Japan’s Jera to handle 35mn t/yr LNG until FY2035-36

Spanish Market: Electricity, Natural gas
17/05/24

Japan's largest LNG importer Jera plans to maintain its LNG handling volumes at no less than 35mn t/yr until the April 2035-March 2036 fiscal year.

Rising renewable power supplies and the possible return of more nuclear reactors are likely to pressure LNG demand from Japan's power sector. Jera consumed 23mn t of LNG in 2023-24, down by 3pc on the year, although it handled 35mn t through its global operations during the same year.

But Jera needs to secure sufficient LNG supplies to adjust for imbalances in electricity supplies and ensure power security, through more flexible operations. It is also looking to further promote LNG along with renewable electricity in Asian countries, while helping to reduce their dependence on coal- and oil-fired power generators.

The 2035 target for LNG is part of Jera's three pillars of strategic focus, along with renewables as well as hydrogen and ammonia, which was announced on 16 May to spur decarbonisation towards its 2050 net zero emissions goal. The company plans to invest ¥5 trillion ($32bn) for these three areas over 2024-36.

Jera also aims to retire all supercritical or less efficient coal-fired units by 2030-31. This would help achieve the company's target of cutting CO2 emissions from its domestic business by at least 60pc against 2013-14 levels by 2035-36.

By Motoko Hasegawa

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17/01/25

Houthis signal Red Sea attacks pause after Gaza truce

Dubai, 17 January (Argus) — The Yemen-based Houthi militant group said it will monitor implementation of a temporary ceasefire between Israel and Gaza-based Hamas, raising the possibility of a reprieve for shipping in the Red Sea, but will remain prepared for military action if the deal is breached. "Our position regarding the situation in Gaza is linked to the position of our brothers in the Palestinian [armed] factions," Houthi leader Abdul-Malik al-Houthi said in a televised speech on 16 January. "We will continue to monitor the stages of implementation of the ceasefire agreement in Gaza, and any Israeli [violation], we will be directly ready to support militarily the Palestinian people." Al-Houthi's remarks suggest a halt in his Iran-backed group's campaign against shipping passing through the mouth of the Red Sea and against Israel directly. But with no clarity if he was referring to attacks on Israel or shipping lanes, shipping firms are likely to remain cautious about returning to the Red Sea. The Houthis began attacking commercial vessels with western and Israeli affiliations in the Red Sea and Gulf of Aden following an escalation of fighting between Hamas and Israel. Al-Houthi said his group have carried out 1,255 operations, including using ballistic missiles, drones and gunboats, since November 2023. But the risk of an attack in the Red Sea remains despite the ceasefire between Hamas and Israel, tanker owner Frontline said today. "We [are] all hopeful with the ceasefire, but… any ceasefire will be vulnerable with risk of [a] crew being caught if it breaks," Frontline chief executive Lars Barstad wrote on X. The possibility of an attack has compelled many ship operators to forego the Suez Canal in favor of longer voyages around the Cape of Good Hope in the last year, adding time and cost to movement of commodities. Transit of liquid and dry cargoes through the Suez Canal totaled 343mn t last year, less than half the 763mn t in 2023, according to data from Kpler. The ceasefire deal was announced late on Wednesday, 15 January, by Qatar and the US, two of the three countries that have been helping to mediate the negotiations between Israel and Hamas. Egypt is the third. Israel's security cabinet will meet today to sign off on the deal, and will send it for approval from the full government. By Bachar Halabi Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Australia rejects gas exploration permit near Sydney

17/01/25

Australia rejects gas exploration permit near Sydney

Sydney, 17 January (Argus) — Australia has refused further permits to two explorers for the controversial petroleum exploration permit 11 (PEP-11) in the offshore Sydney basin, citing public interest and financial stability concerns. The 4,500km² block near the NSW state cities of Sydney and Newcastle contains shale and conventional gas reserves. It was controlled by 85pc stakeholder Asset Energy, 100pc-owned by unlisted oil and gas explorer Advent Energy, and 15pc owner Australia-listed Bounty Oil and Gas. The Commonwealth-New South Wales (NSW) offshore oil joint authority refused the stakeholders' PEP-11 applications on 16 January, federal Labor industry minister Ed Husic said on 17 January. "The joint authority refused the applications for reasons of public interest, concerns about the applicants' estimate of the cost of works and their ability to raise the necessary capital to fund the proposed works," Husic added. The firms were initially refused an extension for PEP-11 in 2021, by then Coalition prime minister Scott Morrison. But Asset appealed this decision , alleging procedural unfairness. Electorates in the northern suburbs of Sydney were considered crucial in Australia's 2022 federal election, which Morrison and his Coalition ultimately lost. Gas exploration and production is politically unpopular in many parts of Australia, despite ongoing concerns about energy shortfalls. Bounty claimed PEP-11 contains potential gas resources of 4.7 trillion ft³ (133bn m³) but the region has not produced any commercial quantities to date. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Trump tariffs may move gas prices, not flows

16/01/25

Trump tariffs may move gas prices, not flows

New York, 16 January (Argus) — US president-elect Donald Trump's threat to impose 25pc tariffs on all imports from Canada would likely raise US natural gas prices if enacted, but not by enough to significantly alter flows across the border. As anxiety over US-imposed tariffs mounted over the past week, gas prices for February delivery on the Pacific coast of southern Canada began trading at a steeper discount to their US counterparts. The February price at Westcoast station 2, a key indicator of western Canadian gas prices, on Wednesday was at a $4.38/mmBtu discount to northwest US gas hub Northwest Sumas, compared with a $3.43/mmBtu discount a week earlier. The February price at Canadian benchmark NIT/AECO on Wednesday also moved to a $2.56/mmBtu discount to the US benchmark Henry Hub in Louisiana from a $2.22/mmBtu discount a week earlier. While other factors could be at play, the wider Canadian discounts line up with a shift in sentiment by Canadian oil and gas groups and politicians over the past week, as those groups coordinate to try and halt the threatened tariffs. "They're likely to come in on January 20th," Danielle Smith, premier of Alberta, a major oil and gas-producing Canadian province, said of the tariffs this week. The attitude is starkly different from a month earlier, when Michael Rose, chief executive of Tourmaline Oil, the largest Canadian gas producer, said at a Goldman Sachs energy conference that he thought there was a "low likelihood" that the tariffs would be imposed. "We'd agree with you," replied Goldman Sachs head of gas research Samantha Dart. But while US-Canadian gas price spreads would widen if gas were not exempted from Trump's tariffs, the western US would probably not reduce purchases of Canadian gas, because "there's nowhere else for them to get the supply," FactSet senior energy analyst Connor McLean said. Moreover, even with a 25pc price increase, Canadian gas is still highly competitive against US-sourced gas and alternative power generation sources like coal. This is also the case for the US' upper midcontinent and east coast, though gas buyers in those regions could also source gas from Appalachia, Oklahoma or the Rockies if there were spare pipeline capacity. The effect of tariffs on gas prices would also probably be dwarfed by more humdrum market dynamics, like the weather. Demand-boosting cold weather this month has quickly drawn down US gas inventories, which appear slated in the coming weeks to flip to a deficit to the five-year average for the first time in more than two years. Even colder weather early next week is also likely to trigger freeze-offs, which are production curtailments caused by extreme cold. Given those more pressing concerns, "tariffs do not come up" in meetings with other market participants, Appalachian gas producer Seneca Resources marketing manager Rob Lindroos told Argus . Approximately 99pc of US gas imports are from Canada via pipeline, with flows into the US averaging 8 Bcf/d (227mn m³/d) in 2023, according to the US Energy Information Administration. Those Canadian sales, accounting for nearly half of western Canada's production, provide crucial energy supplies to the US Pacific northwest and midcontinent, parts of which are far from US reservoirs. By Julian Hast Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

EU gas stockdraw in first half of Jan at four-year high

16/01/25

EU gas stockdraw in first half of Jan at four-year high

London, 16 January (Argus) — European firms boosted gas withdrawals in the first half of January to meet stronger heating-related demand and compensate for the drop in Russian supply following the end of Ukrainian transit. The European gas stockdraw has accelerated since the turn of this year. Combined EU withdrawals averaged 6.57 TWh/d on 1-15 January, the quickest stockdraw for the period since 8.7 TWh/d in 2021 and up from 4.1 TWh/d in the second half of December, according to GIE transparency platform data. Cold weather has boosted heating demand across much of the continent, particularly in recent days, increasing the call on stocks. Overnight lows in Paris, Milan, Essen and Amsterdam were 2-4°C below the seasonal average on 10-14 January. Quick withdrawals drew combined EU stocks down to 736TWh — 64pc of capacity — on the morning of 15 January. This is down from an average 908TWh and a 80pc fill level on the same date in 2023-24, but still above the 2021-22 average of 620TWh and 56pc of capacity. German withdrawals has been particularly strong over the past week. Withdrawals doubled to 2.4 TWh/d on 8-15 January from 1.2 TWh/d on 1-7 January. The quick stockdraw helped support exports to countries affected by the end of Russian transit gas on 1 January. Inflows of German gas to Austria at Oberkappel and the Czech Republic at VIP Brandov have risen to nearly 300 GWh/d in the first half of this month from a combined 48 GWh/d in December. These countries have also turned to underground reserves to compensate for the lost Russian supply. Austria withdrew 515 GWh/d on 1-15 January, up from 360 GWh/d in December. The stockdraw in the Czech Republic averaged 210 GWh/d on these dates, inching up from 205 GWh/d, as German imports compensated for a larger share of Russian flows . In northwest Europe, high weather-related UK demand pushed UK NBP prompt prices far above the Peg and ZTP, encouraging firms to direct Norwegian supply to the UK instead of France and Belgium. This led to slower Norwegian gas flows to France, which in turn contributed to the higher call on French underground storage. Firms also may have used withdrawn volumes to boost exports to Belgium, as high UK demand weighed on supply from the UK to Belgium on the Interconnector pipeline. The French stockdraw averaged 950 GWh/d on 1-15 January, up from a three-year average of 880 GWh/d for the period. Among countries with the largest storage capacity, the Netherlands has the lowest stocks in percentage terms. Its underground sites stood at 48pc of capacity on the morning of 15 January. Further south, the Italian stockdraw ramped up over the past week to help meet strong consumption and to make up for slower receipts from the Trans Adriatic Pipeline (Tap) after a partial outage at Azerbaijan's Shakh Deniz field. Spain has only 1.2TWh from which it can draw, with another 26TWh in storage that form the state-controlled strategic reserves and can be used only under certain conditions. But quick LNG imports so far this month have rapidly boosted the country's available supply, with LNG stocks having reached 11.2TWh on 15 January after reaching a seven-year low of 6.5TWh on 24 December. The pace of EU withdrawals will continue to largely follow changes in heating-related consumption for the remainder of January. And cold weather today was forecast to persist across much of Europe, with overnight lows in Amsterdam, Paris, Essen, Milan and Madrid anticipated to hover at 1-4°C below seasonal values over much of the next week. While heating-related consumption is likely to remain strong in the coming weeks, wider LNG supply availability could alleviate the call on storage. Several cargoes so far this month have diverted away from Asia towards higher-priced European markets, which may support LNG sendout in the continent later this month. By Isabel Valverde Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Brazil to face weaker La Nina conditions

16/01/25

Brazil to face weaker La Nina conditions

Sao Paulo, 16 January (Argus) — Many government agencies expect a weaker La Nina weather pattern in Brazil — partially because of its delayed start — that could help reverse damages from a previous droughtand boost hydroelectric power generation. La Nina conditions emerged a month later than expected, starting only in January, according to national meteorology institute Inmet. Its presence was confirmed by the US' National Oceanic and Atmospheric Administration (NOAA) and is 40pc likely to last until March-May. Delayed La Nina conditions and its weaker effects on Brazil's climate may be linked to the global average temperature hitting an all-time high in 2024 , according to the World Meteorological Organization. La Nina conditions develop when the surface waters in the tropical Pacific Ocean are cooler-than-average across the central and central-eastern regions. But global oceans have been running much warmer for more than a year, which could have delayed the phenomena, according to NOAA. Its usually causes heavier rains in Brazil's northern and northeastern regions, while central-southern states experience drier weather and heatwaves. Brazil, along with South America as a whole, has a history of droughts , agricultural losses , and higher ethanol prices in previous La Nina seasons, but the effects this year will be milder and potentially beneficial to industries in some regions. Agriculture Despite its conditions set to last throughout the first quarter of 2025, Brazil's 2024-25 crop is expected to hit a record 322.3mn metric tonnes (t), up from 297.8mn t in the previous crop, according to national supply company Conab. Still, most forecasts rely on previous favorable conditions during the development of the 2024-25 crop. The soybean crop is set to be 13pc higher than in 2023-24, reaching 166.33mn t. Corn also is expected to increase production, reaching 119.6mn, a 3.3pc rise from the previous crop. But previous dry weather and low precipitation harmed center-southern sugarcane producers, which are responsible for 91pc of the national sugarcane output. The 2024-25 sugarcane crop is forecast to reach 678.7mn t, a 4.8pc decline from the previous season, according to Conab. La Nina's conditions may recover some of the sugarcane crop this season. Northeastern sugarcane production, harmed by last year's drought, will face a period of heavy rains brought by the phenomenon in January. But the sugarcane crop is already projected to decline by 30pc from the previous crop regardless, according to northeastern sugarcane producers' association Unida. The last time La Nina hit Brazil, in 2020-23, roughly 40pc of the main center-south sugarcane crop was at risk from dry weather . Ethanol Ethanol production is set to increase by 1.3pc in 2024-25 from the previous season, according to Conab. Still, sugarcane ethanol is outlined to shrink by 2.8pc thanks to 2024's dry weather and wildfires in the southeast. Electricity La Nina's late arrival enabled the summer rainy period in Brazil. The main hydroelectric reservoirs recovered from last year's drought and will end this month above half of their capacity, according to national grid operator ONS. Regardless of La Nina's presence, most of the central-southern states are expected to have above-average rains in January-April, according to Inmet. Temperatures are also set to stay above the historical average in the central-western, southeastern, southern and northern states. By Maria Frazatto Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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