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China aims to attract shale gas investment

  • : Natural gas
  • 20/12/11

The Chinese government is subsidising costs and relaxing regulations surrounding shale gas exploration in the country in a bid to boost development of the sector. But it remains unclear if the latest move will attract much interest from state-owned or foreign firms.

The Guizhou province in China has offered six shale gas exploration blocks ranging from 56.8-159.2sq km in a government auction. The bidding prices for exploration rights of the blocks ranged between Yn290,000-800,000 ($44,334-122,301). This price range is far lower than the starting bid of Yn42.36mn for a 695sq km block offered in a bidding round by Guizhou authorities in 2017.

Companies are now allowed five years to explore the blocks before relinquishing them, compared with the three years mandated previously. Local and foreign firms can participate if they have a China-registered entity with a minimum capital of Yn300mn. Beijing further expanded its upstream sector since May this year to allow foreign firms to directly explore and develop acreage released by the government, as long as they have a China-registered office and meet other standard requirements.

It is unclear if the new regulations will attract much foreign interest after all as shale gas geology remains challenging in China. China has seen a significant exit of foreign firms from its major shale gas projects in the past few years. BP last year pulled out of the Neijiang-Dazu and Rongchangbei shale gas projects, in which it had partnered with China's biggest state-owned upstream firm CNPC, after Shell exited from its shale gas cooperation with CNPC a year prior to that.

Chinese unconventional gas output is playing an increasingly important role in boosting overall gas output as conventional reserves have showed signs of depletion. The government changed its subsidy system last year to include tight gas and rewarded incremental growth based on production levels in a bid to boost the sector.

China reached 15.4bn m³ in shale gas output last year, up by 41pc from the previous year, according to government figures. But it is unlikely to hit its target to produce 30bn m³ this year.

PetroChina, the largest beneficiary of subsidies given to unconventional gas development, may add up to 4bn m³ of shale gas output this year to reach 12bn m³ in its total yearly output. Sinopec produced 6.3bn m³ of shale gas last year, mainly from its Fuling project in Chongqing, and analysts forecast the firm's output to reach 7.5bn m³ this year.

While it is unclear if it will eliminate shale gas subsidies eventually, the Chinese government is expected to continue to provide "some form of policy support" to aid the development of the shale gas sector, according to an official from a state oil firm.


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25/01/09

Venezuela opposition leader held, Gonzalez warned

Venezuela opposition leader held, Gonzalez warned

Caracas, 9 January (Argus) — Venezuelan opposition leader Maria Corina Machado was detained for several hours today after leaving a rally to protest President Nicolas Maduro's disputed swearing-in on Friday, her allies said. Machado and her party members hold that their candidate, Edmundo Gonzalez, won a July presidential election, a claim supported by the US and many Latin American and other countries. The US kept in place broad sanctions against Venezuela's crude and energy industry in the wake of the contested election. Multiple black SUVs intercepted Machado while she traveled on motorcycle after the rally and forcibly took her while drones circled overhead, her allies confirmed. She was later released, they said, but she had not made a public appearance as of late Thursday afternoon. The Maduro government did not confirm Machado's detention. US representative Maria Elvira Salazar (R-Florida) vowed a response. "Our message to the Maduro regime is clear: If you attack Maria Corina Machado, we, the United States, will attack you", Salazar posted on social media. Venezuelan interior minister Diosdado Cabello has in turn threatened to "neutralize" any aircraft in national airspace carrying Gonzalez, who has said he will try to enter Venezuela on Friday to take the oath of office instead of Maduro. Gonzalez has been visiting multiple leaders in the region in the run-up to Maduro's ceremony, meeting with US president Joe Biden and president-elect Donald Trump's designated White House national security adviser Mike Waltz in Washington earlier this week. He has most recently visited the Dominican Republic and met with President Luis Abinader and other dignitaries there. Sources in Caracas say low turnout at pro-Maduro counter demonstrations today may have triggered the decision to arrest Machado. Trump's advisers have not disclosed whether they plan to tighten the US' sanctions against Venezuela, including whether they would remove exemptions allowing Chevron, Eni and Repsol to lift cargoes of oil produced in their joint ventures with state-owned PdV. Senate Foreign Relations Committee chairman Jim Risch (R-Idaho) unveiled a bill today that would condition a future removal of sanctions against Venezuela on the establishment of a democratically elected government in Caracas. But the bill, which enjoys backing of key Democrats on his committee, does not directly address Chevron's upstream exemption. By Carlos Camacho and Haik Gugarats Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Mexico inflation ends 2024 near 4-year low


25/01/09
25/01/09

Mexico inflation ends 2024 near 4-year low

Mexico City, 9 January (Argus) — Mexico's consumer price index (CPI) eased to an annual 4.21pc in December, the lowest in nearly four years, as slowing agricultural prices offset increases in energy, consumer goods and services. This marks the lowest annual inflation since February 2021 and a significant slowdown from July's annual peak of 5.57pc, which was driven by weather-impacted food prices. Inflation slowed from 4.55pc in November, marking four months of declines in the past five months. It closed 2024 below the December 2023 reading of 4.66pc, as CPI continues to cool from its peak of 8.7pc in August/September 2022at the height of the global inflation crisis. The December headline rate slightly exceeded Mexican bank Banorte's 4.15pc forecast but aligned with its consensus estimate. Following the results, Banorte revised its end-2025 inflation projection to 4pc from 4.4pc and its core inflation estimate to 3.6pc from 3.7pc. The bank suggested that the data supports the possibility of earlier cuts in 2025 in the central bank's target rate, currently at 10pc. Citi Mexico's January survey of 32 analysts estimated a target rate of 8.50pc by the end of 2025, with the next cut of 25 basis points expected at the next central bank policy meeting on 25 February. The central bank is targeting annual CPI of 2-4pc. Core inflation, excluding volatile food and energy prices, accelerated to 3.65pc in December from 3.58pc in November, marking the first uptick after 22 consecutive months of deceleration, according to Mexico's statistics agency (Inegi). Services inflation sped up to 4.94pc from 4.9pc, while consumer goods inflation ticked up to 2.47pc from 2.4pc. Agricultural inflation moved to 6.57pc from 10.74pc in November, supported by favorable weather conditions. Banorte noted that the developing La Nina phenomenon could significantly impact meat prices in the coming months. Meanwhile, energy inflation accelerated to 5.73pc in December from 5.25pc the previous month, driven by higher LPG prices. The industrial association Coparmex called for a review of Mexico's LPG pricing model, citing risks to supply and distribution. Electricity inflation decelerated sharply to 2.65pc from 22pc in November, reflecting the end of seasonal summer subsidies, while natural gas prices fell 5.67pc year over year. By James Young Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Denmark invites applications for CO2 storage permits


25/01/09
25/01/09

Denmark invites applications for CO2 storage permits

London, 9 January (Argus) — The Danish Energy Agency has launched its fourth tender inviting applications for exploration and CO2 storage, in three areas off the northwest coast of Denmark. The blocks, in the Danish North Sea, are geologically "particularly suitable for storing CO2", Denmark's geological survey found. The application deadline is 6 March. The Danish government issues permits with two phases — an exploration and a storage phase. If granted an exploration permit, developers have up to six years to investigate and assess the suitability and CO2 storage capacity of the area. They are then able to apply for a storage permit, which will be valid for up to 30 years. The Danish state holds a 20pc stake in all exploration and storage permits. Denmark awarded three CO2 exploration permits in February 2023, and three more in June last year. UK company Ineos took a final investment decision for the first phase of the Greensand CO2 storage project in December. The site's developers successfully demonstrated a pilot CO2 injection in March 2023. The carbon capture and storage (CCS) industry is gradually developing, led by northern Europe. The region has a geological advantage, in its declining oil and gas fields, as well as government funding from countries including Denmark and Norway. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

German gas demand edges up in 2024


25/01/08
25/01/08

German gas demand edges up in 2024

London, 8 January (Argus) — German gas demand remained largely unchanged on the year in 2024, as a recovery in industrial and power-sector burn was almost completely offset by lower residential and commercial consumption amid mild weather. Germany used about 2.285 TWh/d of gas in 2024, up by 6.6 GWh/d from 2.278 TWh/d in 2023, according to data from market area manager THE ( see yearly graph ). But total gas use remained below the 2018-21 average of 2.7 TWh/d, with the drop in wholesale prices from 2022-23 not supporting a rebound in aggregate consumption. Residential and commercial demand — largely for heating purposes — fell by 5pc year on year in 2024 to 894 GWh/d. Household gas prices remain high and are about double those in 2016-21, according to data from grid regulator Bnetza, which may have weighed on gas use by households and small businesses. Mild weather — especially in the first quarter of the year — also pushed down gas demand from households and small businesses. Temperatures were higher than in 2023 in all but three months in the first three quarters of the year, according to data released by German energy and water association BDEW in late December. The number of heating degree days (HDDs) in Germany was about 4pc below the previous year in 2024, and about 14pc below the 10-year average, according to data from Berlin-based think-tank Agora Energiewende. That said, colder weather in September-December supported a year-on-year increase in heating demand during these months ( see monthly year-on-year graph ). According to preliminary calculations published by Agora Energiewende on Tuesday, mild weather and high consumer prices continue to drive the majority of low heating demand, rather than energy-saving efforts. Without the effect of mild weather, emissions from the built environment — largely caused by heating — would have been higher in 2024 than a year earlier, according to Agora. A return of temperature-adjusted heating patterns to pre-crisis levels as well as slow structural changes, such as plummeting heat pump sales , led Agora to urge for more measures in heat transition policy to drive down gas demand from the built environment. Industrial gas demand up by 7pc despite economic woes German gas demand for use in industrial processes rose on the year, according to Argus estimates, supported by a slight recovery in energy-intensive industry. German industry used about 737 GWh/d for industrial processes in 2024, up from 688 GWh/d in 2023 but well below the 2018-21 average of 877 GWh/d, according to Argus analysis. While German GDP stagnated in 2024 and industrial production continued its downward trend, output from energy-intensive industries such as the chemicals sector recovered slightly, especially in the first half of the year. In addition, gas prices falling below LPG in January and remaining cheaper than LPG for most of the year until the fourth quarter may have encouraged some industrial firms to return to gas where they had previously switched to LPG to reduce energy costs. That said, gas prices rising back above propane and butane parity ( see LPG fuel-switching graph ) and lower output from the chemicals industry in recent months may have slowed the German industrial gas demand recovery . And several plant closures in recent years may similarly constrain any future rebound . Power-sector gas burn up Gas-fired generation increased in 2024 from a year earlier on more favourable generation economics than lignite and hard coal, despite a record renewables share reducing the overall call on thermal generation. Gas-fired generation reached 5.96GW last year, up from 5.88GW in 2023, leading to about 16 GWh/d in additional gas demand for power generation, according to Argus estimates. Gas-fired generation increased year on year despite renewables making up a record 62pc of German power generation. Fossil fuel generation was used to meet 17.1GW of power demand in 2024, down from 19.3GW in 2023. While overall power demand remained roughly unchanged from a year earlier, Germany lifted power imports, pushing down domestic generation ( see power mix graph ). But gas increased its share of the thermal mix, partly on lignite and coal plant closures as Germany's coal phase-out progresses. Gas prices at the bottom of the coal-to-gas fuel-switching range for most of the year until the fourth quarter, even outperforming lignite plants in January-July, supported the call on gas for dispatchable generation. Recent gas price rises have put coal and lignite firmly ahead of gas in the power-generation merit order for all forward periods until 2026, suggesting scope for the share of gas in thermal output to be lower this year. By Till Stehr German power generation mix by year GW TTF versus LPG prices, energy equivalence basis $/mn Btu Monthly year-on-year change in gas demand by sector GWh/d German gas demand by year TWh/d Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Trump wants policy of 'no windmills' being built


25/01/07
25/01/07

Trump wants policy of 'no windmills' being built

Washington, 7 January (Argus) — President-elect Donald Trump wants to pursue a policy to stop the construction of wind turbines, a move that could limit the growth of a resource projected to soon overtake coal and nuclear as the largest source of power in the the US. Trump has spent years attacking the development of wind, which accounted for 10pc of electricity production in the US in 2023, often by citing misleading complaints about its cost, harm to wildlife and health threats. In a press conference today, Trump reiterated some of those concerns and said he wants the government to halt new development. "It's the most expensive energy there is. It's many, many times more expensive than clean natural gas," Trump said. "So we're going to try and have a policy where no windmills are being built." The US is on track to add more than 90GW of wind capacity by 2028, a nearly 60pc increase compared to 2024, the US Energy Information Administration (EIA) said in latest Annual Energy Outlook report. If that growth materializes, wind will become the second largest source of electricity in the US at the end of of Trump's term, overtaking coal and nuclear in 2027 and 2028, respectively, according to the EIA forecast. Trump did not offer specifics on the policy, which he did not run on during his campaign. But the vast majority of wind capacity in the US is built on private land such as farms — largely in rural districts represented by Republicans — limiting the federal government's role. Trump could still threaten wind development by blocking projects on federal land, such as offshore wind projects, and working to repeal federal tax credits that subsidize wind. Democratic lawmakers said blocking wind development will raise costs for consumers and reduce energy production. "Trump is against wind energy because he doesn't understand our country's energy needs and dislikes the sight of turbines near his private country clubs," said US Senate Finance Committee ranking member Ron Wyden (D-Oregon), who helped expand federal tax credits for wind through the 2022 Inflation Reduction Act. Wind energy industry officials also raised concerns with the policy, which they said conflicted with an all-of-the-above energy strategy. "American presidents shouldn't be taking American resources away from the American people," American Clean Power chief executive Jason Grumet said. 'Gulf of America' Trump today separately reiterated his vow to "immediately" reverse Biden's withdrawal of more than 625mn acres of waters for offshore drilling, and also said he would rename the Gulf of Mexico as the "Gulf of America", which he said was a "beautiful name". In addition to expanding oil and gas production offshore, Trump said he will seek to drill in "a lot of other locations" as a way to lower prices. "The energy costs are going to come way down," Trump said. "They'll be brought down to a very low level, and that's going to bring everything else down." US consumers paid an average of $3.02/USG for regular grade gasoline in December, the lowest monthly price in more than three years. Henry Hub spot natural gas prices dropped to $2.19/mmBtu in 2024, the lowest price in four years. During his campaign, Trump said he would cut the price of energy in half within 12 months of taking office. 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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