Equinor, Var Energi depart Barents Blue H2, CCS project
Norway's state-controlled Equinor and independent Var Energi have left the planned blue ammonia Barents Blue project and its linked carbon capture and storage (CCS) development in northern Norway, and will be replaced in the former by Spanish fertiliser producer Fertiberia.
The agreement between Equinor, Var Energi and operator Horisont Energi expired on 31 January. Horisont has now entered a co-operation agreement on Barents Blue with Fertiberia, aiming at a full partnership from 1 April, resulting in a 50pc share for each company. Fertiberia plans to be net zero by 2035.
Equinor and Var Energi have also pulled out of the planned Polaris CO2 storage site, which is linked to the Barents Blue development. Polaris, in the Barents Sea offshore northern Norway, will store the carbon captured during the ammonia production process. The site's potential storage capacity of 100mn t means it could permanently store CO2 from other sources. Horisont will "invite new partners into the Polaris CO2 storage licence, including a qualified operator," it said today. It plans to submit a development plan with a new licence group.
The Norwegian ministry of petroleum and economy awarded a CO2 storage licence to Polaris in April 2022.
Var Energi is still seeking "a comprehensive gas export solution" for Barents Sea resources, it said today.
"Development of the proven [gas] resources in the region, including Goliat, Alke and Lupa, will require an export solution with greater capacity than what we deem realistic within the scope of the project," Var Energi said. It will continue to explore and develop in the Barents Sea, it added.
Equinor said it "remains positive to explore gas supply solutions from Hammerfest LNG to the Barents Blue project following the changes in the partnership."
Barents Blue won a grant of 482mn Norwegian kroner ($48.5mn) from the EU, under its important projects of common European interest (IPCEI) scheme. The funding is unaffected by the changes in the consortium, Horisont said.
Fertiberia said the Barents Blue project, in Finnmark, the northernmost region of Norway, will be largest clean ammonia production plant in Europe. The project will produce 1mn t/yr of blue ammonia when it comes online. The companies previously said it would start in 2026, and were unavailable to comment if this had changed with the new partners.
Analysis by Argus estimated the project would need carbon prices at a minimum of $84/t to be viable unless the developers are able to fetch a premium for their low-carbon blue ammonia over the market price for conventional grey ammonia. The price of EU ETS allowances for delivery in December 2023 averaged €82.94/t CO2e ($90.48/t CO2e) over the past month.
Equinor advances Belgium Project
Separately, Equinor said it is progressing with its carbon capture-enabled 1GW/yr hydrogen project in Belgium with utility Engie. The partners completed a feasibility study on building the plant at Engie's site near Ghent and have now signed an agreement to take the project forward and select design concepts in 2023. A final investment decision is yet to be made.
More than 20 potential hydrogen buyers expressed interest in the H2BE project last year, Equinor said.
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Chevron’s oily DJ basin buy boosts gas output
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New York, 3 May (Argus) — Chevron's US natural gas production has surged in recent quarters due to its crude-focused acquisition of Denver-based PDC Energy last August, increasing the oil major's exposure to the US gas market months after that market entered an extended price slump. Chevron's US gas production in the first quarter was 2.7 Bcf/d (76mn m3/d), up by 53pc from the year-earlier quarter and the highest since at least 2021, according to company production data. Chevron's total US output rose by 35pc year-over-year to 1.57 b/d of oil equivalent (boe/d), while US crude output increased by 21pc to 779,000 b/d. The acreage Chevron picked up last year in the DJ basin of northeast Colorado and southeast Wyoming has higher gas-oil ratios than the rest of its US portfolio. Chevron mostly focuses US production in the crude-rich Permian basin of west Texas and southeast New Mexico. Since Chevron closed its acquisition of PDC on 7 August, US gas prices have mostly languished in loss-making territory. Prompt-month Nymex gas settlements at the US benchmark Henry Hub from 7 August 2023 to 2 May 2024 averaged $2.46/mmBtu, down from an average of $4.999/mmBtu in the year-earlier period. In a May 2023 conference call over Chevron's acquisition of PDC, chief executive Mike Wirth expressed optimism for the long-run outlook for natural gas, despite the more immediately dim outlook. "There's going to be stronger global demand for gas growth than there will be for oil over the next decade and beyond as the world looks to decarbonize," Wirth said. Despite lower US gas prices, Chevron has captured $600mn in cost savings from the PDC acquisition between capital and operational expenditures, the company told Argus . Crude prices have also been more resilient. Chevron's profit in the first quarter was $5.5bn, down from $6.6bn in the year-earlier quarter, partly due to lower gas prices. US gas prices have been lower this year as unseasonably warm winter weather and resilient production have created an oversupplied US gas market. A government report Thursday showed US gas inventories up by 35pc from the five-year average. By Julian Hast Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
UN carbon market enshrines appeal, grievance processes
UN carbon market enshrines appeal, grievance processes
Berlin, 3 May (Argus) — The much-debated procedure for appeal and grievance processes for people negatively affected by carbon mitigation activities was finally passed this week by the regulator of the future UN carbon market. The supervisory body of the Paris agreement crediting mechanism, under Article 6.4 of the Paris climate agreement, called the appeal and grievance procedure a "crucial step towards developing a new international carbon market that sets the benchmark for high integrity carbon credits". The mechanism is expected to be passed at the UN climate summit Cop 29 in November in Azerbaijan. The appeal and grievance procedure sets the fee for filing an appeal at $30,000, compared with the $5,000 fee suggested in earlier iterations, which was seen by some supervisory body members at this week's meeting in Bonn, Germany, as "too low for project developers, but too high for vulnerable groups". The fee will be waived for appellants who are appealing for vulnerable groups, such as local communities and indigenous peoples. But the supervisory body failed to pass the mechanism's long-awaited sustainable development tool, instead launching a call for input. Members had criticised the lack of a validation and verification process for the tool, and its unclear delimitations, given that some of its objectives will be addressed in future rules on carbon removals activities or the carbon reduction methodologies under the mechanism. Making the tool mandatory was demanded by both countries and non-governmental organisations at recent Cop summits, with the lack of a grievance process and sustainable development tool part of the reason why the pricing mechanism was not finalised at Cop 28 in Dubai last year. The sustainable development tool of the Kyoto Protocol's clean development mechanism (CDM), which the new mechanism broadly aims to replace, was never made mandatory. A total of 1,796 carbon mitigation activities have now requested to transition from the CDM to the new mechanism, of which more than 300 have not yet provided full details and could miss the 31 August deadline, the UN's climate arm said in Bonn. The supervisory body called for an extension of the transition period to 4 November. Work on the new mechanism's registry is also advancing, with the supervisory body agreeing to launch a consultation on the "legal, technical and financial implications of providing functionality for the treatment of financial security interests in Article 6.4 emissions reductions within the mechanism registry". By Chloe Jardine Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US job growth nearly halved in April: Update
US job growth nearly halved in April: Update
Adds services PMI in first, fifth paragraphs, factory PMI reference in sixth paragraph. Houston, 3 May (Argus) — The US added fewer jobs in April as the unemployment rate ticked up and average earnings growth slowed, signs of gradually weakening labor market conditions. A separate survey showed the services sector contracted last month. The US added 175,000 jobs in April, the Labor Department reported today, fewer than the 238,000 analysts anticipated. That compared with an upwardly revised 315,000 jobs in March and a downwardly revised 236,000 jobs in February. The unemployment rate ticked up to 3.9pc from 3.8pc. The unemployment rate has ranged from 3.7-3.9pc since August 2023, near the five-decade low of 3.4pc. The latest employment report comes after the Federal Reserve on Wednesday held its target lending rate unchanged for a sixth time and signaled it would be slower in cutting rates from two-decade highs as the labor market has remained "strong" and inflation, even while easing, is "still too high". US stocks opened more than 1pc higher today after the jobs report and the yield on the 10-year Treasury note fell to 4.47pc. Futures markets showed odds of a September rate cut rose by about 10 percentage points to about 70pc after the report. Services weakness Another report today showed the biggest segment of the economy contracted last month. The Institute for Supply Management's (ISM) services purchasing managers index (PMI) fell to 49.4 in April from 51.4 in March, ending 15 months of expansion. The services PMI employment index fell to 45.9, the fourth contraction in five months, in today's report. Readings below 50 signal contraction. On 1 May, ISM reported that the manufacturing PMI fell to 49.2 in April, after one month of growth following 16 months of contraction. In today's employment report from the Labor Department, average hourly earnings grew by 3.9pc over the 12 month period, down from 4.1pc in the period ended in March. Job gains in the 12 months through March averaged 242,000. Gains, including revisions, averaged 276,000 in the prior three-month period. Job gains occurred in health care, social services and transportation and warehousing. Health care added 56,000 jobs, in line with the gains over the prior 12 months. Transportation and warehousing added 22,000, also near the 12-month average. Retail trade added 20,000. Construction added 9,000 following 40,000 in March. Government added 8,000, slowing from an average of 55,000 in the prior 12 months. Manufacturing added 9,000 jobs after posting 4,000 jobs the prior month. Mining and logging lost 3,000 jobs. By Bob Willis Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Austrian regulator consults on gas tariff changes
Austrian regulator consults on gas tariff changes
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