Iraq signs $27bn energy deal with TotalEnergies
France's TotalEnergies today signed a $27bn agreement with the Iraqi government to invest in four troubled energy projects that the country has struggled to implement for several years.
These include the common seawater supply project (CSSP), which Iraq has been trying to progress for over a decade. TotalEnergies will develop a 7.5mn b/d facility to provide desalinated seawater for injection into oil fields, which will be vital to maintaining and ultimately expanding production at mature fields in southern Iraq.
TotalEnergies will also boost production at the 85,000 b/d Ratawi oil field in Basrah, lifting capacity by 150pc to a plateau of 210,000 b/d. Alongside this will be a central processing facility to handle captured associated gas from five oil fields in Basra: Ratawi, West Qurna 2, Majnoon, Luhais and Tuba. These will process up to 600mn ft³/d, split equally over two phases, producing around 12,000 b/d of condensate and 3,000 t/d of LPG.
The final part of the deal covers a 1,000MW solar power plant which Iraq says will produce electricity at less than 45pc of the cost of its current generation capacity. According to the initial agreement signed by TotalEnergies with Iraq in March, the first 500MW phase is due online in just over a year.
The country has been plunged into extended power outages, sparking sporadic protests and the resignation of the minister of electricity in May. The main reason for the crisis is the failure of the country's generation and transmission infrastructure to meet rising demand, making the solar power deal even more important.
Iraq said it envisages a profit of $95bn on the investment over the life of the contract, assuming an oil price of $50/bl. But it could still face delays. The signing ceremony comes ahead of Iraq's parliamentary elections in October, which could bring in a new government in Baghdad.
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Brazil biomethane parity prices R2.43-2.79: Correction
Brazil biomethane parity prices R2.43-2.79: Correction
Corrects CNG truck round-trip freight rates in 8th paragraph. Sao Paulo, 21 May (Argus) — 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. By Rebecca Gompertz Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Australia's Woodside plans CCS for Browse gas project
Australia's Woodside plans CCS for Browse gas project
Perth, 21 May (Argus) — Australian independent Woodside Energy is planning a carbon capture and storage (CCS) element for its Browse gas project offshore Western Australia (WA), but blamed stalled approval processes for the slow progress. The North West Shelf (NWS) life extension — which was first referred to regulators in 2018 — needed to be approved before Browse could progress further, chief executive Meg O'Neill said at the Australian Energy Producers conference held in WA's capital Perth this week. The life extension would allow the joint venture and third-party users to use the NWS project facilities until around 2070. WA's Environmental Protection Authority (EPA) recommended that the NWS life extension be approved in 2022, if it reduces its greenhouse gas (GHG) emissions to net zero by 2050. But the process remains incomplete, awaiting state and federal ministers' decisions and a final issuance of conditions for the project. WA's Office of the Appeals Convenor is still working through responses to the EPA's recommendation, which it must then report to the environment minister alongside its own recommendations, a process which was interrupted by the resignation of a senior bureaucrat last year. Woodside wanted to progress the CCS side of the Browse project before the end of 2024, O'Neill said, but the lack of certainty regarding approval timelines affected other elements of the project. "We've been working closely with the [federal government], state regulators and the Browse JV on the right approach to the environmental approvals, there are a couple of possible pathways that we are evaluating and we hope to be lodging the requests for approving that element of the project within this year," O'Neill said on 21 May. "But part of why we've been very disciplined in our work on Browse and not ramped up engineering work is because it is very difficult to get line of sight for when we'll get those approvals. With personnel changes at the appeals convenor we really don't have very good line of sight unfortunately." The 368bn m³ Browse development is considered critical to WA's future as a major LNG exporter and could provide long-term certainty for the 16.9mn t/yr NWS LNG, where partners have already signalled they will close a 2.5mn t/yr train later this year. Average gross GHG emissions from the three Browse fields are between 6.4mn-6.8mn t/yr with an additional 7.7mn t/yr once Browse gas is liquefied, resulting in total emissions of 14.1mn-14.5mn t/yr of CO2 equivalent, according to the environmental impact statement Woodside released in 2022. This necessitates a CO2 solution for it to progress under Canberra's net zero scope 1 emissions rule instituted last year. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Australia pauses pro-upstream offshore oil, gas reforms
Australia pauses pro-upstream offshore oil, gas reforms
Perth, 21 May (Argus) — Australia's federal resources minister Madeleine King acknowledges the political situation in the nation's upper house of parliament the Senate prevents any deal to clarify consultation requirements for the nation's offshore oil, gas, carbon capture and storage (CCS) and renewables sectors. The Senate last week passed the Labor party-led federal government's legislation on changes to deductions permitted under the Petroleum Resources Rent Tax (PRRT) and a new fuel efficiency standard for light commercial and passenger vehicles . But the deal struck with the Greens party and two independent senators meant the government withdrew amendments designed to specify which stakeholders must be consulted under law before receiving environmental permits. King blamed the Greens for her government removing the amendments from the agenda. "My disappointment is not for the industry but the community that will remain subject to inadequate and inappropriate consultation requirements for longer," King said on 21 May at the Australian Energy Producers conference in Perth. "The Greens political party and the crossbench independents and others promoted widespread misinformation in relation to the proposal that would ensure the community had the benefit of clarity and certainty in consultation." Environmental lawyers delayed field drilling and pipeline laying for Australian independent Santos' $4.6bn Barossa backfill project from late 2022 until early 2024, citing insufficient consultation with traditional owner groups, in a case ultimately dismissed by the Federal Court of Australia. Changes to offshore laws were promised by the federal government in January with concerns legal tactics could lead to further lawsuits aimed at driving up costs for LNG backfill, offshore wind power projects or CCS. Climate campaigners saw the changes as a vehicle for easing scrutiny on developers and its politicians promised to oppose any changes. But having dealt with the Greens instead of the Liberal-National coalition on legislation for fuel efficiency and the PRRT because of the latter's demands that the approvals process for oil and gas be expedited, Labor is less likely to now receive support for changes to consultation ahead of next year's federal election. The future gas strategy released by the federal government this month said new supplies are urgently needed, as gas-fired power generation will likely replace firming capacity provided by retiring coal-fired power plants. The report also found multiple reasons for Australia's low gas exploration investment, including difficulties with the approvals processes, legal challenges and market interventions that may lead international companies to focus on lower cost and lower risk fields in other jurisdictions. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Japan’s FEPC calls for clearer nuclear policy stance
Japan’s FEPC calls for clearer nuclear policy stance
Osaka, 20 May (Argus) — Japan's Federation of Electric Power Companies (FEPC) has called for a clarification of the country's nuclear power policy, to ensure stable electricity supply and alignment with its net zero emissions goal. The call comes as the government reviews its basic energy policy , which was formulated in 2021 and calls for the reduction of dependence on nuclear reactors as much as possible. But Japan's guidelines for green transformation, which was agreed in February 2023, states that Japan should make the most of existing nuclear reactors. Tokyo should clearly state in its new energy policy that it is necessary to not only restart existing nuclear reactors, but also build new reactors, said FEPC chairman Kingo Hayashi on 17 May. Hayashi is also the president of utility Chubu Electric Power. Hayashi emphasised that to utilise reactors, it would be necessary to have discussions regarding financial support, policy measures that would help ensure cost recovery, address back-end issues in the nuclear fuel cycle and conduct a review of nuclear damage compensation law. Japan's current basic energy policy is targeted for the April 2030-March 2031 fiscal year, when the country's greenhouse gas (GHG) emissions is forecast to fall by 46pc from 2013-14 levels. To achieve this, the power mix in the policy set the nuclear ratio at 20-22pc, as well as 36-38pc from renewables, 41pc from thermal fuels and 1pc from hydrogen and ammonia. Japan typically reviews the country's basic energy policy every three years. Nuclear, as well as renewables, would be necessary to reduce Japan's GHG emissions, although thermal power units would still play a key role in addressing power shortages. But Japan has faced challenges in restarting the country's reactors following safety concerns after the 2011 Fukushima nuclear disaster, with only 12 reactors currently operational. Japan's nuclear generation in 2023 totalled 77TWh, which accounted for just 9pc of total power output. Tokyo has made efforts to promote the use of reactors, after the current basic energy policy was introduced in 2021. The trade and industry ministry (Meti) has updated its nuclear policy, by allowing nuclear power operators to continue using reactors beyond their maximum lifespan of 60 years by excluding a safety scrutiny period in the wake of the 2011 Fukushima nuclear disaster. This could advance the discussion on Japan's nuclear stance, especially if the new basic energy policy includes more supportive regulations. The trade and industry ministry started discussions to review the energy policy on 15 May, aiming to revise it by the end of this fiscal year. It is still unclear what year it is targeting and what ratio will be set for each power source in the new policy. But the deliberation would form a key part of efforts to update the GHG emissions reduction goal, ahead of the submission of the country's new nationally determined contribution in 2025, with a timeframe for implementation until 2035. By Motoko Hasegawa Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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