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Brazil's LPG market seeks alternatives: Correction
Brazil's LPG market seeks alternatives: Correction
Corrects national LPG demand in fifth paragraph. Rio de Janeiro, 29 October (Argus) — Brazil's LPG distribution business will change significantly and look toward alternatives such as compressed natural gas (CNG) and biomethane in the near future thanks to a growing number of industry mergers and an expected surge in demand from new federal laws. In March, Copa Energia, Brazil's largest LPG distributor with 25pc the market share, acquired small-scale CNG distributor Companhia de Transporte de Gas (CTG) as part of its strategy to expand distribution of natural gas and biomethane. Copa is looking to acquire at least three other companies, including biomethane producers, to increase margins as biomolecule prices are still higher. Ultragaz — which has 17pc of Brazil's LPG market share — acquired Neogas, another CNG distributor, in 2022 and progressed on to biomethane distribution. Essencis Biometano, a southeastern Sao Paulo state partnership between renewable energy companies MDC and Solvi Essencis Ambiental, will supply 68,000m³/d of biomethane to Ultragaz, and Rio de Janeiro GNR Dois Arcos' biomethane plant will supply 10,000 m³/d to Ultragaz. "This is a rush to capitalize on an opportunity to offer a mix of energy products to the market, hence not only securing one's clients portfolio but also moving ahead of the market and perhaps growing the clientele," one LPG market executive said. The trend of looking into other markets is especially strong in Sao Paulo as well as in southern and central-western states. The federal government's Gas for All social program — expected to deliver one 13kg cylinder/month to 20mn families by the end of 2025 — will also change the LPG market's dynamics by driving demand while including new consumers into the LPG market. Some participants say it will help decrease usage of firewood for cooking, which is still prominent in the countryside and unlikely to be replaced entirely. Delivered cylinders could replace up to 40pc of wood consumption, a consultant told Argus, thus increasing national demand for LPG by 216,000-312,000 metric tonnes (t)/yr, up from about 7.6mn t/yr currently used nationwide. The program is most likely to increase LPG use in rural areas, helping major distributors in those areas increase their market shares even further. By Betina Moura Brazilian LPG market share Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Consensus grows for green gas policy in Germany
Consensus grows for green gas policy in Germany
London, 28 October (Argus) — Germany's two main political parties are beginning to back a national green gas sales quota, increasing the likelihood of its development after the 2025 general election. The German government is yet to put forward a green gas quota proposal, unlike several European neighbours such as Denmark , the Netherlands and Austria . Economy and climate ministry BMWK — led by the Greens — has opted for more active industrial policy to ensure the ramp-up of hydrogen production, rather than a broader green gas policy that would let market prices have more decisive influence over whether hydrogen or alternative green gases prevail. But politicians from the centre-left SPD and centre-right CDU are increasingly referring to a green gas quota as an attractive policy option. The SPD is in government but not in charge of BMWK, while the centre-right CDU is leading the polls for the general election. SPD politicians Bengt Bergt and Andreas Rimkus last year put forward the most concrete proposal yet for such a policy, and it has since found some resonance among politicians and industry. Bergt, the SPD's energy spokesperson, told Argus that he had heard "from a well-placed and high-up source in BMWK that there was ongoing work on a quota solution". BMWK declined to comment on this. CDU politicians too have repeatedly voiced interest for some form of green gas quota. A green gas quota is one option for creating a "lead market" to ensure the most cost efficient delivery of the energy transition, the CDU's deputy head Jens Spahn said in an energy policy paper seen by Argus . The green gas quota is "clearly in the CDU's programme" as a solution, the SPD's Bergt told Argus . With the CDU, SPD and the green-led ministry working towards the plans, Berg said he is looking "quite positively into the future even if it does not come to fruition within this legislative period". The proposal itself Bergt proposes to mandate any supplier of gas to end consumers to evidence a certain proportion of carbon-free or low-carbon gas in its portfolio. This is different to the green gas blending model proposed in other countries. The required proportion of green gas would rise slowly at first to allow for the ramp-up of the hydrogen economy, and takes into account expectations of falling demand later in the next decade, Bergt told delegates at the Handelsblatt Jahrestagung Gas in Berlin earlier this month ( see graph ). The policy foresees that only renewable gases can be used in German gas grids from 2045. Any low-carbon gases could also be used to fulfil this quota, as long as the CO2 savings are equivalent to what they would be if the quota were fulfilled completely with climate-neutral gases. Gases that have lower CO2 emissions per kWh than methane derived from fossil fuels could be used to fulfil the quota for a certain period, including blue hydrogen. But when the CO2-savings targets are high enough, only carbon-neutral renewable gases such as hydrogen or biomethane could be used to meet the quota. In case of non-compliance, utilities would be penalised according to the amount of surplus CO2 emitted compared with the legal pathway, at a minimum cost of €1,200/t CO2. This policy approach would allow Germany to meet its climate goals, ensure security of supply and low energy prices, all while avoiding carbon lock-in effects, at no extra cost to the German state, Bergt said. Gas industry welcomes planning security Several gas industry members agreed with the basic points of the proposal, welcoming the long-term security it could provide for planning horizons. The proposal would answer the hydrogen industry's calls for a policy that supports demand in Germany, panellists at the conference said. But the policy would at the same time allow for price-driven competition between hydrogen and biogas, ensuring the lowest societal cost for decarbonisation, panellists said. Panellists warned against overcomplicating the policy, in light of the general bureaucratic burden. Swiss trading firm MET chief strategy and business development officer Joerg Selbach-Roentgen told Argus in February that the firm was in favour of a green gas blending obligation as it provided a more reliable regulatory framework. A green gas quota is a "valuable instrument to reach the market ramp-up for new gases of all kinds", gas and hydrogen association Zukunft Gas executive director Timm Kehler said at a parliamentary committee hearing late last month. Zukunft Gas praised Bergt's proposal in a position paper in March but asked for further freedoms in compliance, whether through trading of quotas or taking into account uncertain weather-dependent aspects of demand each year. By Till Stehr Percentage of green gas in suppliers' portfolio by year % Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Australia’s Santos commissions Moomba CCS facility
Australia’s Santos commissions Moomba CCS facility
Adelaide, 18 October (Argus) — Australia's Santos has commissioned its 1.7mn t/yr Moomba carbon capture and storage (CCS) project in the onshore Cooper basin of South Australia state. The Australian carbon credit unit-generating project is running at full injection rates of up to 84mn ft³/d (865mn m³/yr) of CO2 with all five wells on line, Santos said, adding that the full 1.7mn t/yr capacity would depend on Cooper basin gas production. The CCS will be Australia's second largest by nameplate capacity after Chevron's controversial 4mn t/yr Gorgon CCS on Barrow Island, which has been criticised for failing to reach its sequestration goals because of problems with pressure management . Santos results Jul-Sep '24 Apr-Jun '24 Jul-Sep '23 y-o-y % ± q-o-q % ± Volumes ('000 t) GLNG (100pc) 1,300 1,338 1,370 -5 -3 Darwin LNG (100pc) 0 0 42 -100 -100 PNG LNG (100pc) 1,938 2,001 2,111 -8 -3 Santos' equity share of LNG sales 1,148 1,264 1,300 -12 -9 Financial LNG sales revenue ($mn) 766 762 821 -7 1 Total sales revenue ($mn) 1,269 1,313 1,436 -12 -3 LNG average realised price ($/mn Btu) 12.69 11.47 12.02 6 11 Oil price ($/bl) 83.24 89.48 89.97 -7 -7 Source: Santos Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Australia’s Santos commissions Moomba CCS facility
Australia’s Santos commissions Moomba CCS facility
Adelaide, 17 October (Argus) — Australian independent Santos has commissioned its 1.7mn t/yr Moomba carbon capture and storage (CCS) project in the onshore Cooper basin of South Australia state, the firm said in its July-September results. The Australian carbon credit unit (ACCU)-generating project is running at full injection rates of up to 84mn ft³/d (2.38mn m³/d) of CO2 with all five wells on line, Santos said, adding that the full 1.7mn t/yr capacity would depend on Cooper basin gas production. The CCS will be Australia's second largest by nameplate capacity after Chevron's controversial 4mn t/yr Gorgon CCS on Barrow Island, which has been criticised for failing to reach its sequestration goals because of issues with the pressure management system. Santos reported July-September output 3pc down from 22.2mn bl of oil equivalent (boe) in the previous quarter to 21.6mn boe. This was primarily because of planned maintenance at amine trains at its Varanus Island plant and natural field decline in Western Australia state. Condensate production fell by 97pc from 329,100 bl to 9,000 bl for the quarter because of field decline and shutdown at the Ningaloo Vision floating production, storage and offloading vessel (FPSO) because of a subsea communications fault, expected to return to service in early to mid October-December quarter. Santos completed decommissioning of 13 wells within the Harriet joint venture and three of 11 wells in the Mutineer, Exeter, Fletcher and Finucane fields. The 7.8mn t/yr Gladstone LNG shipped 21 cargoes for the quarter, one less than a year and quarter earlier. LNG production was similar to the previous quarter because of seasonal shaping to meet domestic winter gas requirements. Growth is expected in October-December owing to new wells from Arcadia and Roma fields. Angore field in Papua New Guinea is being commissioned and will start production of about 350mn ft³/d in October-December, Santos said, in line with previous guidance. The Barossa backfill project offshore northern Australia is 82pc complete with FPSO integration continuing in Singapore and three of six wells completed. Santos' Pikka phase one project is 67pc complete, with Alaskan authorities approving a 25pc increase in the acreage in September. But the project's costs would increase by about 20pc, or around $520mn from the original $2.6bn estimate, because of inflation and accelerated pipelay activity costs, Santos said. This would take the cost of Pikka, which was sanctioned in mid-2022 to $3.12bn. Santos controls 51pc and Spanish energy firm Repsol owns 49pc of the asset. Santos expects its 2024 production to be at the upper end of its guidance of 84mn-90mn boe. By Tom Major Santos results Jul-Sep '24 Apr-Jun '24 Jul-Sep '23 y-o-y % ± q-o-q % ± Volumes ('000 t) GLNG (100pc) 1,300 1,338 1,370 -5 -3 Darwin LNG (100pc) 0 0 42 -100 -100 PNG LNG (100pc) 1,938 2,001 2,111 -8 -3 Santos' equity share of LNG sales 1,148 1,264 1,300 -12 -9 Financial LNG sales revenue ($mn) 766 762 821 -7 1 Total sales revenue ($mn) 1,269 1,313 1,436 -12 -3 LNG average realised price ($/mn Btu) 12.69 11.47 12.02 6 11 Oil price ($/bl) 83.24 89.48 89.97 -7 -7 Source: Santos Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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