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Tehran touts LNG project plans

  • Market: Natural gas
  • 10/03/23

The country's debut LNG project faces familiar sanctions and feedstock supply barriers, writes Nader Itayim

Iran has restarted work on a major gas liquefaction project that it was forced to abandon several years ago owing to sanctions, and plans to have it operational before the current administration's time in office ends in mid-2025.

The two-train 10.8mn t/yr Iran LNG project is one of three LNG export projects the gas-rich country was planning to launch in the early 2000s, only for them to be shelved several years later because of international sanctions related to Tehran's nuclear programme. The two other projects were the 10mn t/yr Pars LNG and 16.2mn t/yr Persian LNG plants on Iran's Mideast Gulf coast, which were being led by TotalEnergies and Shell, respectively.

Iran's perpetually thwarted LNG ambitions come with an extra layer of frustration for Tehran, as it had planned to source gas for the projects from the same supergiant reservoir it shares with Qatar. Known as South Pars to Iran, and the North Field to Qatar, Doha has used it to develop a 77mn t/yr LNG industry, and is due to expand capacity by 48mn t/yr by 2027.

The Pars and Persian LNG plants were still at the early stages of development when they were abandoned, but work at the Iran LNG project at Assaluyeh in Iran's southern Bushehr province had advanced to the point that preparations to install the liquefaction trains had been largely completed. German industrial engineering company Linde was originally supposed to provide the liquefaction equipment, but the sanctions imposed in the mid-2000s and then again in the early 2010s hindered its ability to supply the technology, stalling progress.

Iran now insists that work on the project has already resumed, despite US sanctions still being very much in place, and that the administration of President Ebrahim Raisi is pushing to accelerate work to meet its new deadline. "We have been able to activate the large Iran LNG project, which had been abandoned for more than eight years," Iran's oil minister Javad Owji said this week. There are 700 people working on the project and its utilities have all been prepared, he said. Gas-sweetening units for the plant will be "put into operation by early next year", referring to the Iranian calendar year that begins on 21 March.

South Pars: Bigger, longer and uncut

This renewed push by the government to complete what would be Iran's first LNG project comes as the global market has tightened on soaring European demand following the disruption of Russian pipeline gas supplies to Europe since Russia's invasion of Ukraine. But delivering on these ambitions will not be straightforward, especially as sanctions continue to hinder its access to the finance and know-how needed. Russia's Gazprom has been touted as a potential project partner amid tightening Russian-Iranian energy links, but stronger western sanctions on Russia have exacerbated its own challenges in developing new LNG projects.

More fundamentally, Iran faces the challenge of freeing up enough gas to feed what would be a major liquefaction project. Despite being the world's third-largest gas producer, high per capita consumption has severely limited export volumes. Of the 257bn m³ it produced in 2021, it used 241bn m³ domestically, leaving under 20bn m³ for export by pipeline, mainly to Turkey and Iraq. About 13.5bn m³/yr of additional output would be needed to feed the 10.5mn t/yr Iran LNG project. Iran is set to bring about double this volume on line from two phases — 11 and 14 — of South Pars over the coming 12-24 months as part of a wider plan to boost domestic output to 547bn m³/yr by 2030 from about 368bn m³/yr today. But unless Tehran somehow curbs the runaway demand growth the country has been recording for much of the past decade, even these additions may not be enough for Iran to realise its LNG export ambitions.


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10/01/25

US issues 45Z tax guidance for low-carbon fuels

US issues 45Z tax guidance for low-carbon fuels

Washington, 10 January (Argus) — US producers of low-carbon fuels can start claiming the "45Z" tax credit providing up to $1/USG for road use and $1.75/USG for aviation, following the US Treasury Department's release today of proposed guidance for the credit. The guidance includes proposed regulations and other tools to determine the eligibility of fuels for the 45Z tax credit, which was created by the Inflation Reduction Act to replace a suite of incentives for biofuels that expired at the end of last year. Biofuel producers have been clamoring for guidance from the US Treasury Department so they can start claiming the tax credit, which is available for fuels produced from 1 January 2025 through the end of 2027. "This guidance will help put America on the cutting-edge of future innovation in aviation and renewable fuel while also lowering transportation costs for consumers," US deputy treasury secretary Wally Adeymo said. "Decarbonizing transportation and lowering costs is a win-win for America." The creation of the 45Z tax credit has already prompted a change in US biofuels markets by shifting federal subsidies from blenders to producers. Because the value of tax credit increases for fuels with the lowest lifecycle greenhouse gas (GHG) emissions, it could encourage refiners to source more waste feedstocks such as used cooking oil, rather than conventional crop-based feedstocks. While the guidance is still just a proposal, taxpayers are able to "immediately" use the guidance to claim the 45Z tax credit, until Treasury issues additional guidance, an administration official said. The guidance on 45Z released today affirms that only the producer for the fuel is eligible to claim the credit, not blenders. To be eligible for the tax credit, the fuel must have a "practical or commercial fitness for use in a highway vehicle or aircraft" by itself or when blended into a mixture, Treasury said. Marine diesel and methanol suitable for highway or aircraft use are also eligible for 45Z, as is renewable natural gas that can be used as a transportation fuel. Treasury also released an "annual emissions rate table" offering providers a methodology for determining the lifecycle GHG of fuel. Treasury said a key emissions model from the US Department of Energy, called 45ZCF-GREET, used to calculate the value of the 45Z tax credit is anticipated to be released today, although industry officials said it may be delayed until next week. Treasury said it intends to propose regulations at "a future date" for calculating the GHG emissions benefits of "climate smart agriculture" practices for "cultivating domestic corn, soybeans, and sorghum as feedstocks" for fuel. Those regulations could lower the calculated lifecycle emissions of fuel from those crop-based feedstocks and increase the relative 45Z tax credit. US biofuel producers said they are still awaiting key details on the 45Z tax credit, including the update to the GREET model. Among the outstanding questions is if the guidance released today provides "enough certainty to negotiate feedstock and fuel offtake agreements going forward", said the Clean Fuels America Alliance, an industry group that represents the biodiesel, renewable diesel and sustainable aviation fuel industries. It is unclear how president-elect Donald Trump intends to approach this proposed approach for the 45Z credit, which will be subject to a 90-day public comment period. Trump has promised to "rescind all unspent funds" from the Inflation Reduction Act. But outright repealing 45Z would leave biofuels producers and farmers without a subsidy they say is needed to sustain growth, after the expiration last year of a $1/USG blender tax credit and a tax credit of up to $1.75/USG for sustainable aviation fuel. Biofuel and soybean groups were unsuccessful in a push last year to extend the expiring biofuel tax credits. The 45Z credit is likely to be debated in Congress this year, as Republicans consider repealing parts of the Inflation Reduction Act. House Republicans have already asked for input on revisions to the 45Z credit, signaling they could modify the incentive. In a tightly divided Congress, farm-state lawmakers may hold enough leverage to ensure some type of biofuel incentive — and potentially one friendlier to agricultural producers than 45Z — survives. By Chris Knight and Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Finnish and Baltic gas consumption up by 9pc in 2024


10/01/25
News
10/01/25

Finnish and Baltic gas consumption up by 9pc in 2024

London, 10 January (Argus) — Combined Finnish and Baltic gas consumption rose by 9pc on the year in 2024, with demand higher in all four countries and Lithuania leading the increase. Consumption across Lithuania, Latvia, Estonia and Finland totalled roughly 43.6TWh in 2024, up from 40TWh in both 2022 and 2023 but still well below the 2019-21 average of 67.2 TWh/yr ( see combined consumption graph, data and download ). Demand increased across all four countries, but Lithuanian consumption rose the most in both absolute and percentage terms, jumping by 14pc on the year to nearly 17.1TWh. This was mostly driven by higher demand from fertiliser producer Achema and gas-fired power generators, transmission system operator Amber Grid's commercial director, Justas Cerniauskas, said. Achema, the region's single largest gas user, increased its consumption by roughly 1TWh on the year, while power-sector gas demand rose by around 600GWh, Cerniauskas said. Large consumers with direct connections to the grid consumed 9.8TWh last year, according to Amber Grid data, up from 8.4TWh a year earlier, while demand from the local distribution zone increased by a more moderate 600GWh. Lithuanian gas-fired power generation totalled around 820GWh, compared with 640GWh in 2023, data from Fraunhofer ISE show. In Finland, gas-fired power production fell to 1.2TWh from 1.8TWh in 2023, as much stronger renewable output reduced gas' share of the generation mix. Renewable generation rose to 40.8TWh from 34.6TWh, with onshore wind accounting for almost the entire increase. Total Finnish gas demand rose by nearly 5pc on the year to just over 14TWh, despite the fall in gas-fired generation. Given that household demand accounts for a small part of overall consumption owing to the predominance of electric and district heating in Finland, this suggests that industrial demand continued its recovery. The paper and paper products sector is Finland's most gas-intensive, and appears to have performed better than in 2023 — output on a 2021 basis of 100 averaged 87.5 in January-October compared with 82.6 in all of 2023, data from Eurostat show. In Latvia, the main demand driver is the power sector, particularly state-owned utility Latvenergo's large combined heat and power plants. Latvian gas-fired power generation rose by nearly 19pc on the year to 1.6TWh, as weaker hydro generation left more room in the mix for gas. In Estonia, the region's smallest consumer, gas demand rose by more than 8pc on the year to 3.7TWh. Total gas-fired power generation across the four countries fell to 3.68TWh from 3.84TWh in 2023 ( see table ). Combined sendout from the Inkoo, Hamina and Klaipeda LNG terminals totalled 43.4TWh last year, compared with 47TWh in 2023 and 32.4TWh in 2022 ( see data and download ). A six week dry-docking period for the Klaipeda floating storage and regasification unit (FSRU) weighed on sendout in Lithuania, which was down by around 8TWh. Conversely, a long shutdown on the Balticconnector increased the call on Finland's Inkoo terminal to fill the supply shortfall in the first quarter. Sendout from Inkoo rose to 19.3TWh last year from 14.3TWh in 2023. This pattern is likely to flip in 2025, with Inkoo's Exemplar FSRU due to undergo its own six week dry-docking, which in combination with extensive maintenance on the Balticconnector has left only slightly more than half the year's slots booked . This is likely to increase the usage of Klaipeda, where slots for 2025 are nearly fully booked . There were net withdrawals from Latvia's Incukalns storage facility of 1.54TWh in the 2024 calendar year, flipped from net injections of 6.6TWh in 2023, and compared with 776GWh of withdrawals in 2022. Nearly 4.4TWh of gas was rolled over from the 2023-24 storage year into the next. By Brendan A'Hearn Total annual gas-fired power generation GWh 2021 2022 2023 2024 Finland 4,170 1,790 1,810 1,230 Lithuania 1,110 500 640 820 Latvia 1,820 1,100 1,350 1,600 Estonia 20 30 40 30 Total 7,120 3,420 3,840 3,680 — Fraunhofer ISE Numbers rounded to nearest 10 Annual gas demand by country GWh Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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US added 256,000 jobs in December


10/01/25
News
10/01/25

US added 256,000 jobs in December

Houston, 10 January (Argus) — The US added 256,000 nonfarm jobs in December, reflecting a robust labor market that may prompt the Federal Reserve to keep borrowing costs higher for longer. Analysts had expected gains of about 160,000 jobs for December. The gains last month followed 212,000 more jobs in November, which were downwardly revised by 15,000, the Labor Department said Friday. Job gains in October were revised up by 7,000 to 43,000 jobs. The CME's FedWatch tool today showed 97.3pc probability Fed policy makers will keep the target lending rate unchanged at 4.25-4.5pc at the next Fed meeting at the end of the month, up from 93.6pc on Thursday. FedWatch shows nearly 60pc probability of no change through the May meeting, up from about 45pc Thursday. Unemployment edged down to 4.1pc in December from 4.2pc the prior month. Payroll employment gains averaged 186,000/month in 2024, for total gains of 2.2mn jobs. That was down from 251,000 jobs/month in 2023, for total gains of 3mn jobs that year. Health care added 46,000 jobs in December, retail trade added 43,000 jobs, government jobs rose by 33,000, social assistance increased by 23,000, and leisure and hospitality added 43,000 jobs. Construction added 8,000 jobs in December. Manufacturing lost 13,000 jobs and mining and logging lost 3,000 jobs. Transportation and warehousing jobs grew by 9,600. Average hourly earnings grew by an annual 3.9pc following 4pc growth in November. By Bob Willis Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Australia's ACCC sees gas surplus for eastern states


10/01/25
News
10/01/25

Australia's ACCC sees gas surplus for eastern states

Sydney, 10 January (Argus) — Tight gas supply eased in Australia's eastern states during 2024, with a surplus higher than previously anticipated likely this year, according to the Australian Competition and Consumer Commission (ACCC). The ACCC's Gas Inquiry December 2024 interim report anticipates a 77-112PJ (2.1bn-3bn m³) surplus, driven by larger than expected supply from Queensland state's coal-bed methane projects. The projections show a surplus in each quarter of 2025, including in the peak-demand winter months, if LNG projects export all their available uncontracted gas. This compared with the ACCC's September report which showed a possible July-September shortfall. But a 16PJ supply gap is predicted for the southern states of South Australia, Victoria and New South Wales (NSW), which will need to be managed with careful usage of storage. But this does not account for the 2,880MW Eraring coal-fired generator's lifetime extension , which will reduce gas-fired power demand in 2025, the report said. The ACCC is predicting a supply of 1,982PJ in 2025, higher than 1,946PJ in its July report, with demand at 1,871PJ compared to 1,836PJ previously. The exact surplus figure depends on the export quantities from the LNG projects based at Gladstone, with 77PJ of surplus if projects export all their presently uncontracted gas. Gas will need to be transported south from Queensland as usual in the winter months, the ACCC said, with about 9pc of customer demand to be unmet. The 26PJ Iona gas storage site in Victoria held 16.06PJ on 2 January, up from 15.11PJ a week earlier on 26 December, with the ACCC recommending at least 25PJ to be stored before May to maximise levels ahead of winter. The improved outlook reflects Australia's growing coalbed methane output, with production reaching a new monthly high of 3.57bn m³ in August, according to Australian Petroleum Statistics. An average of 3.49bn m³/month was supplied in the first 10 months of 2024, or 26pc of Australia's total average monthly gas production of 13.51bn m³. This compared to 25pc of the total in 2023 and 24pc in 2022. Domestic gas prices have softened, the report said, because of higher supply and lower global prices but remain above historical levels. Offers from producers for 2025 supply fell by 1.8pc from the previous six months to A$14.77/GJ ($9.15/GJ) in the first half of 2024, while bids fell by 6.6pc to A$13.48/GJ. By Tom Major Australian gas prices (A$/GJ) Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Venezuela opposition leader held, Gonzalez warned


09/01/25
News
09/01/25

Venezuela opposition leader held, Gonzalez warned

Caracas, 9 January (Argus) — Venezuelan opposition leader Maria Corina Machado was detained for several hours today after leaving a rally to protest President Nicolas Maduro's disputed swearing-in on Friday, her allies said. Machado and her party members hold that their candidate, Edmundo Gonzalez, won a July presidential election, a claim supported by the US and many Latin American and other countries. The US kept in place broad sanctions against Venezuela's crude and energy industry in the wake of the contested election. Multiple black SUVs intercepted Machado while she traveled on motorcycle after the rally and forcibly took her while drones circled overhead, her allies confirmed. She was later released, they said, but she had not made a public appearance as of late Thursday afternoon. The Maduro government did not confirm Machado's detention. US representative Maria Elvira Salazar (R-Florida) vowed a response. "Our message to the Maduro regime is clear: If you attack Maria Corina Machado, we, the United States, will attack you", Salazar posted on social media. Venezuelan interior minister Diosdado Cabello has in turn threatened to "neutralize" any aircraft in national airspace carrying Gonzalez, who has said he will try to enter Venezuela on Friday to take the oath of office instead of Maduro. Gonzalez has been visiting multiple leaders in the region in the run-up to Maduro's ceremony, meeting with US president Joe Biden and president-elect Donald Trump's designated White House national security adviser Mike Waltz in Washington earlier this week. He has most recently visited the Dominican Republic and met with President Luis Abinader and other dignitaries there. Sources in Caracas say low turnout at pro-Maduro counter demonstrations today may have triggered the decision to arrest Machado. Trump's advisers have not disclosed whether they plan to tighten the US' sanctions against Venezuela, including whether they would remove exemptions allowing Chevron, Eni and Repsol to lift cargoes of oil produced in their joint ventures with state-owned PdV. Senate Foreign Relations Committee chairman Jim Risch (R-Idaho) unveiled a bill today that would condition a future removal of sanctions against Venezuela on the establishment of a democratically elected government in Caracas. But the bill, which enjoys backing of key Democrats on his committee, does not directly address Chevron's upstream exemption. By Carlos Camacho and Haik Gugarats Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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