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EU court to rule on Opal gas pipeline in July

  • Market: Natural gas
  • 18/06/21

The European Court of Justice will on 15 July publish its decision on Germany's appeal against a ruling on the use of the 36bn m³/yr Opal gas pipeline.

The announcement follows the publication on 18 March of a non-binding but influential opinion by an advisory judge recommending the dismissal of the appeal.

The appeal opposes a 2019 EU court decision annulling a regime change from 2016 that had allowed expanded use of Opal by Russian state-controlled Gazprom. The legal effect of the court's decision was to restore the more restrictive 2009 access regime.

Gazprom has been largely able to offset the supply and sales impact of the decision by diverting flows from the 55bn m³/yr Nord Stream pipeline, to which Opal connects, by delivering gas along a short section of the 20bn m³/yr Nel pipeline to the 55bn m³ Eugal line, which tracks the same route and supplies the same markets as Opal.

This has been possible as Eugal was built to receive flows from the nearly-complete 55bn m³/yr Nord Stream 2. This may continue to be the case even if the German appeal is dismissed, but full use of Nord Stream 2 — if allowed under an an amended European-wide gas infrastructure access regime, which Gazprom is also contesting — could leave Eugal with no spare capacity to receive gas from Nord Stream 1.

Unless Gazprom is allowed greater access to Opal, it would likely be difficult to run Nord Stream 1 and Nord Stream 2 at full capacity simultaneously, which could in turn require Gazprom to continue delivering gas quickly along the 33bn m³/yr Yamal-Europe route and through Ukraine, where it has booked 40bn m³/yr of capacity in 2021-24.

Yamal-Europe already flows near capacity on most days. And Gazprom can book extra capacity through Ukraine at regular auctions.

The Opal access regime was agreed upon with Gazprom as a condition for its access to the pipeline as a result of competition concerns, particularly in the Czech Republic.

Commissioning of Nord Stream 2 could also be expected to change physical flows further, although the timing, access and other conditions under which the pipeline may be allowed to operate remain unclear.

The 2019 court decision overturning the 2016 access regime did so partly on the basis that the decision-maker did not consider the principle of "energy solidarity" in the EU's foundational treaties.

The European Commission was contacted for comment but declined to do so "in view of the political situation but also the legal proceedings".

The decision expected on 15 July may further complicate consideration of the access regimes, which could apply to the short section of Nord Stream 2 that falls within the scope of EU legislation, pending Gazprom's legal challenges, as well as Opal itself.

No similar restrictions were applied to Eugal. Nearly all offered capacity was booked at multi-year auctions on 6 March 2017.


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28/02/25

Energy a priority for Uruguay’s new government

Energy a priority for Uruguay’s new government

Montevideo, 28 February (Argus) — Energy will play a central role as Uruguay's new president Yamandu Orsi begins his five-year term on 1 March. Orsi, of the left-wing Broad Front coalition, takes over one of South America's most economically and politically stable countries. The economy is forecast to expand by 3pc this year, above the regional average, and the government wants to attract investment to maintain growth. The energy sector is a priority. Uruguay already has one of the region's cleanest grids, with 99pc of power coming from renewable sources, and in February reached the goal of 100pc electrification nationwide, according to the state-run electric company, UTE. The Orsi administration is studying options for the second phase of the energy transition, which includes adding capacity to meet increasing demand from electrification of transportation and clean fuel production. New finance minister Gabriel Oddone said the administration would focus on reducing red tape and potentially provide incentives for investment in the energy sector. Uruguay currently has close to 5.3GW of installed capacity, with 78pc in renewable sources, for its population of 3.5mn. The UTE, which had a profit of $315mn in 2024, is adding 100MW in wind power in the next two years. The Orsi administration plans to prioritize solar capacity. The new government is keenly following the development of low-carbon hydrogen and e-fuel projects. The most advanced project is for production of 700,000 tonnes (t) of synthetic fuel by Chile's HIF Global and ALUR, the biofuel arm of the state-owned Ancap. Investment is estimated at $6bn, making it the largest planned single investment in the country's history. The company requested approval in January of environmental permits for the project's solar park that would include 1.84mn bifacial solar panels. It would produce a peak of 1,162MW. Construction would take 18 months from approval. The municipal council in Paysandu, in northwestern Uruguay where the project is planned, on 27 February approved a change in land use to facilitate plant construction. Ancap, which lost an estimated $130mn last year because its only refinery was closed for six months, has proposed offshore production of low-carbon hydrogen. The Orsi administration has not yet committed to the project. Reverse transition? The new government will also have to also have to decide on the future of seven offshore exploration blocks, with seismic testing planned for late this year, and the possible construction of a gas pipeline that would link Argentina and Brazil. A pipeline exists from Argentina to Uruguay, but it could be expanded and extended to supply southern Brazil. It would require an additional 415km (258mi) in Uruguay, and around 500km in Brazil's Rio Grande do Sul state. Orsi has taken a wait-and-see attitude toward exploration, while a gas pipeline would likely have more popular support because it could expand service from only a section of the coast to a wider region. By Lucien Chauvin Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Muted Norwegian gas flows in Jan-Feb follow forecast


28/02/25
News
28/02/25

Muted Norwegian gas flows in Jan-Feb follow forecast

London, 28 February (Argus) — Nominated flows to Europe from Norway have held below 2024 so far this year, but this decline is roughly in line with the Norwegian Offshore Directorate's (NOD) revised forecast for gas output. Nominated Norwegian flows to Europe, including the UK, averaged 327.5mn m³/d on 1 January-27 February, down by 4pc from 340.4mn m³/d a year earlier ( see flows graph ), data from Norwegian offshore system operator Gassco show. But nominated deliveries from the Norwegian continental shelf (NCS) to Europe were particularly high in January last year at 348.2mn m³/d — the second-highest for any month since January 2017. Norwegian flows to Europe held in a range of 295-318.2mn m³/d per year in 2021-23 and averaged 317.4mn m³/d across last year. But factoring out May and September last year, when maintenance on the shelf was the heaviest, average flows were 329.5mn m³/d. Unplanned maintenance has cut into exports On top of already scheduled works, unplanned maintenance has cut into production availability at several Norwegian fields so far this year. Average capacity cuts at Norwegian fields were 11.9mn m³/d in January and 6mn m³/d on 1-27 February, the latest Gassco data show. This is up on the year from capacity reductions of 4.2mn m³/d and 5.6mn m³/d for the respective periods. Gassco's schedule of works does not include capacity restrictions of less than 5mn m³. And past and scheduled Remit messages on the Gassco website include maintenance at 21 producing fields, but there are "currently above 65 producing units delivering into system", the operator has said. Norwegian exports to Europe can also be limited by works at processing plants, although this impact is difficult to assess as production from some fields can be processed at more than one processing plant,is processed at the field or at a receiving terminal. As such, available Norwegian export capacity can at times be lower than works at fields suggest. Nominated flows to Europe peaked at 360.3mn m³ on 19 December 2023 in recent years, even though technical capacity of export infrastructure is higher. Taking this figure as maximum export capacity to Europe, there has been a gap between actual and potential flows in recent months ( see actual versus potential flows graph ). NOD revised down forecast gas output for 2025 The NOD forecast that gas output on the NCS will fall faster on the year in 2025 than previously projected. The NOD forecast NCS gas production to fall this year from 2024 by 5pc to 118.45bn m³ or 324.5mn m³/d this year, according to data published on 20 February. This is a downward revision from its previous projection of 120.4bn m³ or 329.7mn m³/d. This would correspond to a year-on-year decline of 3pc from 2024. The forecast decline in output may have contributed to the drop in exports so far this year, although there is no confirmed production data yet available. The NOD forecast does not factor in commercial flexibility, where firms producing on the shelf may defer some production volumes in reaction to market conditions. In particular, production at the giant Troll field and fields in the Oseberg area, which account for a significant share of overall NCS production, are important flexible assets. Troll produced 119.5mn m³/d and Oseberg fields 24.2mn m³/d last year. While the shape of the TTF forward-price curve has changed in recent days as TTF prompt prices have fallen more than contracts further out along the curve, there remains an incentive to maximise production now looking longer term ( see price graph ), suggesting limited scope for production deferrals. In addition, forecasts by the NOD are likely based on the schedule of works at the time of modelling, but further gas works are often added over time and unplanned outages can occur, as has been the case so far this year. Maintenance at Norwegian fields is scheduled to be significantly lighter in March-December than in the period last year. Capacity cuts at the fields were scheduled as of today to be 14mn m³/d over the next 10 months, peaking at 48.6mn m³/d in September. This is down from realised capacity cuts of 29.7mn m³/d in March-December last year and a peak of 111.9mn m³/d in September 2024. In any event, the 4pc on-the-year decline so far this year is not far from the forecast decrease of 5pc. LNG could fill in for lower Norwegian exports LNG deliveries might need to step up this year to fill in for lower Norwegian exports to Europe. Given the expected reduction of NCS gas output of 5.79bn m³ this year from 2024, assuming an average LNG vessel size at 174,000m³ and accounting for boil-off and heel — LNG which remains in the vessel when unloading — Europe would need an additional 61 LNG cargoes this year to substitute the drop in Norwegian pipeline deliveries. And given the halt in Ukrainian transit of Russian gas at the start of the year, combined with continental storage stocks at a multi-year low approaching the end of the winter, it is likely Europe will need to attract even more LNG cargoes to comply with EU-mandated storage filling targets for 1 November. By Jana Cervinkova Norwegian nominated flows to Europe from Jan '21 until 1-27 Feb '25 mn m³/d Actual nominated vs potential daily Norwegian exports to Europe mn m³ Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Japanese utility Tepco faces nuclear restart delay


27/02/25
News
27/02/25

Japanese utility Tepco faces nuclear restart delay

Osaka, 27 February (Argus) — Japanese utility Tokyo Electric Power (Tepco) is facing a possible further delay in restarting its Kashiwazaki-Kariwa nuclear power plant in Niigata prefecture, as the company is likely to miss a deadline for installing anti-terrorism facilities at the No.7 and No.6 reactors. Under Japanese nuclear safety regulations, nuclear power plant operators are required to build emergency control facilities in the event of severe accidents such as an aircraft crash or terrorist attack, within five years of receiving approvals to upgrade a reactor. Operators that miss the deadline will have to shut down their reactors. Tepco said on 27 February that it has revised its target date to complete the counter-terrorism measures at the 1,356MW Kashiwazaki-Kariwa No.7 reactor from March 2025 to August 2029, after reviewing the upgrade construction process. This means that Tepco will not be able to meet its October 2025 deadline. This will force the reactor to shut for an extended period to complete the reinforcement work, even if Tepco secures local government approval to restart and successfully resumes operations before the deadline. Tepco has also extended a target date to complete the counter-terrorism measures at the 1,356MW Kashiwazaki-Kariwa No.6 reactor from September 2026 to September 2031, later than the September 2029 deadline. The Kashiwazaki-Kariwa No.7 and No.6 reactors have been closed since August 2011 and March 2012 respectively, following the March 2011 Fukushima nuclear disaster. The reactors have already cleared the post-Fukushima stricter safety inspection by the Nuclear Regulation Authority (NRA), but still need to secure local approval as the final hurdle. Niigata governor Hideyo Hanazumi has been cautious about whether to approve the restoration of the Kashiwazaki-Karaiwa nuclear plant because of safety concerns, reiterating he will prioritise the concerns of local residents. Tepco has tried to restart the No.7 reactor first, while completing the loading of nuclear fuel into the reactor in April 2024. But given that the October 2025 deadline for the No.7 reactor is looming, the company may refocus on restoring the No.6 reactor to utilise it until its safety deadline of September 2029. Tepco plans to load nuclear fuel into the No.6 reactor on 10 June. The possible return of the Kashiwazaki-Kariwa nuclear plant will symbolic of Tepco's progress, given it has scrapped the melted-down Fukushima Daiichi and its nearby Fukushima Daini nuclear plants. Kashiwazaki-Kariwa is now Tepco's sole nuclear plant, and its return is expected to help ease the risk of an electricity shortage like the one that occurred in January 2021 in the Tokyo metropolitan area. Tepco estimates that the restart of one nuclear reactor, which can produce 10TWh/yr of electricity, will help boost the company's profits by around ¥100bn ($668mn). It also expects the return of the Kashiwazaki-Kariwa No.7 reactor will help reduce CO2 emissions by around 3.3mn t/yr. By Motoko Hasegawa Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Malaysia’s Petronas reports higher gas output in 2024


27/02/25
News
27/02/25

Malaysia’s Petronas reports higher gas output in 2024

Singapore, 27 February (Argus) — Malaysia's state-owned Petronas reported higher gas output in 2024, but its oil production fell. It also posted a significant drop in profit, resulting from lower average realised prices and divestments. Petronas' total oil and gas production amounted to 2.4mn b/d of oil equivalent (boe/d) in 2024, up by 1pc on the year. Of this, oil production fell by 4.4pc on the year to 813,000 boe/d, while gas output rose by 3.6pc to 1.64mn boe/d. The rise in gas production was attributed to the firm's attempts to maximise output from domestic and international operations. Petronas achieved first hydrocarbon production for 21 projects in Malaysia and Indonesia in 2024, and signed 14 production sharing contracts during the year. It expanded its presence in the UAE with its third concession in Abu Dhabi — the 7,300km² onshore block 2, for which it holds 100pc equity and will assume operatorship during the exploration period. The firm's oil product sales fell by 16pc on the year to 247.8mn bl in 2024, while its LNG sales rose by 9pc to 35.7mn t. Its petrochemical product sales rose by 7pc to 10.1mn t. The firm's revenue fell by 7pc on the year to 320bn ringgit ($72.2bn), partly because of lower average realised prices, said Petronas. Its 2024 revenue also only included five months of South African oil firm Engen's financial results, until the divestment of its 74pc share in the company in May 2024. In line with the fall in revenue, the firm's profit after tax fell by 32pc to 55.1bn ringgit. The divestment of Engen also meant an unfavourable realisation of the firm's foreign currency translation reserve, said Petronas. Petronas' capital expenditure (capex) rose by 3pc on the year to 54.2bn ringgit. About half of its capex went to its upstream business, with investments mainly in the Kasawari gas field development and the integrated Bekok oil development. Over 70pc of the group's costs were attributable to domestic activities, said Petronas. The firm also allocated over 6bn ringgit of capex toward cleaner energy solutions, mainly in renewables, hydrogen and carbon capture and storage. The firm's Scope 1 and 2 greenhouse gas emissions totalled 46.04mn t of CO2 equivalent (CO2e) across its Malaysian operations in 2024, surpassing its target of 49.5mn t of CO2e for the year. In comparison, the firm recorded 45.6mn t of Scope 1 and 2 GHG emissions last year. By Prethika Nair Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Australia’s Karoon to buy Bauna FPSO at Brazil oilfield


27/02/25
News
27/02/25

Australia’s Karoon to buy Bauna FPSO at Brazil oilfield

Sydney, 27 February (Argus) — Australian oil and gas firm Karoon Energy has agreed to buy the Cidade de Itajai floating production, storage and offloading (FPSO) unit at its Bauna oilfield offshore Brazil for $115mn. The vessel is presently owned and operated by oil services company Ocyan and its joint-venture partner Altera Infrastructure. The acquisition will improve operational efficiencies and provide direct strategic control over the facility, Karoon said in its 2024 annual results released on 27 February. Karoon intends to find a new operations and maintenance contractor for the FPSO, which was most recently affected by the failure of two mooring chains late last year , leading the firm to cut its 2024 guidance in December. Karoon produced a total of 28,400 b/d of oil equivalent (boe/d) in 2024 but this was 20pc lower than it had planned. A deposit of $30mn has been paid with the transaction expected to close by 30 April. Karoon plans to update its 2025 guidance no later than the closing date. Karoon said the purchase of the FPSO is expected to cut unit production costs for Bauna, which were $13.60/boe on a net working interest basis in 2024, up from $12.40/boe a year earlier. The Melbourne-based firm reported 2024 revenue of $776.5mn, up from $680mn in 2023 thanks to its stake in the Who Dat assets in the US' Gulf of Mexico that it acquired in a $720mn deal in late 2023 . But it posted a 39pc dip in statutory net profit to $127.5mn because of $15.1mn that was expensed against the failed Who Dat West well and a $60.9mn deferred tax adjustment. Profit was $208mn in 2023. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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