New Fortress secures LNG supply until 2027

Spanish Market: Natural gas
07/07/21

US firm New Fortress Energy has signed an LNG supply deal that will cover its outstanding requirements until the end of 2027, the firm said today.

The firm did not specify the volume of the deal, but said it has now secured sufficient LNG to feed its gas and electricity businesses across its "existing portfolio of terminals and customers". This includes five terminals and assets across the Caribbean, Mexico and Central America. But the transaction does not include LNG supply for its four LNG terminals in Brazil, for which New Fortress plans to secure additional volumes later this year ahead of their start-ups in 2022.

The firm signed two LNG purchase agreements in December, alongside previously contracted supply for 2022-25. The contractual volume or duration of the deals signed in December were not specified, but New Fortress said in August last year that it would need to secure 100 cargoes for 2022-25, on top of the 36 cargoes it previously bought for the period — which suggests the firm's total supply requirements could be about 33-34 cargoes per year.

The volumes contracted last year cover around 80pc of the firm's requirements for its portfolio as it stood in December, which was before New Fortress acquired the Brazilian terminals from Hygo Energy, a subsidiary of Norway's Golar LNG, in January. This suggests that the agreement today could be for around 94-96 cargoes to cover the remaining 20pc the firm had left to acquire for 2022-25 and the following two years until the end of 2027.

New Fortress terminated a supply deal in July 2020 that it signed with UK utility Centrica for its 2020 requirements, as it sought to source "cheaper cargoes" on the LNG spot market. The firm expected spot prices to remain low in 2021 and normalise in 2022. But spot LNG prices have reached multi-year highs in recent weeks, amid a rebound in global demand after the lifting of Covid-19 restrictions, strong economic activity and environmental policies encouraging coal-to-gas switching.

The firm secured the final permits for its LNG-to-power project at Pichilingue on Mexico's Pacific coast in mid-June and expects the plant to start commercial operations "within days", it said today, having previously expected to launch operations by the end of June. New Fortress will use a floating storage and regasification unit to deliver up to 1.1mn USG/d (685,000 t/yr) of LNG to the Baja California Sur peninsula, some of which will be used for a 135MW power plant. And New Fortress' planned import facility in Nicaragua is expected to start operations next month, the firm said today, having delayed the start-up from the end of the first quarter.

New Fortress has one terminal in Brazil already in operation — the 21mn m³/d Sergipe LNG-to-power plant, and three more that are expected to begin operations in 2022. The Barcarena LNG-to-power plant, which is expected to start up in January, the Suape LNG-to-power plant, planned to start up in first quarter of next year and the Santa Catarina offshore LNG facility, planned to begin operations in the second quarter of next year.

By Ellie Holbrook

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09/05/25

White House ends use of carbon cost

Washington, 9 May (Argus) — The US is ending its use of a metric for estimating the economic damages from greenhouse gas (GHG) emissions, the latest reversal of climate change policies supported by President Donald Trump's predecessors. The White House Office of Management and Budget (OMB) this week directed federal agencies to stop using the social cost of carbon as part of any regulatory or decision-making practices, except in cases where it is required by law, citing the need "remove any barriers put in place by previous administrations" that restrict the ability of the US to get the most benefit "from our abundant natural resources". "Under this guidance, the circumstances where agencies will need to engage in monetized greenhouse gas emission analysis will be few to none," OMB said in a 5 May memo to federal agencies. In cases where such an analysis is required by law, agencies should limit their work "to the minimum consideration required" and address only the domestic effects, unless required by law. OMB said these steps are needed to ensure sound regulatory decisions and avoid misleading the public because the uncertainties of such analyses "are too great". The budget office issued the guidance in response to an executive order Trump issued on his first day in office, which also disbanded an interagency working group on the social cost of carbon and called for faster permitting for domestic oil and gas production and the termination of various orders issued by former president Joe Biden related to combating climate change. The metric, first established by the administration of former US president Barack Obama, has been subject to a tug of war between Democrats and Republicans. Trump, in his first term, slashed the value of the social cost of carbon, a move Biden later reversed . Biden then directed agencies to fold the metric into their procurement processes and environmental reviews. The US began relying on the cost estimate in 2010, offering a way to estimate the full costs and benefits of climate-related regulations. The Biden administration estimated the global cost of emitting CO2 at $120-$340/metric tonne and included it in rules related to cars, trucks, residential appliances, ozone standards, methane emission rules, refineries and federal oil and gas leases. By Michael Ball Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Brazil's inflation accelerates to 5.53pc in April

09/05/25

Brazil's inflation accelerates to 5.53pc in April

Sao Paulo, 9 May (Argus) — Brazil's annualized inflation rate rose to 5.53pc in April, accelerating for a third month despite six central bank rate hikes since September aimed at cooling the economy. The country's annualized inflation accelerated from 5.48pc in March and 5.06pc in February, according to government statistics agency IBGE. Food and beverages rose by an annual 7.81pc, up from 7.68pc in March. Ground coffee increased at an annual 80.2pc, accelerating from 77.78pc in the month prior. Still, soybean oil prices decelerated to 22.83pc in April from 24.36pc in March. Domestic power consumption costs rose to 0.71pc from 0.33pc a month earlier. Transportation costs decelerated to 5.49pc from 6.05pc in March. Gasoline prices slowed to a 8.86pc gain from 10.89pc a month earlier. The increase in ethanol and diesel prices decelerated as well to 13.9pc and 6.42pc in April from 20.08pc and 8.13pc in March, respectively. The hike in compressed natural gas prices (CNG) fell to 3.5pc from 3.92pc a month prior. Inflation posted the seventh consecutive monthly increase above the central bank's goal of 3pc, with tolerance of 1.5 percentage point above or below. Brazil's central bank increased its target interest rate for the sixth time in a row to 14.75pc on 7 May. The bank has been trying to counter soaring inflation as it has recently changed the way it tracks its goal. Monthly cooldown But Brazil's monthly inflation decelerated to 0.43pc in April from a 0.56pc gain in March. Food and beverages decelerated on a monthly basis to 0.82pc in April from a 1.17pc increase a month earlier, according to IBGE. Housing costs also decelerated to 0.24pc from 0.14pc in March. Transportation costs contracted by 0.38pc and posted the largest monthly contraction in April. Diesel prices posted the largest contraction at 1.27pc in April. Petrobras made three diesel price readjustments in April-May. By Maria Frazatto Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Australian firms flag coal phase-out timeline concerns

09/05/25

Australian firms flag coal phase-out timeline concerns

Sydney, 9 May (Argus) — Energy utilities raised concerns that Australia's coal-fired power generation phase-out might be running on an unrealistic timeline, according to submissions to the National Electricity Market (NEM) review consultation process. Utilities AGL Energy, Alinta Energy, Delta Energy, Energy Australia, Origin Energy and Stanwell — which operate 10 of the 20 coal-fired power plants in Australia (see table) — submitted separate recommendations to the consultation launched late last year looking at wholesale market settings. This came after the conclusion of the Capacity Investment Scheme (CIS) tenders in 2027, and as Australia transitions to more renewables from its aging coal-fired plants. The Australian Energy Market Operator (Aemo) forecast the country will exit all coal-fired generation by 2038 in its Integrated System Plan (ISP) published in 2024. But Delta Energy predicts that this timeline will not be met, and views ISP's priority as emissions reduction targets rather than a realistic timeline. Insufficient capacity to replace the coal plants was a common issue flagged by these companies, with AGL saying this is partly because of uncertainty in the market leading to less investments. The utility plans to close all its coal plants by the end of June 2035. AGL was Australia's largest emitter of greenhouse gas emissions in the 2024 financial year, according to the Clean Energy Regulator (CER), followed by Stanwell, Energy Australia and Origin Energy. The transition could be supported using flexible dispatchable resources, according to Origin Energy. The coal phase-out means more variable renewable energy (VRE) is required, but VRE output will not necessarily match demand. "The NEM review must also consider the actions to facilitate the planned retirement of coal-fired power stations from the energy system, which will still be occurring in the NEM beyond the CIS," Stanwell warned. "The urgency of developing solutions cannot be overstated, as any indecision now would result in increased government intervention later, and a disorderly and costly NEM beyond the CIS." Gas-fired generation A few firms view gas-powered generation as critical in the transition away from thermal coal and in maintaining system reliability. It will provide back-up in times of renewable droughts, said Stanwell and AGL, and should be noted in discussions of the forward strategy. But Alinta Energy is cautious of the costs of gas-fired power plants, believing them to be the least costly for customers but not economically viable because of their exposure to global gas market prices. Alinta's suggestion is to reduce the market's dependence on high-cost facilities including gas-fired facilities. Mixed views on capacity market Some companies mentioned a capacity mechanism as a solution. Coal-fired facilities should be allowed to continue until they can be replaced, said Alinta Energy, and gas power plants are necessary. Energy Australia and Delta are calling for the NEM to stay technologically neutral in this process, keeping thermal coal exits in mind. A capacity market needs to be sustainable without government subsidies, Alinta Energy said, and exit strategies for government intervention should be clear from the beginning. But capacity markets can lead to higher costs for customers, according to AGL, because of potential over-procured capacity. "If a capacity mechanism was implemented, it would be important to consider the impact of any capacity incentive on the operation of the NEM and the appropriate level of the market price settings — a balance that may be difficult to strike," AGL noted. The expert independent panel leading the review will continue carrying out consultation, and is expected to make final recommendations to energy and climate ministers in late 2025. By Susannah Cornford Australia coal fired power plant closures in NEM Plant Capacity (MW) Owner Closure date State Emissions CER 2023/24 year Scope 1 & 2 of CO2e Eraring 2,880.0 Origin 2025 NSW 13,550,220.0 Yallourn 1,480.0 Energy australia 2029 Vic 10,502,080.0 Callide B 700.0 CS Energy 2029 Qld 4,028,161.0 Total by 2030 5,060.0 28,080,461.0 Coal plant closures in NEM after 2030 Bayswater 2,640.0 AGL 2030-33 NSW 13,712,719.0 Vales Point 1,320.0 Delta 2033 NSW 7,111,963.0 Stanwell 1,460.0 stanwell 2035 Qld 6,982,204.0 Tarong 1,843.0 Stanwell 2035 Qld 10,936,021.0 Kogan 740.0 CS Energy 2035 Qld 4,522,472.0 Callide C 825.0 CS Energy 2035 Qld 688,038.0 Loy Yang A 2,210.0 AGL 2035 Vic 18,723,707.0 Sub-total 11,038.0 62,677,124.0 Total by 2030 16,098.0 90,757,585.0 CER Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Permian output could plateau sooner: Occidental CEO

08/05/25

Permian output could plateau sooner: Occidental CEO

New York, 8 May (Argus) — Oil production from the Permian basin could plateau sooner than expected if operators keep talking about reducing activity levels in the wake of lower oil prices, warned the chief executive of Occidental Petroleum. Vicki Hollub said she previously expected to see Permian output growing through 2027, with overall US production growth peaking by the end of the decade. "It's looking like with the current headwinds, or at least volatility and uncertainty around pricing and the economy, and recessions and all of that, it's looking like that peak could come sooner," Hollub told analysts today after posting first quarter results. "So I'm thinking right now the Permian, if it grows at all through the rest of the year, it's going to be very little." Occidental is reducing the midpoint of its annual capital spending guidance for 2025 by $200mn on the back of further efficiency gains. The US independent also plans to trim domestic operating costs by $150mn. "We continue to rapidly advance towards our debt reduction goals, and we believe our deep, diverse portfolio of high-quality assets positions us for success in any market environment," Hollub said. Occidental closed asset sales of $1.3bn in the first quarter and has repaid $2.3bn in debt so far in 2025. Occidental produced 1.4mn b/d of oil equivalent (boe/d) in the first quarter compared with nearly 1.2mn boe/d in the same period of last year. By Stephen Cunningham Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US seeks flexibility from Europe to help LNG deals

08/05/25

US seeks flexibility from Europe to help LNG deals

Washington, 8 May (Argus) — President Donald Trump's administration is pressing European countries to offer flexibility on standards for methane emissions as a way to ease the pathway for them to sign long-term purchase agreements for US LNG. Trump has pushed for countries to commit to buying more US LNG as a way to avoid steep tariffs he has threatened to impose on countries that have trade imbalances with the US. But a looming requirement for European importers to show "equivalence" to EU methane monitoring requirements for newly signed gas supply contracts could pose an obstacle for US LNG, based on differences in how methane emissions are tracked. The administration's "ask" is for the EU to ensure that its methane-related measurement, reporting and verification (MRV) methodologies do not pose a barrier to US LNG, US acting assistant secretary of state for energy resources Laura Lochman said today. US LNG terminals have struggled to show equivalency to the MRV rules because, unlike many global LNG projects, they source their gas from pipelines connected to multiple fields. "Give time for industry to work through some of those traceability issues as well, because it would take a few years to be able to get to that point and work out the equivalency methodology," Lochman said at an event with European officials organized by the industry group LNG Allies. European officials indicated they are receptive to finding a solution, as they work to end purchases of Russian gas by the end of 2027. But they say they want to continue to see reductions in emissions of methane, which is a potent greenhouse gas. Trump has already started rolling back restrictions on methane emissions. "We understand you've got a different supply chain, as opposed to us, and that it's important to have it worked out so that any difficulties are taken away from American companies with those regulations," Netherlands ambassador to the US Birgitta Tazelaar said at the event. "Of course it's very important for the Netherlands and Europe that methane be reduced." US LNG developers are likewise pushing Europe to consider pushing back a goal to largely phase out natural gas consumption by 2040. That deadline could complicate the traditional financing model for new LNG terminals typically premised on signing 20-year supply deals, said Kimmeridge managing partner Ben Dell, whose company is building the proposed 9.5mn metric tonne/yr Commonwealth LNG project in Louisiana. "The one thing I would ask is for European members in this room to think beyond 2040," Dell said. "Ultimately extending that runway allows a lower-cost project financing and ultimately a lower cost delivery into the European market." A potential trade deal between the US and the EU could create an opportunity to grant equivalency to US LNG exports to avoid barriers from the EU methane regulation, LNG Allies president Fred Hutchison said today. The US in turn could reclassify the EU as having a free trade agreement for gas, which would expedite US LNG export licensing, Hutchison said. The Trump administration sees the potential for European contracts to lead proposed US LNG export terminals to reach final investment decisions (FIDs). The administration has already been "very clear" about its goal to increase LNG exports and cut regulations facing the natural gas sector, the State Department's Lochman said. "When you put together the push from the US side to support, and then the demand signals on the European side, you can get more projects making it to FID," Lochman said. By Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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