Projects & Finance

Australia-listed LNG Ltd, developer of U.S. Magnolia liquefaction plant, faces a financial crunch as a takeover bid by a Singaporean investor has been pushed back to mid-April. Magnolia LNG hence postponed shipment of the first cargo to the Bac Lieu power plant in Vietnam’s Mekong Delta.

Polish utility PGE is adding two gas-fired units, powered by GE’s 9HA.01 gas turbines, to its Dolna Odra power plant. By adding flexible combined-cycle units, PGE gradually converts the 1,832 MW coal-fired plant into a cleaner-burning facility to meet regional emission standards.

The Russian President Vladimir Putin has instructed Gazprom to proceed to the pre-investment phase for the ‘Power of Siberia 2’ pipeline. Supplies via this route may total up to 50 billion cubic meters per year (bcm/y), with the gas set to be brought to western China.

French industrial company Eranove is fast-tracking the development of the 390 MW Atinkou combined-cycle power plant in Ivory Coast, having just taken financial close after receiving €303 million in debt financing. Total cost of the CCGT is €404 million, developers disclosed.

Tokyo-based Yokogawa Electric will provide a control system and field instruments for the Zerger open-cycle gas power plant in Turkmenistan. The order was awarded by Renaissance Heavy Industries, the Turkish EPC co-contractor that is building the 400 MW gas peaking plant on behalf of Turkmenenergo. Start-up is due by September this year.

Competitive Power Ventures’ (CPV) new gas-fired Fairview Energy Center has been adapted to use ethane in its combustion mix. Using GE’s DLN2.6+ AFS combustion system, the Fairview combined-cycle gas power plant successfully completed testing with 25% ethane mix and is now ready for full commercial operation.

The Japanese utility Osaka Gas, part of Daigas Group, is fast-tracking development of the Himuka LNG import terminal and integrated gas power plant on Kyushu Island. The project, set to replace a coal power unit of Ashai Kasei chemicals company, is on schedule for start-up in 2022.

MAN Energy Solutions is supplying gas engines for a new 125 MW power plant and Chandpur, Bangladesh, and has handed over another three power plants in the cities of Bogra and Chittagong. Together, the four plants bring MAN’s recently installed capacity in the country to 400 MW.

Four pipelines – currently in planning or under construction – will significantly step up gas deliverability into New England, in the northeastern United States. Once operational, these interconnectors will gradually add more than 350 million cubic feet per day (MMcf/d) of pipeline capacity into the region by 2023.

Mitsubishi Hitachi Power Systems (MHPS) has begun work on a full turnkey contract to build Unit 1-3 at the Anegasaki Power Station, operated by JERA in Japan. Three 650 MW combined-cycle gas power units will replace four ageing units at the plant, and are due to start operations successively from early 2023.

Golar Power, together with Stonepeak Infrastructure Partners, has agreed to develop an integrated LNG import and power generation project at Port of Suape in northeastern Brazil, its second such project in the region. The venture is due operational in the second half of 2020.

Canada-based Demand Power, a behind-the-meter energy storage company, has secured $71 million (€63.9m) in equity and project finance from a group of investors, led by Star America. The funds will be used to deploy industrial-grade batteries and uninterruptible power supply (UPS) on customer sites, with the first project due onstream by the end of 2020.

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News in Brief

Zhonghua’s profits halve

April 1 – Hong Kong-listed Zhonghua Gas Holdings has recorded a staggering 46.7% fall in profit, citing a lower margin for LNG supplies and reduced subsidies, although full-year revenue rose by 7.3%. In December, Zhonghua partnered with Shanghai Shenergy to supply LNG in the Yangtze River Delta region, and also has strong business relationships with Tractebel Engineering and Tianjin Jinre Heat-Supply Group.

Endesa donates $28m to fight coronavirus

March 31 – Endesa has created a 25 million euros ($27.8 million) fund to help fight the coronavirus pandemic in Spain. The Spanish utility, subsidiary of Enel, said the fund will be designated for purchases of protective equipment for health-care workers.

 

MAN develops liquid methane terminal in Swedish port

March 30 – OxGas has commissioned MAN Energy Solutions to act as ‘owners engineer’ to develop and build a liquefied methane-based fuels terminal in the Swedish Port of Oxelösund. The terminal will feed both LNG and green methane derived from bio gas to SSAB ’s local steel production, and to re-distribute it via train and trailers to other parts of Sweden for use in the steel industry and decentralized power generation.

American ISOs to delay grid investments

March 27 – North America’s independent system operators (ISO) are considering delaying investments in grid upgrades and enhancement as electricity demand weakens due to industry shutdowns to contain the coronavirus pandemic. PJM Interconnection, the largest U.S. bulk power market which spans 13 Mid-Atlantic and Midwestern states, revised its daily forecast of about 100,000 MW of load but actual demand came in at 95,500 MW.

Wärtsilä starts combustion trials using ammonia

March 26 – The Finish technology group Wärtsilä has initiated combustion trials using ammonia in an effort to reduce emissions. Based on initial results, the tests will be continued on both dual-fuel and spark-ignited gas engines, followed by field tests in collaboration with ship owners from 2022, and potentially also with energy customers.

Xodus sees growth in cable services

March 25 – Xodus Group has stepped up services related to subsea power cables over the last twelve months. The number of new consulting assignments grew by more than 50%, resulting in more than 70 active work streams that are handled by more 30 permanent staff.

Electricity “more indispensible than ever”

March 24 – Disruptions caused by the coronavirus crisis lay bare how much modern societies rely on electricity, according to the International Energy Agency (IAE). Millions of people are mandated to stay home, causing a surge in teleworking, e-commerce and video streaming which pushes up domestic electricity use.

U.S. frackers cut Capex

March 23 – Sharp cuts in capital spending among Appalachian gas producers are now being replicated in other U.S. basis, with Energy Aspects anticipating the deepest impact on production and earnings to take place starting from the second half of 2020. So far, E&P companies just hedged 52% of this year’s expected production even though some Appalachian producers are seen “lock in some pure gas volumes at prices above the curve.”

EV makers face bankrupcy

March 20 – Electric vehicles (EVs) remain particularly exposed to the corona effect of supply-side constraints and demand erosion. Gigafactory facilities are likely to be delayed and fledging EV manufacturers could face bankruptcy, Wood Mackenzie warns. On the flip side, declines in EV sector demand may be gains for the stationary energy storage segment.

Manufacturing rebounds in Asia

March 19 – Asian-dominant supply chains for solar and energy storage are gradually rebounding after contractions in February. Moving forward, Wood Mackenzie expects near-term development activity and local logistics in leading European and North American markets will outweigh lingering supply issues.

Italy’s gas demand plunges

March 18 – Corona-struck Italy has seen demand for natural gas plunge 8% from the previous week, with similar declines likely in other EU countries as national governments impose lockdowns to contain the virus. Industrial demand is “particularly volatile,” while gas generators will bear the brunt of demand loss, Wood Mackenzie says, as a carbon price decline is bolstering thermal coal.

Nexif raises funds for Rayong CHP

March 17 – Nexif Energy, a joint venture between Singapore-based Nexif and Denham Capital, has raised project financing for the Rayong gas-fired cogeneration project in Thailand. The 92 MW plant is being developed project with Ratch Group, based on 25-year power purchase agreement with Electricity Generating Authority of Thailand (EGAT).

ADB provides $10m loan for Afghan IPP

March 16 – The Asian Development Bank (ADB) has agreed to provide $10 million in debt financing for a gas-fired power unit in Mazari Sharif with a capacity of nearly 60 MW. Phase-1 of the Independent Power Project (IPP) will get another $10 million loan from the Leading Asia's Private Sector Infrastructure Fund (LEAP).

IEA models 50% Carbon-Free Generation

March 13 – Analysts at the U.S. Energy Information Administration (EIA) have drawn up the 50% Carbon-Free Generation case - assuming a stark shift in state-level policies. In this event, the U.S. would have 19% more nuclear power generation, 10% more wind power and 17% more solar PV contribution than in its Annual Energy Outlook 2020 (AEO2020) reference case.

E-charging market to top $15bn by 2030

March 12 – By 2030, the U.S. market for energy-optimisation in support of charging electric-vehicles could be worth $15 billion per year, McKinsey finds. The consultancy expects high demand for home-charging appliances as residential power tariffs are comparatively cheap and most charging can happen overnight when off-peak electricity prices are lower.

Oversupply builds up

March 10 – Energy Aspects’ end-March forecast has added on another 100+ billion cubic feet of natural gas supply while demand remains subdued. In the U.S., the seasonal decline in heating degree days nearly halved the natural gas withdrawal rate. Gas-burn in the power sector and residential/commercial demand are forecast to fall by 1.7 billion cubic feet per day (bcf/d) and 4.0 bcf/d, respectively.

Small-scale LNG cuts cost for power plants

March 10 – Decentralized gas power plants in remote locations can source cheaper fuel from small-scale LNG regas terminals than from trucking the super-chilled gas across long distances. “Trucking LNG further inland would entail additional costs as well as logistical challenges,” IEA analysts noted. For example, a 100 MW baseload power plant would require, on average, around 20 daily deliveries from tanker trucks.