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Swap operations could unlock Brazil’s RNG

  • : Electricity, Emissions, Natural gas
  • 24/04/15

Brazil needs to increase liquidity and establish taxation to let gas swap contracts unlock constraints on biomethane trade, industry observers said.

Gas swap operations are commercial exchanges of products between traders in different regions that do not have a way to physically deliver. For example, a biomethane plant in one region could sell to a consumer in a different, unconnected region if it is able to get that transaction mirrored in its own region — creating a "swap" of products without the need of delivery away from the local pipelines.

This mechanism could cut logistics costs for biomethane delivery and provide a way around the single largest hurdle to Brazilian biomethane market growth — a lack of connections between the biomethane plants scattered across the country and potential customers in major cities.

The main challenges for swaps in the biomethane sector are the lack of gas market liquidity to find mirror transactions in different regions and the fiscal challenge of properly taxing the operations, according to Maria Fernanda Soares, partner at the Machado Meyer law firm.

"Unlocking the tax challenge would be a better way to make this type of transaction viable, because it would be an alternative to the regulatory prohibition of injecting gas into the distribution network," she said.

Biomethane certificates attesting to its renewable attributes can also lessen logistical challenges, as buying a certificate substitutes the need for the physical delivery.

"Today, everyone in the sector believes there is a need for certification to advance so that biomethane has an environmental validation," said Marcelo Mendonça, strategy and market director for natural gas distributors' association Abegas. "Otherwise, you are just buying a more expensive natural gas molecule."

But biomethane certificates will not be enough to create liquidity between regions, said Soares: "Many companies tend to prefer buying their biomethane with the certificates included, so there would be difficulty in having enough surplus."

Under a draft of a so-called fuel of the future bill, Brazil would create a biomethane mandate with the option of using guarantees of origin to fulfill obligations. The bill still awaits senate approval.


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25/05/08

Permian output could plateau sooner: Occidental CEO

Permian output could plateau sooner: Occidental CEO

New York, 8 May (Argus) — Oil production from the Permian basin could plateau sooner than expected if operators keep talking about reducing activity levels in the wake of lower oil prices, warned the chief executive of Occidental Petroleum. Vicki Hollub said she previously expected to see Permian output growing through 2027, with overall US production growth peaking by the end of the decade. "It's looking like with the current headwinds, or at least volatility and uncertainty around pricing and the economy, and recessions and all of that, it's looking like that peak could come sooner," Hollub told analysts today after posting first quarter results. "So I'm thinking right now the Permian, if it grows at all through the rest of the year, it's going to be very little." Occidental is reducing the midpoint of its annual capital spending guidance for 2025 by $200mn on the back of further efficiency gains. The US independent also plans to trim domestic operating costs by $150mn. "We continue to rapidly advance towards our debt reduction goals, and we believe our deep, diverse portfolio of high-quality assets positions us for success in any market environment," Hollub said. Occidental closed asset sales of $1.3bn in the first quarter and has repaid $2.3bn in debt so far in 2025. Occidental produced 1.4mn b/d of oil equivalent (boe/d) in the first quarter compared with nearly 1.2mn boe/d in the same period of last year. By Stephen Cunningham Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US seeks flexibility from Europe to help LNG deals


25/05/08
25/05/08

US seeks flexibility from Europe to help LNG deals

Washington, 8 May (Argus) — President Donald Trump's administration is pressing European countries to offer flexibility on standards for methane emissions as a way to ease the pathway for them to sign long-term purchase agreements for US LNG. Trump has pushed for countries to commit to buying more US LNG as a way to avoid steep tariffs he has threatened to impose on countries that have trade imbalances with the US. But a looming requirement for European importers to show "equivalence" to EU methane monitoring requirements for newly signed gas supply contracts could pose an obstacle for US LNG, based on differences in how methane emissions are tracked. The administration's "ask" is for the EU to ensure that its methane-related measurement, reporting and verification (MRV) methodologies do not pose a barrier to US LNG, US acting assistant secretary of state for energy resources Laura Lochman said today. US LNG terminals have struggled to show equivalency to the MRV rules because, unlike many global LNG projects, they source their gas from pipelines connected to multiple fields. "Give time for industry to work through some of those traceability issues as well, because it would take a few years to be able to get to that point and work out the equivalency methodology," Lochman said at an event with European officials organized by the industry group LNG Allies. European officials indicated they are receptive to finding a solution, as they work to end purchases of Russian gas by the end of 2027. But they say they want to continue to see reductions in emissions of methane, which is a potent greenhouse gas. Trump has already started rolling back restrictions on methane emissions. "We understand you've got a different supply chain, as opposed to us, and that it's important to have it worked out so that any difficulties are taken away from American companies with those regulations," Netherlands ambassador to the US Birgitta Tazelaar said at the event. "Of course it's very important for the Netherlands and Europe that methane be reduced." US LNG developers are likewise pushing Europe to consider pushing back a goal to largely phase out natural gas consumption by 2040. That deadline could complicate the traditional financing model for new LNG terminals typically premised on signing 20-year supply deals, said Kimmeridge managing partner Ben Dell, whose company is building the proposed 9.5mn metric tonne/yr Commonwealth LNG project in Louisiana. "The one thing I would ask is for European members in this room to think beyond 2040," Dell said. "Ultimately extending that runway allows a lower-cost project financing and ultimately a lower cost delivery into the European market." A potential trade deal between the US and the EU could create an opportunity to grant equivalency to US LNG exports to avoid barriers from the EU methane regulation, LNG Allies president Fred Hutchison said today. The US in turn could reclassify the EU as having a free trade agreement for gas, which would expedite US LNG export licensing, Hutchison said. The Trump administration sees the potential for European contracts to lead proposed US LNG export terminals to reach final investment decisions (FIDs). The administration has already been "very clear" about its goal to increase LNG exports and cut regulations facing the natural gas sector, the State Department's Lochman said. "When you put together the push from the US side to support, and then the demand signals on the European side, you can get more projects making it to FID," Lochman said. By Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

HSFO defies the green tide


25/05/08
25/05/08

HSFO defies the green tide

New York, 8 May (Argus) — High-sulphur fuel oil (HSFO), once seen as a fading relic, is proving remarkably resilient (see table) despite the maritime sector's push toward decarbonization. The fuel remains economically attractive thanks to persistent scrubber investments and regulatory frameworks that fail to fully penalize its use. Under the EU notation, HSFO and very low-sulphur fuel oil (VLSFO) are assigned the same calorific and greenhouse gas emission values. This equivalence means that ships fitted with scrubbers — systems that strip out sulphur oxides — face no additional penalties for choosing HSFO over VLSFO. As a result, greenhouse gas fees under FuelEU Maritime and the EU emissions trading system (ETS) offer no disincentive for scrubber users to stick with cheaper HSFO. In March 2025, the VLSFO-HSFO spread in Singapore narrowed to just $44/t, the lowest since the IMO 2020 sulphur cap took effect. At that level, a scrubber on a capesize bulker pays for itself in under two years. When the spread averaged $122/t in 2024, the payback period was about eight months. Even in regulated markets like Europe, economics favor HSFO. Under the EU ETS, ships operating in, out of or between EU ports must pay for 70pc of their CO2 emissions in 2025. In Rotterdam, bunker prices including ETS surcharges still favor HSFO: $575/t for HSFO, $605/t for VLSFO, and $783/t for a B30 Used cooking oil methyl ester blend. While biofuels, methanol and LNG are inching forward in market share, they remain cost-prohibitive. In the meantime, HSFO, with scrubber backing, continues to punch above its environmental weight. By Stefka Wechsler Selected ports marine fuel demand t % Chg 1Q 25-1Q 24 1Q 2025 less 1Q 2024 1Q 2025 1Q 2024 Singapore HSFO 1.0% 33,160.0 4,898,372.0 4,865,212.0 VLSFO/ULSFO -13.0% -1,005,951.0 6,829,667.0 7,835,618.0 MGO/MDO -5.0% -49,012.0 907,874.0 956,886.0 biofuel blends 187.0% 237,552.0 364,418.0 126,866.0 LNG 34.0% 25,935.0 101,856.0 75,921.0 Rotterdam HSFO 1.0% 11,169.0 829,197.0 818,028.0 VLSFO/ULSFO 14.0% 118,670.0 976,249.0 857,579.0 MGO/MDO 3.0% 9,662.0 393,071.0 383,409.0 biofuel blends -60.0% -158,597.0 104,037.0 262,634.0 LNG 7.0% 7.0 104.0 97.0 Panama HSFO 22.0% 65,266.0 362,388.0 297,122.0 VLSFO/ULSFO 25.0% 177,296.0 878,776.0 701,480.0 MGO/MDO 22.0% 27,097.0 150,980.0 123,883.0 — Maritime and Port Authority of Singapore, Rotterdam Port Authority and Panama Canal Authority Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

FinBalt gas demand down on the year in April


25/05/08
25/05/08

FinBalt gas demand down on the year in April

London, 8 May (Argus) — Combined gas demand across the Finnish and Baltic region fell by 4pc on the year in April despite gas-fired power generation rising by nearly 50pc. Aggregate consumption in Finland, Estonia, Latvia and Lithuania in April fell to 3.42TWh, down from 3.56TWh the previous year and the three-year average of 5.12TWh in 2019-21. That said, it was still higher than in both 2022 and 2023 ( see consumption graph ). Lithuania remained the region's largest consumer, as it has been for every month since June, again driven by an increase in gas-fired power generation. Average gas-fired output soared by nearly 400pc on the year in April to 254MW according to data from Fraunhofer ISE, more than making up for a 43pc drop in Finnish production ( see power table ). Following the de-synchronisation of the Baltic states from the post-Soviet Brell system, gas-fired power plants have become particularly important in the region, not just for producing electricity but also for providing ancillary services such as frequency reserves. Lithuania has the largest gas-fired fleet in the region, and its output jumped despite domestic power consumption falling by more than 5pc on the year and renewable output increasing, which allowed the country to cut its power imports last month to 104MW, from 546MW in the previous year. With power sector gas demand increasing in April but overall gas consumption in the region dropping, demand from households and industries must have been lower on the year. Weather patterns were split across the region, with lower average minimum temperatures than the previous year in Vilnius and Riga, but higher in Tallinn and Helsinki. That said, overnight lows in all four capitals were still above the 2015-24 average last month, limiting strong heating demand in the shoulder month ( see temperature table ). Traded volumes on the region's gas exchange GET Baltic rose to 1.1TWh last month, an "unusually high result for this time of year" according to the exchange's senior account manager Karolis Bagdonas. Of the overall volume, 56pc traded in Lithuania, 28pc in the joint Estonia-Latvia market area, and the remaining 16pc in Finland. The average price on GET Baltic was €39.40/MWh last month, down by around 8pc from March. GET Baltic announced in April that its full integration into the European Energy Exchange (EEX) had been delayed again until 9 September , having previously been planned for 27 May . Across all of January-April FinBalt consumption totalled 18.43TWh, down from 20.04TWh in the same period of 2024. Stocks at the region's only storage facility in Latvia ended the storage year on 1 May at 8.4TWh, below 11.3TWh on the same day last year and 9TWh in 2023, but still above all other years since 2018 ( see data and download ). The entire 100pc of capacity, amounting to just over 23TWh, had been booked for the 2024-25 storage year, but for the new 2025-26 cycle a lower 17TWh has been allocated, representing around 68pc of the cycle's total technical capacity of 24.9TWh. Consistently positive summer-winter spreads over the winter period, which gave no financial incentive to book storage, may have driven lower interest in 2025-26 capacity, although they had normalised by April. Lower overall booked volumes is despite operator Conexus managing to sell all 9TWh of the new five-year capacity product it offered in February and March . Slow start to injection season Injections into Incukalns have been weak so far this year, with not a single day of net injections until 24 April. In the previous year, there had been some brief net injections on 1-4 April at an average of 54 GWh/d, and across all of April they averaged just over 7 GWh/d. In contrast, this year's April averaged net withdrawals of 32 GWh/d across the month, with injections only on 24-30 April. This slow stockbuild has continued in the first week of May, with 35GWh of net injections on 1 May but then a flip back to very minor net withdrawals of 0.2 GWh/d on every day of 2-6 May, the latest data from GIE show. Last year, there were average net injections of 47 GWh/d on 1-6 May, and 39 GWh/d in 2021-23. Despite weak injections, overall LNG sendout across the region's three terminals of Klaipeda, Inkoo and Hamina has increased significantly from April, nearly doubling to 150 GWh/d on 1-7 May from 80 GWh/d in April. Sendout from these terminals averaged 84 GWh/d on 1-7 May last year. Rather than injecting all of the regasified LNG, some of it is being sent southward to Poland at Santaka, with exit flows at the point averaging 22 GWh/d on 1-7 May, switched from net inflows of 2 GWh/d in April. This is likely to be linked to Polish incumbent Orlen's deals to supply LNG to Ukraine's Naftogaz, of which one of the contracts specified that it would be delivered to Klaipeda and transited to the Ukrainian border . By Brendan A'Hearn FinBalt gas-fired power production MW Apr-25 Apr-24 year-on-year % change Finland 118 206 -43 Estonia 6 5 20 Latvia 85 53 60 Lithuania 254 52 388 Total 463 316 47 — Fraunhofer ISE FinBalt average minimum temps °C Apr-25 Apr-24 2015-24 avg Helsinki 0.7 0.1 0.1 Talinn 2.2 2.0 1.0 Riga 4.8 5.0 4.0 Vilnius 3.8 5.2 2.8 — Speedwell FinBalt gas demand by country GWh Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Cop 30 head urges upgraded climate co-operation: Update


25/05/08
25/05/08

Cop 30 head urges upgraded climate co-operation: Update

Updates with comments from Copenhagen climate ministerial London, 8 May (Argus) — The incoming president of the UN Cop 30 climate summit today called for climate co-operation to be "better equipped" to implement the Paris climate agreement and Cop decisions, including "upgraded global governance" on climate action. Cop 30 president-designate Andre Correa do Lago has called for "innovative governance approaches" and for the aggregation of "currently fragmented" efforts. This would reinforce the decision-making process for UN climate body the UNFCCC and support the implementation of the Paris agreement, he noted. Climate advocates including former UN secretary general Ban Ki Moon last year wrote an open letter to the UN calling for a reform of the Cop climate change summits which they said have failed to deliver change at the speed and scale required. "Climate change will increasingly supervene and disrupt political and socioeconomic agendas", Correa do Lago wrote in a second letter outlining his priorities for the summit, which will be held in November in Belem, Brazil. The president-designate has previously set out his hopes for Cop 30 to be "a Cop of action". Minister and leaders are "still committed to finding solutions together", Danish climate minister Lars Aagaard said today. He co-hosted a climate ministerial this week in Copenhagen, Denmark, alongside Correa do Lago, at which country representatives "worked to lay the foundation" to Cop 30. "Even though the international backdrop is marked by war and unrest, and even though we are experiencing nations pulling in a darker direction, there is still momentum for global climate action," Aagaard said. Correa do Lago acknowledged "serious geopolitical, socioeconomic, and environmental challenges", calling for reinforced multilateralism. And he set out his vision for a "Global Mutirao" — an "unprecedented" global mobilisation of "self-driven" climate action. Brazil's Cop 30 presidency has set up four "circles of leadership", including one comprised of previous Cop summit presidents, and a "circle of finance ministers". The latter, chaired by Brazil's finance minister Fernando Haddad, will offer advice to the Cop 30 presidency on climate finance issues, from "policy-making perspectives", Correa do Lago wrote. Climate finance dominated Cop 29 in Baku, Azerbaijan, last year , where countries agreed that developed nations would provide at least $300bn/yr to developing nations by 2035 for climate action and their energy transitions. Countries will this year discuss a promised "roadmap", intended to forge a path to climate finance of $1.3 trillion/yr, but this will likely lie outside formal negotiations. Correa do Lago today pointed to recent data from the World Meteorological Organisation , which confirmed that 2024 was the hottest year on record. It surpassed the previous record set in 2023. But his letter failed to mention the key driver of climate change — greenhouse gas emissions from fossil fuel consumption. Correa do Lago's first letter also neglected the topic , provoking criticism from environmental campaigners. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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