Eni set to sign landmark Libyan gas deal worth $8bn
Libya's state-owned NOC is poised to sign an 845mn ft³/d offshore gas project deal with Italy's Eni worth an estimated $8bn, representing the largest single investment in the north African country's upstream sector since the 2011 civil war.
"We have reached an agreement with Eni and the signing ceremony will take place on 28 January," NOC chairman Farhat ben Gudara told local TV channel Al Masar. Eni declined to comment.
The long-delayed deal will not only help Libya meet rising domestic gas demand but will also boost its gas exports to Italy, which slumped to the lowest level since 2011 last year. The agreement is due to be signed in Tripoli during the first visit to Libya by Italian prime minister Giorgia Meloni, who is pushing her "Mattei plan" that seeks to deepen Italy's energy and political ties to Africa. Italy has been scrambling for alternative gas supplies since Russia's invasion of Ukraine and is looking to north Africa in particular.
Central to the agreement with Eni is the Structures A&E project in Block NC-41, which will have the capacity to produce 760mn ft³/d of gas and 47,000 b/d of liquids, mostly condensate. This is equal to about 65pc of Libya's current 1.2bn ft³/d of sales gas production capacity. The agreement is also likely to include the 85mn ft³/d Bouri Gas Utilization project, which plans to capture associated gas output that is currently being flared at the 25,000 b/d Bouri oil field in Block NC-41. With its own climate goals in mind — and Libya's nascent decarbonisation ambitions — Eni has floated the possibility of incorporating a carbon capture and storage (CCS) element to its projects in the block.
The company said in October last year that it expects first gas from Structures A&E in 2024, with the project slated to reach full capacity in 2027. The relatively safe location of the two projects offshore Tripoli makes them less vulnerable to disruption than Libya's onshore fields. The country's decade-long political quagmire has not only hampered new oil and gas projects from getting off the ground but has also frequently led to existing output being shut down for political purposes.
With Libya roughly split between rival western and eastern administrations, political division still poses a threat. The head of the eastern-aligned Government of National Stability (GNS), Fathi Bashagha, has pushed back against the Eni deal, saying the western-based Government of National Unity (GNU) lacks the legitimacy to sign such an agreement.
Eni is Libya's largest foreign gas producer, overseeing most of the country's gas output via its Mellitah Oil and Gas joint venture with NOC. Mellitah's production is split between the offshore Bahr Essalam project and the Wafa wet gas project located on the border with Algeria, as well as some fields in the Sirte basin, Libya's oil heartland. Mellitah's western output feeds the 775mn ft³/d Greenstream pipeline — Libya's only gas export outlet — which has been running at well below capacity over the past few years. Exports through Greenstream hit their lowest level since the 2011 revolution last year, averaging some 250mn ft³/d.
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Canada’s TMX awaits regulator OK on eve of service
Canada’s TMX awaits regulator OK on eve of service
Calgary, 30 April (Argus) — Regulatory approvals needed for the 590,000 b/d Trans Mountain Expansion (TMX) crude pipeline in western Canada are coming down to the wire on the eve of entering commercial service. The major crude pipeline last week maintained its plan to start commercial operations on 1 May, but three filings remain under assessment by the Canada Energy Regulator (CER) with less than 24 hours to go. Federally-owned Trans Mountain requires all sections, called spreads, of the pipeline to receive regulatory blessing before the line can be put into service. Outstanding are applications pertaining to Spread 5B Part 3, which runs from kilometer post 1064 to 1067, according to CER's website. The segment is near Hope, British Columbia, about 140 kilometers (87 miles) east of the line's terminus in Burnaby. The three applications concern piping, valves and other components at two pipeline inspection gauge (pig) traps and the mainline pipe between the two traps. The traps were added for safety assurance when the operator was allowed by CER to use a smaller diameter pipe as part of the Mountain 3 deviation. Mountain 3 was the last segment of the pipeline to be constructed because of delays relating to difficult terrain while tunneling. TMX will nearly triple the existing 300,000 b/d Trans Mountain system that connects oil-rich Alberta to the docks in Burnaby, British Columbia. Importantly, the line will provide Canadian oil sands producers with a significant export outlet without having to first go through the US. The "golden weld" marking the end of construction occurred on 11 April, according to Trans Mountain. A group of shippers last week expressed concern that TMX would not be ready for commercial service by 1 May. Spreads 6, 7A and 7B stretching from kilometer post 1075 to 1180 were approved earlier in the week, bringing the total number of approvals up to 39. The expansion was first conceived more than a decade ago with the intention of being operational by late-2017, but that date slipped amid cost overruns and repeated delays. By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US crude output rebounds by 4.6pc in February: EIA
US crude output rebounds by 4.6pc in February: EIA
Calgary, 30 April (Argus) — US crude output rebounded by 4.6pc in February after freezing temperatures in the prior month took production offline in the three largest producing states. Output averaged 13.15mn b/d in February, up by 578,000 b/d from January, the Energy Information Administration (EIA) said today in its Petroleum Supply Monthly report. February's production was up by 622,000 b/d from February 2023 but remained short of the 13.3mn b/d record high set in November 2023. North Dakota was hit particularly hard by winter storms in January, which temporarily knocked as much as 700,000 b/d of production offline. The country's third-largest producing state pumped out 1.29mn b/d during February, up by 173,000 b/d from January and 159,000 b/d higher than in February 2023. About 86pc of North Dakota's production was 40.1°API or higher, according to the EIA. Texas, home to more than 40pc of the country's crude production, pumped out 5.55mn b/d in February. This was up by 172,000 b/d from January and 242,000 b/d higher than February 2023. New Mexico, which shares the prolific Permian basin with Texas, also boosted its output in February with 1.98mn b/d of production. This was up by 120,000 b/d from January and up by 183,000 b/d from February 2023. Similar to North Dakota, about 91pc of crude produced in New Mexico was 40.1°API or higher, while in Texas about 55pc of output fell into that category. About 44pc of all crude produced in Texas fell into the relatively heavier 30.1-40°API range. US output in the Gulf of Mexico came in at 1.8mn b/d in February, up from the 1.78mn b/d produced in the prior month but down by 28,000 b/d from February 2023. Almost all the crude produced in the Gulf of Mexico was 40°API or lower. By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Milei's bid to open Argentina's economy passes
Milei's bid to open Argentina's economy passes
Montevideo, 30 April (Argus) — Argentina's congress today approved the government's sweeping economic legislation that could open the door to more private-sector investment in energy and commodities. The bill passed on a 142-106 vote, with five abstentions, after a marathon 20-hour debate. Changes include privatizing some state-owned companies, controversial labor reforms and measures to promote LNG development. The omnibus legislation, which includes 279 articles, is an important victory for President Javier Milei's administration and will change the way many sectors, including energy, operate in the country. Lawmakers aligned with Milei's Liberty Advances party swiftly moved to the second stage of the process, which requires approval of individual articles. The omnibus bill was initially approved in February, but the administration withdrew it after congress failed to approve several key individual articles. That original version included 664 articles. Several of the more controversial articles were brought up immediately after the blanket approval and easily passed. They included an article allowing for privatization of state-run enterprises — national power company Enarsa is on the list — and another delegating to the administration the power to eliminate state agencies without having to consult with congress. Also approved was the article on labor reform. The country's oilseed industry and port workers' unions called a strike the previous day to pressure congress to modify the labor reform. That did not happen. It passed in a separate 136-113 vote. The strike started to fizzle with approval of the legislation. Approval of the package includes several articles the administration says will open the door to major investments in the energy sector. Chapter II specifically covers natural gas, and introduces new regulations for LNG. The chapter includes five articles that allow for 30-year contracts for LNG export projects and guarantees that gas supply cannot be interrupted for any reason. The energy secretariat has six months to design the implementing rules for LNG. The government wants to speed up monetization of the Vaca Muerta unconventional play, which has an estimated 308 trillion cf of natural gas reserves. It is pushing for Malaysia's Petronas to fully commit to a large-scale LNG facility that would start with a $10bn investment. Chapter IX of the legislation creates a new framework, known as the Rigi, for investments above $200mn. It offers tax, fiscal and customs benefits. Companies have two years from implementation of the legislation to take advantage of the Rigi. The chapter on this framework is one of the most complex in the bill, including 56 articles. It includes specific references to energy projects, from power generation to unconventional oil and gas development. The administration claims the legislation will help tame inflation and stabilize the economy. Inflation was 276pc annualized through February, but is declining, and Milei announced that monthly inflation would be in single digits when the March numbers are announced. The country recorded a 0.2pc quarterly fiscal surplus in the first quarter of this year, something not achieved since 2008. By Lucien Chauvin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
G7 countries put timeframe on 'unabated' coal phase-out
G7 countries put timeframe on 'unabated' coal phase-out
London, 30 April (Argus) — G7 countries today committed to phasing out "unabated coal power generation" by 2035 — putting a timeframe on a coal phase-out for the first time. The communique, from a meeting of G7 climate, energy and environment ministers in Turin, northern Italy, represents "an historic agreement" on coal, Canadian environment minister Steven Guilbeault said. Although most G7 nations have set a deadline for phasing out coal-fired power, the agreement marks a step forward for Japan in particular, which had previously not made the commitment, and is a "milestone moment", senior policy advisor at think-tank E3G Katrine Petersen said. The G7 countries are Italy — this year's host — Canada, France, Germany, Japan, the UK and the US. The EU is a non-enumerated member. But the pledge contains a caveat in its reference to "unabated" coal-fired power — suggesting that abatement technologies such as carbon capture and storage could justify its use, while some of the wording around a deadline is less clear. The communique sets a timeframe of "the first half of [the] 2030s or in a timeline consistent with keeping a limit of 1.5°C temperature rise within reach, in line with countries' net-zero pathways". OECD countries should end coal use by 2030 and the rest of the world by 2040, in order to align with the global warming limit of 1.5°C above pre-industrial levels set out in the Paris Agreement, according to research institute Climate Analytics. The countries welcomed the outcomes of the UN Cop 28 climate summit , pledging to "accelerate the phase out of unabated fossil fuels so as to achieve net zero in energy systems by 2050". It backed the Cop 28 goal to triple renewable energy capacity by 2030 and added support for a global target for energy storage in the power sector of 1.5TW by 2030. The group committed to submit climate plans — known as nationally determined contributions (NDCs) — with "the highest possible ambition" from late this year or in early 2025. And it also called on the IEA to "provide recommendations" next year on how to implement a transition away from fossil fuels. The G7 also reiterated its commitment to a "fully or predominantly decarbonised power sector by 2035" — first made in May 2022 and highlighted roles for carbon management, carbon markets, hydrogen and biofuels. Simon Stiell, head of UN climate body the UNFCCC, urged the G7 and G20 countries to lead on climate action, in a recent speech . The group noted in today's outcome that "further actions from all countries, especially major economies, are required". The communique broadly reaffirmed existing positions on climate finance, although any concrete steps are not likely to be taken ahead of Cop 29 in November. The group underlined its pledge to end "inefficient fossil fuel subsidies" by 2025 or earlier, but added a new promise to "promote a common definition" of the term, which is likely to increase countries' accountability. The group will report on its progress towards ending those subsidies next year, it added. Fostering energy security The communique placed a strong focus on the need for "diverse, resilient, and responsible energy technology supply chains, including manufacturing and critical minerals". It noted the important of "guarding against possible weaponisation of economic dependencies on critical minerals and critical raw materials" — many of which are mined and processed outside the G7 group. Energy security held sway on the group's take on natural gas. It reiterated its stance that gas investments "can be appropriate… if implemented in a manner consistent with our climate objectives" and noted that increased LNG deliveries could play a key role. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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