Markets

New Fortress Energy (NFE), holder of LNG regas terminals, shipping and power gen assets, has reported a first-quarter net income of $241.2 million, recovering substantially from a loss of $39.5 million in the prior-year quarter. The company is progressing its ‘Fast LNG’ liquefaction concept in integrated LNG-to-Power projects on the US Gulf Coast and Africa.

Frontmonth contracts on the TTF, Europe’s main gas trading hub, have soared from Wednesday midday in reaction to the EU’s proposed ban on Russian oil imports this year which could increase demand for coal and natural gas. The TTF frontmonth June was last seen trading at €107.00/MWh, up nearly 6% on the previous day.

German utility Uniper has reported a €3.1 billion net loss for the first quarter, blaming impairment charges related to its Russian unit Unipro and the suspended Nord Stream 2 gas pipeline. Having to shield against potential disruptions in Russian supplies, Uniper’s operating performance was also hit by lower gas storage withdrawals which reduced sales and profits.

The European Union is getting ready to propose a sixth sanctions package against Russia that will include an oil embargo and warned that paying Gazprom in roubles would breach existing EU sanctions. The Kremlin might retaliate by suspending gas deliveries to other countries apart from Poland and Bulgaria, exacerbating supply risks.

Russia’s Gazprombank has for the first time rejected a payment for some April and May gas deliveries under a contract with Gazprom Marketing & Trading (GM&T), a company recently seized by the German government. The move conjures up fears that Gazprom may suspend deliveries – Berlin hence launched the "early warning" stage of its gas supply emergency plan.

A majority of RWE shareholders have rejected a request to spin off the company’s brown-coal business. Activist investor Encraft Impactive had proposed the spin off and called the lignite business “economically negligible,” but RWE CEO Markus Krebber said the move would not accelerate his strategy of building out renewable energy sources.

China’s ‘dynamic clearing’ policy against Covid-19 requires local government to impose strict measures as soon as cases rise into double figures. Lockdowns like in Shanghai made transportation fuel demand plunge, while electricity demand fell in line with the slowing economy. Record coal and gas prices, pushed thermal generation output down by almost 6% in March.

Abundant domestic gas resources accelerate the build-out of combined-cycle power gen capacity in the United States. Around 32.3 GW of new gas-fired plants are scheduled to start operations in 2025 and are in advanced stages of development. Some 14.2 GW are under construction while 14.7 GW have a status of advanced permitting.

The Finish engine maker Wärtsilä will write off around €200 million ($215.7 million) related to assets and business operations in Russia. “After the attack on Ukraine, we immediately suspended all deliveries, sales, orders, and bidding to Russia […] complying with trade sanctions,” Wärtsilä said in its first-quarter 2022 earnings report.

Japan’s JERA, one of the world’s biggest LNG importer and portfolio player, has agreed to help Thailand’s state power producer EGCO Group with setting up an LNG supply chain. Both partners will also carry out a feasibility study to use hydrogen and ammonia as an alternative carbon-free fuel for co-firing gas power plants.

Gazprom has suspended supplies to both Poland and Bulgaria from today due to their refusal to pay in Russian roubles. Poland’s state gas company PGNiG was given notice that deliveries through the Yamal-Europe pipeline would stop Wednesday. The 33 bcm/y interconnector carries Russian gas through Belarus and Poland to Germany.

LNG drives growth in overall US gas exports and could reach 12.2 billion cubic feet per day (Bcf/d) in 2022. If realized, the United States would surpass Australia and Qatar and become the world’s top LNG exporter. Rampant demand in Europe is forecast to boost US LNG exports by 2.4 Bcf/d this year and 0.5 Bcf/d in 2023.

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News in Brief

FlatFish drone inspects Shell fields off Brazil

May 25 – Shell and Petrobras have contracted Saipem to use its FlatFish subsea drone in pilot projects to inspect two ultra-deepwater oil and gas fields offshore Brazil in over 2,000-meter depth. Initial tests will be carried out at Saipem’s base in Trieste, Italy, with a view to deploying the drone to Brazilian waters in the third quarter of 2022.

Gazprom cuts off supplies to Finland

May 24 – Gazprom has completely suspended gas supplies to Gasum after the Finish company refused to pay in roubles, the two companies said in separate statements. Gasum is confident it will be able to supply all its customers with gas imported through the Balticconnector (2.6 Bcm/y) from Estonia.

Heisco wins tender in Kuwait

May 23 – Heavy Engineering Industries and Shipbuilding Company (Heisco) has won a KD1.8 million ($6.4 million) tender – floated by the energy ministry of Kuwait – to install, examine and test four high voltage transformers at the Doha East Power Generation and Water Distillation Station. Heisco, founded in 1974 and listed on the Kuwait Stock Exchange, has developed into one of the largest energy engineering groups in the emirate.

JERA issues bond to finance power plant upgrades

May 20 – Japan’s leading LNG importer and power producer JERA has issued its first energy transition bond to help finance the accelerated deployment of decarbonisation technologies like hydrogen and ammonia co-firing, as well as the decommissioning of older thermal power stations. The bond is offered in two tranches: a 12 billion yen ($83 million) for a 5-year bond with a 0.420% per annum coupon, and a 8 billion yen $62 million) for a 10-year bond with a 0.664% rate coupon.

Rolls-Royce conducts laser field tests in the US

May 18 – Rolls-Royce has successfully conducted laser field tests to demonstrate ‘deep magazine’ power capability for directed applications in connection with Lockheed Martin’s layered laser defense project. Deep magazine power can be provided by a battery-only system, but the Rolls-Royce ColdFire system includes both battery-powered and near-continuous firing modes provided by M250 gas turbine engines.

Gas vs oil ratio increases in the Bakken

May 17 – The ratio of natural gas to crude oil production has risen in North Dakota’s Bakken region since 2008, and continues to accelerate. According to the US Energy Information Administration's (EIA) Drilling Productivity Report, annual gas gross withdrawals in the Bakken increased by 9% to an annual high of 2.97 Bcf/d in 2021, even though the region’s crude oil production fell by 6%.

Middle East shifts to gas power

May 16 – The Middle East, a region vulnerable to climate change, is undergoing a major shift from petroleum-based power plants towards gas-fired generation and renewable power sources. Capacity additions of over 185.46 GW are the pipeline, according to ResearchandMarkets, as the regions electricity demand for industry and residential cooling is set to grow. In fact, cooling already accounts for 70% of residential power demand.

Carbon utilisation in strong demand

May 13 – The market for carbon utilisation is forecast to grow rapidly from the 2030s onwards to surpass $285 billion by 2042, driven by rising climate commitments and a favourable regulatory framework. In its latest report IDTechEx also highlights the role of technology advances such as thermodynamics which help sequester CO2 permanently.

MTU gensets approved for biofuels

May 12 – Rolls-Royce has gained approval to use synthetic fuels in its MTU Series 4000 and Series 1600 diesel engines for power generation application. Field testing confirmed both engines can use a range of sustainable fuels including biomass-to-liquid, hydrotreated vegetable oil and power-to-liquid fuels such as e-diesel.

E.ON tells Germans how to save gas

May 11 – A large-scale switch to heat pumps, solar power and better demand-side management could help save Germany nearly 100 TWh of natural gas per year, E.ON has said, calling on households to contribute to Europe’s efforts to reduce reliance on Russian gas imports. “If 10% of the homes in Germany are equipped with solar PV installations, 20% of gas boilers are replaced by heat pumps, and the average temperature in all households is reduced by one degree Celsius on average, this would lead to natural gas savings of 103 TWh per year," E.ON Energy CEO Filip Thon said, noting this volume would equate to about 30% of Germany’s current gas imports from Russia.

Exelon Q1 earnings lower following Constellation cave-out

May 10 – Exelon has reported lower first quarter earnings and a higher operating revenue, having completed the separation of Constellation Energy – Excelon’s former power gen business. Focussing now solely on transmission and distribution, Exelon’s net income from continuing operations for the first quarter of 2022 decreased to $0.49 per share from $0.53 a share in pre-year period. In contrast, adjusted operating earnings notched up to $0.64 per share, primarily due to due to higher electric distribution earnings at ComEd from higher rate base and higher allowed electric distribution. Rate increases at Excelon’s group companies PECO, BGE, and PHI were partially offset by higher depreciation expenses at BGE and PHI.

South Africa to add 2.6 GW of new capacity

May 9 – South Africa’s Department of Mineral Resources and Energy, has just announced the REIPPPP BW6 Request for Proposals (RFP).  The bid round will add 2,600 MWs of new capacity to the energy mix. The ministry seeks to procure 11,813 MW of electricity from various power sources including renewable energy, storage, gas and coal.

GE Gas Power authorized as CVE Numbering Authority

May 6 – GE Gas Power’s increased focus on cybersecurity has been recognized by the Common Vulnerability and Exposures Programm as a ‘CVE Numbering Authority (CNA).  As such, GE Gas Power can now assign CVE identification numbers to newly discovered vulnerabilities potentially related to its products and allow GE Gas Power to directly publish new CVE Records and streamline the reporting process.

Heliogen gets nearly $90m in funding

May 5 – Heliogen has moved from design into testing and implementation of its supercritical CO2 power gen system that will be deployed for Woodside in California. The system consists of a 5 MWe sCO2 power block integrated with high temperature solid media thermal energy storage. The demonstration project is being funded with up to $50 million from Woodside, along with $39 million from the U.S. Department of Energy (DoE).

Capstone to install microturbine in the Caribbean

May 4 – E-Finity Distributed Generation, Capstone's distributor for the Mid-Atlantic, Southeastern United States and the Caribbean, has secured an order for two C1000S microturbines for a government water authority in the Caribbean. The 2 MW system will provide emergency standby power to several pumping stations throughout the remote island community and is scheduled to be commissioned towards the end of 2022.

Forecasting solar and energy storage in CAISO

May 3 – Marubeni has chosen Veritone’s AI-based distributed energy resource management solution (iDERMS) to provide price, demand and generation forecasts at their pilot project in the California Independent System Operator (CAISO) SP-15 region. In addition to day-ahead and real-time generation figures, Veritone will also forecast production and demand for the overall CAISO region.

Forecasting solar and energy storage in CAISO

May 2 – Marubeni has chosen Veritone’s AI-based distributed energy resource management solution (iDERMS) to provide price, demand and generation forecasts at their pilot project in the California Independent System Operator (CAISO) SP-15 region. In addition to day-ahead and real-time generation figures, Veritone will also forecast production and demand for the overall CAISO region.