Gazprom fire raises gas export concerns

Spanish Market: Natural gas
06/08/21

Yesterday's fire at Russian state-controlled Gazprom's Novy Urengoy condensate treatment plant in western Siberia has raised concerns about its effect on gas exports to Europe, but its magnitude is not yet clear.

Gazprom has still not disclosed the extent of the damage or its effect on gas output, saying only that it is analysing the causes and consequences of the accident, and that its subsidiary, Gazprom Refining, is carrying out repair and restoration work at the plant to prepare condensate for transport. The Russian firm told Argus today in mid-afternoon London time that the fire had been extinguished and earlier said that "measures were promptly carried out to stop production facilities".

The Novy Urengoy plant is Gazprom's largest refining unit in the far north of Russia and receives hydrocarbons from the Urengoy production complex. Urengoy's gas production was 99.8bn m³ in 2019 and 88.8bn m³ in 2020 — probably down as a result of the Covid-19-induced demand drop across the region. The area makes up just over a fifth of Gazprom's total gas production.

Gazprom has not listed the plant's dry gas processing capacity. It can process up to 13.7mn t of unstable condensate or 12.1mn-12.2mn t of de-ethanised condensate.

It is unclear how much production from Urengoy fields could be refined and exported using other facilities.

Gas from Urengoy fields is typically sent either to pipelines connected to Ukraine or to the Ukhta-Torzhok lines through an intermediary spur, judging by Gazprom's transport network map. These feed the 33bn m³/yr Yamal-Europe and 55bn m³/yr Nord Stream lines and are used mainly to transport gas from the much newer Yamal peninsula fields.

Investment bank Renaissance Capital believes the fire could reduce Gazprom's gas supply by the equivalent of 8bn m³/yr until restored. The estimate assumes that Gazprom will wait for the commissioning of a replacement for the plant in 2022 rather than reviving the damaged unit as it was already scheduled to be replaced. But the bank did not elaborate further on how it arrived at its estimate.

Mallnow flows down sharply

Mallnow flows to Germany downstream of the Yamal-Europe pipeline slumped yesterday afternoon but have since stepped up, albeit holding firmly below previous days.

Mallnow flows averaged 380 GWh/d at 06:00-19:00 GMT today, up from 240 GWh/d in the second half of yesterday's gas day. Flows were nominated higher, at 429 GWh/d, for the rest of the gas day.

Mallnow deliveries were already weak, at 546 GWh/d on 31 July-4 August, having hovered around technical capacity at 932 GWh/d earlier last month. Poland's supply has been unaffected, with deliveries down exclusively at Mallnow (see flows graphs).

Polish system operator Gaz-System told Argus today that lower Yamal-Europe flows since late July were the result of the "market behaviour of our clients". It added that it plans to make short-term Yamal-Europe capacity available in subsequent auctions, but did not elaborate further. Yamal-Europe's capacity is fully booked up until the end of September (see bookings graph).

Flows through Ukraine are unaffected, but "may hit us in 24 hours", Sergiy Makogon, chief executive of Ukraine's system operator, GTSOU, said. Nominated entries to Ukraine from Russia for yesterday and today were unchanged from flows in previous days.

European hub prices climbed sharply yesterday afternoon as deliveries at Mallnow slowed (see prices graph). And prices opened today's trading session higher before falling later in the trading session.

The Dutch TTF day-ahead market closed at €42.55/MWh yesterday, up from €41.825/MWh a day earlier and €40.55/MWh on 30 July, ahead of the initial drop in Yamal-Europe deliveries. And the winter 2021-22 price climbed even more sharply, closing at €41.495/MWh, up from €40.375/MWh a day earlier and €39.20/MWh ahead of the initial drop.

European withdrawals climb

Gazprom appeared to turn to strong storage withdrawals from its long-term European capacity to offset lower Yamal-Europe deliveries.

The stockdraw climbed to about a combined 115GWh yesterday from Gazprom's storage sites — excluding its share of Etzel EKB and Serbia's Banatski Dvor. This assumes its withdrawals from sites at which it holds only some capacity were in line with its share of the space. There was a net stockdraw of 43.3 GWh/d on 2-4 August, reversed from a net stockbuild of 212 GWh/d on 31 July-1 August when Yamal-Europe flows initially dropped. Net injections were 313 GWh/d in the previous seven days (see storage graph).

Stocks at these sites were 15.7TWh yesterday morning, much lower than in previous years. The firm probably also has some space booked commercially elsewhere.

By Paul Martin and Jacob Mandel, with reporting from Victoria Dovgal in Kyiv, Matt Drinkwater in London, and Svetlana Novolodskaya and Natalia Perevertaylo in Moscow

Kondratki flows to Poland TWh/d

Hourly Mallnow flows to Germany GWh/d

Prices keep rising €/MWh

Yamal-Europe bookings to drop GWh/d

Gazprom EU stock movements GWh/d

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01/04/25

Next US tariffs to take effect 'immediately'

Washington, 1 April (Argus) — President Donald Trump plans to announce a sweeping batch of tariffs on Wednesday afternoon that will take effect "immediately", the White House said today. Trump will unveil his much anticipated tariff decision Wednesday at 4pm ET during a ceremony at the White House Rose Garden. While the administration has announced the effective date, there is little clarity on what goods will face tariffs at what rates and against which countries, leaving the government agencies that will be tasked with enforcing new tariffs largely in the dark. "The president has a brilliant team of advisers who have been studying these issues for decades, and we are focused on restoring the golden age of America and making America a manufacturing superpower," the White House said today, brushing off criticism from economists, industry groups and investors. Economic activity in the US manufacturing sector contracted in March as businesses braced for Trump's tariff threats. Trump has previewed or announced multiple tariff actions since taking office. The barriers in place now include a 20pc tariff on all imports from China, in effect since 4 March, and a 25pc tax on all imported steel and aluminum, in effect since 12 March. A 25pc tariff on all imported cars, trucks and auto parts, is scheduled to go into effect on 3 April, the White House confirmed today. Trump and his advisers have previewed two possible courses of action for 2 April. Trump has suggested that all major US trading partners are likely to see a broad increase in tariffs in an effort to reduce the US trade deficit and to raise more revenue for the US federal budget. But Trump separately has talked about the need for "reciprocal tariffs", contending that most foreign countries typically charge higher rates of tariffs on US exports than the US applies to imports from those countries. In that scenario, high tariffs become a negotiating tool to bring down alleged foreign barriers to US exports. Treasury secretary Scott Bessent told Fox News on Monday night that the second course is the one Trump is more likely to take. Trump will announce "reciprocal tariffs" and "everyone will have the opportunity to lower their tariffs, lower their non-tariff barriers, stop the currency manipulation" and "make the global trading system fair for American workers again", Bessent said. But the White House insisted today that the new tariffs will not be a negotiating tool. Trump is "always up for a good negotiation, but he is very much focused on fixing the wrongs of the past and showing that American workers have a fair shake", the White House said. Trump's words and actions already have drawn retaliatory tariffs from Canada and China, and the EU is preparing to implement its first batch of counter-tariffs in April. Trump, for now, has deferred his tariff plans for imported Canadian and Mexican oil and other energy commodities. But the US oil and gas sector, which depends on pipelines and foreign-flagged vessels to transport its crude, natural gas, refined products and LNG, will feel the effects of tariffs on imported steel and proposed fees on Chinese-made and owned vessels calling at US ports. By Haik Gugarats Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Mexican peso weakness may partially offset US tariffs

01/04/25

Mexican peso weakness may partially offset US tariffs

Mexico City, 1 April (Argus) — Volatility in the peso/dollar exchange rate may help to partially offset any tariffs that US President Donald Trump decides to impose on imports from Mexico as the ensuing peso depreciation would make its exports more competitive, said analysts from US bank Barclays. President Trump will announce Wednesday his next decision related to the threat to impose a 25pc tariff against imports from its commercial partners Mexico and Canada. Trump has delayed the decision twice, and it is likely that he will do so again, given the serious repercussions the tariffs could cause to the US economy, said Latam chief economist at Barclays, Gabriel Casillas, during a webinar held Monday. The base scenario for Barclays is that Trump's administration will finally step back from imposing tariffs on Mexico and Canada and rather go for an early renegotiation of the (US Mexico Canada Free Trade Agreement (USMCA) this year, said Casillas. In this scenario, the Mexican peso would strengthen to between Ps19.5 to Ps19.00 to the greenback, he added. However, if Trump's administration decides to impose the 25pc tariffs on all Mexican imports as he has threatened to do, then the peso would weaken to Ps24/$1, said Erik Martinez, foreign exchange research Analyst at Barclays during the same webinar. "If tariffs were imposed, 25 percent on all imports, we think a good portion of this would be absorbed by the exchange rate," said Casillas. A weaker peso makes Mexican exports more competitive abroad. The Mexican peso on Tuesday was trading at around Ps20.30 to the dollar, and has weakened by 18.5pc in the past year from about Ps16.6 to the dollar a year ago. If President Claudia Sheinbaum's administration avoids the tariffs, the peso may strengthen to around Ps 19.00/$1 in upcoming days, said Martinez. If the tariffs are applied during a brief period or only for the automobile sector, the exchange rate could range between Ps21.00-22.00 per dollar, said Martinez. However, even without any tariff being applied, Mexico's economy is expected to grow only by around 0.7pc this year, less than the estimates made late in 2024 of around 1.4pc, due to the deceleration of the US economy, Mexico's main trading partner, said Casillas. The US economy is showing signs of slowing down, specially in the industrial sector, which will impact Mexico's growth for the year. Also, this uncertainty is directly affecting any upside expected from so-called nearshoring as companies would now lose interest in moving their manufacturing lines to Mexico if there is no clear benefit in using the USMCA to avoid tariffs, said Casillas. By Édgar Sígler Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Australia's OCE sees higher LNG export earnings

01/04/25

Australia's OCE sees higher LNG export earnings

Sydney, 1 April (Argus) — Australia's Office of the Chief Economist (OCE) has revised up its LNG export earnings forecasts for the present fiscal year and the next, given global supply issues and higher than expected prices. Seasonal pressures — including higher winter demand in Europe owing to lower renewable energy output and an end to Russian gas flows via Ukraine — have increased prices, the OCE's Resources and Energy Quarterly (REQ) March report said. The OCE raised its expectations for the average LNG price for the fiscal year to 30 June by 10pc ( see table ), while increasing its forecast for the following year by 14pc from its previous report. Receipts predicted in 2024-25 have been forecast A$8bn ($5bn) higher to A$72bn, while 2025-26 earnings will likely reach A$66bn, up from A$60bn in December's REQ. Asian demand continues to strengthen, even with Japan and South Korean import levels likely peaking. The OCE noted LNG's growing popularity as a transport fuel in China and record-high Indian imports last year, given increased pressure on power grids. Higher prices have failed to dampen demand in southeast Asia — including Malaysia, Bangladesh, Singapore and Thailand — while Taiwan's backtracking on renewable targets, coupled with artificial intelligence (AI) and semiconductor sector growth, will increase energy demand there. Qatari and US investment in new supply will add 5pc to global export volumes in 2025, while demand witll grow by just 2.5pc, but the REQ expects this year's imports and exports will gradually balance. Greenfield projects The biggest challenge for Australian projects appears to be a lack of greenfield projects, following the expected completion of the 8mn t/yr Scarborough and 3.7mn t/yr Barossa projects in July-December 2026 and July-September 2025 respectively. The impact of these backfill operations in offsetting gradual declines at the 14.4mn t/yr North West Shelf LNG facility will have ceased by 2029-30, with exports falling by 2mn t/yr to 78mn t/yr. But oil and gas exploration spending is increasing after years of declines, the OCE said, with onshore search expenditure rising from A$190mn in July-September last year to A$285mn in October-December 2024. Offshore spending rose from A$125mn to A$178mn in the same period, indicating that higher prices are driving greater confidence. The ANEA price — the Argus assessment for spot LNG deliveries to northeast Asia — for first and second-half May were assessed at $12.96/mn Btu and $12.995/mn Btu respectively on 28 March. The ASEA price — Argus' assessment for spot LNG deliveries to southeast Asia — for the same period was $12.72/mn Btu and $12.75/mn Btu. By Tom Major Australia LNG export forecasts 2023-24 2024-25 (f) 2025-26 (f) 2026-27 (z) 2027-28 (z) 2028-29 (z) 2029-30 (z) Exports (mn t) 81 80 80 82 80 80 78 Export receipts (A$bn) 70 72 68 64 63 57 51 Mar '25 LNG export price (A$/GJ) 16.1 17.1 16.3 14.9 14.8 13.4 12.5 Dec '24 LNG export price (A$/GJ) 16.1 15.6 14.3 n/a n/a n/a n/a Export price % ± (Mar vs Dec forecasts) 0 10 14 n/a n/a n/a n/a f - forecast z - projection Source: OCE REQ Argus gas prices ($/mn Btu) Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Global energy mix evolves as electricity demand surges

28/03/25

Global energy mix evolves as electricity demand surges

Climate change is becoming a bigger factor behind electrification, but cleaner energy use is slowing the growth in global emissions, writes Georgia Gratton London, 28 March (Argus) — A substantial increase in electricity demand — boosted by extreme weather — drove an overall rise in global energy demand in 2024, lifting it well above the average pace of increase in recent years, OECD energy watchdog the IEA announced this week. This led to a rise in natural gas consumption, although renewables and nuclear shouldered the majority of the increase in demand, leaving oil's share of total energy demand below 30pc for the first time. Global energy demand rose by 2.2pc in 2024 compared with 2023 — higher than the average demand increase of 1.3pc/yr between 2013 and 2023 — according to the Paris-based agency's Global Energy Review . Global electricity consumption increased faster, by 4.3pc, driven by record-high temperatures — that led to increased cooling needs — as well as growing industrial consumption, the electrification of transport and the rapid growth of power-hungry data centres needed to support the boom in artificial intelligence, the IEA says. Renewables and nuclear covered the majority of growth in electricity demand, at 80pc, while supply of gas-fired power generation "also increased steadily", the IEA says. New renewable power installations reached about 700GW in 2024 — a new high. Solar power led the pack, rising by about 550GW last year. The power generation and overall energy mix is changing, as economies shift towards electrification. The rate of increase in coal demand slowed to 1.1pc in 2024, around half the pace seen in 2023. Coal remained the single biggest source of power generation in 2024, at 35pc, but renewable power sources and nuclear together made up 41pc of total generation last year, IEA data show. Nuclear power use is expected to hit its highest ever this year, the agency says. And "growth in global oil demand slowed markedly in 2024", the IEA says, rising by 0.8pc compared with 1.9pc in 2023. A rise in electric vehicle (EV) purchases was a key contributor to the drop in oil demand for road transport, and this offset "a significant proportion" of the rise in oil consumption for aviation and petrochemicals, the IEA says. Blowing hot and coal Much of the growth in coal consumption last year was down to "intense heatwaves" — particularly in China and India, the IEA found. These "contributed more than 90pc of the total annual increase in coal consumption globally", for cooling needs. The IEA repeatedly noted the significant effect that extreme weather in 2024 had on energy systems and demand patterns. Last year was the hottest ever recorded, beating the previous record set in 2023, and for CO2 emissions, "weather effects" made up about half of the 2024 increase, the watchdog found. "Weather effects contributed about 15pc of the overall increase in global energy demand," according to the IEA. Global cooling degree days were 6pc higher on the year in 2024, and 20pc higher than the 2000-20 average. But the "continued rapid adoption of clean energy technologies" restricted the rise in energy-related CO2 emissions, which fell to 0.8pc in 2024 from 1.2pc in 2023, the IEA says. Energy-related CO2 emissions — including flaring — still hit a record high of 37.8bn t in 2024, but the rise in emissions was lower than global GDP growth. Key "clean energy technologies" — solar, wind and nuclear power, EVs and heat pumps — collectively now prevent about 2.6bn t/yr CO2 of emissions, the IEA says. But there remains an emissions divide between advanced and developing economies. "The majority of emissions growth in 2024 came from emerging and developing economies other than China," the agency says, while advanced economies such as the UK and EU cut emissions last year and continue to push ahead with decarbonisation. Global energy suppy by fuel EJ Growth ±% 2024 2023 2022 24/23 23/22 Total 648 634 622 2.2 1.8 Renewables 97 92 89 5.8 3.1 Nuclear 31 30 29 3.7 2.2 Natural gas 149 145 144 2.7 0.7 Oil 193 192 188 0.8 1.9 Coal 177 175 172 1.2 2.0 Global power generation by fuel TWh Growth ±% 2024 2023 2022 24/23 23/22 Total 31,153 29,897 29,153 4.2 2.6 Renewables 9,992 9,074 8,643 10.0 5.0 Nuclear 2,844 2,743 2,684 3.7 2.2 Natural gas 6,793 6,622 6,526 2.6 1.5 Oil 738 762 801 -3.2 -4.8 Coal 10,736 10,645 10,452 0.9 1.8 Global power generation by country TWh Growth ±% 2024 2023 2022 24/23 23/22 World 31,153 29,897 29,153 4.2 2.6 US 4,556 4,419 4,473 3.1 -1.2 EU 2,769 2,718 2,792 1.9 -2.6 China 10,205 9,564 8,947 6.7 6.9 India 2,059 1,958 1,814 5.2 7.9 Global CO2 emissions by country mn t Growth ±% 2024 2023 2022 24/23 23/22 World 37,566 37,270 36,819 0.8 1.2 US 4,546 4,567 4,717 -0.5 -3.2 EU 2,401 2,455 2,683 -2.2 -8.5 China 12,603 12,552 12,013 0.4 4.5 India 2,987 2,836 2,691 5.3 5.4 *includes industrial process emissions — IEA Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US consumer confidence down on policy angst

28/03/25

US consumer confidence down on policy angst

Houston, 28 March (Argus) — The University of Michigan's gauge of consumer sentiment fell in March to the lowest level since November 2022, led by a slump in expectations over the "potential for pain" from US economic policies introduced by the new administration. Sentiment fell to 57, down from 64.7 in February and 79.4 in March 2024, according to the University of Michigan's consumer sentiment survey released Friday. The final reading for March was lower than the preliminary reading. The sentiment index fell to a record low of 50 in June 2022 on inflation concerns. The index of consumer expectations fell to 52.6, the lowest since July 2022, from 64 in February and 77.4 in March last year. The expectations index has lost more than 30pc since November last year. "Consumers continue to worry about the potential for pain amid ongoing economic policy developments," the survey director Joanne Hsu said. The decline "reflects a clear consensus across all demographic and political affiliations: Republicans joined independents and Democrats in expressing worsening expectations … for their personal finances, business conditions, unemployment and inflation," Hsu said. Current economic conditions slipped to 63.8 in March from 65.7 in February and 82.5 last March. Two thirds of consumers expect unemployment to rise in the year ahead, the highest reading since 2009. Year-ahead inflation expectations jumped to 5pc this month, the highest reading since November 2022, from 4.3pc last month. The University of Michigan survey comes three days after The Conference Board's preliminary Consumer Expectations Index fell in March to its lowest in 12 years, to below a threshold that "usually signals" a recession. 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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