Estonia drops plans for stake in Finnish LNG terminal
The Estonian government has decided to give up on acquiring a stake in the Finnish LNG terminal, and to instead buy the mooring quay at Paldiski.
"At today's cabinet meeting, the ministers decided to abandon the acquisition of a stake in the Finnish LNG terminal" operated by Gasgrid Finland's subsidiary Floating LNG Terminal Finland Oy, the Estonian government said today.
Estonia and Finland previously signed a co-operation agreement stating that the floating storage and regasification unit (FSRU) Exemplar, wholly rented by the Finnish side, will be moored at whichever terminal — either Paldiski in Estonia or Inkoo in Finland — is finished first. But last month, the Estonian and Finnish economy ministries confirmed that Exemplar will be moored at Finland's Inkoo port, while the Finnish side suggested that Estonia would have to buy a stake in the LNG terminal before getting preferential access to it.
Around €30mn has been allocated for the Estonian system operator Elering to participate in the joint project with Finland. This will be used to buy additional gas volumes, said the minister of economy and infrastructure Riina Sikkut.
"There is a possibility under discussion that the first gas cargo arriving to the LNG floating terminal will be offered primarily to the holders of strategic reserves in Estonia, Finland and Latvia. If the price... is good, the conditions are suitable and the purchase increases the supply security of the Estonian market, then it is reasonable to use the opportunity," Sikkut said.
The FSRU at Inkoo is scheduled to receive its commissioning cargo in mid-December, according to the Finnish system operator Gasgrid.
But the Estonian government instead instructed state-run gas stockpiling agency ESPA to buy the mooring quay at Paldiski from construction firms Alexela and Infortar, which according to the country's prime minister Kaja Kallas is "an important" project for Estonia's energy security.
Following today's decision, construction firms will be able to sell the quay to the state "if they wish, even from this year", Kallas said.
Estonia will pay the "proven costs incurred by the developer for the quay this year, the upper limit of which is €30mn", according to Sikkut. "In total, the transaction will cost up to €38mn... and this amount has already been allocated by the government to the gas stockpiling agency ESPA," Sikkut said.
Construction works at Paldiski were completed in late October.
Related news posts
Industry decarbonization talks mark progress: EDF
Industry decarbonization talks mark progress: EDF
Houston, 19 September (Argus) — Growing decarbonization discussions in the oil and gas industry is a sign that momentum is building toward reducing emissions, according to Mark Brownstein, senior vice president of energy transition for the Environmental Defense Fund (EDF). Brownstein, speaking on the sidelines of the Gastech conference in Houston, Texas, noted a "robust conversation" was happening to address CO2 and methane emissions from natural gas use, which was "something you would not have seen five years ago." "Now, what would really make me happy, is to come back here next year, and see that it's not just talk," he said. "That there's real investment, that there's real action and that we're actually beginning to see emissions of methane and other pollutants going down." Brownstein noted that more than 70 companies in the oil and gas industry have committed to the COP 28 decarbonization charter to get to near-zero methane emissions by 2030. "That is a commitment that needs to be expanded to all players," he said. "A commitment that needs to be expanded by investment and real action. I believe the industry can do it. But of course you need to see it." Earlier this year the EDF helped launch MethaneSAT, a satellite that will allow for real-time monitoring of global methane emissions, aimed at bringing transparency to global emissions data. By David Haydon Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Fed rate cuts 'no bearing' for CCUS: NET Power
Fed rate cuts 'no bearing' for CCUS: NET Power
Houston, 19 September (Argus) — Interest rate cut by the US Federal Reserve this week have "no bearing" on carbon capture, use and storage (CCUS) projects, according to the chief executive of power technology company NET Power, since most are still in the development phase. The majority of CCUS projects are in the "pre-revenue" stage with companies that are still "more focused on the engineering" aspects, chief executive Danny Rice said on the sidelines of the Gastech conference in Houston, Texas, today. The Fed on Thursday cut its target interest rate by 50 basis points, the first cut since 2020 and following an aggressive rate increase regimen to fight inflation. Lower interests rates lower borrowing costs for companies. Rice said earlier in the day during a CCUS panel discussion there was still a need to "get capital costs down". "Historically it would be challenging to deploy a new technology and scale into a flat or declining market, but ... we're talking about decarbonization for power generation," Rice said. "Power generation is growing globally." CCUS projects and other carbon capture technologies have been repeatedly criticized by non-governmental organisations as an excuse for continued fossil fuel use, although the UN Intergovernmental Panel on Climate Change has backed the technology. Rice stressed the importance of an "objective, physics-driven view" for policy regarding decarbonization, describing CCUS projects for gas-fired powerplants as the most cost-effective method to decarbonize power. "People are going away from this exercise of 'what's clean or not'," Rice said. "What matters is the outputs. The affordability, the reliability, the carbon intensity." By David Haydon Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Western Australia to allow some onshore gas exports
Western Australia to allow some onshore gas exports
Darwin, 19 September (Argus) — Western Australia's (WA) state government will allow onshore developers of gas fields to export about 20pc of their output as LNG during a five-year window, in response to a growing failure to bring on new supplies for the domestic market. WA previously banned onshore gas exports, except in the case of Australian independent Beach Energy's 250 TJ/d (6.7mn m³/d) Waitsia stage 2 project . Beach may be required to share its infrastructure with fellow Perth basin firms, the WA government said, to expedite market access for new projects. Australian mining firm Mineral Resources, which has argued for permission to export 85pc of the gas from its Lockyer project as LNG and fellow WA-based firm Strike Energy may benefit from the changes, as both hold significant reserves in the Perth basin. The changes apply to new onshore developments or existing projects seeking to expand production. Developers are required to reserve 80pc of gas produced for WA, with this rising to 100pc from 2031 onwards. The policy shift follows dire outlooks for WA's gas supplies as the state attempts to wean itself off coal-fired power generation. It currently contributes about a third of the electricity into the state's largest power grid. A parliamentary report last month warned WA cannot rely on sporadic appeals for more gas to meet demand. "These policy changes are sensible responses that balance the need for Western Australia to secure its energy future while encouraging onshore producers to bring on more gas supply as and when it is needed," mines and petroleum Minister David Michael said on 19 September. The 15pc reservation for offshore LNG projects will continue, while WA has promised more transparency on the policy with the publication of a yearly WA Domestic Gas Statement to reveal how producers are meeting obligations, with a review to take place after two years. An interim parliamentary report tabled earlier this year showed about 8pc of the state's offshore gas output has reached WA consumers since 2006, representing just over half the required volumes. Following public criticism of LNG producers' contributions, Australian independent Woodside Energy has since pledged an extra 32PJ (854mn m³) of domestic supplies by the end of 2025 . WA will also seek to strengthen laws designed to prevent companies banking prospective onshore oil and gas tenements, with a review into the "use it or lose it" policy to be led by the state's energy department. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US Fed cuts rate by half point, signals more: Update
US Fed cuts rate by half point, signals more: Update
Adds chairman Powell comments, economic projections. Houston, 18 September (Argus) — The US Federal Reserve cut its target interest rate by 50 basis points today, the first rate cut since 2020, with policymakers signaling they expect to make another half-point worth of cuts by the end of 2024. The Fed's Federal Open Market Committee (FOMC) lowered the federal funds rate to 4.75-5pc from the prior range of 5.25-5.5pc, which was a 23-year high. The Fed had kept the target rate unchanged since July 2023 after hiking it for more than a year in the most intense rate-tightening campaign in four decades to quash inflation, which peaked at 9.1pc in mid-2022. "The committee has gained greater confidence that inflation is moving sustainably toward 2pc, and judges that the risks to achieving its employment and inflation goals are roughly in balance," the FOMC said in its statement after the two-day meeting. "Job gains have slowed, and the unemployment rate has moved up but remains low." In their latest economic projections, the Fed board and policymakers expect the target rate range will end 2024 near a midpoint of 4.4pc compared with an end of year midpoint of 5.1pc projected in June, which implies further cuts amounting to 50 basis points by the end of 2024. Policymakers also penciled in another 100 basis points of cuts over the course of 2025. "We're recalibrating policy down over time to a more neutral level and we're moving at the pace that we think is appropriate given developments in the economy," Fed chair Jerome Powell told a press conference after the meeting. "The economy can develop in a way that will cause us to go faster or slower. The US economy is in a good place and our decision today is designed to keep it there." The Fed's economic projections see core Personal Consumption Expenditures inflation — the Fed's favorite measure of inflation — ending 2024 at a median rate of 2.6pc, down from a prior forecast of 2.8pc. Policymakers see core PCE inflation falling to a median of 2.2pc by the end of next year. The outlook for the unemployment rate for the end of 2024 climbed to 4.4pc from 4pc penciled in at the June meeting. Policymakers expect gross domestic product (GDP) growth to end 2024 at an annual 2pc, slightly down from a prior 2.1pc projection. The latest policy meeting comes as the Consumer Price Index (CPI) eased to an annual 2.5pc in August , down from 2.9pc in July, the Labor Department reported on 11 September. Inflation had ticked up to 3.5pc in March from 3.1pc in January, prompting the Fed to turn more cautious about beginning its rate cuts. US job growth has recently slowed sharply, falling to an average 116,000 in the three months through August from 211,000 for the prior three months. The jobless rate rose to 4.3pc in July, the highest in three years, before edging down to 4.2pc in August. By Bob Willis 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