Daily News

Natural gas is set to become a 'high-carbon fuel' after 2025, as the perception of gas generation changes over time among EU member states. "In the short-term, we need gas to keep the lights on," but analysts stressed "Carbon Capture Storage (CCS) will need to kick off after 2025."

For new gas pipelines, timing is everything. This especially applies to the new 38 Bcm/y ‘Power of Siberia (PoS)’ link that will elevate China to become Gazprom’s second largest export market. However, analysts say  considering the cost of transporting Russian pipeline gas over thousands of miles towards Beijing and Shanghai, it is unlikely that CNPC will want to quickly ramp up PoS gas supply at the expense of imported LNG.

Aggreko is fast-tracking the delivery of a gas-battery hybrid power solution to the largest steel manufacturing and processing and in the United Arab Emirates (UAE). The 24 MW hybrid unit will deliver a 49 percent cost saving for the mill operator, United Steel Industries Fujairah.

Finnish equipment manufacturer Wärtsilä has commissioned the first ever utility-scale gas engine project in Papua New Guinea. Situated Port Moresby, the capital city, the 58 MW gas-fired power unit will enhance local electricity supply and ensure grid stability.

‘Wider Access’ – the latest project launched by National Grid ESO to increase accessibility to the UK balancing  mechanism – is already attracting new market entrants. Aggregated power units, notably hybrid and battery-based units, are increasingly being dispatched in this regulated market, providing the grid operator with much-needed flexibly.  

Dominion Energy has applied for an air permit, one of the final regulatory warrants required to realize a $600 million gas-fired peaking power plant in Chesterfield County near Dutch Gap conservation area, Virginia. The four proposed open-cycle gas turbine (OCGT) power units would be built by spring 2023, and only dispatched at times of high demand.

Sales of electric vehicles in Germany have jumped 49 percent, with over 97,000 electric cars sold in the months up to December. Consumers increasingly embrace e-cars – not least as a means to shield against Berlin’s latest hike of the entry-level price for CO2 emissions in the transport sector, which has just been raised to 25 Euros per tonne from 2021.

While global climate talks in Madrid ended with lackluster results, German lawmakers agreed to raise the entry-level price for CO2 emissions from the buildings and transport sector from 10 Euros to 25 Euros starting from 2021. Thereafter, it will rise to 55 Euros by 2025, with state revenues to be used to lower the renewables levy on consumers' electricity bills.

Southern California Gas Company’s (SoCalGas) has managed to improve its gas supply flexibility going into December, just before demand will peak in the latter half of the month. Working gas inventory currently stands at 74.4 billion cubic feet (Bcf), and though that’s similar to last winter SoCalGas stressed it enhanced withdrawal volumes and speed from its large Aliso Canyon storage.

Aggreko has placed the first order for Wärtsilä’s new ‘Modular Block’ power gen solution. Four Modular Blocks, equipped with one Wärtsilä 32 engine each, will be supplied to provide 40 MW of onsite power to Resolute Mining’s Syama gold mine, situtated in a remote off-grid location in Mali.

Researchers at GE, working together with Baker Hughes, Intel and the Florida State University, have developed ‘Digital Ghost’ – a new tool designed to allow critical energy infrastructure like natural gas pipelines to operate safely during a cyber-attack. The $5.2 million program is partly funded by the U.S. Department of Energy (DoE).

With the opening of the ‘Power of Siberia’ interconnector, Russia’s Gazprom has shifted its focus on its new Chinese offtaker CNPC who agreed to import 38 Bcm annually over the next 30 years under a deal worth some $400 billion. As for 2019, Gazprom says Chinese gas demand will rise 10 percent and “considerably exceed 300 billion cubic meters (Bcm).”

Competitive Power Ventures (CPV) and Osaka Gas have fast-tracked the start up of the $1 billion CPV Fairview Energy Center near Johnstown, Pennsylvania. CPV said thanks to “outstanding team effort” of construction contractor Kiewit and equipment supplier GE, the 1,050 MW plant is now “fully operational on budget and significantly ahead of schedule.”

Los Angeles Department of Water and Power (LADWP), a municipal utility, has confirmed plans to convert its Intermountain Power Plant in Utah from coal to natural gas, and then to 100 percent hydrogen. Right from the start of the new 840 MW gas power unit in 2025, hydrogen will fuel 30% of its operation and the ratio will be increased to full hydrogen fuelling by 2045.

MAN Energy Solutions has been delivering ten 20V35/44G gas engines with a combined capacity of over 100 MW to Bolivia. The engines will supply electricity for steel works at the El Mutún iron ore mine, operated by Tenova’s HYL division together with Sinosteel on the border with Brazil.

News in Brief

ExxonMobil enhances turbine oils

Jan 17 – New high performance turbine oils, developed by ExxonMobil Lubricants, are  entering the market which are formulated to prevent build-up of lacquer, varnish and deposits. The oils are designed to protect against thermal and oxidative degradation, one of the root causes of deposit build-up.

Wärtsilä signs O&M deals in the Bahamas

Jan 16 – Following the commissioning of a Wärtsilä-built 132 MW power plant in Bahamas in December, the Finish manufacturer now signed a two-year operation and maintenance (O&M) accord with the plant owner, the Bahamas Power and Light Company (BPL). Wärtsilä will transition, train, and develop the owner’s Bahamian work force and provide key performance guarantees.

China, S'Korea curtail coal to tackle air pollution

Jan 15 – Beijing city government’s aggressive approach to tackling air pollution is working and South Korea’s spring coal-fired curtailments show some success in cutting seasonal emissions. According to Wood Mackenzie, this should benefit LNG, particularly while spot prices remain low.

Sri Lanka at brink of power shortages

Jan 14 – Sri Lanka could face power cuts by March, after plans for a large-scale coal power plant were been cancelled just prior to start of construction, and a tender for a 300 MW diesel plants ended up in court. On the demand side, pressure is building up as the region is moving into the dry season in February and March. Weather warnings say the island is likely to receive lower than average rainfall in the first quarter of 2020.

Caterpillar’s new genset comply with UK & German grid codes

Jan 13 – Caterpillar Inc. has launched a series of new generator sets that comply with the new G99 United Kingdom, VDE-AR-N 4110 German and Belgium C10/C11 grid codes. The following gensets – G3500H, CG132B, CG170, and CG260 (rated from 280-4,500kVA) – have been verified to be able to accommodate different reactive power modes, active power functions, and connection conditions for normal operation or reconnection after mains decoupling.

Transneft launches battery-based power supply for ILI tools

Jan 10 – Transneft Diascan, the largest Russian inspection service provider for pipelines, has developed and put into operation a power supply system for in-line inspection (ILI) tools based on rechargeable batteries. Flaw detectors performing inspections of trunk oil pipelines, gas pipelines and oil product pipelines can now use the energy from rechargeable batteries, which helps save time and reduces the cost of in-line inspection.

Pavilion starts trading LNG out of Madrid

Jan 9 – Singapore-based Pavilion Energy has completed the acquisition of all gas and LNG assets of the Spanish utility Iberdrola. From its new European headquarters in Madrid, Pavilion said has launched 2020 LNG trading operations with supplies focusing on Spain and the UK market.

Gazprom extends gas transits via Belarus until 2021

Jan 8 – Gazprom and Gazprom Transgaz Belarus have sealed additional agreements to extend the contracts for gas supplies to and gas transportation across Belarus until 2021. According to the newly-signed documents, the contractual supply and transit volumes in 2020 will remain at the level of 2019.

EastMed pipeline to take FID by 2022

Jan 7 – Greece, Cyprus and Israel have signed an agreement to build the 1,900-kilometre EastMed pipeline at an estimated cost of 6 billion Euros. The subsea pipeline, spanning over 1,900-kilometres would initially carry 10 Bcm of gas per annum from Israeli and Cypriot waters to Crete and then on to the Greek mainland and into the European gas network via Italy. A final investment decision (FID) is meant to be reached in 2022, given that the pipeline is scheduled for completion by 2025.

U.S. energy-related emissions drop over 2%

Jan 6 – Fewer emissions from coal consumption, combined with lower energy demand, have helped to significantly reduce the overall energy-related carbon emissions in the United States. According to government statistics, energy-related CO2 emissions fell 2.2 percent last year, and the downward trend is forecast to continue into 2020.

Brent crude prices surge

Jan 3 – North Sea Brent crude prices have risen to their highest level since September 2019, up nearly $3 per barrel because of Middle East tensions coupled with improved Chinese economic forecasts. Brent crude futures for March 2020 delivery were last seen trading at 69.21 per barrel the Intercontinental Exchange (ICE). This bullish price sentiment will feed through to oil-indexed natural gas contracts and LNG deliveries, linked to the Japanese crude cocktail (JCC) basket price.

IEA says coal’s fate tied to Asia

Dec 23 – Rapid rise of wind and solar power in many parts of the world has pushed coal-fired power generation into steep decline in most developed countries. "But this is not the end of coal, since demand continues to expand in Asia," analysts at the International Energy Agency commented: "The region’s share of global coal power generation has climbed from just over 20 percent in 1990 to almost 80 percent in 2019, meaning coal’s fate is increasingly tied to decisions made in Asian capitals."

Drop in coal-burn makes Germany edge closer to climate targets

Dec 20 – In 2019, Germany managed to increase its greenhouse gas emissions for the second year in a row, mainly due to a 20 percent drop of coal use for power generation and a growing contribution from renewables. Energy savings and efficiency increases also helped. According to calculations by energy research group AG Energiebilanzen (AGEB), Germany’s primary energy consumption declined by 2.3 percent this year, overall energy use fell more than 2 percent, and energy-related CO2 emissions fell by as much as 7 percent.

Glencore buys Orsted’s lgas business unit

Dec 19 – UK-listed mining company Glencore has agreed to take over a loss-making natural gas business from Orsted, including long-term import capacity at the Gate regas terminal in Rotterdam and five other LNG purchase agreements. “The transaction entails a payment from Orsted to Glencore and will result in a loss that exceeds our current provision related to the LNG activities,” stated Copenhagen-based Orsted without disclosing the value of the transaction.

Carbon-intensive firms may shed over 40% in value

Dec 18 – Energy- and carbon-emissions intensive companies could lose up to 43% of their value if national governments enact more stringent policies to reduce air pollution and tackle climate change. Companies using green energy, in contrast, could gain up to 33% in value, research by the United Nations-backed Principles for Responsible Investment (PRI) finds.

COP25 – a “lost opportunity”

Dec 17 – UN Secretary António Gutierrez has dismissed the outcome of the COP25 climate talks in Madrid as “disappointing” and “lost opportunity“. Some of the world’s largest emitters, including Australia, Brazil, China and Saudi Arabia had joined the U.S. in pushing for accounting loopholes to weaken commitments to reduce emissions in the transport and power generation sector.

Industry produces over 13% of Germany’s electricity

Dec 16 – Decentralized power generation at industrial sites keeps rising in Germany. According to the Federal Statistical Office (Destatis), industry produced 55 Terawatt-hours (TWh) of in 2018, meaning local units of mining and manufacturing generated 12.6 percent of the country's gross electricity output, mostly from gas-fired power units. The use of gas as a fuel for industrial power plants has consequently risen from around 35 percent to almost 50 percent over the last ten years.