Petrobras to expand free gas market footprint

Spanish Market: Natural gas
10/05/24

Petrobras said today it will offer new types of natural gas contracts in Brazil's open market with more flexibile and competitive terms, but provided no details on the planned offers.

The company also announced new commercial contract models for gas sales to state distributors, offering price reductions for current contracts of up to 10pc. The reduction will be connected to the distributors performance, Petrobras said, without providing more detail.

The move by the state-controlled giant is significant given the 2021 gas market liberalization as aimed at increasing competition at every step of the value chain beyond just Petrobras. But progress has been slow in cutting Petrobras' market share, lowering prices, and increasing market transparency.

The 2021 gas law covers the full lifecycle of natural gas, from production to transportation, processing to storage, and sales. A key provision aimed at promoting competition in the upstream, midstream, and downstream sectors, particularly transportation and distribution.

Yet, three years later, there is little sign of downstream customers migrating to the free market, despite some moves such as those from Delta Geração, Acelen, Gerdau, Tradener, and others. The number of free market commercial contracts does not exceed ten, according to a lawyer specialized in the energy market.

By Betina Moura

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28/11/24

Japan’s Saibu Gas to launch terminal expansion in 2029

Singapore, 28 November (Argus) — Japanese gas retailer Saibu Gas expects to start commercial operations at its Hibiki terminal expansion between the second and third quarter of 2029. The firm has reached a final investment decision (FID) for the Hibiki terminal expansion, the firm said on 28 November. Saibu's expansion plan includes building a third LNG storage tank with a capacity of 230,000m³, as well as gas production and LNG tank truck-loading facilities. The total project cost is estimated to be around ¥50bn ($330m), and construction will start around summer 2025. The firm issued the tender for expansion in March. This is part of the firm's efforts to meet domestic gas demand "for carbon neutrality", Saibu said. It is also considering introducing e-methane in the future to further enhance its decarbonisation efforts. Saibu Gas plans to expand its global business by utilising the Hibiki terminal to reload cargoes to sell to overseas customers using isotank containers . The terminal has two existing 180,000m³ tanks and sits at Kita-Kyushu in west Japan's Fukuoka prefecture. It is jointly operated by Kyushu Electric and Saibu Gas. The terminal will supply regasified LNG through pipelines to the new 620MW Hibiki LNG-fired power plant at Hibikinada, in the southern Fukuoka prefecture. The facility is expected to start commercial operations in 2026 and it is operated by Hibiki Power, a joint venture between Kyushu (80pc) and Sabu (20pc). By Naomi Ong Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Japan’s Kline receives new LNG-fuelled car carrier

28/11/24

Japan’s Kline receives new LNG-fuelled car carrier

Tokyo, 28 November (Argus) — Japanese shipping company Kawasaki Kisen Kaisha (Kline) received an LNG-fuelled car carrier on 28 November, as it looks to use more lower-carbon marine fuels as part of its decarbonisation efforts. Kline received the car carrier Pontus Highway with a capacity of 7,000 vehicles from Chinese shipbuilder China Merchants Jinling Shipyard. The vessel is equipped with a dual fuel engine and is designed to curb emissions of CO2 by 25-30pc, sulphide oxide by almost 100pc and nitrogen oxide by around 75pc, compared to conventional fuel oil. Kline previously commissioned the LNG-fuelled car carrier Nereus Highway , also built by China Merchants Jinling Shipyard, in the first half of August . It received LNG-fuelled car carrier Poseidon Highway , built by domestic shipbuilder Imabari Shipbuilding, on 1 October . Kline said LNG-fuelled ships have an advantage in securing fuel as supply facilities for these vessels are well-established at ports, especially compared to methanol- and ammonia-fuelled vessels. By Nanami Oki Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Australia’s Santos wins costs in gas pipeline case

28/11/24

Australia’s Santos wins costs in gas pipeline case

Townsville, 28 November (Argus) — Australian independent Santos will receive millions of dollars in legal costs, months after the Federal Court ruled in the firm's favour regarding a lawsuit intended to derail its $4.6bn Barossa gas field in the Timor Sea. Environmental law group the Environmental Defenders Office (EDO) must pay Santos' legal bills of slightly more than A$9mn ($5.8mn), 100pc of the company's costs incurred defending a 2023 court case. The EDO's lawyers claimed Barossa's gas export pipeline required a new environmental plan because of cultural heritage matters, but the court found the action brought on behalf of three Tiwi islander Aboriginal people failed to establish any new facts following a cultural survey along the route of the 262km pipeline. Justice Natalie Charlesworth dismissed the independence and credibility of an EDO-commissioned underwater map showing cultural sites, with court papers released showing an expert offered to move the location of one such site so it would conflict with the pipeline. The decision may have a chilling effect on further legal challenges to oil, gas and coal projects in Australia. Court action planned against Australian independent Woodside's $12.5bn Scarborough project offshore Western Australia was called off in August , with the applicant labelling the case as "expensive and risky". Australia's conservative Coalition alliance has promised to end taxpayer funding for the EDO if it wins control of federal parliament in 2025. The October 2022 budget pledged A$9.8mn over four years and A$2.6mn/yr in ongoing funding to the EDO and fellow national legal organisation Environmental Justice Australia. Santos plans to bring its $4.6bn, 84pc complete Barossa field in the Timor Sea on line in July-September 2025, a slight delay from the previously guided first half of 2025. The field will provide feedstock for the 3.7mn t/yr Darwin LNG terminal, which exported its final cargo from the Bayu-Undan field in 2023. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

LNG use poses risk to Cambodia's energy security: IEEFA

28/11/24

LNG use poses risk to Cambodia's energy security: IEEFA

Singapore, 28 November (Argus) — Cambodia's increasing reliance on LNG for power generation could be detrimental to its energy security because of instability in LNG markets, according to Institute for Energy Economics and Financial Analysis (IEEFA). Rapid economic growth and electrification have led to Cambodia's electricity demand growing by 16pc/yr since 2009, according to IEEFA's report released on 26 November. Its power generation is mostly from hydropower and coal, but the country aims to boost its gas-fired power generation to meet its decarbonisation targets. Cambodia has a net zero by 2050 goal, and aims to reach 70pc renewable energy generation by 2030. The share of coal in Cambodia's power mix was 45pc in 2023, with hydropower representing 44pc, solar 5pc and imports from neighbouring countries making up the remaining 6pc. The country in 2021 declared that it would not build new coal plants beyond those already approved. Natural gas had not played a role in the country's power mix until recently, but "optimism has grown in recent years regarding the ability of new LNG-to-power projects to help the country meet rising electricity demand," stated the report. Gas operator Cambodian Natural Gas imported the country's first LNG shipment in 2020 from China's state-owned firm CNOOC, according to IEEFA. The firm also planned to complete a 1,200MW LNG-fired power plant and a 3mn t/yr import terminal by 2023, although there has been no progress as of June this year. Cambodian officials in November 2023 announced the cancellation of a 700MW coal project, which will be replaced with a 800MW gas-fired power plant instead. Cambodia is seeking to build these large LNG-fired power plants because of concerns over the intermittency of renewables such as wind and power, and LNG is viewed as a suitable transition fuel for grid reliability. The government expects LNG-fired capacity to reach 900MW by 2040, which would require roughly 840,000 t/yr of imports. When considering long-term wholesale prices of $8-16/mn Btu, Cambodia's LNG import bill could range between $361mn-722mn/yr, according to IEEFA. Some forecasts estimate that Cambodia's LNG-fired capacity could rise to as much as 2,700MW by 2040 and 8,700MW by 2050, stated the report. This would entail import requirements of 2.53mn t/yr in 2040 and 8.14mn t/yr in 2050. The fuel import costs for 2,700MW of LNG-fired capacity could amount to $1.08bn-2.17bn. LNG volatility LNG markets have been volatile over the past two years, because of factors such as geopolitical tensions and outages at supply facilities. Other emerging Asian economies such as Pakistan and Bangladesh faced fuel and power shortages because they have been unable to secure affordable LNG supplies, and this "demonstrates the evident risks of LNG importation for developing countries," states the report. Cambodia already has one of the highest electricity tariffs in Asia at $0.16/kWh, so higher LNG prices could require higher tariffs. LNG prices in Asia have been roughly $14/mn Btu and would have to fall below $5mn/mn Btu to compete with other electricity sources, according to IEEFA, but these low price levels are rare. The ANEA price, the Argus assessment for spot LNG deliveries to northeast Asia for the front-half month, stood at $15.08/mn Btu on 27 November. Cambodia's LNG demand and LNG-fired power plant expansions remain uncertain, so long-term offtake commitments will be challenging and the country will likely have to initially source cargoes from the sport market, according to the report. But the spot market poses risks in terms of supply security and price stability. Establishing an LNG supply chain also entails rigid long-term contracts that lock in fossil fuel infrastructure for decades. By Prethika Nair Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Uruguay's left-wing candidate wins presidency

25/11/24

Uruguay's left-wing candidate wins presidency

Montevideo, 25 November (Argus) — The left-wing opposition Frente Amplio will return to power in Uruguay after winning a hard-fought run-off election on 24 November. Yamandu Orsi, former mayor of the Canalones department, was elected president with close to 51pc of valid votes. He defeated Alvaro Delgado, of the ruling Partido Nacional. The Frente will control the senate, but will have a minority in the lower chamber. It last governed from 2015-2020. Orsi will take office on 1 March in one of Latin America's most stable economies, with the World Bank forecasting growth at 3.2pc for this year, much higher than the 1.9pc regional average. He will also inherit a country that has been making strides to implement a second energy transition geared toward continued decarbonization and new technologies, such as SAF and low-carbon hydrogen. He will also have to decide on future oil and natural gas exploration. Uruguay does not produce oil or gas, but has hopes that its offshore mimics that of Nambia, because of similar geology. TotalEnergies has made a major find there. The Frente's government plan states that it "will deepen the energy transition, focusing on the use of renewable energy, and decarbonization of the economy and transportation … gradually regulating so that public and cargo transportation can operate with hydrogen." On to hydrogen Uruguay is already the regional leader with renewable energy, with renewables covering 100pc of power demand on 24 November, according to the state-run power company, UTE. Wind accounted for 49pc, hydro 35pc, biomass 10pc and solar 6pc. Orsi will need to make decisions regarding high-profile projects for low-carbon hydrogen, as well as a push by the state-run Ancap to get private companies to ramp up oil and gas exploration on seven offshore blocks. The industry, energy and mining ministry lists four planned low-carbon hydrogen projects, including one between Chile's HIF and Ancap subsidiary Alur that would have a 1GW electrolyzer. Germany's Enertrag is working on an e-methanol project with a 150MW electrolyzer, while two Uruguayan groups are working on small projects with 2MW and 5MW electrolyzers, respectively. The Orsi government will also need to decide if it continues with Ancap's planned bidding process for four offshore blocks, each between 600-800km² (232-309 mi²), to generate up to 3.2GW of wind power to produce 200,000 t/yr of green hydrogen on floating platforms. The Frente has been noncommittal about the future of seven offshore oil and gas blocks, including three held by Shell, two by the UK's Challenger — which recently farmed in Chevron — and one each by Argentina's state-owned YPF and US-based APA Corporation. The Frente's government plan states that "a national dialogue will be called to analyze the impacts and alternatives to exploration and extraction of fossil fuels." By Lucien Chauvin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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