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Environmentalists bring Nord Stream 2 permit to court

  • Market: Natural gas
  • 05/08/20

German environmental group Deutsche Umwelthilfe (DUH) has taken legal action against the country's Stralsund Mining Authority, requesting that it reconsider its decision to issue a permit for Russian state-controlled Gazprom's 55bn m³/yr Nord Stream 2 gas pipeline, otherwise it will ask for a court-issued suspension of the permit.

The group has asked the authority to review the permit, taking into account a broader view of related methane emissions. The permit — issued in January 2018 — authorised the pipeline's construction and operation in German territorial waters.

The mining authority had rejected a previous application by DUH for a review. The environmental group submitted its request to the Greifswald higher administrative court on 27 July.

If the authority does not agree to reconsider the permit, DUH is requesting that the German court suspend the permit and refer the case to the European Court of Justice (ECJ). The suspension would remain in effect until the ECJ makes a preliminary decision on whether the permit should require the determination and evaluation of additional operational emissions within its environmental impact assessment, or until the ECJ decides whether the pipeline's operation is compatible with the EU's precautionary approach to environmental risks, taking into consideration new scientific insights.

A review is required because of a "significant" upward revision of estimated methane emissions from gas production than in the mining authority's earlier environmental impact assessment, DUH said. The initial assessment — a prerequisite for the permit's approval — had only taken into account possible methane links from the pipeline itself, assessing them as non-existent along the line's German underwater route. But this does not include methane leaks from extraction, transportation and processing that are "inextricably linked" to the operation of Nord Stream 2, DUH said. The section of the pipeline located within Germany is non-operational without considering additional infrastructure, DUH said.

Related projects should be taken into account as a whole to avoid the circumvention of EU rules by splitting projects that have a significant aggregate effect on the environment into different jurisdictions, the group said.

Independent and verifiable measurement data on methane leaks for related Russian infrastructure are not available, the group said. But methane emissions from gas infrastructure are significantly higher than previously estimated, it said. Peer-reviewed studies have found that leakage from the US oil and gas production chain is 60pc higher than estimated by industry and the US Environmental Protection Agency, DUH said.

Nord Stream 2 has taken note of and will evaluate DUH's lawsuit against the mining authority, the pipeline project developer told Argus. The developer does not comment on ongoing proceedings, it said.

Construction of Nord Stream 2 is mostly complete, with little work remaining in German waters. But Switzerland-based pipelaying firm Allseas suspended works on the Danish section after the US imposed sanctions targeting firms providing pipelaying vessels for the project. Russian president Vladimir Putin said earlier this year that the pipeline could be delayed until the first quarter of 2021.

And the US has threatened further sanctions against Nord Stream's European partners that could jeopardise a timely restart to construction.

Construction in Germany has been conducted in line with permit conditions and planned environmental mitigation measures, Nord Stream 2's developer has said. The line could reduce the EU's CO2 emissions from power generation by about 14pc if its gas supplies replace coal-fired power production, it has said.


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Technical issue behind EIA gas report delay: Update

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Updates with report, EIA staff reduction. New York, 1 May (Argus) — The US Energy Information Administration (EIA) said a technical issue with third-party software was the reason a key natural gas storage report was delayed today. The Weekly Natural Gas Storage Report , which is closely watched by traders and often moves markets, did not appear until 2pm ET, later than its regular scheduled time of 10:30am ET. Inventories grew by 107 Bcf (3bn m³) in the week ended 25 April, according to the report. The latest delay comes amid a flurry of staff departures at the EIA, the energy statistics arm of the US government, as part of ongoing efforts by President Donald Trump's administration to slash the size of the federal work force and curb spending. Around a third of the agency's 350 staff have taken voluntary buyouts, according to a person familiar with the situation. The staff exodus raises concerns about the agency's ability to gather and report timely data and continue providing independent forecasts covering energy production, stocks, demand and prices. Last month, the EIA delayed its monthly Short-Term Energy Outlook (STEO) by two days to take into account significant changes in markets following Trump's sweeping tariffs. And the EIA's release of its 2025 Annual Energy Outlook did not include the in-depth analysis that usually accompanies the report. It was accompanied by a statement from the Department of Energy that said the report reflects the "disastrous path" US energy production was on under the administration of former president Joseph Biden. By Stephen Cunningham Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Ukraine, US sign reconstruction deal


01/05/25
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01/05/25

Ukraine, US sign reconstruction deal

London, 1 May (Argus) — The government of Ukraine has agreed a "reconstruction" deal with the US that will establish a fund to be filled with proceeds from new mineral extraction licenses. There are few firm details about how much money will be involved, or how any future extraction contracts will be structured. It appears to be the same agreement that came close to being signed in February , which collapsed after an awkward meeting in the White House between Ukrainian president Volodymyr Zelenskiy and his US counterpart Donald Trump. Washington had pitched the deal in advance as providing stakes in Ukraine's mineral rights, as a form of repayment for past US support and a deterrence against future military incursions by Russia. There is no firm indication from either side that this is the case. Ukraine's economy minister Yulia Svyrydenko said today that 50pc of state budget revenues from new licences will flow into the fund, and the fund would then invest in projects in Ukraine itself. US treasury secretary Scott Bessent said the deal "allows the US to invest alongside Ukraine, to unlock Ukraine's growth assets, mobilise American talent, capital and governance standards", suggesting US companies will be involved in the new licenses. He said the fund will be established with the assistance of the US International Development Finance Corporation. Ukraine was eager to show the deal as a success. Svyrydenko said Kyiv will retain ownership of all resources, and "will decide where and what to extract." Neither does the agreement allow for privatisation of state-owned oil and gas company Ukrnafta or power company Energoatom, nor does it mention any debt obligation to the US, she said. The depth of Ukraine's resources are unclear. The country's geological survey shows deposits of 24 of the EU's list of critical minerals, including titanium, zirconium, graphite, and manganese, along with proven reserves of metals such as lithium, beryllium, rare earth elements and nickel. The IEA estimates Ukraine's oil reserves at more than 6.2bn bl and its gas reserves at 5.4 trillion m³, although it said Russia's annexation of Crimea means Kyiv no longer has access to "significant offshore gas resources". By Ben Winkley, John Gawthrop and James Keates Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Brazil's energy transition spending drops in 2024


30/04/25
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30/04/25

Brazil's energy transition spending drops in 2024

Sao Paulo, 30 April (Argus) — Brazil's mines and energy ministry's (MME) energy transition spending shrank by 83pc in 2024 from the prior year, while resources for fossil fuel incentives remained unchanged, according to the institute of socioeconomic studies Inesc. The MME's energy transition budget was R141,413 ($24,980) in 2024, down from R835,237 in the year prior. MME had only two energy transition-oriented projects under its umbrella last year: biofuels industry studies and renewable power incentives, which represented a combined 0.002pc of its total R7bn budget. Still, despite available resources, MME did not approve any projects for renewable power incentives. It also only used 50pc of its budget for biofuel studies, Inesc said. Even as supply from non-conventional power sources advances , most spending in Brazil's grid revamp — including enhancements to better integrate solar and wind generation — comes from charges paid by consumers through power tariffs, Inesc said. Diverging energy spending Brazil's federal government also cut its energy transition budget for 2025 by 17pc from last year and created a new energy transition program that also pushes for increased fossil fuel usage. The country's energy transition budget for 2025 is R3.64bn, down from R4.44bn in 2024. The new program — also under MME's umbrella — has a budget of around R10mn, with more than half of it destined to studies related to the oil and natural gas industry, Inesc said. A second MME program — which invests in studies in the oil, natural gas, products and biofuels sectors — has an approved budget of R53.1mn. The science and technology ministry is the only in Brazil that increased its energy transition spending for 2025, with R3.03bn approved, a near threefold hike from R800mn in 2024. Spending will focus on the domestic industry sector's energy transition, Inesc said. Despite hosting the UN Cop 30 summit in November, Brazil has constantly neglected to address the phase-out of fossil fuels, drawing the ire of climate activists . By Maria Frazatto Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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US LNG developers seek tariff loophole in FTZs


30/04/25
News
30/04/25

US LNG developers seek tariff loophole in FTZs

Construction costs for planned LNG projects could shoot up as a result of new import tariffs on key metals, writes Tray Swanson London, 30 April (Argus) — US president Donald Trump's ultra-protectionist trade policies are pushing developers of LNG export projects to consider using foreign-trade zones (FTZs), in a bid to avoid or defer tariff bills on imported materials. Trump's imposition of wide-ranging import tariffs this year raises the risk of cost inflation for LNG projects, particularly for the six terminals that are already under construction and the seven expected to reach a final investment decision (FID) this year. The 25pc levy on all foreign-sourced steel and aluminium introduced in March is likely to have the greatest impact on LNG projects, given that steel and aluminium can account for about 30pc of a facility's $5bn-25bn construction costs. Steel is required for liquefaction units, pipelines, tanks, structural frameworks and cryogenic hoses, and aluminum is used in heat exchangers. Many LNG developers are seeking to reduce or defer paying the new duties by establishing foreign-trade zones (FTZs) — designated areas in which foreign inputs can avoid import tariffs, at least temporarily, if they fulfil certain criteria. FTZs were introduced in the US nearly a century ago to counteract domestic protectionist trade policy and help US companies remain internationally competitive. US developer Cheniere's 33mn t/yr Sabine Pass plant in Louisiana has already been operating as an FTZ since 2015, according to the US FTZ Board. And Australian independent Woodside Energy's 16.5mn t/yr Louisiana LNG facility in Calcasieu Parish near Lake Charles is in an FTZ, a company spokesman told Argus. The project reached an FID on 29 April and is expected to cost $17.5bn, up from a weeks-old estimate of $16bn. About a quarter of Louisiana LNG's capital expenditure is for equipment and construction materials, roughly half of which will need to be imported so are subject to tariffs, Woodside chief executive Meg O'Neill told investors on 23 April. Other planned projects in Louisiana are looking to establish or join FTZs. US developer Commonwealth LNG's proposed 9.5mn t/yr terminal in Cameron Parish is in the process of joining the same trade zone as Sabine Pass LNG and compatriot firm Venture Global's 12.4mn t/yr Calcasieu Pass facility. Midstream firm Energy Transfer's 16.5mn t/yr Lake Charles LNG facility has been approved by the US FTZ Board, although it has not been activated as an FTZ as no significant construction has taken place yet. The project is awaiting federal permits ahead of likely reaching an FID later this year. On the Texas side of the Sabine river, state-run QatarEnergy and ExxonMobil's 18.1mn t/yr Golden Pass facility, set to come on line in 2026, and US developer Sempra's 13.5mn t/yr Port Arthur LNG terminal, expected on line in 2027, have joined the southeast Texas FTZ. Call of duties FTZs are treated as though they are outside of US Customs territory for purposes of duty payments. This enables companies to defer or reduce tariff payments until the imported product is used commercially. For LNG projects in FTZs, developers do not need to pay tariffs on imported steel or modular liquefaction trains until the unit comes on line and begins producing LNG. Terminals with multiple trains can stagger the payments. Most onshore project developers import materials and components and build their trains on site. Cheniere's Sabine Pass facility used this approach and required 89,000t of structural steel for its six trains. Port Arthur LNG and US firm NextDecade's 17.6mn t/yr Rio Grande LNG plant intend to do the same. But NextDecade is not active in the Port of Brownsville's FTZ, according to the FTZ Board, meaning it is probably the project at greatest immediate risk from the metals tariffs. By late February, NextDecade had secured only 69pc of the materials it needs for the project's first two trains and 33pc for its third train. NextDecade and the Port of Brownsville declined a request for comment. Some projects choose to use smaller, prefabricated trains that are built elsewhere and imported. Venture Global took this approach for its Calcasieu Pass and 27.2mn t/yr Plaquemines plants, using imported trains built by oil field services provider Baker Hughes in Italy, and it intends to use the same technology for its proposed CP2 terminal, on track to reach an FID this year. Under such arrangements, the LNG developer must pay the US' import tariffs. Baker Hughes' customers take ownership of the products it makes in Italy, the company said on 23 April. Calcasieu Pass, which began commercial service on 15 April , is in an FTZ, but Venture Global will need to expand its boundaries to include the adjacent CP2 project. FTZs also have a so-called inverted tariff benefit that allows companies to pay the duty on the finished unit if it is cheaper than the rate for the components. But Trump's executive orders outlining the tariffs essentially prevent the use of the inverted benefit, outlining a special status requirement that import duties be applied to the components, trade group the National Association of Foreign-Trade Zones' director of advocacy and strategic relations, Melissa Irmen, tells Argus. If the tariffs are lifted, firms that had deferred payments would still be required to pay the duties when they reach commercial service unless the order that removes or modifies the tariffs specifically dictates otherwise, Irmen says. Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Germany approves decree to lower gas storage target


30/04/25
News
30/04/25

Germany approves decree to lower gas storage target

London, 30 April (Argus) — The German government has passed a decree to reduce the national start-of-November target to 70pc from the existing 90pc, the economy and climate ministry BMWK said today. The Gas Storage Level decree was submitted to the federal cabinet as a ministerial decree and does not need parliamentary approval. It will come into force "upon promulgation". The decree sets out a 70pc gas storage fill level for the country as a whole, but imposes an 80pc fill level requirement for cavern storage and a 45pc target for porous storage sites, with the exception of four facilities in southern Germany which will abide to the 80pc obligation in order to maintain "supply security in Austria and Switzerland". BMWK presented the decree alongside the ongoing EU legislative process to allow more flexibility in bloc-wide storage regulation. It was developed in "close consultation with the EU institutions", BMWK said. But the EU's final legal text still needs to be agreed between the parliament and member states . Mixed response from industry associations Most German gas associations welcomed the reduction of fill level requirements. German gas grid operators association FNB backed the introduction of the decree as it supports security of supply while "gradually transferring responsibility back to the market". The timeframe and regional differentiation will enable preparation for the coming winter, FNB said. Energy association BDEW welcomed the bill, but said that it is also essential that the relevant EU framework be "established in a timely manner". The association also said it would be sensible to consider the flexibility proposed at the EU level, in which countries can meet the start-of-winter target at any date between 1 October and 1 December. Energy Traders Germany welcomed the reduction, it told Argus . But it added that the new changes should not reduce the discussion about which instruments can reliably ensure security of supply in the EU and German gas markets. And "constant changes to requirements that lead to market distortions must be avoided", it said. By Alejandro Moreano Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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