Projects & Finance

Royal Dutch Shell has made its first foray into the Australian electricity sector by launching a A$617 million (£345.4 million) takeover offer for the retailer ERM Power. The offer is understood to be a 43% premium on the ERM’s market value. Trevor St Baker, the founder of ERM, already endorsed the offer.

Kahraba, a part of the Egypt Kuwait Holdings (EKH) Group has contracted Wärtsilä to supply gas engines to boost the capacity of a power plant in Borg El Arab, an industrial city some 45km southwest of Alexandria.

MAN Energy Solutions has been commissioned to build two combined heat and power (CHP) plants in Chemnitz on behalf of the municipal utility eins energie in sachsen. The two CHPs will be driven by a total of 12 MAN 20V35/44G TS gas engines, each with an output of 12.6 MWe.

To raise electrification levels in Asian island nations, utilities are looking at small-scale LNG receiving terminals with integrated gas generators. Collocating LNG regas and power projects can curb Capex significantly, Black & Veatch finds, but operators need to ensure a steady stream of LNG shipments.

Japan’s JERA; the country’s largest LNG importer and power generator, has completed works to replace 13 gas turbine units at the 5,040 MW Futtsu Power Station. The revamped CCGT has already resumed commercial operation.

Ansaldo Energia has been selected by the German utility Uniper to build an open-cycle power plant on a turnkey basis. The 300 MW plant, driven by an AE94.3A gas turbine, will be installed in Irsching, southern Bavaria for grid balancing purposes.

General Electric has secured two orders for 6F.03 gas turbines in China with Guangdong Lee & Man Paper Manufacturing Ltd (Lee & Man) and China Huadian Corp (CHD) Xiangyang. These order wins come as the 6F turbine achieved 25 years of successful operations.

Siemens Gas and Power has carried out the first Brownfield Engine Exchange (BEX), replacing a the gas turbine section (V84.2) at PowerSouth’s McWilliams power plant in Covington County, Alabama with a newer, more efficient SGT6-2000E.

Mitsui OSK Lines (MOL) is to more than double its fleet of LNG regasification ships to tap into a construction boom for gas-fired power stations in developing regions, such as Southeast Asia. According to Reuters, the Japanese giant will add six FSRUs, bringing its total to 10, by 2025.

Spanish regulator CNMC has proposed to cut gas grid access fees for gas-fired power plants by 6.7%. According to traders, this could put pressure on wholesale power prices.

TC Energy Corp, formerly Trans Canada, has entered into an agreement through its wholly-owned subsidiary, TransCanada Energy, to sell interests in three Ontario natural gas-fired power plants for about C$2.97 billion.

The Mozambican government has approved a 30-year concession for Beluluane Gas Company to build, own and operate the 2,000 MW Beluluane gas power near the capital of Maputo. The developer is also required to build a feeder pipeline to supply the power plant with regasified LNG form Mantola Port.

International Finance Corp (IFC), part of the World Bank, has made a $2 million cost-sharing commitment to South Africa’s Transnet to develop a floating storage and regasification unit (FSRU) at the Port of Richards Bay by 2024. The aim is import LNG to fuel independent power projects.

Egypt’s National Electricity Technology company Kahraba has handed an engineering and equipment (EEQ) contract to Wärtsilä to install two 34SG engines at a power plant in Borg El Arab, an industrial city some 45km southwest of Alexandria. The upgrade will increase the plant’s capacity by two thirds.

The Florida Power Plant Siting Board has approved Tampa Electric's plan to build a combined-cycle gas power unit in replacement for a coal-fired block at its 1,700 MW Big Bend power station in Hillsborough County, Florida. Construction of the CCGT comes at a cost of $853 million, with works slated to start in August.

Page 9 of 157

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.