Quality conversion to lift Dutch gas import demand
Stronger quality conversion could continue to bolster the Netherlands' high-calorie gas imports over the rest of this year, including from Russia.
Russian state-controlled Gazprom sold 2.82bn m³ of gas to the Netherlands in the second quarter, up from 1.74bn m³ a year earlier. The firm had already lifted sales in the first quarter.
This was in contrast to most other markets in Europe, including Germany, to which Gazprom's sales plummeted to 20.1bn m³ in January-June from almost 27bn m³ a year earlier. Sales to the UK also dropped sharply, although the firm registers some deliveries to UK-based marketing and trading arm GMT as sales to other markets, such as the UK and Belgium, even if physical delivery is elsewhere.
Gazprom's sales to the Netherlands were close to 1bn m³/quarter before the 2017-18 winter — in line with its 4bn m³/yr contract with Dutch firm Gasterra. But sales to the country rose to 7.88bn m³ in 2018 and 8.51bn m³ in 2019.
Gazprom and Gasterra settled an arbitration case in June 2017 over their contract, including a price revision. A substantial proportion of deliveries in the contract — which runs to 2023 — is linked to spot prices.
The increase in Russian take was supplemented by brisk deliveries from elsewhere. The Netherlands received 137 GWh/d through the BBL pipeline from the UK in April-June, with physical flows towards the Netherlands only becoming available from July 2019. And high-calorie imports from Belgium climbed to 156 GWh/d from 130 GWh/d.
The rise in deliveries was at least partly offset by slower LNG sendout and weaker Norwegian imports.
But aggregate Dutch import demand rose in the second quarter. It was boosted by stronger conversion of high-calorie gas into low-calorie supply, even as domestic consumption and high-calorie injection demand slipped.
Aggregate Dutch consumption slipped in the second quarter, with low-calorie exports also down.
But converted high-calorie supply rose to 757 GWh/d from 640 GWh/d a year earlier, with nitrogen use up to 8.77mn m³/d from 7.61mn m³/d.
An expansion of the Wieringermeer base-load facility in December last year has allowed for a sharp rise in Dutch quality conversion.
And demand for quality conversion has stayed quick this summer, partly because of injections using converted supply into the Norg storage site for the first time.
In contrast to Norg, high-calorie injection demand slipped.
Dutch high-calorie needs to stay high
Quality conversion could stay strong over the rest of the year, boosting Dutch high-calorie gas demand compared with a year earlier.
Converted high-calorie supply jumped to 730 GWh/d on 1 July-16 August from 464 GWh/d a year earlier, as Norg injections remained brisk.
And nitrogen availability at GTS' base-load facilities is scheduled to be 9.38mn m³/d over the rest of the quarter and as high as 10.1mn m³/d in October-December, up from 5.19mn m³/d and 9.11mn m³/d respectively a year earlier.
Using 100pc of base-load nitrogen availability, as targeted by GTS for this gas year, and assuming the same ratio between converted supply and nitrogen use as earlier this year, converted high-calorie supply could reach 800 GWh/d over the rest of the summer and 857 GWh/d in the fourth quarter. This would be well up from 478 GWh/d and 761 GWh/d, respectively, a year earlier.
Quick quality conversion could help pare Groningen output further, in line with the field's 2020-21 production plan. The plan stipulates that output of 9.3bn m³ would be allowed, assuming an average number of degree days. This is well down from the 10.7bn m³ allowed under the revised 2019-20 plan, although output is on track to be substantially lower.
Brisk Russian take likely to continue
The Netherlands could continue to rely on quick imports from Russia to meet part of its additional import demand.
Deliveries to Oude Statenzijl have slowed this quarter from a year earlier. But Russian sales may have remained quick, with Gazprom likely relying on withdrawals from its capacity at Bergermeer rather than physical deliveries to meet demand.
Oude Statenzijl flows slipped to 216 GWh/d on 1 July-15 August from 253 GWh/d a year earlier. But Bergermeer switched to a net stockdraw of 53.1 GWh/d from net injections of 53.7 GWh/d, leaving the site emptier than a year earlier.
LNG sendout has risen to 206 GWh/d from 137 GWh/d. Deliveries from the UK along the BBL have also remained brisk.
Norwegian deliveries into the GTS network have stayed slower, but the year-on-year fall was just 13 GWh/d on 1 July-15 August relative to 77 GWh/d in April-June.
But this was partly offset by a slowdown in high-calorie imports from Belgium.
Related news posts
US M&A deals dip after record 1Q: Enverus
US M&A deals dip after record 1Q: Enverus
New York, 26 April (Argus) — US oil and gas sector mergers and acquisitions (M&A) are likely to slow for the rest of the year following a record $51bn in deals in the first quarter, consultancy Enverus says. Following an unprecedented $192bn of upstream deals last year, the Permian shale basin continued to dominate first-quarter M&A as firms competed for the remaining high-quality inventory on offer. Acquisitions were led by Diamondback Energy's $26bn takeover of Endeavor Energy Resources. Other private operators, such as Mewbourne Oil and Fasken Oil & Ranch, would be highly sought after if they decided to put themselves up for sale, Enverus says. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Start-ups to help Total keep output stable in 2Q
Start-ups to help Total keep output stable in 2Q
London, 26 April (Argus) — TotalEnergies said it expects its oil and gas production to hold broadly steady in the second quarter as planned maintenance is partially offset by rising output from new projects in Brazil and Denmark. The company expects to average 2.4mn-2.45mn b/d of oil equivalent (boe/d) in April-June, compared with 2.46mn boe/d in the previous three months and 2.47mn boe/d in the second quarter of 2023. Production is being supported by the restart of gas output from the redeveloped Tyra hub in Denmark late last month and the start of the 180,000 b/d second development phase of the Mero oil field on the Libra block in Brazil's Santos Basin at the beginning of the year. TotalEnergies first-quarter output was flat compared with the previous three months but 2pc lower than a year earlier as a result of Canadian oil sands divestments. The company reported a robust set of first-quarter results today, broadly in line with analysts' expectations. Profit for the first three months of 2024 was $5.7bn, compared to $5.6bn in the same period last year. Adjusted profit — which takes into account inventory valuation effects and special items — came in at $5.1bn, down by 22pc on the year but slightly ahead of the consensus of analysts' estimates of $5bn. Adjusted operating profit from the firm's Exploration & Production business was down by 4pc year-on-year at $2.55bn, driven in part by lower natural gas prices. The Canadian oil sands asset sales weighed on the segment's production but this was partly compensated by start-ups. As well as Mero 2, the Akpo West oil project in Nigeria started production during the first quarter. TotalEnergies' Integrated LNG segment saw a 41pc year-on-year decline in its adjusted operating profit to $1.22bn in January-March. The company said this reflects lower LNG prices and sales. But while its LNG sales for the quarter fell by 3pc in year-on-year terms, its LNG production was greater by 6pc. TotalEnergies achieved an average $78.9/bl for its liquids sales in the first quarter, an improvement on $73.4/bl a year earlier. But the average price achieved for its gas sales was 43pc lower on the year at $5.11/mn Btu. In the downstream, the company's Refining & Chemicals segment's first-quarter adjusted operating profit was $962mn in January-March, down by 41pc on the year but 52pc higher than the preceding quarter. TotalEnergies attributes the quarter-on-quarter rise to higher refining margins and a rise in refinery throughput . For the second quarter, it expects refinery utilisation rates to be above 85pc, compared with 79pc in the first quarter, boosted by the restart of 219,000 b/d Donges refinery in France. Total's Integrated Power segment continued to improve, registering a quarter-on-quarter and year-on-year increased of 16pc and 65pc respectively in its adjusted operating profit to €611mn. Net power production increased 14pc year-on-year to 9.6 TWh, while the company's portfolio of installed power generation capacity grew 54pc to 19.5GW. Total's cash flow from operations, excluding working capital, was down by 15pc on a year earlier at $8.2bn in the first quarter. The company has decided to raise its dividend for 2024 by 7pc to €0.79/share and plans a $2bn programme of share buybacks for the second quarter. By Jon Mainwaring Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Japanese gas utilities to sell more city gas in 2024-25
Japanese gas utilities to sell more city gas in 2024-25
Osaka, 26 April (Argus) — Japanese gas utilities are expecting city gas demand from their customers to rebound in the April 2024-March 2025 fiscal year, after warmer than normal weather reduced the use of the heating fuel in 2023-24. Japan's largest gas retailer by sales Tokyo Gas forecast on 25 April that its city gas sales will increase to 11.422bn m³ for 2024-25, up by 1.1pc from a year earlier. Sales to the household sector are predicted to grow by 3.4pc to 2.8bn m³, after unusually warm weather during the summer and winter of 2023-24. Supplies to the industry and commercial users are also anticipated to edge up by 0.3pc to 8.6bn m³ during the period. The optimistic outlook came after a 10.1pc year-on-year fall in city gas sales for 2023-24. Tokyo Gas sold around 2.7bn m³ of city gas, down by 2.8pc from a year earlier, to the household sector to meet weaker weather-driven demand. Sales to the industry sector plunged by 20.1pc to 4.7bn m³ because of slower operations at their customers, while wholesale sales dropped by 3.2pc to 1.56bn m³. The falls more than offset a 2.3pc rise to 2.3bn m³ in the commercial sector where hotter than normal summer weather boosted city gas demand for cooling purposes. Tokyo Gas forecast temperatures in its service area to average 16.4°C in 2024-25, down from the previous year's 17.5°C. Fellow gas retailer Toho Gas forecast its city gas sales to increase by 1.2pc from the previous year to 3.4bn m³ in 2024-25, with supplies to residential users rising by 5.6pc to 595mn m³ and sales to the industry and commercial sectors edging up by 0.3pc to 2.8bn m³. The company sold 3.37bn m³ of city gas in 2023-24, down by 2.4pc from a year earlier, pressured by the warmer weather. City gas sales by Saibu Gas are expected to rise by 2.3pc from a year earlier to 940mn m³ in 2024-25. The company expanded sales by 3pc to 919mn m³ in 2023-24. Possible increased city gas sales in 2024-25 would increase demand for its main feedstock of LNG. But the 2024-25 sales forecast by Tokyo Gas and Toho Gas would remain lower compared with their 2022-23 sales. Japan's city gas production in 2022-23 totalled 35bn m³, which required 25.5mn t of LNG, according to trade and industry ministry data. By Motoko Hasegawa Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
LNG Energy eyes sanctions-hit Venezuela oil blocks
LNG Energy eyes sanctions-hit Venezuela oil blocks
Caracas, 25 April (Argus) — A Canadian firm plans to revive two onshore oil blocks in Venezuela, but the conditional deals signed with struggling state-owned PdV come just as the US is reinstating broad sanctions on the South American country. LNG Energy Group's Venezuela unit agreed two deals with PdV to boost output in five fields in the Nipa-Nardo-Niebla and Budare-Elotes blocks, which produce about 3,000 b/d of light- to medium-grade crude, the company said on Wednesday. The Canadian company, which operates in neighboring Colombia, would receive 50-56pc of production of the blocks. Venezuela's oil ministry declined to comment. But finalizing the contracts depends on providing required investment to develop the fields within 120 days of the contract signing on 17 April, LNG Energy said. And the signing came on the same day as the US reimposed oil sanctions on Venezuela and gave most companies until 31 May to wind down business. LNG Energy Group said it intends to comply with existing and upcoming US sanctions, noting that the conditional contracts were executed within the terms of the temporary lifting of sanctions — general license 44 — but it will abide by the new license 44A. The reimposition of US sanctions on Venezuela prohibits new investment in the country's energy sector, at the threat of US criminal and economic penalties. "The company will assess in the coming days the applicability of license 44A to its intended operations in Venezuela and determine the most appropriate course of action," LNG Energy said. "The company intends to operate in full compliance with the applicable sanctions regimes." The two blocks are in the adjacent Anzoategui and Monagas states, part of the Orinoco extra heavy oil belt. Most of Venezuela's output is medium- to heavy-grade crude. Both PdV and Chevron have drilling rigs working in those two states, in separate workover and drilling campaigns. Venezuela is now producing above 800,000 b/d, after the US allowed Chevron to increase production and investment under separate waivers. By Carlos Camacho Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Business intelligence reports
Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.
Learn more