Brazil biomethane parity prices R2.43-2.79: Correction

  • Spanish Market: Natural gas
  • 21/05/24

Corrects CNG truck round-trip freight rates in 8th paragraph.

Biomethane parity prices in Sao Paulo and Rio de Janeiro states, Brazil's two largest hubs, ranged between R2.43-2.79/m³ (49-56¢/m³) on 23 February, according to the market's first price indicators launched by Argus.

That represents the marginal price that can be charged by biomethane producers from gas distributors, reflecting daily Cbio carbon credits assessments and weighted averages of natural gas prices in Rio de Janeiro and Sao Paulo. It is the first specifically calculated Brazilian biomethane price indicator in a market that has often lacked transparency.

Biomethane producers traditionally have determined their prices on a case-by-case basis, depending on a series of factors such as the consumer's need for the green attribute, which fuel the biomethane gas will substitute and logistics costs.

Initially, the biomethane sector looked to LPG prices for reference, as industry machinery only needs small alterations to substitute one fuel for the other. But the LPG market is much more consolidated and stable in its supply than biomethane.

The international crude industry and Brazilian real-dollar exchange rates also influence the market, leading to distortions that do not reflect the renewable natural gas (RNG) market's true conditions. Market participants are still learning the ropes of the biomethane sector, as all of its production and supply structures are new in Brazil, according to Hugo Nery, chief executive of landfill company Marquise Ambiental, part of the joint venture that controls the 110,000 m³/d GNR Fortaleza biomethane plant.

All biomethane plants certified by hydrocarbons regulator ANP within Brazil's national biofuels Renovabio policy are eligible to issue Cbio carbon credits, which is a compliance market for fossil fuel distributors to compensate their sales' impact. But this segment is still much smaller than it could be for biomethane manufacturers, according to biomethane producer Gas Verde's chief executive Marcel Jorand. Still, Cbios are the most liquid alternative to pricing the green attribute of biomethane in Brazil, with other certification models still in preliminary stages and not openly traded.

Producers are adopting their own solutions to biomethane transportation challenges. Marquise Ambiental's strategy is to build its new biomethane plants near distribution networks, Nery said. GNR Fortaleza was the first plant in Brazil to inject biomethane directly into a distribution network and supplies 20pc of Ceara state's gas demand.

On the other hand, biomethane generators Gas Verde and Zeg Biogas supply their customers through CNG truck deliveries. Argus' CNG truck freight rates, based on Sao Paulo costs, show that each cubic meter of gas delivered on a 150km (93.2-mile) round trip cost R0.005/km on 23 February. Gas Verde and Zeg Biogas eye opportunities for longer-distance deliveries, using LNG trucks that have more range compared with CNG truck freights, or injecting gas into pipelines.

Biomethane producers are finding demand for RNG outstripping supply available to the market. Zeg Biogas expects to start up a 30,000 m³/d biomethane plant in Minas Gerais state on the second half of the year. The company aims to explore the off-grid market in the region and expects to sign four additional contracts this year and increase its production capacity, according to chief executive Eduardo Acquaviva.

Gas Verde, which owns Brazil's largest biomethane plant in Seropedica, Rio de Janeiro state, with 204,000 m³/d of capacity, also expects to expand. The company will transform nine biogas-fired thermal power plants into biomethane generators in the next 18-24 months.


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18/06/24

Tropical storm warning for South Texas coast: Update

Tropical storm warning for South Texas coast: Update

Updates with closure of Galveston, Texas City ports. New York, 18 June (Argus) — A tropical storm warning has been issued for parts of south Texas and northeastern Mexico, bringing with it the risk of heavy rainfall and flooding. The warning is in effect for the Texas coast from Port O'Connor south to the mouth of the Rio Grande, as well as the northeastern coast of Mexico, according to the National Hurricane Center. "The disturbance is very large with rainfall, coastal flooding, and wind impacts likely to occur far from the center along the coasts of Texas and northeastern Mexico," the center said overnight. Maximum sustained winds this morning remained near 40 mph and the disturbance is forecast to become a tropical storm by Wednesday. The system has been classified as a potential tropical cyclone by the center since it has not yet become better organized, but is expected to become the first named storm system of the year by early Wednesday. The port of Corpus Christi in South Texas and the Houston Ship Channel remained open as of Tuesday morning, but the nearby ports of Galveston and Texas City closed to inbound and outbound shipping traffic at 10pm ET Monday due to heavy weather, the US Coast Guard said. The system was expected to disrupt ship-to-ship transfer operations off the Texas coast as of Monday evening because of heavy seas. In the Gulf of Mexico, the transfer typically is from an Aframax or Suezmax onto a very large crude carrier (VLCC) at designated lightering zones near Corpus Christi, Galveston and Beaumont-Port Arthur. Prolonged lightering delays can prevent crude tanker tonnage from becoming available and exert upward pressure on freight rates, while also adding to demurrage fees. The storm is expected to turn towards the west-northwest and west tonight and Wednesday, with the system forecast to approach the western Gulf coast late Wednesday, the NHC said. Rainfall totals of 5 to 10 inches are seen across northeast Mexico into South Texas, with maximum totals of 15 inches possible. Flash and urban flooding are likely to follow with river flooding. By Stephen Cunningham and Tray Swanson Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Tropical storm warning for South Texas coast


18/06/24
18/06/24

Tropical storm warning for South Texas coast

New York, 18 June (Argus) — A tropical storm warning has been issued for parts of South Texas and northeastern Mexico, bringing with it the risk of heavy rainfall and flooding. The warning is in effect for the Texas coast from Port O'Connor south to the mouth of the Rio Grande, as well as the northeastern coast of Mexico, according to the National Hurricane Center. "The disturbance is very large with rainfall, coastal flooding, and wind impacts likely to occur far from the center along the coasts of Texas and northeastern Mexico," the center said overnight. Maximum sustained winds this morning remained near 40 mph and the disturbance is forecast to become a tropical storm by Wednesday. The system has been classified as a potential tropical cyclone by the center since it has not yet become better organized, but is expected to become the first named storm system of the year by early Wednesday. The system was expected to disrupt ship-to-ship transfer operations off the Texas coast as of Monday evening because of heavy seas. In the Gulf of Mexico, the transfer typically is from an Aframax or Suezmax onto a very large crude carrier (VLCC) at designated lightering zones near Corpus Christi, Galveston and Beaumont-Port Arthur. Prolonged lightering delays can prevent crude tanker tonnage from becoming available and exert upward pressure on freight rates, while also adding to demurrage fees. The storm is expected to turn towards the west-northwest and west tonight and Wednesday, with the system forecast to approach the western Gulf coast late Wednesday, the NHC said. Rainfall totals of 5 to 10 inches are seen across northeast Mexico into South Texas, with maximum totals of 15 inches possible. Flash and urban flooding are likely to follow with river flooding. By Stephen Cunningham Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Shell buys Singapore LNG firm Pavilion Energy


18/06/24
18/06/24

Shell buys Singapore LNG firm Pavilion Energy

Singapore, 18 June (Argus) — Shell has bought from state-controlled investment firm Temasek the Singapore-based LNG firm Pavilion Energy, which currently has about 6.5mn t/yr of term contracted supplies. The deal is expected to be finalised by next year's first quarter, subject to regulatory approvals and fulfilment of other conditions, Shell said on 18 June. Financial details of the acquisition were undisclosed. Pavilion's term LNG supplies come from producers including Cheniere's 11.5mn t/yr Corpus Christi liquefaction facility in the US, the 22mn t/yr Bonny export terminal in Nigeria and Norway's 4.2mn t/yr Hammerfest export terminal. The firm also operates in the LNG bunker market, tracking the growing number of LNG bunker vessels operating in Singapore. It supplied over 16-17 February the dual-fuel bulk carrier Mount Api with LNG through the firm's 12,000m³ Brassavola LNG bunkering vessel. The Pavilion acquisition puts Shell in a position to capitalise on the growing LNG bunkering market. Demand for LNG as a bunker fuel in May at the port of Singapore touched a record high of 48,800t, on par with biofuels, according to the Maritime and Port Authority of Singapore. Pavilion Energy and Shell each hold one term LNG import licence for Singapore, granted by regulator the Energy Market Authority. The other two licence holders are ExxonMobil and Singapore's Sembcorp Fuels. By Rou Urn Lee Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Japex takes control of Norway-focused upstream venture


17/06/24
17/06/24

Japex takes control of Norway-focused upstream venture

Tokyo, 17 June (Argus) — Japanese upstream firm Japex has acquired a majority stake in Longboat Japex from London-listed independent Longboat Energy to take full control of the Norwegian oil and gas joint venture. Japex spent $2.5mn to buy the 50.1pc stake, which will completed during July-September this year, Japex said. It bought a 49.9pc stake in Longboat Japex from Longboat Energy in May last year, with the UK firm last year looking to raise extra funds through asset sales, farm-down deals or issuing new equity. By Reina Maeda Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Renewable natural gas not ‘major’ for climate: Chevron


13/06/24
13/06/24

Renewable natural gas not ‘major’ for climate: Chevron

New York, 13 June (Argus) — The growth of renewable natural gas (RNG) production is great news for the climate, but "to say that it is having a major impact by itself is difficult," the president of Chevron's global gas division said this week at an industry gathering. The US oil major, which has invested in RNG facilities in California , Michigan and elsewhere in recent years, has also boosted its conventional gas production on the heels of a crude-focused acquisition of a Denver-based producer. "I don't want to get called out (for) greenwashing or whatever because the volume is just very small compared to the overall portfolio," Chevron gas division president Freeman Shaheen said at the Northeast LDC Gas Forum in Boston, Massachusetts. Advocates for RNG hail the fuel, comprising methane from landfills and animal waste projects that is processed into pipeline-quality gas, as a boon for the climate. This is not only because its use displaces conventional natural gas produced in hydrocarbon drilling — so-called ‘fossil gas' — but because its production takes methane that would have been released directly into the atmosphere and burns it as fuel, releasing CO₂ — a less potent greenhouse gas — instead. But RNG today comprises just 0.5pc of the North American gas market. Even with continued policy support and technological development, Wood Mackenzie projects it will grow to just 4 Bcf/d (113mn m³/d), or 3pc of the market, by 2050. This is why some policymakers, such as Massachusetts' utilities regulatory, have rejected gas distributors' calls to decarbonize the gas system with RNG. The energy industry simply has not invested enough in RNG over the past several decades for it to reach the scale needed to play a bigger role in cutting emissions, Shaheen said. By Julian Hast Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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