Spreads for arbitrage trading are narrowing between the Dutch TTF and the US Henry Hub as well as the TTF and the Japan Korea Marker (JKM), so Energy Aspects warns "any further tightening could close the arb windows and lock-in US supply.” The coal-to-gas switching level is seen at $3.70/mmbtu, or €11.1/MWh – below the breakeven to ship cargoes from the US to Europe at current freight rates.
Con Edison, the largest utility in the New York City area, has imposed a moratorium on new natural gas connections in most of Westchester County, claiming it it cannot guarantee uninterrupted service to new connections. Despite rising shale gas production in the Northeast, the rise in demand and infrastructure bottlenecks in the NYC area is now jeopardizing supply security.
Infigen Energy, an Australian listed renewable energy developer, has surprised market observers by announcing it will buy a 159 MW gas peaking power plant in New South Wales. The utility claims the Smithfield gas peaking plant will serve as a backstop, and allow it to invest in “up to 400 MW more cheap renewables.”
Japanese LNG imports notched up 0.3% in April, after dropping for five straight months over slowing demand for thermal energy as the restart of nuclear reactors progresses and coal outcompetes regasified LNG on price. Nine of Japan's 54 nuclear power stations were re-started last month, although only seven are currently operating.
Indian imports of LNG increased 9.75% in April, spurred by a drop in the costs of shipment and tepid demand from the power sector. Demand is bound to rise further if the Government will allow power plants running on regasified liquefied natural gas (RLNG) to sell electricity into the higher-priced spot market.
Russia’s Federal Agency for Mineral Resources has approved Gazprom’s latest gas discoveries on the Yamal Peninsular, the Dinkov and Nyarmeyskoye fields, containing over 500 Bcm of proven reserves combined. The finds underpin Gazprom’s plans to produce up 360 Bcm/y from its 32 fields in the region, with most of the volume designated for export through the Nord Stream pipeline.
Singapore’s big three banks – DBS Group Holdings (DBS), United Overseas Bank (UOB) and the Oversea-Chinese Banking Corporation (OCBC) have each announced they are ceasing financing for new coal-fired power plants. With this move, the banks accelerate the region’s fuel switch to natural gas. Echoing an initially largely European phenomenon, the latest Asian financial exodus highlights growing regional concerns with stranded coal power asset and air pollution.
YPF, Argentine’s state-run oil and gas producer, is seeking to sell a partial cargo from its Tango floating liquefaction unit at Bahia Blanca in a first step to turn the country into a major shale gas exporter. Growing production from the Vaca Muerta shale gas play is meant to cover domestic demand and leave a surplus for export.
Stockpiles of thermal coal in the United States have fallen to the lowest level in a decade as more and more coal-fired power plants retire and the lost capacity is being replaced with gas-fired plants and renewables. Coal stockpiles decreased to 98.7 million tons in February 2019, their lowest value in more than a decade, and the EIA expects them to remain relatively low for the rest of this year.
Texas is at risk of power emergency alerts this summer, and may even face rotating blackouts, the Electric Reliability Council of Texas (ERCOT) warned, as the current 8.6% electric reserve margin may prove insufficient to meet strong electric demand growth. Power grid operators typically aim for reserve margins of 10% to 15% and ERCOT itself had set a target of 13.75%.
The Government of Morocco has made “positive efforts” to improve energy access for all citizens and end fossil fuel subsidies to establish a more competitive energy pricing regime, said Dr Fatih Birol, Executive Director of the International Energy Agency (IEA). With the exception of bottled butane, fuel prices are now linked to the international market.
The power sector is attracting more investment than the oil and gas industry, with developers having spent over $1.8 trillion globally in 2018 on energy-related projects. Though the overall spent has stabilized after three years of decline, investors increasingly focus on projects with shorter lead times, the IEA’s World Energy Investment 2019 report finds.
General Electric has outperformed its rivals Siemens and Mitsubishi Hitachi Power Systems (MHPS) by winning the most orders for HA-class gas turbines in Q1-2019, according to the latest McCoy Power Report. GE booked six orders, up from zero a year ago – MHPS won five orders, while Siemens booked four.