Though oil demand is projected to peak as soon as 2025, natural gas will play a pivotal role throughout the energy transition with demand set grow by 10% in the next decade before peaking by 2035, McKinsey forecasts. Investment in sustainable fuels – particularly hydrogen – is anticipated to reach up to $50 billion over the next three years.
Belgian start-up Tree Energy Solutions (TES), co-developer of the German North Sea LNG import project at Wilhelmshaven together with E.ON, has launched an open season to gauge interest. The regas terminal will initially import LNG to wean off Germany’s dependence on Russian pipeline gas before switching to green hydrogen imports from 2030.
Skyrocketing energy and food prices have pushed up UK inflation to 7% in March – the highest for 30 years – and analysts say it is on track to reach 8% this month. Germany was hit by a 7.3% rise in inflation in March as energy prices soared nearly 40% year-on-year, prompting the government to grant state aid to selected companies.
Fitch Rating says recent higher LNG netbacks in Europe compared to China make shipments and cargo diversions “more competitive” as the EU wants to reduce its dependence on Russian gas imports by two-thirds by year-end. Tight markets will keep prices high, analysts reckon, as more capacity will come onstream “only in the medium term.”
Chemical and energy giant INEOS has written to the UK government offering to develop a shale test site to prove gas production through fracking is “safe and secure.” The offer comes as Britain seeks to bolster its energy independence by expanding nuclear and offshore wind power as well as domestic oil & gas production in the North Sea.
Italy’s Prime Minister Mario Draghi is traveling to Algeria today to sign a new gas supply deal as Rome strives to lower its dependence on Russian energy. Deliveries through the Trans-Mediterranean Pipeline are expected to be increased by 4 bcm per year at the most, adding to the 21.2 bcm of Algerian gas exported to Italy in 2021.
El Salvador has imported its maiden LNG cargo in early April when Shell shipped roughly 0.06 million tons of super-chilled gas to FSRU Tatjana near the Port of Acajutla. The permanently moored FSRU was built for exclusive use by the 378 MW Energía del Pacífico power plant and is jointly owned by BW LNG and Invenergy Investment.
Choking Russian gas deliveries to Europe by 80% in 2023 and halting it in 2025 would propel up European wholesale power prices by at least 12%, modelling by the registrar DNV finds. To replace Russian supply, Europe itself is expected to produce 12% more gas through 2030 and generate more electricity from renewables, coal and nuclear.
The Australians, supplying the largest share of China’s LNG imports at around 39 percent, expect the People’s Republic will import 86 million tons of LNG in 2022 – a slightly slower rate of growth, as Russia ramps up deliveries of rival pipeline gas through the ‘Power of Siberia’ interconnector. An economic slowdown also curbs China’s gas-burn for power generation.
France’s power grid operator RTE has issued a supply warning, urging local authorities and households to lower their energy usage. Electricity supply is “tense” as demand spiked following a cold snap over the weekend while about half of France’s nuclear reactors are offline and fuel for gas peaking plants is expensive and hard to come by.
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.
