Petrobras to lease out LNG terminal
Brazilian state-controlled Petrobras has started pre-qualifying bidders for a long-term lease of its 20mn m³/d Bahia LNG import terminal and associated pipeline, opening the company's lock on Brazil's LNG imports.
Petrobras said the planned terminal lease aligns with its July 2019 agreement with anti-trust regulator Cade to exit natural gas distribution and transport and open third-party access to its infrastructure.
The lease agreement will not include the 138,000m³ Golar Winter floating storage and regasification unit (FSRU) that is currently installed at the site.
According to Norwegian LNG company Golar's 2018 annual report, Petrobras began its 10-year charter of the Golar Winter in early September 2009, but in return for vessel modifications made at the request of Petrobras, the charter was extended to 2024.
The terminal is located in the Bahia state capital of Salvador. The associated 45km gas pipeline, which originates at the LNG terminal, has two gas exit points at Sao Francisco do Conde and Sao Sebastiao do Passe.
Petrobras has three LNG regasification terminals, but only two are currently operational – Bahia and the Pecem port terminal in Ceara state, where the 20mn m³/d Excelerate Experience FSRU is currently moored. A third terminal located in Rio de Janeiro state has been idle since September 2018.
Petrobras' LNG regasification terminals have operated with significant volumes of unused capacity. According to hydrocarbons regulator ANP, the average utilization for the three terminals reached just 36.4pc between 2009 and 2018. Use of the terminals peaked at 54.1pc in 2014 but has since fallen to 15.7pc in the past three years.
This year, the Bahia terminal has had the largest LNG send-out volumes, reaching an average of nearly 8mn m³/d in the first nine months of the year, according to the mines and energy ministry's monthly gas report. Pecem send-out averaged just 1.64mn m³/d in the same period.
Despite significant unused volumes, Petrobras has not allowed third-party access to the terminals.
A recent tender offer for a combined 9.4mn m³/d of gas supply by seven gas distributors in the northeast region was dominated by Petrobras. Ceara state gas company Cegas told Argus that competition was hampered by lack of access to LNG terminals and gas pipelines.
Petrobras' monopoly on LNG imports, which started in 2009, was close to ending even before today's lease announcement.
Golar is in the final stages of commissioning a greenfield LNG terminal in Sergipe state, and will begin commercial operations in early 2020. The 163,000m³ FSRU Golar Nanook is already moored at the site.
The company said it will announce the final deadline for pre-qualification at a future date.
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Caribbean power faces long recovery from Beryl
Caribbean power faces long recovery from Beryl
Kingston, 5 July (Argus) — Power utilities in several eastern and central Caribbean countries have started repairing networks that were brought down this week by Hurricane Beryl. Beryl — the Atlantic's first hurricane this season — hit several islands with winds of up to 225 km (140 miles)/h, and also damaged roads, bridges and ports and telecommunications infrastructure. Many parts of Jamaica, Grenada and St Lucia remain without power, with one utility company forecasting "a long and difficult period of continuing darkness" in these countries. Jamaican power utility JPS said yesterday 60pc of its clients — just under a half a million households — were without electricity. "Our teams are doing damage assessment, and will complete the necessary repairs to restore power as quickly and as safely as possible," the company said. Beryl entered the Caribbean earlier in the week, leaving extensive damage in St Vincent and the Grenadines and in Dominica. St Vincent and the Grenadines will be without power for the next fortnight, chief executive of its power utility Vinlec Vaughn Lewis said. "We have significant damage … and we will be working to get power to facilities such as gas stations and supermarkets." Granada's ward island Cariacou is in an "Armageddon-like condition," prime minister Dickon Mitchell said. "The electricity and communication systems are wiped out." Winds from Beryl hit the southern coast of the Dominican Republic on 3 July, causing blackouts from a deficit of 900MW, according to distributor Edesur. Winds affected major natural gas-fired power plant AES Andres, reducing its regasification capacity for LNG and its fuel supplies to other natural gas plants, the government said. Beryl left several thousand people without power in the Cayman Islands yesterday as it left Jamaica and headed for Mexico. The Caribbean is likely to be hit by more strong hurricanes by the end of the season in November, a spokesman for Jamaica's weather office told Argus . "We have been promised a very active season with many and strong storms." The US federal weather agency NOAA forecast that there is an 85pc chance that this year's Atlantic hurricane season will be "above normal." The Atlantic season's first hurricane "sets an alarming precedent for what is expected to be a very active hurricane season," the World Meteorological Organization said. By Canute James Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US adds 206,000 jobs in June, jobless rate ticks up
US adds 206,000 jobs in June, jobless rate ticks up
Houston, 5 July (Argus) — The US added a solid 206,000 jobs in June while job gains in the prior two months were revised downward and wage gains cooled. The job gains, which beat analyst estimates, followed downwardly revised 218,000 job gains in May and 108,000 gains in April, the Bureau of Labor Statistics (BLS) said today, for a combined downward revision of 111,000 for the prior two months. The US generated a monthly average of 220,000 jobs in the 12 months through May. Economists expected gains of about 190,000 in June, according to a survey by Trading Economics. The jobless rate ticked up to 4.1pc, the highest in more than two years, from 4pc. Still, the unemployment rate remains near five-decade lows. Construction added 27,000 jobs, while manufacturing lost 8,000 jobs. Gains also occurred in government, health care and social assistance. Average hourly earnings rose by 3.9pc from a year earlier, down from a 4.1pc annual gain in the prior month and the lowest in three years. Futures markets after the jobs report indicated a 71.8pc chance the Fed will cut its target rate by a quarter point from a 23-year high in September, up from 68.4pc odds on Wednesday. The Federal Reserve, after its last policy meeting in mid-June, had penciled in one likely quarter point rate cut was likely this year, paring that from a likely three cuts shown in March. Still, it also said it needs to see evidence that inflation is "sustainably" slowing towards its 2pc target before beginning to cut rates from 23-year highs. By Bob Willis Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
French power sector braces for change ahead of election
French power sector braces for change ahead of election
Paris, 4 July (Argus) — The outcome of the French parliamentary election on Sunday could bring reforms that will impact the country's power industry, causing mixed reactions among market participants. The far-right National Rally (RN) and its allies gathered 33pc of votes in the first round of the French legislative election on 30 June, placing it ahead of the coalition of left-wing parties, the New Popular Front (NFP), and the current government's Ensemble coalition. But energy agendas strongly differ across the three political groups, creating a climate of uncertainty in the French power sector, especially as those programmes were put together in a rush after Emmanuel Macron called a surprise snap election, and they will probably need some fine-tuning. Divide over the renewable line On the topic of wind farms, the RN has reiterated its proposal to halt the construction of new wind projects, which could put at risk the achievement of French renewable targets. Despite the halt of new projects, RN leader Jordan Bardella in the party's last press conference said he does not plan to "stop all variable sources of energy", adding that wind farms currently in operation would not be dismantled. He also mentioned an ambition to "recreate a French solar PV [photovoltaic] industry" and to protect it by raising tariffs on the European level. But the party did not respond to Argus on the specifics of its programme. The NFP intends to develop both offshore wind and tidal energy, and has called for a vote on an "energy and climate law". And the current government has raised solar PV targets in its updated national energy and climate plan (NECP), in addition to raising the offshore wind goal to 45GW by 2050. "The pressure on public support mechanisms for renewable development would depend on the next majority in parliament," director of power and PPA advisory at consultancy firm Greensolver, Alexandre Soroko, told Argus . "It could change the way in which renewable energy projects under development generate their revenues and finance their development. If the pressure is increased, it would probably have a bigger impact on wind projects than on solar PV ones." Other market participants told Argus they expect delays in permitting processes if RN wins the election. Parliament last year passed the "renewable acceleration law", to speed up permitting processes that are longer in France than in neighbouring countries. A boost to nuclear energy The RN plans to strengthen the French nuclear fleet with a massive investment programme, making it the pillar of the French energy mix, while NFP's position is not clear on the matter. RN aims to increase French nuclear capacity through the construction of European pressurised reactors (EPRs) paired with small modular reactors (SMRs) and fast-neutron reactors. This plan echoes Emmanuel Macron's recent pledge to build 14 EPRs of type 2 reactors by 2050, with three pairs already planned . In contrast, the topic of nuclear reactor construction has been absent from the NFP's programme as views on it diverge among participants in the union, mostly between green party Les Ecologistes, which has been traditionally against nuclear energy, and the communist faction. An exit of the European power market? Criticising the rules of the European power market has been a recurring discourse on the French political scene. Bardella said he wanted a "French power price, that corresponds to the costs of nuclear production", while far left La France Insoumise (LFI), which is part of the NFP group, opposed the EU power market design reform in April. During the Europ'Energies conference this week, energy consumers association CLEEE's president Frank Roubanovitch said he was "favourable to the idea supported by RN and LFI of ending the marginal pricing mechanism while maintaining physical interconnections". But an exit of the European market would mean a "not optimal use of transmission infrastructure", according to European Commission team leader on the internal energy market, Mathilde Lallemand. Points of convergence Nuclear power, a protection of current hydropower concessions and the conversion of coal-fired plants to biomass are topics that are found in both the RN and Ensemble agendas. Although the RN plans to invest into hydropower plants to increase their production capacity, it is strongly opposed to the introduction of competition to the hydropower concessions system. The latter was mentioned in the draft energy sovereignty proposal unveiled by the government in February, but was never introduced to parliament. The RN party also wants to phase out coal and convert coal-fired plants to biomass — an ambition announced by Emmanuel Macron for 2027 at the end of 2023 . The second round of the elections is planned for 7 July. By Tatiana Serova Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Q&A: RAG says EU lacks clear hydrogen storage rules
Q&A: RAG says EU lacks clear hydrogen storage rules
Brussels, 4 July (Argus) — RAG Energy Storage has been one of the front-runners in hydrogen storage, and established the first operational commercial underground hydrogen storage (UHS) in a depleted gas field in April 2023. Argus spoke to its managing director Georg Dorfleutner, who is calling for a clear framework. Are you OK with the EU apparently scaling back from 10mn t/yr of hydrogen imports? We base the modeling of the report for HeartforEurope more or less on 2030 projections from the RepowerEU strategy. The assumptions on our modelling to identify an investment gap for hydrogen storage were rather conservative — that the only demand would come from industry, thus a rather flat profile over the year without seasonal-shift needs yet. From our side we have multiple potential hydrogen storage projects throughout Europe, but the hydrogen market development and support regimes for infrastructure investments will define the timely realisation. How might any scaling back affect your report's projected 36 TWh H2 storage gap? Whatever happens infrastructure needs to be in place very soon. Our report really underlines the need for a clear framework for hydrogen storage. And we come with a toolbox of different possible measures to support this. Storage tariffs alone won't solve the issue of market ramp-up. Policymakers may feel relieved that the gas and hydrogen decarbonisation package was finished before the EU elections. But our report is more or less saying that this alone will not do the trick. Could a strict EU definition of low-carbon hydrogen hinder growth? The wider and more pragmatic the definitions of low-carbon hydrogen are, the easier market ramp-up will be. Market ramp-up is enormously important for infrastructure. You don't build infrastructure just for demand over the next two years but for the next 10-15 years. Do we need more tailored financial support for UHS, at EU and state levels? There's simply no tailored financial support right now. There's a little aid for hydrogen storage research projects. Currently, policy-making appears focused on whether or not hydrogen infrastructure has to be unbundled. As for financial support, we're completely out of the picture for now. And there's this idea that regulated tariffs make commercially viable projects. But that's not true. It's only booked capacity based on a cost-covering approach that delivers a financially viable project. You don't build infrastructure just to have nice infrastructure without customers. Do we need EU and member state UHS targets? We're not looking for a strict mandatory goal. But if there is a certain goal for hydrogen uptake in the market, then you should ensure that you have the necessary infrastructure in place. That said, targets may be helpful at state level in setting a framework for state aid. But we also have to recognise that Europe is very diversified. Some areas may have very well-functioning hydrogen supply while other landlocked countries might depend on longer supply chains, thus being more dependent on storage. Are markets ready for UHS? Firms are already approaching us. The market is willing, but they need to know what the costs are. The best way forward then is providing clear rules for storage and giving industry a clear pricing idea. There also need to be clear state support mechanisms until we get to cheaper hydrogen and sufficient infrastructure utilisation. In the process of creating UHS capacities we need to keep in mind the SOS for natural gas, which currently is crucial. That's why we focus on new sites — caverns, porous reservoirs and aquifers — rather than repurposing. But at some point, post-2030 with a market ramp-up, decisions on repurposing gas into hydrogen storage will need to be taken. Dafydd ab Iago Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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