Nova Gas Transmission Ltd. (NGTL), part of the Canadian pipeline company TC Energy, has signed a letter of intent with Tidewater Midstream and Infrastructure and TransAlta to acquire the Pioneer Pipeline for C$255 million (US$185m). The pipeline supplies West Canadian gas to power generation units in wider Alberta, supporting coal-to-gas conversions.
Though the latest oil price crash hits U.S. upstream companies, for Asian buyers it’s a blessing as the pricing of oil-indexed long term gas contracts is bound to come down from late 2020. Sustained lower oil price will substantially lower the price of gas which could prompt large scale coal-to-gas switching for power gen in Japan, South Korea and parts of China.
Plummeting oil prices impact U.S. fracking activities. With Brent crude oil prices seen average $43 a barrel in 2020, down from $64/bbl last year, the Government expects shale oil and gas output to decline. Spot gas prices at Henry Hub are forecast to rise starting from April, amid higher demand from the power sector, exceeding $2.2/MMBtu in the third quarter of 2020.
Financials of Indonesia’s state utility PLN are burdened by excess electricity, notably on the Java-Bali grid, which could be oversupplied by 41.5% in 2020. PLN is facing mounting criticism that the ongoing construction of mega-projects is “unnecessary,” hence government targets to add 35 GW of new capacity by early 2020 have been pushed back to 2029/30.
German utility Uniper has lifted its full-year earnings outlook in reaction to the recent revival of the UK capacity market programme which compensates power producers for dispatching plants at short notice. Uniper, subject to a takeover bid from Fortum, said today it aims to achieve up to €950 million in EBIT, lifting targets from initially €850 million.
Crude oil prices have edged up some 10 percent and natural gas prices start to stabilize in reaction to President Trump’s promise of a “major” economic relief package to cushion the impact of the coronavirus crisis. Oil prices plunged nearly 30 percent yesterday after Saudi Arabia decided to flood the market with cheap fuel to recapture market share.
Crude oil prices plummeted over the weekend after Saudi Arabia decided to slash price and flood the market in a bid to recapture market share, opening a price war with Russia. Rock-bottom oil prices affect long-term oil-indexed gas contracts helping the latter outcompete coal as a fuel for power generation.
Despite the coronavirus outbreak, China’s natural gas demand and LNG offake has rebounded in February as the government is keen to reinvigorate industrial output as much and as quickly as possible. Chinese LNG offtakes in February were more than 21 percent higher year-on-year, compensating for the y/y reduction seen in January.
Cash-strapped McDermott International, a global EPC contractor, is moving forward with the previously agreed sale of Lummus Technology after having received no higher bids. Lummus will be sold for $2.725 billion to the Chatterjee Group and Rhône Capital, with proceeds used to repay McDermott's debtor-in-possession (DIP) financing.