EU court to rule on Opal gas pipeline in July
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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Egypt’s Egas seeks LNG over October-December
Egypt’s Egas seeks LNG over October-December
Singapore, 6 September (Argus) — Egypt's state-owned gas firm Egas is seeking 20 spot cargoes for delivery over October-December through a tender that will close on 12 September. The firm is seeking 17 deliveries to Ain Sukhna, and three deliveries to Jordan's 3.8mn t/yr Aqaba import terminal. Egas was last in the market to seek up to five cargoes for delivery over August-September , through a tender that closed on 29 July. This tender was likely fully awarded at an average of a $1.50/mn Btu premium to the Dutch TTF, possibly to TotalEnergies, Gunvor and BP, traders said. Traders in mid-August estimated that Egypt would seek about eight to 15 spot cargoes for winter. Its latest requirement for 20 cargoes may indicate that the country's demand for imports is leaning towards the higher end. Egypt's appetite for spot cargoes is likely to remain, particularly as domestic gas production in the country has been falling. Gas production in Egypt fell to its lowest for seven years in June , the country's latest submission to the Joint Organisation Data Initiative (Jodi) show. At the same time, its pipeline gas deliveries from Israel have been hit with uncertainty since the start of the Israel-Gaza conflict. Pipeline deliveries from Israel to Egypt fell to 731mn m³ in June from 851mn m³ in May, having reached record highs earlier this year. LNG exports from Egypt this winter are "not very likely" , Italy's Eni said back on 26 July. By Rou Urn Lee Egas tender delivery windows Delivery to Ain Sukhna, Egypt Delivery to Aqaba, Jordan 4-5 October 2024 16-17 October 2024 9-10 October 2024 21-22 November 2024 14-15 October 2024 23-24 December 2024 19-20 October 2024 24-25 October 2024 29-30 October 2024 8-9 November 2024 13-14 November 2024 18-19 November 2024 23-24 November 2024 28-29 November 2024 3-4 December 2024 9-10 December 2024 15-16 December 2024 21-22 December 2024 27-28 December 2024 31 December 2024 - 1 Jan 2025 Source: Egas Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Roadblocks across Colombia cut LPG supply
Roadblocks across Colombia cut LPG supply
Bogota, 5 September (Argus) — Colombia's LPG shortages are worsening as a fourth day of protests and roadblocks over higher diesel prices are limiting production and distribution. Protesters have completely blocked roads to processing plants in the key Cusiana and Cupiagua fields, preventing trucks from moving supply. Those two fields along with the Ty Gas processing plant handle 41pc of the country's LPG supply, LPG association (Agremgas) director Sara Velez told Argus . Colombia uses about 60,000 metric tonnes (t)/month of LPG. The Cusiana plant that produces about 15,000t/month of LPG is flaring 100t/d of LPG that cannot be transported, Velez said. "If Cusiana is unable to move out the LPG, it may force it to shut in, affecting natural gas as well," Velez said. Blockades are also preventing LPG produced at the 250,000 b/d Barrancabermeja and the 200,000 b/d Cartagena refineries from reaching distributors. The refineries produce 24pc of the country's LPG supply, equivalent to 14,400t/month. Adding to troubles, multiple rebel attacks have put sections of the country's 220,000 b/d Cano Limon-Covenas and the 120,000 b/d Bicentenario crude pipelines out of service for repairs, restricting crude supply to the refineries. The smaller LPG field of Capacho controlled by Canadian oil company Parex shut in 5,000 b/d of oil equivalent (boe/d), or about 10pc of its Colombian output. That reduced LPG supplies to the Arauca department, the LPG association added. The departments of Caqueta, Cundinamarca and Valle del Cauca have inventories for four days. Another 28 departments have LPG inventory for one or two days. Velez has called on the government to create a safe corridor to help LPG reach consumers. The LPG shortage is also affecting industries. Fenavi, the country's poultry association, consumes 42mn kg/yr of LPG, which is equivalent to state-controlled Ecopetrol's monthly LPG production. The LPG is used to warm the poultry, but the association also said that blockades have also cut supplies of feed and could put the chickens at risk of starvation. The country produces 1.8mn tonnes/yr of chickens and 1.6bn eggs/yr. In Colombia 1.2mn families already still cook with wood, and the current shortage will likely increase that number. By Diana Delgado Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
EU gas-fired power output down in Aug
EU gas-fired power output down in Aug
London, 4 September (Argus) — EU gas-fired power generation fell on the year in August, even as above-average temperatures bolstered power demand. EU gas-fired output was 27.7TWh in August, making up 14.4pc of the generation mix, according to data from Fraunhofer ISE. EU gas-fired output was 29.3TWh a year earlier and 36.8TWh in August 2022. Spain and France drove the overall EU drop. Spanish gas-fired generation fell to 4.1TWh from 5.6TWh, as renewable generation rose on the year. French generation dropped to 626GWh from 1.6TWh as nuclear output increased. Italy partly offset this fall as gas-fired output increased to 9.6TWh from 7.7TWh. Gas-fired generation in Germany edged up to 3.2TWh from 2.9TWh. In Italy and Spain, usually the two EU countries with the highest summer gas-fired generation supported by strong demand for cooling, average maximum temperatures in Rome and Madrid were almost 3°C above 10-year averages. Maximum temperatures in Athens were also nearly 3°C above 10-year averages. Above-average temperatures boosted power demand for cooling. Total power demand last month hit 193.6TWh across the EU, up from 190.2TWh in August 2023, but still down from August in every other year since at least 2015, as shown by Fraunhofer data. Given the above-average temperatures — especially in southern Europe — and the growing use of air conditioning, the drop in power demand from pre-2023 might have been driven by weaker industrial consumption. Energy-intensive industries across Europe have continued to struggle this year with high energy costs and muted demand. German power demand in August was 36.9TWh, the lowest since at least 2010, apart from last year. And the decrease in gas-fired generation despite higher year-on-year EU power demand came as a result of higher nuclear and renewable output, the latter of which increased to 87.5TWh from 82TWh in August 2023, driven by strong solar output of 31.6TWh, up from 23.8TWh. Nuclear output rose to 51.6TWh from 46TWh, supported by increased French nuclear generation as nuclear unavailability decreased to 19.3GWh from 27.6GWh a year earlier. Coal-fired generation was down by almost a quarter in August from a year earlier, falling to 6.9TWh from 9.1TWh. Clean day-ahead spark spreads for 55pc gas-fired units held a premium to equivalent dark spreads for 40pc-efficient units on most days in August in Germany, France and Italy. This suggests there was an incentive for firms to boost gas-fired generation over coal-fired generation, at times of low renewable output. By Lucas Waelbroeck Boix Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Equinor gets nod for strong Oseberg 2024-25 gas output
Equinor gets nod for strong Oseberg 2024-25 gas output
London, 4 September (Argus) — The Norwegian energy ministry has given the green light for a high Oseberg gas production quota for the 2024-25 gas year, but has concerns about the effect of an acceleration of gas exports on oil production. While the ministry would not reveal to Argus how much gas it has permitted state-controlled Equinor to produce from Oseberg in October 2024-September 2025, other details from the permit approval letter suggest that the quota is again high. But the ministry has cautioned that Equinor must ensure maximum recovery of the oil in the main Oseberg Brent reservoir. It has ordered the field's operator to include an updated overall drilling plan in its 2025-26 permit application. Gas blowdown has begun at the main parts of the Oseberg field, which involves a shift to gas production rather than gas injections as the amount of oil that can be profitably extracted declines. The gas production permit — for Oseberg, Oseberg Sor and Oseberg Ost combined — was 7bn m³ in each of the past three gas years including 2023-24, up from 5bn m³ in 2020-21 and 4bn m³ in 2019-20 (see graph). The Oseberg licensees also plan to produce part of the gas in 2024-25 that has been "carried forward" from previous gas years. The Oseberg permit has flexibility within defined constraints — shareholders can under or overproduce against their quota and balance it out with higher or lower output in the following gas years. To ensure sufficient gas production capacity to support its planned 2024-25 exports, Equinor initially submitted a request to the Norwegian Offshore Directorate (NOD) to accelerate two gas wells that it had previously planned to drill after two time-critical oil wells. Following discussion with the NOD, Equinor adjusted its plan and now aims to recomplete one gas well and speed up another gas well. Compared with the option of accelerating two gas wells, this entails a lower risk of the two oil wells being pushed back past the remaining time window for viable drilling, the ministry said. This balance between consideration of remaining oil and ensuring gas production capacity is "satisfactory", according to the NOD. The ministry, after considering the directorate's advice, assessed that Equinor's requested 2024-25 gas production volume and drilling plan "support good resource management". But the ministry expressed concerns that Equinor's plan to delay drilling of oil wells to prioritise gas wells will mean that reservoir pressure becomes too low for profitable oil extraction. The ministry specified that it is approving the 2024-25 gas production and drilling plan on the basis that Equinor will extract gas "to the greatest extent possible" from reservoir segments that have the least remaining oil potential, so that the pressure at oil reservoirs is maintained for as long as possible. Equinor must continue to monitor the reservoir, the ministry said. And it should take measures if gas extraction has unexpected consequences and inform the resource authorities of this, the ministry said. The NOD emphasises that the Oseberg C facility has a shorter expected lifetime than the facilities at the Oseberg field centre. Since only Oseberg C can drill wells to the northernmost segment of Oseberg, called Alpha Nord, all necessary oil and gas wells for this segment must be drilled early enough for reserves to be produced before Oseberg C is shut down. Equinor must also investigate and implement other measures such as low-pressure production to achieve the greatest possible value creation from the Oseberg field, the ministry said. Equinor must submit its application for a 2025-26 gas permit by 1 February. Its plan needs to include an updated overall drilling strategy, and it needs to be clarified with the ministry in good time for submission, the ministry said. By Natasha Fielding Oseberg gas permit vs production bn m³ Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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