Brazil, Guyana, Suriname postpone joint energy plan

  • Market: Natural gas
  • 01/21/22

The leaders of Brazil, Guyana and Suriname have postponed the creation of a regional energy corridor after Brazilian president Jair Bolsonaro left discussions early.

Bolsonaro, whose country's abundant pre-salt natural gas reserves would anchor the proposed corridor, returned to Brazil prematurely because of his mother's death.

The discussions on the Arco Norte project started in Suriname yesterday, and were to conclude in Guyana today, but "have been set back because president Bolsonaro has had to return home," a Guyanese government official told Argus today. No date for the resumption of talks has been set.

The talks included presidents Irfaan Ali of Guyana and Chandrikapersad Santokhi of Suriname.

Arco Norte would feature a gas pipeline network tied to industrial and petrochemical projects, such as a gas-fired aluminium smelter to process Guyana's bauxite ore.

The gas could come from offshore Guyana and Suriname that are emerging onto the hydrocarbons map, as well as Brazil.

Also on the agenda was an interchange of electricity, and a highway network connected to a planned deepwater port in Guyana, giving parts of northern Brazil access to the Atlantic.

Preferred access

Bolsonaro is looking to secure priority for Brazil's state-controlled Petrobras in the offshore Suriname play, which is geologically related to Brazil's offshore northern frontier.

During his 20 January meeting with his Suriname counterpart Santokhi, Bolsonaro said Petrobras could bring its deepwater expertise to the region.

Brasilia touts its offshore northern basins as its "new pre-salt", with around 40pc of the more than 20bn bl of oil equivalent (boe) discovered in pre-salt areas in the Campos and Santos basins.

Petrobras will spend around $2bn of the $5.5bn in planned exploration spending under its $68bn 2022-26 business plan on looking for oil in the Equatorial margin.

The company's upstream director Fernando Borges has said 14 wells at four offshore basins — Foz do Amazonas, Barreirinhas, Potiguar and Para-Maranhao — are believed to be connected to a trend in Suriname and Guyana.

Petrobras expects to receive authorization from environmental watchdog Ibama for drilling in Foz do Amazonas in the first half of 2022. BP and TotalEnergies exited exploration blocks in the region after the discovery of a nearby reef complicated licensing.


Sharelinkedin-sharetwitter-sharefacebook-shareemail-share

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

News
02/23/24

CEE countries ask EU to protect internal gas market

CEE countries ask EU to protect internal gas market

London, 23 February (Argus) — Five central and eastern European countries have issued a joint call for the EU to better protect the internal gas market, as storage levies in neighbouring countries could distort regional trade. The Czech industry and trade ministry is leading the initiative, in which Hungary, Austria, Poland and Slovakia are all taking part. The European gas market is "threatened by the introduction of new charges" for transporting gas across borders, which could "distort its functioning, create barriers to trade and hinder cross-border co-operation", the Czech ministry said. The five countries on 20 February asked the Belgian presidency of the EU to place the subject on the agenda of the 4 March energy ministers' meeting so that the issue can be discussed on an EU-wide basis. Europe has done a "tremendous job" in getting rid of its dependence on Russian gas supply, and it should "avoid taking steps that will undermine the work we have done, [and] damage our unity", Czech industry and trade minister Jozef Sikela said. The main target of criticism is the German storage levy, charged on all gas exiting the German grid and currently set at €1.86/MWh for the first half of this year. The levy creates barriers to the free trade of gas between EU countries, creating an "uneven playing field for national economies, increased energy costs for households and reduced cross-border cooperation", the minister said. The Italian regulator recently proposed a similar measure and "other countries" are also considering such levies, "suggesting a possible negative trend towards the extension of such charges across Europe", Sikela said. Levies "undermine efforts to diversify gas sources and favour gas supplies from Russia, which is contrary to the EU's geopolitical and energy security objectives", the minister said. These five countries call for "better protection" of the European gas market and the need for a "co-ordinated European solution". Energy Traders Deutschland expects German levy to rise further The storage levy has led to higher costs within Germany as well, the head of the gas taskforce of Energy Traders Deutschland Joachim Rahls emphasised on the sidelines of the E-World conference in Essen this week. Even within Germany, lower cross-border flows as a result of the levy are raising transport tariffs, as the same costs have to be distributed across less booked capacity, Rahls said, adding a higher storage levy would exacerbate the problems. Rahls "firmly expects" the storage levy to rise further in the next six-month period as current cross-border flows and revenues remain below the ones projected in the most recent setting of the levy. By Brendan A'Hearn and Till Stehr Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Read More
News

Jera to invest $1.4bn in Australia's Scarborough gas


02/23/24
News
02/23/24

Jera to invest $1.4bn in Australia's Scarborough gas

Osaka, 23 February (Argus) — Japanese LNG importer Jera has decided to invest $1.4bn in the Scarborough gas project being developed by Australian independent Woodside Energy off the northwest coast of Western Australia, in a deal that will give it up to 1.2mn t/yr of LNG. Jera on 23 February agreed with Woodside Energy through its subsidiary Jera Australia to acquire a 15.1pc stake in the Scarborough gas field. The $1.4bn is Jera's biggest investment in any gas field by monetary value. The transaction is likely to be completed in the latter half of 2024, subject to conditions including obtaining permits and approvals. The Scarborough gas project aims to produce 8mn t/yr of LNG at Woodside's 4.9mn t/yr Pluto LNG facility from 2026, where it is building a second 5mn t/yr train 2 facility. Jera plans to secure LNG for around 20 years on an fob basis, basically for its own use. It could consider chartering a new LNG vessel in the future, while leveraging its existing fleet, the company said. Jera has decided to get involved in the Scarborough gas development, as the project is in relatively close proximity to Japan and has already passed its final investment decision in November 2021. The percentage of CO2 in gas in the field is at less than 0.1pc, which has also encouraged the company to invest. Jera will not consider installing carbon capture and storage (CCS) technology in the project. It could purchase carbon credits, if CO2 emissions rise above the baseline set for the project. Jera also agreed on 23 February to buy six LNG cargoes per year (around 400,000 t/yr) from Woodside's portfolio over 10 years beginning in April 2026. The deal is on a des basis, with the price formula undisclosed. Combined LNG quantities in the last two deals account for around 4.6pc of Jera's current LNG handling volumes of 35mn t/yr. It is unclear whether handling quantities would increase in the future, which is dependent on demand, Jera said. But the company sees LNG playing a vital role in Asia to balance stable energy supply, to support economic growth with decarbonisation and back up unstable renewable power output. Jera looked for a new LNG supply source, while the US in late January decided to temporarily pause new licences for gas export . Jera said it is monitoring the US situation, without clearly adding that this has influenced its recent investment decisions. Jera and Woodside also agreed on 23 February to explore collaboration in areas such as ammonia, hydrogen and CCS. More details such as timelines for discussion are yet undisclosed. By Motoko Hasegawa Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

India’s Gail seeks to add LNG tanker for US project


02/22/24
News
02/22/24

India’s Gail seeks to add LNG tanker for US project

Mumbai, 22 February (Argus) — Indian state-controlled gas distributor Gail plans to add an LNG tanker to ship cargoes from the US, two persons with knowledge of the matter told Argus . Gail is seeking delivery of the tanker between October 2024 and September 2025 for a minimum period of seven years, which can be extended by another two years, a source in a shipping firm said. The tanker would have a capacity of 159,000m³ to 181,000m³ to transport the fuel from the US. Gail has a term deal for 3.5mn t/yr of LNG from the US' Sabine Pass terminal and 2.3mn t/yr from Cove Point, valid till 2038. The firm currently has four LNG tankers to bring the super-chilled fuel from the US, which includes two-time charter agreements with Japan's Mitsui O.S.K Lines and the rest with NYK Line. The new tanker will help Gail bring more US LNG cargoes to the country instead of swapping cargoes. It will also provide more operational flexibility to the firm, keep its downstream consumers adequately supplied and at the same time reduce supply uncertainty stemming from geopolitical conflicts like the continuing Red Sea tensions. Gail has sold some LNG cargoes sourced from Cheniere Energy's terminal in the Gulf of Mexico to an unnamed highest bidder in Europe, Argus had reported quoting Gail's director of marketing Sanjay Kumar on the sidelines of the India Energy Week in Goa on 9 February. Gail used the proceeds from the sale to source spot cargoes from Gulf countries — shipments which do not have to transit through the Suez Canal to reach India. The firm is likely to issue more LNG tenders to swap US term cargoes with supplies closer to India as cargoes face difficulty in transiting the Suez Canal, Kumar added. The conflict in the Red Sea since December 2023 has disrupted shipping operations as tankers heading to India have been taking the longer route around the Cape of Good Hope. An inability to take the shorter Suez Canal route adds up to seven days in delays for Gail's US LNG shipments to reach the 17.5mn t/yr Dahej LNG import terminal on the west coast of India, Kumar said. Gail offered several LNG cargoes from the Cove Point LNG export terminal in 2017, in order to overcome the problem of a shortage of tankers that could deliver supplies to India. The swap deal resulted in shorter and more efficient deliveries as the swapped cargo ideally would come from a terminal closer to India as compared to the US, and the Cove Point cargo would go to a destination nearer to the US as compared to India. But swap tenders from the US have declined because of availability of four LNG tankers to bring cargoes to India. Gail originally planned to bring all its US cargoes into the country this year, but the conflict in the Red Sea prompted the firm to change tack and issue swap tenders instead, a source with knowledge of the matter said. By Rituparna Ghosh Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Australia’s Santos joins OGCI zero methane initiative


02/21/24
News
02/21/24

Australia’s Santos joins OGCI zero methane initiative

London, 21 February (Argus) — Australian independent Santos has signed the Aiming for Zero Methane Emissions initiative, which seeks "near-zero" methane emissions by 2030 from signatories' operated oil and gas assets. The project, which now has 23 signatories, was launched in March 2022 by the Oil and Gas Climate Initiative (OGCI) — a group of 12 major oil and gas companies. Santos has operations in Australia, Papua New Guinea, Timor-Leste and the US. The company produced 92.2mn bl of oil equivalent in 2023 and has set a target of net zero emissions across scopes 1 and 2 by 2040 for its equity share. The company is also looking to develop three carbon capture and storage (CCS) hubs offshore Australia, which could have a total future storage capacity of up to 35mn t/yr of CO2 — though Santos did not provide a timeframe. Its Moomba CCS project is 80pc complete and the first CO2 injection is expected in the middle of this year. Santos today also formally endorsed a World Bank initiative to eliminate routing flaring from oil operations by 2030. Santos will "will develop and implement plans to achieve its commitment under this initiative", it said. It will also report "flaring and improvement progress" to the World Bank on an annual basis, from 2025. The recent UN Cop 28 climate summit, in November-December 2023, placed scrutiny on oil and gas producers' emissions reduction plans. Companies representing over 40pc of global oil production pledged to cut emissions — including methane to "near zero" by 2030. The summit saw renewed focus on methane emissions , although the frameworks are voluntary. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Lebanese exploration blocks in limbo


02/21/24
News
02/21/24

Lebanese exploration blocks in limbo

Cairo, 21 February (Argus) — The fate of two exploration blocks offshore Lebanon remains in limbo, with the government yet to agree contractual terms with the consortium that bid for the licences last year, the country's energy minister Walid Fayad said. A consortium consisting of TotalEnergies, Italy's Eni and state-owned QatarEnergy submitted bids to explore Blocks 8 and 10 in October last year as part of Lebanon's second licensing round. The blocks lie on Lebanon's recently delineated border with Israel. The same consortium drilled an exploration well in the adjoining Block 9 in August last year but failed to find any commercial volumes of oil or gas . Speaking on the sidelines of the Egypt Energy Show in Cairo, Fayad said the main issue with the bids for Blocks 8 and 10 relates to timeframes for 3D seismic surveys and drilling decisions. TotalEnergies' insistence on a one-year period to decide whether it would shoot 3D seismic on Block 8 is too long, Fayad said. The government's position is that three months should be more than enough, he added. "For Block 10, they're asking for two years to make a decision whether to drill or not. And we're saying you don't need to, you can do it in one year," Fayad said. "That's why they did not sign." TotalEnergies has yet respond to a request for comment. It is unclear whether there will be any further negotiations for Blocks 8 and 10, both of which have been included in Lebanon's third licensing round launched late last year. Fayad said interest in the latest bid round "has yet to be elicited", which is why he is proactively engaging with companies and countries. "It's an uphill battle," he said. The conflict in Gaza is making it more difficult to create a stable environment for the eastern Mediterranean's oil and gas sector to grow, Fayad said. "It makes risk a lot higher, it makes the financing cost a lot higher, and it makes any investment decision a lot more cumbersome. It is crippling the region," he said. By Aydin Calik Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.