Brazil gas sector sets sights on 2022 opening up
Brazil's regulators are facing an end-of-year deadline to lay out a key part of a new regulatory framework for the natural gas industry aimed at boosting competition and efficiency and lowering costs.
The regulator ANP is expected to craft the regulatory framework focusing on transporters, which own pipelines, and the carriers, which own or hold the gas contracts, by the end of the year. That timing would allow the carriers to transport natural gas in the open market by January 2022.
ANP is expected to finish the full regulatory framework for the industry within 18-24 months from last month, when the new natural gas law was signed by president Jair Bolsonaro.
Approval of the new gas law comes at a troubled political moment for Brazil, with president Bolsonaro under fire for mishandling the Covid-19 pandemic and economic slump. Still, pushing the measure through Congress at such fraught times is seen as proof of the pro-business Bolsonaro administration's will to develop the gas market, which has long been dominated by state-controlled Petrobras.
Today, Petrobras is responsible for more than 70pc of gas volume produced daily, has stakes in two of the country's five gas transportation companies and in 20 of the 27 gas distribution companies via its subsidiary Gaspetro. Petrobras also owns 14 of the 15 gas processing units in Brazil. With the reform, Petrobras will play a diminished but still large role across the sector.
The new gas law aims to increase gas supply by more than 60pc in 10 years, by attractinginvestment into the sector and facilitating the entrance of new companies, especially in the pipeline segment. Its aim is to end the concession model for the midstream sector. Although exploration and production will still be under the concession model, companies will be able to trade and carry gas freely with authorization from ANP.
The opening of the gas market started in 2019, when Petrobras agreed to divest from the pipeline segment, followed by associated facilities such as regasification plants. Petrobras has since reduced its stake in the pipeline segment to about a third, sold its stakes in three of the five transportation companies, and now is seeking to lease out some of its processing facilities.
About 70 companies are already authorized to carry gas, up from only five in 2014, with 124 authorized to trade gas, up from 21 in 2002, a sign of mounting interest in the sector even before the reforms. These players are eager to hire transportation capacity from the five pipeline companies, and that will depend on the first two regulatory chapters that ANP is aiming to release by December. Other transportation companies are expected to follow, since consumer demand will dictate where carriers will need to take their gas.
"The government gave a very strong message, that we worked for and will keep on working for the market opening," said José Mauro Ferreira, oil and gas secretary at Brazil's mines and energy ministry. "Now it's the law."
Participants in the gas sector are optimistic.
"Brazil's government has sent a strong signal to investors by approving the new gas law," said Rogério Manso, president of Brazil's natural gas association ATGás.
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Australian new environment agency to speed up approvals
Australian new environment agency to speed up approvals
Sydney, 16 April (Argus) — The Australian federal government announced today it will introduce new legislation in the coming weeks to implement the second stage of its Nature Positive Plan, which includes setting up a national environment protection agency to speed up approval decisions. The planned Environment Protection Australia (EPA) will initially operate within the Department of Climate Change, Energy, Environment and Water until it transitions to become an independent statutory agency, with "strong new powers and penalties" to better enforce federal laws, the government said on 16 April. The EPA chief will be an independent statutory appointment, similar to the Australian federal police commissioner, so that "no government can interfere" with the new agency's enforcement work. The agency will be able to audit businesses to ensure they are compliant with environment approval conditions and issue environment protection orders to anyone breaking the law. Penalties will be increased, with courts able to impose fines of up to A$780mn ($504mn) or jail terms for up to seven years in cases of extremely serious intentional breaches of federal environment law. EPA will also be tasked with speeding up development decisions, including project assessments in areas such as renewable energy and critical minerals. Almost A$100mn will be allocated to optimise the approval processes, with its budget directed to support staff to assess project proposals and help businesses comply with the law. A new independent body Environment Information Australia (EIA) will also be created to provide environmental data to the government and the public through a public website. EIA will need to develop an online database giving businesses quicker access to data and helping EPA to make faster decisions. It will also need to publish state of environment reports every two years. The government said that an audit ordered by environment minister Tanya Plibersek last year found that around one in seven developments could be in breach of their offset conditions, when a business had not properly compensated for the impact a development was having on the environment, highlighting "the need to urgently strengthen enforcement". The planned new legislation is part of the federal government's reform of Australia's environmental laws including the Environment Protection and Biodiversity Conservation Act. Resource project decisions are currently made by the environment minister, with the move to an independent agency will removing any perception of political interference in such decisions, the government said when it first announced the reforms in late 2022. The first stage of the reform was completed late last year with new laws passed to create the Nature Repair Market, with further stages expected to be implemented in the future, the government said. Tight timing Resources industry body the Chamber of Minerals and Energy of Western Australia (CMEWA) welcomed the announcement that the federal government will take a "staged approach" to the implementation of the reforms but noted the timing of EPA's implementation was "tight". "We continue to hold reservations about the proposed decision-making model and will continue to advocate for a model that balances ecologically sustainable development considerations and includes the [environment] minister as the decision maker," CMEWA chief executive Rebecca Tomkinson said. The Minerals Council of Australia (MCA) said that it had been advocating for the creation of EIA, whose future collated data "will provide greater certainty and reduced costs for both government and project proponents", which "may shave years off project development". But it was cautious about potential "unintended consequences" stemming from more bureaucracy. "Australia has one of the most comprehensive environmental approvals processes in the world and the MCA has been clear about the significant risks of duplicative, complex and uncertain approvals processes pose to the minerals sector, the broader economy and the environment if we do not get this right," it warned. By Juan Weik Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
La deuda de Pemex sobresale en el panorama electoral
La deuda de Pemex sobresale en el panorama electoral
Mexico City, 15 April (Argus) — La campaña presidencial de México termina en menos de dos meses, pero aunque ambas candidatas proponen una revolución verde en el sector de la energía, ninguna de ellas ha propuesto un plan viable para evitar la implosión financiera de la empresa estatal Pemex. Claudia Sheinbaum, candidata de continuidad para la política energética nacionalista del Presidente Andrés Manuel López Obrador, anunció el mes pasado su estrategia energética, comprometiéndose a aumentar la producción de petróleo y gas de Pemex, aumentar el rendimiento de las refinerías y la producción petroquímica, desarrollar una industria nacional de litio y buscar un nuevo enfoque en la generación de energía renovable. La antigua jefa de gobierno de la Ciudad de México no ha proporcionado detalles sobre ninguna de estas políticas, pero es difícil conciliar su compromiso con una ampliación de las energías renovables con un límite en la inversión del sector privado sin depender en gran medida del aumento de la financiación de la estatal de electricidad CFE. La política de Sheinbaum en materia de energías renovables es la única desviación de la agenda energética de López Obrador, aunque las agencias de calificación, los inversores y los analistas coinciden en que es probable que Pemex incurra en impago sin una amplia reforma estructural. Pemex tenía una deuda total de $106,100 millones a finales de 2023 y se enfrenta a $10,000 millones en vencimientos de deuda este año. El impulso del gobierno para aumentar el rendimiento de las refinerías ha generado pérdidas de miles de millones de dólares para Pemex. Solo en 2023, la división de refinación de Pemex reportó una pérdida de $4,400 millones, una mejora con respecto a una pérdida de $11,000 millones el año anterior. De 2019 a 2023, la división de refinación de la empresa registró más de $46,000 millones en pérdidas. López Obrador puso el rescate de Pemex y sus refinerías en el centro de su administración. Pero a pesar de no detener la espiral de deuda de la empresa, la disminución de la producción de crudo, el empeoramiento del récord de seguridad y el aumento de las emisiones de gases de efecto invernadero, sus políticas han tenido un coste que Sheinbaum no ha querido refutar públicamente. En su lugar, se compromete a lanzar el proyecto de la refinería Olmeca de 340,000 b/d de la empresa, que ya tiene dos años de retraso y ha costado al menos el doble del presupuesto original de $8,000 millones, dinero que las agencias de calificación afirman que debería haberse dirigido al negocio principal de Pemex en la exploración y producción. El apoyo gubernamental a Pemex, por un total de más de $52,000 millones entre 2019 y 2023, ha sido incapaz de mover la aguja en sus métricas financieras u operativas, y ahora amenaza la calificación crediticia soberana de México. Sheinbaum ha evitado abordar públicamente la carga de la enorme deuda de Pemex, proponiendo únicamente "niveles de deuda aceptables en el sector de la energía". Pero dada la importancia de Pemex para el proyecto político del partido Morena, además los cientos de miles de puestos de trabajo que dependen de Pemex, no se puede permitir que la empresa incumpla. Por otro lado, la candidata de oposición Xóchitl Gálvez pide poner fin al "caos financiero" en Pemex, diversificar su negocio hacia iniciativas de bajas emisiones de carbono, políticas rigurosas de emisiones, el cierre de sus refinerías más contaminantes, un nuevo enfoque en renovables y una reapertura de la industria energética a la inversión del sector privado. Sin embargo, a pesar de su perspectiva más favorable para la inversión privada, Gálvez aún no ha ofrecido una solución detallada para la situación financiera de Pemex. Sus planes para Pemex pueden ser demasiado radicales para los votantes, especialmente dentro del importante sindicato de trabajadores del petróleo, que repudió rápidamente sus llamados el mes pasado para cerrar dos refinerías. Incluso si ganara, la oposición que representa podría tener dificultades para acordar un camino a seguir para Pemex. Si la próxima administración vuelve a abrir la puerta a la inversión del sector privado, el nuevo gobierno se enfrentará a un esfuerzo lento para reconstruir los reguladores de la energía que han sufrido de baja inversión en los últimos seis años. Pero será el tamaño de la posible victoria de Sheinbaum lo que determinará el futuro del sector de la energía mexicano. Una mayoría convincente podría permitirle aprobar las grandes reformas energéticas que eludieron a López Obrador y seguir limitando la participación del sector privado en el sector energético, justo cuando la inversión directa extranjera en México está en auge en otras industrias. Por Rebecca Conan Producción de crudo en México Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
German power spot index to deliver above expectations
German power spot index to deliver above expectations
London, 15 April (Argus) — The German power spot index has delivered below over-the-counter (OTC) expectations in April as wind and solar output have averaged above seasonal norms. But forward prices suggest that the spot index is on track to deliver above OTC expectations on declining wind generation in the second half of the month. The German spot index averaged €50.49/MWh over 1-16 April, below the April OTC contract's expiry of €54.90/MWh. But the index is on track to deliver at around €58.46/MWh across the month, based on the weighted-average of the expiry of week 16 at €65.70/MWh and the latest assessments of weeks 17 and 18 at €71.20/MWh and €59.50/MWh, respectively, and the spot index in April. Combined onshore and offshore wind generation has climbed to 19.65GW this month, well above the 13.4GW average for April 2019-23. And solar output has averaged above 8.6GW, a new high for April. Rising renewable output has weighed on thermal generation, with combined gas, coal and lignite-fired output down to 10.5GW, the lowest of any month in over seven years. Working day-ahead clean dark spreads for 40pc-efficient plants have averaged minus €28.46/MWh for delivery on 1-15 April from minus €13.88/MWh in March. Clean spark spreads for plants with 55pc efficiency have fallen by €14.68/MWh on the month and into negative territory at minus €11.17/MWh. And clean lignite spreads for 36pc-efficient plants have averaged minus €13.51/MWh from €0.29/MWh last month. The seasonal rise in temperatures has also lowered demand by 1.6GW on the month to 50.35GW in April, outpacing the month-on-month decline in generation by over 300MW. And Germany has been a net exporter on six days this month, compared with seven days in all of March . But wind output is forecast to remain below the 2019-23 average on most days in the second half of the month, data from analytics platform Kpler show, while peak-load solar output is expected to remain below a load factor of 30pc — or 16GW — over 16-21 April, which could support the spot index and imports. And the May contract rose to its highest in almost three months on its latest assessment on 12 April at €64.60/MWh, up from under €50/MWh on its first assessment as the front month. Thermal generating margins for base and peak-load delivery in May have averaged well below zero in April, with even higher-efficiency coal, lignite and gas-fired plants priced out of the mix. Germany is likely to continue importing from its Swiss and French neighbours in May. Swiss hydropower stocks widened their surplus to the long-term average in week 14, while precipitation in Sion is forecast well above seasonal norms next month and Alpine snowpack is well above average, which could boost inflows when snowmelt picks up in May. And French nuclear unavailability is forecast to drop by 4GW on the month to 15.6GW in May, well below the 25.4GW in May last year. By Adrien Seewald German April power generation GW Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Australia’s Origin buys 1.5GW wind, battery project
Australia’s Origin buys 1.5GW wind, battery project
Sydney, 15 April (Argus) — Australian upstream and utility firm Origin Energy has entered an agreement with renewables developer Virya Energy to acquire the 1.5GW wind, 800MWh battery Yanco Delta project in New South Wales (NSW). Origin will pay up to A$300mn ($194mn) for the project, starting with an upfront payment of A$125mn and an additional payment of up to A$175mn dependent on Yanco Delta achieving some development milestones. Yanco Delta — one of the largest and most advanced wind and energy storage projects in NSW — will allow Origin to bring a "material volume of renewable energy supply into the market relatively quickly", chief executive officer Frank Calabria said. Yanco Delta received development approval from the NSW government last December and federal approval under the Environment Protection and Biodiversity Conservation (EPBC) Act in February, with grid connection rights expected to be the next major milestone for the project. "Securing transmission access rights is a key near term priority for the project, which subject to the timing of the access rights tender process, we anticipate occurring before the end of the 2024," an Origin spokesperson told Argus on 15 April. "Timing for development will ultimately be confirmed once we have all aspects of the project finalised, EPC contractors engaged, and a final investment decision is taken." The Australian Energy Market Operator (Aemo) manages access rights via a competitive tender process. Virya Energy previously said it expected the final investment decision and the start of construction for 2025-26, with completion between 2027-29. Yanco Delta will be located some 10km northwest of Jerilderie in the Riverina district, in NSW's South West Renewable Energy Zone (REZ). It could be one of the biggest renewable plants helping to replace ageing coal-fired plants in NSW, with three of the four remaining facilities in the state — Origin's 2,880MW Eraring, utility AGL's 2,640MW Bayswater and utility Delta Electricity's 1,320MW Vales Point — expected to close over the next decade. Virya Energy estimates Yanco Delta could avoid between 3.3mn-4.5mn t/yr of greenhouse gas (GHG) emissions. Origin was the fourth largest GHG emitter in the 2022-23 fiscal year to 30 June, according to the Clean Energy Regulator (CER). The utility has been in talks with the NSW government to extend Eraring's operations beyond its planned August 2025 closure , while stepping up renewable investments in recent months. It in February acquired developer Walcha Energy, which is developing the Ruby Hills wind and Salisbury solar projects with more than 1.3GW of combined capacity. By Juan Weik Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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