Markets

Deep disparities between well-supplied oil and gas markets, growing emissions and the insufficiency of stated policies to curb those emissions are the key theme of the 2019 World Energy Outlook (WEO), published by the International Energy Agency (IEA) today. However, critics the IEA is “underplaying the speed” at which the world could switch to green energy.

Japan’s machinery and electric equipment maker Toshiba is considering taking full control of two of its four listed subsidiaries, including Toshiba Plant Systems & Services and Nishishiba Electric. With Toshiba’s board is still discussing the matter, market observers expect a decision to be made in the coming weeks.

State-owned Saudi Aramco, the world’s most valuable oil company, has disclosed details on the initial public offering (IPO) of at least 0.5% of its shares in December. In its IPO prospectus, Aramco said it strives to remain the world’s leading crude oil producer by volume and low cost, while boosting investment in natural gas upstream, LNG trading and green energy.

Rolls-Royce’s power system unit and 2G Energy, German maker of gensets and cogeneration modules, have agreed to mutually supply gas-powered gensets. Under the deal, Rolls-Royce will buy 2G gensets in the 250-550 kilowatt range and re-sell them under its MTU brand, while 2G buys MTU Series 4000 generators in a range of 776 kW to 2,535 kW.

A flurry of pipeline projects has been proposed throughout the United States. The U.S. government counts 134 active projects but only 46 entered service this year, adding 16-17 billion cubic feet per day (Bcf/d) of gas transport capacity. More than 40% of this – or 7.2 Bcf/d – is situated in the South Central region.

The German government believes hydrogen is key for a successful energy transition. Even if costs for making renewable hydrogen in electrolysers are much higher in Europe than in Asia, the ship has not sailed yet for Germany,” economic minister Peter Altmaier said, suggesting German-made technologies could be exported to African countries instead.

American oil and gas producers are shying away from building major pipelines in the Appalachian Shale as production has slowed down in the current low-price environment. “No exit pipelines will come into service in 2020,” Energy Aspects says, pointing at scheduling delays and massive cost overruns at the Atlantic Coast Pipeline and Mountain Valley Pipeline.

A new Storage and Flexibility Model (SFM), developed by Baringa for the British Energy Technology Institute (ETI) and now owned by Energy Systems Catapult, is said to give the “clearest ever picture” on balancing supply and demand. Storage technologies are vital to ensure grid operators can cope with fluctuating supply, and avoid buying energy at peak times.

Siemens today reported a rise in its fourth quarter earnings and net profits, exceeding analysts’ expectations, but warned of a subdued year ahead as the global economic slowdown hits demand for short-cycle products. In 2020, Siemens said its focus will be on the listing of Siemens Energy, with preparations “well on track.”

Runtime restrictions, imposed by the South Korean government on coal-fired power plants to limit fine dust, are expected to push up LNG demand. Energy Aspects cautioned, however, that the country’s natural gas imports requirements this winter will merely rise 0.47 million tons due to good nuclear power availability.

Analysts at the World Bank expect energy and metal prices will continue to decline in 2020, following sharp drops this year amid weaker global growth and consequent softer demand. Prices of oil, natural gas and coal are forecast almost 15% lower in 2019 than in the previous year, and to fall further in 2020.

By 2035, over half of the world’s energy will come from renewables while power consumption doubles due to fast-progressing electrification. By shaping energy ecosystem across buildings, industry and the grid, Siemens supports cities and businesses with their sustainability goals.

In its 2019 World Energy Outlook, the International Energy Agency (IEA) is looking beyond 2030 targets of achieving electricity and clean cooking facilities for all. Offshore wind, in particular, will lead sustainable energy production as the sector is forecast to become a $1 trillion industry.

Mitsubishi Heavy Industry (MHI) Group has updated its midterm business plan to focus on decarbonization through hydrogen co-firing, electrification and artificial intelligence. Reacting to lower demand for steam turbines, the group also cut its revenue target of 5,000 yen to 4,700 billion by end of fiscal 2020.

Start-up of two liquefaction trains - Cameron LNG Train 1 and Corpus Christi LNG Train 2 - have pushed total U.S. net gas exports to 4.1 billion cubic feet per day (Bcf/d) in the first half of this year, more than double pre-year levels. Apart from LNG, pipeline gas is exported to Canada and Mexico.

Page 5 of 163

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.