Trinidad weighs gas impact of Venezuela crisis
Trinidad and Tobago is assessing how new US oil sanctions on Venezuela will impact its plan to import natural gas from its tumultuous neighbor.
Gas-short Trinidad and Venezuela signed a term sheet in late August 2018 for Trinidad to purchase 150mn cf/d of gas from the offshore Dragon field starting in 2020, later ramping up to 300mn cf/d.
Trinidad needs the gas to help end curtailments that started when domestic production began to decline in 2011. The shortage has curbed output of LNG, ammonia and methanol.
Trinidad is "seeking advice" to ascertain the effect of the sanctions on the Dragon project, communications minister Stuart Young said this week.
"The government's legal departments are examining the extent to which the sanctions could affect PdV's ability to go through with the arrangement," Trinidad's energy ministry told Argus.
The US sanctions on Venezuelan state-owned oil company PdV are part of US-led efforts to unseat Venezuela's sitting president Nicolas Maduro. The sanctions include withholding payments for purchases of Venezuelan oil in favor of an emerging interim government. The sanctions apply to crude and oil products, and do not mention natural gas.
The US, Canada and most of Latin America recognize National Assembly speaker Juan Guaidó as interim president. Trinidad still regards Maduro as the president of Venezuela, prime minister Keith Rowley said 26 January.
The term sheet for the Dragon project was signed by Trinidad´s state-owned gas company NGC, PdV and Shell, whose offshore Hibiscus platform in Trinidad would receive the Venezuelan gas.
The Dragon gas purchase agreement is "not legally binding although heads of agreement and other documents were signed," Trinidad's energy minister Franklin Khan said 25 January.
A collapse of the Dragon plan would be "a severe setback" for Trinidad, the energy ministry said yesterday.
"We need the gas to return to optimum production for our gas-based industries that have been delivering below capacity for years."
Trinidad´s gas production in January-November 2018 averaged 3.59 Bcf/d, up by 8.2pc year on year, according to energy ministry data.
Rowley's support for Maduro has sparked a diplomatic spat with Washington. US ambassador to Trinidad Joseph Mondello said he was "deeply concerned" that Trinidad was recognizing "the undemocratic and illegitimate government" of Maduro.
Rowley said he "took offense" at Mondello's remarks. "We have preserved the sovereign position of the people of Trinidad," he said.
Trinidad will not support an invasion of Venezuela to topple Maduro, Rowley said, adding that
Trinidad and the US were not "at war" over Venezuela.
"What you have is a difference of opinion. And we maintain without apology that Trinidad is entitled to have a difference of opinion with any country on any matter in the interest of the people of Trinidad."
Trinidad has offered itself as a mediator to settle the political dispute in Venezuela, but Maduro has not contacted the island's government, Rowley said.
Related news posts
Polymers stocks safe in storm-hit Brazil: Braskem
Polymers stocks safe in storm-hit Brazil: Braskem
Orlando, 8 May (Argus) — Brazilian petrochemical giant Braskem said its polymer inventories are safe and protected from the damage caused by heavy rainfall at its operations in southern Brazil during the past two weeks. The inventories include polyethylene (PE), polypropylene (PP), ethylene and basic chemicals. Braskem had to shutdown all of its operations in Rio Grande do Sul state after the extreme weather event in recent days , the company told Argus on Wednesday, on the sidelines of the NPE Plastics fair in Orlando, Florida. The shutdown was completed safely, with no harm to the company's plants at the Triunfo petrochemical hub, which represents about 30pc of its ethylene production capacity in Brazil. Braskem is reevaluating its supply chain strategy to deal with the lack of production at the Trinfo hub. This includes serving its clients with PE produced at other company hubs in Brazil and Mexico, where it owns PE manufacturing joint venture Braskem Idesa. The same goes for PP and polyvinyl chloride (PVC), with other production hubs serving customers if the weather situation does not improve in the coming days. Operations at Braskem's 260,000 t/yr bio-based PE plant will restart as soon as conditions improve, the company said. No fatalities occurred at the company's operations, but part of its workforce has lost their homes and are being taken care of by Braskem, according to the company. State governor Eduardo Leite called the the flooding "the worst disaster in Rio Grande do Sul's history." There are 100 people dead and 128 missing, according to the state's civil defense. Braskem said it will resume its operations gradually, after weather conditions normalize and logistics in the state such as airports, railroads and flooded roads resume. Braskem is the largest producer of thermoplastic resins in the Americas and a leader in biopolymer production. By Frederico Fernandes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Low US natgas prices help ammonia economics
Low US natgas prices help ammonia economics
Houston, 8 May (Argus) — Nitrogen fertilizer production costs in the US are primed to hit historically low levels through the third quarter, potentially creating favorable margin and arbitrage opportunities during the offseason as bloated natural gas inventories depress key feedstock prices. Estimated ammonia production costs for most US producers tied to Henry Hub natural gas prices have spent the last 12 consecutive weeks below $100/short ton (st) on sub-$2/mmBtu feedstock prices. They should benefit from sub-$3/mmBtu natural gas costs through October, based on the 7 May Nymex futures curve. A mild winter stemmed seasonal withdrawals from natural gas storage and mitigated heating demand. US natural gas inventories exited the 2023-24 winter at the highest seasonal levels in eight years. High inventories help contain US gas prices by easing concerns about spikes in demand or supply shortfalls. Slackened natural gas demand has continued through April and has maintained downward price pressure, even as producers curtail output. The US Energy Information Administration (EIA) said that it expects inventory growth to lag average levels in the coming months as producers cut output in response to lower prices. But inventories were still expected to exit the injection season, when gas stockpiles are replenished to meet winter heating needs, at an all-time high above 4.1 Tcf, the EIA said. Natural gas is the primary feedstock for US ammonia producers, comprising on average 60-70pc of total production costs at current prices. Ammonia production costs have not spent this long below $100/st since May-July 2020, according to Argus data. Ammonia is a key feedstock for urea and UAN manufacturing. Sinking feedstock ammonia costs lowers the cost floor for upgraded nitrogen alternatives and fosters favorable margin opportunities. US producer CF Industries said during its first quarter results the energy curves between North America and Europe — with the latter a higher-cost ammonia production hub — remain wider than historical levels, creating potential arbitrage scenarios. Ammonia production costs based on the Dutch TTF natural gas day-ahead contract, which serves as the European benchmark, have averaged more than three-times more than those tied to Henry Hub since January, according to Argus data. "Longer term, we expect the global energy cost structure to continue to provide significant margin opportunities for our North American production network," CF chief executive Tony Will said during the company's earnings call. By Connor Hyde Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Enchentes afetam operações de empresas no Sul do Brasil
Enchentes afetam operações de empresas no Sul do Brasil
Sao Paulo, 8 May (Argus) — Diversas empresas brasileiras suspenderam operações no Rio Grande do Sul em razão das chuvas intensas que causaram diversos alagamentos e danos à infraestrutura. As enchentes ocasionadas pelo recorde de chuvas geraram pelo menos 83 mortes e 111 pessoas desaparecidas, de acordo com o governo estadual. Mais de 23.000 pessoas foram obrigadas a deixarem suas casas em meio a danos generalizados, incluindo pontes e rodovias inundadas em diversas cidades. A barragem da usina hidrelétrica 14 de Julho, com capacidade de 100MW, no rio das Antas, rompeu na semana passada em meio às fortes chuvas. A Companhia Energética Rio das Antas (Ceran), que opera a usina, implementou um plano de evacuação de emergência em 1 de maio. A produtora de aço Gerdau informou em 6 de maio que suspendeu suas operações em duas unidades no estado até que seja assegurada a "segurança e proteção das pessoas". A empresa não divulgou o volume de produção de aço dessas unidades. A empresa de logística Rumo interrompeu parcialmente suas operações e informou que os "danos aos ativos ainda estão sendo devidamente mensurados". A gigante petroquímica Braskem desligou duas unidades no complexo petroquímico Triunfo, como uma medida de prevenção em decorrência dos "eventos climáticos extremos" no estado, afirmou em 3 de maio. A empresa adicionou que não há expectativa de data para retomar as atividades. A Braskem opera oito unidades industriais no Rio Grande do Sul, que produzem 5 milhões de toneladas (t)/ano de petroquímicos básicos, polietileno e polipropileno, de acordo com seu website. Por Carolina Pulice Envie comentários e solicite mais informações em feedback@argusmedia.com Copyright © 2024. Argus Media group . Todos os direitos reservados.
Baltic April gas consumption rises on year
Baltic April gas consumption rises on year
London, 8 May (Argus) — Gas demand in the three Baltic states and Finland was up by 26pc on the year in April, although there were diverging trends in the different markets. Consumption in Finland, Estonia, Latvia and Lithuania totalled 3.56TWh, up from 2.82TWh a year earlier but down from 4.31TWh in March ( see data and download, graph ). That said, total demand was still well below the 2018-21 average for the month of 5.03TWh. Consumption was up on the year in all three Baltic countries, but Finnish demand edged down. This was the first month in which Finnish demand was lower on the year since April 2023. In contrast, Lithuanian consumption surged by nearly 50pc on the year, and was also higher than in February and March despite the end of the traditional heating season. Gas-fired power generation held broadly stable from a year earlier, totalling 305MW across the four countries compared with 301MW in April last year ( see gas-fired output table ). Output edged down in Estonia and Lithuania and dropped by 25MW in Finland, but this was offset by a 31MW increase on the year in Latvia. But, unlike in March, gas-fired output fell by 246MW, a large contributing factor to the lower gas demand on the month. Many combined heat and power plants will have switched off at around the end of March or mid-April as the traditional heating season came to a close, possibly driving the fall in gas-fired output. But renewables generation was also stronger in April than March, particularly in Finland, where wind output rose to 2.03GW from 1.63GW, while hydro also stepped up. In Lithuania, solar and waste-based production increased on the month. Demand was also stronger despite higher year-on-year minimum temperatures in all four capital cities, which may have curbed most residual heating demand after the end of the traditional heating season, although there was a brief cold snap towards the middle of the month that temporarily drove up demand ( see temperatures table ). With gas-fired power generation only marginally higher than a year earlier, and the warmer weather curbing residential demand, a possible uptick in industrial demand may have driven the aggregate rise in consumption. Average prices on the regional GET Baltic exchange were €33.30/MWh in April, up by 8pc on the month but 30pc lower than a year earlier, the exchange said. Prices increased in around the middle of April "due to the unexpectedly cold weather and the increased demand for gas in the market", but then fell again "as the weather warmed", GET Baltic chief executive Giedre Kurme said. There were a total of 2,400 transactions last month for a combined 642GWh of gas. Volumes sold on the Finnish market accounted for 42pc, the joint Latvian-Estonian market 33pc, and the remaining 25pc was sold in Lithuania. Klaipeda and Balticconnector to change flows The return of the Finnish-Estonian Balticconnector pipeline and the start of maintenance at the Klaipeda LNG terminal in Lithuania will drive changed flow patterns this month. The Balticconector resumed commercial operations on 22 April after being off line since 8 October following a rupture caused by a dragging ship anchor . The reconnection of Finland to its southern neighbours has allowed for strong southward flows since 22 April, at an average of 62 GWh/d on 22 April-7 May. Some of this gas is probably being injected into storage, with the region's only facility at Incukalns switching to net injections on 23 April from net withdrawals of 7 GWh/d earlier in the month. Net injections have since averaged 46 GWh/d on 23 April-6 May, the latest data from EU transparency body GIE show. Stocks at Incukalns ended the withdrawal season on 30 April at 11.29TWh, the highest since at least 2014 and well above the previous high from last year of 9.03TWh. Large volumes of gas that had been stored over the previous summer for export to Finland over the winter were left stranded in Incukalns after the Balticconnector went off line. And the Klaipeda LNG terminal began maintenance on 1 May, which will last until 15 June, as the terminal's Independence floating storage and regasification unit (FSRU) departed for dry-docking in Denmark. As a result, there were net exports from Poland to Lithuania for the first time since early November, at an average of 17 GWh/d on 1-7 May. Some of this gas could have been withdrawn from Ukrainian storage, with flows from Ukraine to Poland averaging 10 GWh/d over the same period. Lithuania's largest supplier Ignitis has said it stored some volumes in Ukraine. And flows at the Kiemenai border point with Latvia have also flipped towards Lithuania, averaging 11 GWh/d on 1-7 May, compared with net flows towards Latvia of 15 GWh/d in April. That said, there were no flows at the point on 6-26 April. By Brendan A'Hearn Finnish, Baltic average gas-fired power generation MW Apr-24 Apr-23 Mar-24 ± Apr 23 ± Mar 24 Estonia 5 6 7 -1 -2 Latvia 49 18 215 31 -166 Lithuania 46 47 52 -1 -6 Finland 205 230 277 -25 -72 Total 305 301 551 4 -246 — Entso-E Daily average minimum temperature in FinBalt capitals °C Apr-24 Apr-23 Mar-24 ± yr/yr ± m/m 2014-23 Apr avg Vilnius 5.22 3.83 0.93 1.39 4.29 2.63 Riga 5.01 4.98 1.93 0.03 3.08 3.65 Tallinn 2.00 1.46 -0.59 0.54 2.59 1.17 Helsinki 0.11 -0.45 -2.55 0.56 2.66 0.12 — Speedwell Finnish and Baltic April consumption by country GWh 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