Thailand's Gulf Energy launches 5,300MW gas-fired plant

Spanish Market: Natural gas
09/10/24

Thailand's Gulf Energy has launched operations at a 5,300MW gas turbine combined cycle (GTCC) plant on 1 October, Japanese energy solutions firm Mitsubishi Power said today.

Mitsubishi Power, which was in charge of building the gas-fired power plant, also completed the eighth and final unit of the power plant today. This marked Mitsubishi Power's largest ever completed order by capacity, according to the firm.

The plant's other seven existing units have been installed progressively since 2018 and have collectively logged 100,000 actual operating hours.The plant is a joint venture between Gulf Energy, Thailand's largest independent power producer and part of the Gulf Group, and Japanese trading firm Mitsui.

This is the second plant to be put into operation, marking the completion of a multi-phase project that was first awarded to Mitsubishi Power in 2018. This comprised two GTCC plants in Thailand provinces Chonburi and Rayong, and consists of a total of eight units. The project was also successfully completed on time, despite delays caused by the Covid-19 pandemic back in 2020.

This power plant project is part of Thailand's initiative to decarbonise its energy sources and secure energy security. Mitsubishi Power was also awarded an order to build a GTCC plant in 2020 by Hin Kong Power, another Gulf Energy joint venture.

The increase in the country's demand for LNG imports could be minimal for now, with some focus on relying more on domestic gas production. Thailand's state-controlled upstream firm PTTEP has highlighted ramping up gas production at the country's largest and oldest Erawan field as key to reducing its import reliance. But declining production at other smaller gas fields in the country may eventually compel Thailand to step up LNG imports to make up for the resultant shortfall.

By Naomi Ong

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09/10/24

US September OCTG, line pipe imports may rise

Houston, 9 October (Argus) — US imports of oil country tubular goods (OCTG) and line pipe products could increase in September. US OCTG imports could be 114,500 metric tonnes (t) in September, which would represent an increase of 15,200t compared to the prior year, according to license data from the US Department of Commerce, which is subject to change. If realized the September OCTG rise would be driven by a potential 19,800t increase from the prior year from South Korea to 60,600t and a 7,700t increase in volumes from Taiwan, up from none in the prior year. Those increases are partially offset by a possible 8,400t decrease in volumes from Canada and a 5,100t decrease from Mexico. If September OCTG import volumes do rise, it will be only the second month since May 2023 that import volumes have increased year over year. Line pipe imports may jump by 19,200t from the prior year to 101,800t. That increase could be driven by a 9,500t increase in line pipe of unspecified diameter from South Korea to 34,700t, and a 3,900t increase in Japanese volumes for line pipe less than or equal to 16in. By Rye Druzchetta US pipe and tube import licenses metric tonnes Product Sep-24 Sep-23 Difference ±% Aug-24 OCTG 114,521 99,310 15,211 15.3% 129,096 Line pipe* 101,777 82,589 19,188 23.2% 84,940 Standard 56,725 56,488 237 0.4% 63,929 Heavy Structural Shapes 57,682 43,364 14,318 33.0% 66,669 US Department of Commerce; September 2024 data is license data, which is subject to change. *Line pipe is all diameters. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Russia to present climate strategy at Cop 29

09/10/24

Russia to present climate strategy at Cop 29

Edinburgh, 9 October (Argus) — Russia is preparing to present its climate strategy at the UN Cop 29 climate conference in Baku, Azerbaijan, in November, deputy prime minister Alexander Novak said. Novak convened a meeting with Russian ministries on climate issues on 7 October, in which a forecast for Russia's emissions rates, in line with the country's 'low emissions economic development strategy to 2050', was discussed. The strategy was approved in 2021. It is unclear whether the strategy is linked to Russia's new Nationally Determined Contribution (NDC) — a climate plan to be submitted to the UN. Cop parties are expected to publish their next NDCs to the Paris climate agreement — this time for 2035 — in November-February, as part of a cycle that requires countries to "ratchet up" their commitments every five years. Russia's president Vladimir Putin announced Russia's 2060 net zero ambitions in October 2021, but the country has not updated its NDC since 2020. The Cop 28 agreement signed in the UAE last year included an energy section calling for "transitioning away from fossil fuels in energy systems", a tripling of renewable capacity by 2030 and for "accelerating action in this critical decade", giving the direction countries need to take in the energy transition. The country's main focus is on doubling the absorptive capacity of Russia's forests and producing and exporting more gas, to replace demand for more carbon-intensive oil and coal. Russia has no plans to reduce coal and oil output. Russia's climate envoy Ruslan Edelgeriyev said in November 2022 that Moscow could achieve net zero a decade earlier than in 2060 if its access to international debt markets and technology was not blocked because of the sanctions imposed over Ukraine. While reiterating net zero ambitions last year despite the sanctions, Putin repeatedly called accelerated decarbonisation irresponsible, claiming that it contributed to Europe's energy crisis in 2021. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Hurricane Milton set for late Wednesday landfall

08/10/24

Hurricane Milton set for late Wednesday landfall

New York, 8 October (Argus) — Hurricane Milton is expected to come ashore on Florida's Gulf coast near Tampa Bay late Wednesday, bringing life-threatening storm surge and destructive winds that have already spurred widespread evacuation orders. US president Joe Biden warned Milton could be one of the worst storms to hit Florida in 100 years, as he urged residents under evacuation orders to act without delay. "It's a matter of life and death," he said today. The storm was located about 520 miles southwest of Tampa at 2pm ET today, with maximum sustained winds of 155mph, according to the National Hurricane Center. Storm surge is expected to range from 10-15 feet along the Florida coast from north of Tampa to Englewood. The fall-out for offshore oil and gas production in the US Gulf of Mexico appears limited given the forecast track takes Milton far south of most platforms. Mexican state oil company Pemex said its ports in the Gulf of Mexico stopped operations over the last 24 hours as Milton passed north of the Yucatan Peninsula, but the company did not report on the status of offshore production. Milton is expected to pick up speed as it turns toward the northeast later today, with the center forecast to move across the eastern Gulf of Mexico and approach the west-central coast of Florida through Wednesday. Landfall is expected on Wednesday night before Milton sweeps across central Florida. "While fluctuations in intensity are expected, Milton is forecast to remain an extremely dangerous hurricane through landfall in Florida," the center said. Florida officials are dispatching previously stockpiled fuel to retail stations throughout the state as hundreds of thousands of residents flee the western coast. Ports and terminals on Florida's Gulf coast from Tampa to Fort Myers Beach closed at 8am ET today as a precaution. Chevron previously evacuated and shut in its Blind Faith oil and gas production platform in the Gulf of Mexico. The 65,000 b/d platform is located around 160 miles southeast of New Orleans. Crude production from Blind Faith feeds into South Louisiana Intermediate crude slate, which is not actively traded in the spot market but is typically priced using Heavy Louisiana Sweet. Shell, BP and ExxonMobil all said there has been no impact to their drilling or production in the Gulf of Mexico, although the companies continue to monitor the hurricane. By Stephen Cunningham Hurricane Milton projected path Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Asia LNG premium to Europe falls to six-month low

08/10/24

Asia LNG premium to Europe falls to six-month low

London, 8 October (Argus) — The premium offered by northeast Asian delivered LNG markets over those in northwest Europe for prompt Atlantic loadings has this week slipped to its smallest since early May, as very low winter charter rates force European firms to bid higher compared to Asian buyers in order to secure cargoes. The Argus Northeast Asia (ANEA) des price for December offered just a 39¢/mn Btu premium to the northwest Europe November des price on 7 October. The spread dropped to 33¢/mn Btu on 4 October — the smallest since 2 May — having been as much as $2.36/mn Btu on 19 September ( see ANEA premium graph ). At least four LNG carriers loaded from US liquefaction terminals have diverted away from heading to Asia via the Cape of Good Hope to Europe instead over the last week, judging by shiptracking data from Kpler, likely stemming from the narrowing premium offered by Asian markets compared to Europe. The inter-basin spread has tightened since mid-September largely because a rally in European delivered markets has not been matched by Asia. The northwest Europe November des price increased by $1.85/mn Btu over 19 September-7 October, largely as a result of extensions to Norwegian pipeline maintenance, incremental downward revisions in minimum temperature forecasts, and geopolitical concerns surrounding conflict in the Middle East. The corresponding ANEA price, on the other hand, was little changed over the same period, as warmer weather than the seasonal average curbed early heating gas demand. Prompt shipping rates holding lower on the year has also forced European buyers to bid higher in order to compete with their Asian counterparts and ensure uncommitted Atlantic cargoes head for Europe. The prompt Argus Round Voyage rate (ARV2) for tri-fuel diesel-electric (TFDE) carriers in the Atlantic basin stood at $40,000/d today, compared to $130,000/d a year earlier ( see ARV2 spot charter graph ), with some firms even viewing additional shipping capacity as a sunk cost given the number of available vessels at present and difficulties subletting spare shipping capacity. The quick delivery of newbuild LNG carriers this year, coupled with the lack of floating storage in Europe, has contributed to a very shallow contango in forward freight prices. Forward winter rates for two-stroke vessels delivering US LNG to northwest Europe (ARV5) peak at $81,000/d in December, having been revised lower from over $100,000/d at the start of September ( see ARV2 winter rates graph ). Weak charter rates mean European buyers will likely continue to have to bid higher relative Asian bids over the winter than in previous winters, when the freight market was tighter, particularly in instances of cold snaps or other events which would tighten the global LNG balance. Europe's demand for LNG was consistently lower on the year over the second and third quarter of 2024, as Asian demand held the inter-basin arbitrage for US LNG mostly open. But imports to Europe are likely to step higher in the fourth quarter, with the arbitrage firmly shut. Minimum temperatures across the northwest — where much of the region's heating demand emanates from — are forecast to hold below the seasonal average from mid-October onwards, which may spur gas consumption. And the EU's underground gas storages are less full than a year earlier. Aggregate gas stocks stood at 1,083TWh on 1 October 2024, marginally lower than last year's 1091TWh, though both are above the EU-mandated 90pc target. A lack of floating storage this year could limit deliveries later in the year however, with European receipts over the period in the past two years supported by the unwinding of floating storage, mainly in November and December, boosting supply as colder weather boosts heating demand. By Cerys Edwards ARV2 spot charter costs 2022-2024 ARV2 winter rates assessed over Jan-Sept 2024 ANEA premium to NWE August-October Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Dutch TTF gas rises through coal-to-gas switching range

08/10/24

Dutch TTF gas rises through coal-to-gas switching range

London, 8 October (Argus) — A rally in recent weeks has pushed gas prices up to a range at which even older coal-fired power stations would be more profitable to run than some of the most efficient gas-fired power stations. European gas benchmark price the Dutch TTF front-month has risen strongly over the past two weeks, having closed at €40.57/MWh on 7 October, up from a recent low of €32.80/MWh on 19 September. The higher gas prices have outstripped similar price increases of other energy-related commodities such as coal, with the TTF front-month contract approaching the top of the gas-to-coal fuel-switching range ( see TTF front-month graph ). In assessments on 3 and 4 October, even older coal-fired power stations with an efficiency of 42pc would would be more profitable to run than the newest gas-fired turbines with an efficiency of 60pc, for the first time since early December last year. Geopolitical tensions in the Middle East have contributed to gas' price increase. But with muted LNG deliveries to the continent so far this shoulder season and colder weather than last year, European gas storage sites are less full than they were a year earlier. European stocks were filled to about 94.5pc of capacity on the morning of 7 October, according to GIE transparency platform data, down from 96.7pc a year earlier. Demand has already stepped up strongly in some countries, pushing the continent to some days of net withdrawals from storage earlier in the autumn than in most recent years. While coal prices have also stepped up slightly in turn, partly in reaction to the expectations of higher coal burn, their slower upwards momentum has brought coal largely ahead of gas in the merit order. Many coal trading firms have banked on a strong coal burn this winter, with low trading activity in the shoulder season so far, which incentivises trading companies to keep coal prices close to the fuel-switching level, market participants have told Argus . And prompt prices for European CO2 emissions allowances in September and October so far have been about 20pc lower on the year, closing at an average of €64.24/t, compared with €81.60/t over the same period in 2023. Lower emissions prices benefit higher coal burn as coal is more CO2-intensive than gas, requiring operators to purchase and surrender more CO2 emissions certificates. A similar price movement happened last autumn, when a rally in early October pushed the TTF front-month price to the top of the fuel-switching range. But from early December, when a mild winter reduced the remaining risks for gas security of supply, prices fell through the fuel-switching ranges sharply , to the bottom of the range. Impact probably highest in Germany Germany is one of the last remaining markets with large numbers of both coal- and gas-fired power stations in Europe, leaving the market able to react to price movements in either market more flexibly. The power sector can still provide considerable demand-side flexibility in the German gas market, while coal phase-out plans in the rest of Europe mean the scope for alternating between the thermal generation fuels has narrowed. Gas prices can provide the signal that the market has spare gas for the power sector to burn by falling into coal-to-gas switching territory, while gas prices climb above the fuel-switching range to discourage gas-fired generation when the gas market is tighter. Last winter, gas prices at the very bottom of the fuel-switching range encouraged the highest gas-fired generation in Germany in at least a decade , according to data from European system operators' association Entso-E. While many German coal and gas-fired plants are combined-heat-and-power plants, which do not respond to price incentives as flexibly as pure power plants, the impact of the fuel switch on gas' share in the thermal generation mix was still visible last winter in Germany. In October and November, with prices at the top of the range, gas-fired generation at 6GW met 55pc of the combined call on coal and gas. But when prices dropped through the switching range, gas' share increased to 63pc in December-March, with about 7.3GW of gas-fired generation ( see generation percentage graph ). In addition, the German storage levy of €2.50/MWh, which power producers must pay, pushes gas prices up further in the fuel-switching range. The levy, which is likely to rise further from next year , thus further decreases gas' profitability compared with coal, which could be detrimental for Germany's own coal phase-out plans. By Till Stehr TTF front-month vs fuel-switching range €/MWh German gas- and coal-fired generation and fuel-switching price pc, €/MWh Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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