Qatar Energy wins Gail LNG supply deal for five years

Spanish Market: Natural gas
16/12/24

QatarEnergy has won a bid to supply 12 cargoes a year to Indian state-run gas distributor Gail under a five-year LNG supply contract beginning in 2025, according to market sources.

Gail floated a tender in early November, inviting bids for supplies of LNG from April 2025 until March 2030, with prices linked to the US Henry Hub (HH) on a delivered basis to India's west coast, according to a tender document seen by Argus. The tender closed on 13 December.

QatarEnergy will supply LNG at 115pc HH in addition to a constant of $5.6/mn Btu, sources told Argus.

Gail in turn has contracted with downstream customers in India at a contract price of 119pc HH in addition to a constant of $6/mn Btu, according to documents seen by Argus.

"Typically, a Henry hub linked contract only makes sense when it is for 10-15 years. But this tender is a unique one as it is just for five years," a source told Argus.

What is unclear is the source of supply. QatarEnergy and ExxonMobil's 15.6mn t/yr Golden Pass LNG project has been delayed after lead construction contractor Zachry Holdings filed for bankruptcy in March, according to a Federal Energy Regulatory Commission filing, prompting US federal regulators to give a three-year extension to finish building the plant.

The agreement with Gail may equate 3.6mn t of LNG supply over the five-year period to 2030, assuming a 60,000t LNG cargo size, and add to Gail's existing 5.8mn t/yr of LNG supply under a 20-year agreement from US' Sabine Pass and Cove Point on a fob basis till 2038.

The deal is also likely to support the demand for India's city gas distribution network as the government abruptly cut domestic gas allocations to city gas distribution firms in the past two months.

Gail aims to add 5mn-6mn t/yr of medium-to-long-term LNG contracts to take its overall LNG portfolio to 20mn-21mn t/yr by 2030 in addition to its existing long-term LNG portfolio of 15.38mn t/yr.

By Rituparna Ghosh

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16/12/24

US’ Plaquemines LNG terminal achieves first production

Singapore, 16 December (Argus) — US-based LNG developer Venture Global has achieved first production at its planned 27.2mn t/yr Plaquemines LNG terminal, the firm announced on 14 December. The terminal is still undergoing commissioning, but it will start producing and exporting LNG, the firm said. Venture Global is targeting full commercial operations at the terminal in mid-2027, according to a filing with the US Department of Energy (DOE) in October. The terminal's first phase, with a 13.3mn t/yr base-load capacity, is set to start commercial operations in mid-2026, and the second phase, with a base-load capacity of 6.7mn t/yr, in mid-2027. The 36 trains will have a peak capacity of 27.2mn t/yr. Venture Global had planned a 24-month commissioning phase for Plaquemines. But the early operation is possible because of the project's unique configuration and construction approach, which enables production even as construction and commissioning works for the remainder of the project's 36 trains continue, the firm added. The ability to produce and export LNG during the commissioning phase enables the company to accelerate the supply of additional LNG to the global market, outpacing other suppliers, the firm said. This incremental supply has proven to be a critical asset given historically tight global LNG markets and project delays, it added. Venture Global also sold commissioning cargoes to the spot market until commercial operations are reached at its 12.4mn t/yr Calcasieu Pass terminal. US energy regulator Ferc in late November approved the first phase of the Gator Express pipeline to enter service, after the second phase was approved for service in April. The pipeline will supply feedgas to Louisiana's planned 27.2mn t/yr Plaquemines LNG export terminal. The Plaquemines LNG export facility is Louisiana's fourth liquefaction terminal. By Joey Chan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

BP and Adnoc form Egypt-focused gas joint venture

16/12/24

BP and Adnoc form Egypt-focused gas joint venture

Dubai, 16 December (Argus) — BP and Abu Dhabi's state-owned Adnoc have set up a natural gas joint venture which will initially focus on developing assets in Egypt, the companies said today. BP will hold a 51pc stake in the venture, named Arcius Energy, while Adnoc's recently formed energy investment unit, XRG, will have the remaining 49pc. Arcius Energy "will combine the pair's deep technical capabilities and proven development track record as it aims to grow a highly competitive gas portfolio", Adnoc and BP said in a joint statement. Today's announcement comes around 10 months after the companies first revealed their intentions to form the joint venture in the second half of 2024. At the time, they said it would focus on Egypt, but they suggested today that Arcius Energy's scope could extend elsewhere. "Arcius Energy, initially to operate in Egypt, includes interests assigned by BP across two development concessions, as well as exploration agreements," the firms said. The assets assigned to Arcius Energy include BP's 10pc stake in the Shorouk concession, which contains the giant Zohr gas field, and the North Damietta offshore block in the Nile Delta. Also included are BP's exploration agreements covering the North El Tabya, Bellatrix-Seti East and North El Fayrouz concessions. In February, the firms said BP would transfer to the new venture a 50pc interest in the North El Burg offshore concession, where four gas discoveries have been made since 2008. But there was no mention of this in today's announcement, implying a change of plan. Naser Saif al-Yafei has been appoimnted the new venture's chief executive. He has worked for Adnoc for close to 20 years, most recently as senior vice-president for strategy, sustainability and transformation. Katerina Papalexandri will be chief financial officer. She has been at BP for more than 20 years, most recently as vice-president gas and low-carbon energy growth for the Caspian region. By Nader Itayim Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Canada sets 2035 emissions reduction goal

13/12/24

Canada sets 2035 emissions reduction goal

London, 13 December (Argus) — Canada has set a new 2035 climate goal, aiming to reduce its greenhouse gas emissions by 45-50pc by 2035, from a 2005 baseline. This builds on its 2030 target of a 40-45pc emissions reduction, again from 2005 levels. Canada's emissions had been in 2015 projected to rise by 9pc by 2030, from 2005 levels, "but we are now successfully bending the curve", the Canadian environment and climate change ministry said. The newly-announced target is in line with a pledge Canada made at the UN Cop 29 climate summit last month. Countries that are party to the Paris climate accord must submit new national climate plans by 10 February 2025, to cover a timeframe up to 2035. Canada, the EU, Mexico, Norway and Switzerland committed at Cop 29 to set out new plans with "steep emissions cuts" that are consistent with the global 1.5°C temperature increase limit sought by the Paris Agreement. The plans are known as nationally determined contributions (NDCs). Canada's NDC is being considered by the cabinet, and the country plans to submit it by the deadline, Canadian climate change ambassador Catherine Stewart told Cop 29 delegates on 21 November. Tackling climate change is "both an environmental imperative and an economic opportunity", she added. The target was informed "by the best available science, Indigenous Knowledge, international climate change commitments, consultations with provinces and territories and expert advice", the ministry said. Canada will also "seek feedback on how to help companies take advantage of the economic opportunities that come with building a clean economy" in the near term, it added. Although the plan is not yet available, the ministry said that it will examine the role of carbon removal technologies for the energy transition. "Canadians are increasingly experiencing record-breaking extreme weather," the ministry noted. The country experienced record wildfires in 2023. Carbon emissions from wildfires this year were second only to the "unprecedented" levels in 2023, EU earth-monitoring service Copernicus found this month. Canada has a legally binding target of net zero emissions by 2050. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

India's Gujarat Gas raises PNG prices in Morbi cluster

13/12/24

India's Gujarat Gas raises PNG prices in Morbi cluster

Mumbai, 13 December (Argus) — India's state-run city gas distribution company Gujarat Gas has increased prices of piped natural gas (PNG) in the Morbi industrial cluster in west India's Gujarat state. This came after it kept rates unchanged since July. Prices of PNG used in the industrial ceramic cluster have been hiked to 46.95 rupees/m³ ($0.55/m³) from Rs44.68/m³ in July. This comes to Rs5.60/kcal on an energy equivalent basis, based on a calorific value of 8,400 kcal/kg. This is slightly higher than propane prices, which is a competing fuel in the region's ceramic cluster. Propane prices in Morbi were pegged at Rs61/kg for December , up from Rs60.30/kg in November because of rising import costs. Propane on an energy equivalent basis is Rs5.50/kcal based on the calorific value of 11,100 kcal/kg, traders said. Gujarat Gas has regained some market share in the last few months by keeping its prices unchanged. But it remains to be seen if ceramic units in the region will switch back to propane again. Propane demand in the region fell to 3.2mn m³/d in November from 4.5mn m³/d in October, regional traders said. Overall gas demand in the region was 7mn m³/d in November. Capacity utilisation of ceramic clusters continues to remain weak because of lower export demand for the upcoming Christmas season in the west, according to traders in the region. Gujarat Gas competes with regional propane distributors, including state-controlled IOC, BPCL and HPCL, as well as private-sector firms Reliance Industries, Aegis Logistics and Gogas. It remains to be seen if propane prices will rise further next month, as Saudi Arabia's state-controlled Aramco kept its December propane contract price unchanged at $635/t. Spot LNG prices have also risen this month, which makes a fall in PNG prices unlikely. The Argus -assessed spot price of LNG delivered to India's west coast for first-half January stood at $14.09/mn Btu on 12 December, up from $12.70/mn Btu a month earlier for December-arriving vessels. Tile manufacturers in Morbi have been switching between PNG and propane depending on LNG import prices, since the latter rose in 2022 as a result of the Russia-Ukraine war. By Rituparna Ghosh Propane vs PNG prices (Indian rupees/kcal) Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

US inflation rises to 2.7pc in November

11/12/24

US inflation rises to 2.7pc in November

Houston, 11 December (Argus) — Headline US inflation ticked higher in November, largely on food and shelter costs, suggesting the Federal Reserve still has work to do to reach its inflation target. The consumer price index rose by an annual 2.7pc in November after rising by 2.6pc through October, the Labor Department said. The gain matched expectations in a survey of economists by Trading Economics. So-called core inflation, which strips out more volatile food and energy, rose by 3.3pc, matching the prior month's gains. Services less energy services rose by 4.6pc following a 4.8pc increase the prior period. Today's report is the last consumer price index (CPI) reading before Federal Reserve policymakers meet next week to assess progress in bringing down inflation to their 2pc long term goal and release economic projections. The CME FedWatch tool today gave a 96pc probability the Federal Reserve will cut its target rate by a quarter point at its last meeting of the year, up from nearly 89pc Tuesday. The Fed began cutting its target rate in September after holding it at a 23-year high for more than a year. The energy index contracted by 3.2pc for the 12 months ending in November after falling by 4.9pc through October. Gasoline fell by 8.1pc and the fuel oil index declined by 19.5pc. The food index rose by 2.4pc over the past year, following a 2.1pc gain through the prior month. Transportation services rose by 7.1pc. Shelter slowed to 4.7pc from 4.9pc The CPI rose by 0.3 in November from the prior month, after rising by 0.2pc in each of the prior four months. The shelter index rose by 0.3pc for the month, accounting for nearly 40pc of the total monthly gain in the headline index, Labor said. By Bob Willis Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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