Markets

U.S. major ExxonMobil, together with Qatar Petroleum, has made a gas discovery of 5-8 trillion cubic feet (Tcf) its Glaucus-1 well off Cyprus. The find adds another giant discovery to the East Mediterranean but a lack of subsea pipelines hamper the use of this gas in the local power sector, so Exxon considers teaming up with other majors to monetize the find through a new LNG venture.

Electric load at the MISO grid in the Midwest of the United States was pushed to its limits during the recent period of extreme cold weather in late January. According to EIA figure, day-ahead gas spot prices reached $7.42/MMBtu) at Chicago, the main hub in the region, while MISO day-ahead electricity prices surged to $120/MWh.

Enagas, the Spanish gas network and LNG terminal operator, has announced construction of the Trans Adriatic Pipeline (TAP) - part of Europe’s Southern Gas Corridor - is 85% complete. Enagas saw a 1% rise in its 2018 annual profit to 442.6 million Euros amid a 4.5% increase in conventional gas demand.

Spanish-owned Scottish Power has unveiled its “biggest ever investment in the UK in a single year," announcing to splash out £2 billion on green energy in 2019. Programmes include building giant batteries to store excess energy at wind farms, investing in smart grids for customers to buy and sell electricity, and charging points for electric cars.

U.S. engineering company McDermott International has posted a fourth-quarter loss, largely due to $2.2 billion in charges related to works on Cameron LNG and Freeport LNG and higher construction costs for Calpine’s York 2 Energy Center. The Houston-based McDermott today reported a net fourth quarter loss of $2.8 billion – a stark contrast to its $26 million profit in Q4-2017.

Natural gas will become the fastest-growing energy source in the coming decade, displacing coal as a fuel for power plants and heavy industries, Royal Dutch Shell said in its 2019 LNG Outlook 2019. Global energy demand is seen grow 18% by 2035, spurred by clean-air policies in China and India, with gas set to meet 40% of that largely through expanding LNG trade.

Economic growth, combined with a rapidly expanding population, has led to an investment boost in the Indonesian power sector which is forecast to quadruple in size over the coming decade, growing at a 18.7% rate to reach $63.6 billion in market value by 2022. Coal-fired power will retain its leading position while decentralized LNG-fuelled projects also gain attractiveness.

Nuclear restarts and rising coal-burn for power generation has decreased LNG imports to Japan. Nine of Japan's 54 nuclear power plants have re-started, leading to a 8.7% drop in LNG shipments to 7.54 million tonnes in January, down from 8.26 mt a year earlier.

Reciprocating internal combustion engines –  typically used for backup, standby, or emergency power – are playing a fast advancing role in utility-scale power generation applications, according to EIA findings. In Texas alone, the share of gas-fired recip engines surged 20% to over 4,600 MW largely as a reaction to the state’s rapid growth in installed wind power capacity.

The Japanese energy majors JERA and Tepco Power Grid have agreed to jointly invest up to $32.68 billion (£25 million) in Zenobe Energy, a UK-based battery storage company. Zenobe owns and operates some 73 MW of batteries and is currently looking to use its technology in related business areas, notably the charging of electric vehicles.

The Japanese trading house Itochu has pulled the plug on investments in thermal coal mines and coal-fired power projects. Having just sold its stake in the Rollestone mine in Queensland, the Japanese firm said it seeks to increase the renewables ratio in its power plant portfolio to over 20% by the end of fiscal 2031.

Abundant supply of cost-competitive shale gas, combined with technological advances, has led to an ever-increasing average size of a combined-cycle gas power block in the United States. While the average CCGT had about 500 MW installed capacity before 2014, the power block capacity has since then increased to an average 820 MW, according to the EIA’s electric generator report.

Indonesia's upstream regulator SKK Migas has announced a significant gas discovery at the Repsol-operated Sakakemang PSC onshore Central Sumatra, Indonesia. If pre-drill estimates are realised, it would be the largest discovery in the country since ExxonMobil's Cepu find in 2001. The latest discovery has the potential to alter Indonesia’s gas supply balance and power generation mix.

New hybrid energy sources, consisting of a combination of renewabes and flexible gas generators, will cover up to 85% of the world’s energy demand growth through 2040, according to BP’s latest Energy Outlook. Fast-developing countries in Asia are expected to push up global energy demand by a third from today’s levels.

Production and use of refined coal – processed to reduce emission when burned – has reached record highs the United States, particularly in the power sector. According to EIA estimates, refined coal’s share of total coal tonnage consumed for U.S. electricity generation will have increased from 15% in 2016 to more than 18% through October 2018.

Page 14 of 156

News in Brief

SPIG wins contract for Al Dur Phase II

Sept 23 – Italy-based SPIG, part of Babcock & Wilcox Enterprises, has won a contract to provide seawater cooling tower system to SEPCOIII for the Al Dur Phase II project in Bahrain. The Al Dur Phase II is a combined-cycle gas-turbine plant to generate 1,500 MW of electricity and approximately 50 million gallons fresh water per day.

MHI-MME to take over turbocharger production

Sept 20 – Mitsubishi Hitachi Power Systems will no longer produce MET turbochargers, the standard worldwide exhaust gas turbochargers used in stationary engines. Starting from January 1, 2020, these devises will be produced by Mitsubishi Heavy Industries Marine Machinery & Equipment (MHI-MME) instead.

Japan starts electricity futures trading

Sept 19 – Tokyo Commodity Exchange (TOCOM) has launched trading in electricity futures to advance price competition in Japan’s liberalized energy market. The East Area peakload electricity contract for October delivery first traded at 10.9 Yen per kWh, lower than the standard price of 11 Yen set by TOCOM in advance.

Duke to reduce rates in 2020

Sept 18 – Duke Energy Florida (DEF) customers will see lower bills in 2020. The utility filed a proposal with the Florida Public Service Commission to reduce rates for electricity and gas by more than 3% while adding more solar power and making grid improvements.

Myanmar approves three power projects

Sept 17 – Myanmar’s Ministry of Electricity and Energy has given the green light to plans for a 1,230 MW gas-fired power plant in Kanpauk, Taninthayi region, a 377 MW gas-fired unit in Ahlon, Yangon region and a 1,390 MW thermal plant in Milaunggyine in Ayeyawady region. The conflict-ridden country is currently producing electricity from 5,600 MW installed capacity, derived both from state- private-owned power stations.

Bonny Train-7 to cost $6.5bn

Sept 16 – Nigeria LNG is preparing to add a seventh processing train to Bonny LNG, bringing total capacity from 22 million tons per annum (mtpa) to 30 mtpa. Estimated to cost $6.5 billion, Bonny Train-6 will include a new liquefaction unit, a storage and a condensate tank as well as three gas turbine generators.

Schneider to complete L&T takeover by early 2020

Sept 13 – Venturing into India, Schneider Electric hopes to finalise the Rs 14,000 crore acquisition of Larsen & Toubro's electrical and automation business by early 2020. After the transaction is completed, Schneider will have a 65% stake in L&T, while the remainder will be held by Temasek.

MHI to advice China on energy conservation

Sept 12 – Mitsubishi Heavy Industries Thermal Systems, part of MHI, has set up a joint venture withan affiliate of State Grid Corporation of China (SGCC) to perform technical consulting for energy conservation projects in China. The focus of SGCC lies on building new decentralized power stations, biomass-derived power gensets and energy saving solutions.

Tender extended

Sept 11 – Turkmengas has extended a tender for the overhaul of the gas turbine engines of the NK-12ST and NK-14ST brands. Bidders need to pay to receive the tender documents, and then submit a written application to Turkmenistan’s state gas company.

Gas power units to buffer Germany’s coal exit

Sept 10 – Electricity output of Germany’s fleet of gas-fired power plants has risen to a over 13,5 billion kilowatt-hours in the three months from June to August, Fraunhofer ISE figures show. These productivity gains put CCGTs in pole position to balance supply swings in connection with the German coal exit.

Power of Siberia gas flows to start on Dec 1

Sept 9 – Russian gas supplies to China via the eastern route are going to start on December 1, 2019, Gazprom chairman Alexey Miller told his counterpart at CNPC in Beijing. The huge Chayandinskoye field, containing some 1.2 trillion cbm of gas, had already been connected to the 38 Bcm per year ‘Power of Siberia’ gas pipeline in August.

Hurricane Dorian causes havoc in the Bahamas

Sept 6 – In the aftermath of Hurricane Doran, a Category 5 storm, Bahamas Power and Light has said there is a total blackout in New Providence, the most populous island of the archipelago. Dorian made landfall twice on Sunday, ripping off roofs and electricity lines. In most parts, electricity has not been restored.

LNG cargoes via Bab-el Mandeb decrease

Aug 30 – Northbound LNG shipments via Bab el-Mandeb, a sea route chokepoint between the Horn of Africa and the Middle East, have fallen over the past three years as Egypt imports less natural gas from the Persian Gulf. In 2015 and 2016, both Jordan and Egypt imported up to 1.4 Bcf/d of LNG into Red Sea ports but these shipments fell sharply following the development of large gas finds in the Mediterranean.

Hokuriku Electric buys LNG cargo

Aug 29 – Japanese utility Hokuriku Electric has purchased an LNG cargo for delivery in November as soaring temperatures drew down gas in storage for the autumn. The cargo is understood to be scheduled for delivery in the second half of November from Malaysia’s Petronas and may well be destined for Hokuriku Electric’s first LNG-fired power generation unit,  the Toyama Shinko plant.

Technip spins off LNG activities

Aug 28 – TechnipFMC, has decided to spin off its European-based engineering and construction operations into a separate business, leaving the American half of the firm as an equipment supplier to the oil and gas sector. The split is due to be completed in the first half of 2020.

FLNG power market to top $930m by 2023

Aug 27 – The global market for floating LNG power vessel is projected to reach $ 931.6 million by 2023, up from $ 860.1 million seen last year, according to ReportsnReports. Major vendors of FLNG power vessels are Siemens, MAN, Wärtsilä, Caterpilar and GE which are targeting to use the technology to supply decentralized power to island nations in Southeast Asia and along the coast of sub-Saharan Africa and the Americas.

EIA monitors grid hourly

Aug 26 – The U.S. Energy Information Administration (EIA) has launched a beta release of its hourly electric grid monitor. The enhanced version analyses hourly generation by energy source and hourly sub-regional demand for certain balancing authorities in the Lower 48 states.