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Petrobras to expand free gas market footprint
Petrobras to expand free gas market footprint
Rio de Janeiro, 10 May (Argus) — Petrobras said today it will offer new types of natural gas contracts in Brazil's open market with more flexibile and competitive terms, but provided no details on the planned offers. The company also announced new commercial contract models for gas sales to state distributors, offering price reductions for current contracts of up to 10pc. The reduction will be connected to the distributors performance, Petrobras said, without providing more detail. The move by the state-controlled giant is significant given the 2021 gas market liberalization as aimed at increasing competition at every step of the value chain beyond just Petrobras. But progress has been slow in cutting Petrobras' market share, lowering prices, and increasing market transparency. The 2021 gas law covers the full lifecycle of natural gas, from production to transportation, processing to storage, and sales. A key provision aimed at promoting competition in the upstream, midstream, and downstream sectors, particularly transportation and distribution. Yet, three years later, there is little sign of downstream customers migrating to the free market, despite some moves such as those from Delta Geração, Acelen, Gerdau, Tradener, and others. The number of free market commercial contracts does not exceed ten, according to a lawyer specialized in the energy market. By Betina Moura Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Floods stress Brazil energy sector vulnerability
Floods stress Brazil energy sector vulnerability
New York, 10 May (Argus) — Record flooding in Brazil's Rio Grande do Sul state over the past week underscores vulnerabilities in the country's energy system to extreme weather, which could also slow its pace of transition to cleaner energies. Nearly one week after record rainfall began flooding the state, power outages continue to plague it, with nearly 400,000 residents still in the dark. The flooding forced companies to suspend operations of critical infrastructure for the power sector, including three substations, 25 transmission lines, six hydroelectric plants and 11 power transformers. This led grid operator ONS to import power from Uruguay to meet domestic demand. With forecasts pointing to more rain, it is increasingly clear that it will take weeks if not months for the state to start returning to normal. The Rio Grande do Sul government estimates that the floods will cost the stateR19bn ($3.6bn?) . The tragedy in southern Brazil comes less than a year after a record drought struck the Amazon basin, which pushed water levels of the Amazon River and its tributaries to their lowest in 120 years. The drought reduced hydroelectric output from the region's plants and interrupted transport of fuel along key river corridors, leaving many households without power, because of the lack of diesel to operate generators used in off-grid communities. These crises highlight the country's failure to prepare for extreme weather and underscore the lack of investment in critical infrastructure, including in the energy sector. A study by the World Bank from 2023 warned of the need to upgrade the country's aging infrastructure and of future power supply risks. Brazil's large hydroelectric plants have been operating for an average of 55 years, according to the study, and need investments to boost efficiency and to limit the impact of extreme weather. A total of 11 hydroelectric plants in Rio Grande do Sul are being monitored, including six that present an elevated risk of rupture, such as the 28MW 14 de Julho plant that experienced a partial rupture last week because of the heavy rains. Authorities will now need to change their focus, which has been largely on limiting the impact of dry weather on the electricity sector, especially following the 2021 droughts, that resulted in expansion of thermoelectric generation. More recently, electricity regulator Aneel has been focusing on making power distribution and transmission networks more resilient to extreme weather, especially after downed power lines resulted in extended blackouts for some 4mn consumers in the city of Sao Paulo and over 1.3mn consumers in Rio de Janeiro. The sector is working to make transmission towers more resilient to high winds. Several cities and states in Brazil have launched plans to prepare for climate change, but the bulk of these plans focus on increasing investments in renewable energy and emissions reduction. Increasingly, these plans will also need to focus on mitigating risk from floods, heat waves and landslides. Brazilian energy companies are also behind the curve in their preparations for climate change. Only 13pc of executives in the energy sector that participated in a recent survey conducted by consulting firm PwC Brasil said they have assessed the impact of climate change on their financial planning. State of climate Brazil faced 12 extreme climate events in 2023, according to the World Meteorological Association (WMO). This included a tropical cyclone that hit Rio Grande do Sul last year and affected more than 340,000 people and left nearly 50 dead. The WMO blamed the extreme climate events in Brazil on the "double-whammy of El Niño and longer-term climate change." Last year, eight Brazilian states recorded their lowest July-to-September rainfall in over 40 years, it said. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
India's Chhara LNG terminal to start operations by Oct
India's Chhara LNG terminal to start operations by Oct
Mumbai, 10 May (Argus) — Indian state-run refiner Hindustan Petroleum (HPCL) will start up its 5mn t/yr Chhara LNG import terminal by October, a company official said in an investor call today. This follows commissioning delays after the firm faced difficulty in unloading its first cargo last month. The 160,000m³ Maran Gas Mystras vessel failed to unload at the terminal because of a "swell in the rough sea beyond permittable limit," the official added. The facility is set to be closed from 15 May-15 September because of the monsoon season. The firm will be ready to receive LNG cargoes from October as its pipeline that begins at the terminal and stretches over 40km to Gundala village in Gujarat is now complete, the official said. The pipeline is further connected to Gujarat State Petronet's city gas distribution network to Somnath district, a total stretch of 86.6km. The LNG vessel that arrived in mid-April at the terminal was left stranded for over a week as it could not achieve mooring mode after berthing, because of inclement weather and the lack of a breakwater facility at the terminal, a source close to the matter told Argus . Rough weather and sea conditions caused the vessel to hit the fenders, resulting in damage. Almost five loading arms were also broken before the whole operation was abandoned on 18 April, the source added. The fender acts as a buffer or cushion between the ship hull and the dock, and prevents damage as a result of contact between the two surfaces. HPCL is building a breakwater facility at the terminal which is required to ensure safe LNG tanker berthing during India's monsoon season. No specific timeline has been given for building the breakwater, but the terminal will be able to operate year-round once it is completed. Indian state-controlled refiner IOC brought in the distressed vessel through a tender seeking approximately 80mn m³ of regasified LNG for delivery to the 17.5mn t/yr Dahej terminal at around $8.40/mn Btu on a des equivalent. HPCL also has not awarded a tender that is seeking another early-May delivery cargo , which closed on 19 April. Commissioning of the Chhara LNG terminal has been delayed since September 2022 owing to pipeline issues. The terminal is the country's eighth LNG import facility, which would lift total regasification capacity to 52.7mn t/yr from 47.7mn t/yr currently. By Rituparna Ghosh Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Korea's Kogas seeks short-term, long-term LNG from 2025
Korea's Kogas seeks short-term, long-term LNG from 2025
Singapore, 10 May (Argus) — South Korea's major importer Kogas is seeking short-term and long-term LNG through two separate tenders. The firm is seeking at least 700,000 t/yr of LNG for delivery over 2025-27, through a tender that will close on 3 June. Offers can be linked to a northeast Asian spot LNG price, Brent or Henry Hub. Kogas is also separately seeking 700,000 t/yr, 1.4mn t/yr or 2.1mn t/yr of LNG over a duration of 7-15 years, starting from 2027 or 2028. The firm is seeking offers on a fob or des basis, although it has specified a minimum vessel size of 135,000m³ for fob offers. Offers can be linked to either Brent or Henry Hub, and the deadline for submission is at 12am Korea time (3pm GMT) on 10 June. The firm's latest long-term requirement comes on the heels of another long-term agreement that it signed with BP just last month, for up to 9.8mn t of LNG over 11 years from mid-2026. This also comes after South Korea's trade, industry and energy ministry (Motie) announced on 2 May that Kogas will continue to seek new term import contracts for the super-chilled fuel, to stabilise prices and meet higher domestic gas demand. The renewed focus on securing term supply has come at an interesting time with spot LNG prices in a downward trend since late last year, right in the middle of the winter season when prices typically peak. The front half-month of the ANEA — the Argus assessment for spot LNG deliveries to northeast Asia — was last assessed at $10.165/mn Btu on 10 May, a drop of 40pc since prices peaked on 23 October 2023. More LNG importers are also seeking term volumes over 2025-27, which is widely deemed to be a period during which LNG supply could be tighter as it is just before the new US liquefaction capacity fully hits the market. Higher nuclear availability in South Korea over the upcoming northern hemisphere summer season could weigh on LNG demand over the season. The country may also further trim its LNG use in the years to come, as it increases its reliance on nuclear power generation. By Rou Urn Lee Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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