies to Argentina after losing control of a key field and infrastructure, amid deepening political turmoil gripping the Andean country.

Bolivia – Shell is temporarily dialling down upstream operations in Bolivia and other oil majors are reportedly following suit, after the country was plunged into a political vacuum by the resignation of president Evo Morales amid violent protests.

Europe

Italy / Norway – Offshore contractors Saipem and Subsea 7 may be discussing a potential merger to survive a prolonged downturn for oilfield services companies, according to unconfirmed reports.

EU – The European Investment Bank has agreed to compromise on its new lending policy, which will see the bank become the first multilateral lender to end financing for unabated fossil fuel projects including gas by the end of 2021.

Germany – The Bundestag has approved a law adopting an amended EU Gas Directive imposing regulations around third-party access and unbundling on pipelines from non-EU member states, such as Gazprom’s Nord Stream 2 and TurkStream projects.

Poland – PGNiG has notified Gazprom of its intention to terminate imports of Russian pipeline gas from the end of 2022, highlighting the company’s reliance on a proposed new pipeline from Norway and uncertain US LNG projects.

Spain – Lobbying by Spanish energy giants against regulatory changes appears to have paid off after the country’s competition watchdog CNMC reduced the severity of proposed cuts to regulated returns for gas transmission and regasification infrastructure.

Mediterranean

Cyprus / Turkey – The EU Council has piled more pressure on Turkey for its “illegal” drilling activities in the Cyprus exclusive economic zone, voting unanimously to impose a travel ban to the EU and freezing assets for those involved in drilling.

Middle East

Iran – Iran has reported a major new crude oil discovery that will provide a significant boost to the clountry's overall oil reserves, but harnessing these barrels will remain difficult as long as Tehran remains under stringent US sanctions.

United Arab Emirates – ADNOC LNG has finalised short-term supply agreements with subsidiaries of Total and BP, booking out most of the firm’s LNG production capacity through to Q1’22, bringing the UAE a step closer to becoming a net gas exporter.

Yemen – Three NGOs have called on Total to reveal the extent of its knowledge of a “secret prison” in the Yemen LNG facility in the port town of Balhalf, after a report found United Arab Emirates-backed forces used the facility to torture Yemeni citizens.

North Africa

Algeria – Italy’s Edison has extended a 1 Bcm/year supply agreement until 2027 with Algeria’s state-owned Sonatrach, covering only half the volume of the previous deal signed in 2008.

The Algerian government has appointed lifelong company manager Kamel Eddine Chikhi to head national oil company Sonatrach, coinciding with the country’s lower parliamentary house approving a contentious hydrocarbons law to encourage foreign investment in the flagging energy sector.

North America

US – New York governor Andrew Cuomo has given National Grid notice of his intention to revoke the company’s licence in the southern part of the state, unless it supplies additional customers, but lacking pipeline capacity and rallying spot prices limit the utility’s options.