Bolivian gas supply will be key for Brazil in 2023
Bolivian natural gas will continue to make a difference in the Brazilian market in 2023 and even gain momentum under the new federal administration, as regional gas production remains constrained by a lack of infrastructure.
Bolivia exported 18mn m³/d to Brazilin 2022 — when Brazil's thermal power generation was low — according to data from Bolivian pipeline company Gas Transboliviano (GTB). That is close to 70pc of Brazil's total gas imports and around 26pc of total Brazilian demand.
Bolivia supplied 20mn m³/d of gas to Brazil in 2021 and was close to repeating that figure in 2022, even though Bolivian state-company YPFB shaved volumes sent to Brazil last year to meet Argentinian demand for gas during the winter. The country averaged 15mn m³/d of gas exports to Brazil from April-September, and reached a low of 12.7mn m³/d in September.
YPFB sees Brazil as a strategic partner and is willing to diversify its clientele, something it will pursue in 2023. The Bolivian company wants to shift volumes imported to Brazil by state-controlled Petrobras to new gas shippers, such as trading companies Tradener and Gas Bridge, which could pay higher prices, closer to international levels.
Gas supply agreements between Brazilian distributors and those traders to import Bolivian gas allowed YPFB to increase prices above its agreement with Petrobras. The companies do not disclose details about the deals, but sources say that the Petrobras-YPFB contract is priced at around 8-9pc of the Brent crude index. Petrobras' signed or amended contracts in 2022 with local gas distributors that were priced at 16.75pc of the Brent index.
Tradener's contract with Santa Catarina's state distributor SCGas is priced at 12.81pc of the Brent index, with a 30pc discount or a 20pc premium. Gas Bridge's contract with SCGas establishes a 13.5pc of the Brent price, plus Bolivian pipeline costs.
Bolivia wants to sign more deals of this kind with final gas consumers in Brazil, especially after 2024. The company said in early January that it aims to "diversify clients in Brazil," focusing commercial efforts to meet its commitment with Petrobras for the next two years and to seek other long-term clients in the liberalized market, where YPFB can supply gas directly to the final consumers on either firm or interruptible contracts — with spot prices — to complement the variable demand from Petrobras and Argentinian company Enarsa.
Lula to foster hermanos
President Luiz Inacio Lula da Silva's views on economic development may favor YPFB plans to access Brazilian customers directly.
Lula met with Argentinian and Bolivian presidents Alberto Fernandez and Luis Arce on 1 January, his first day in office, and discussed energy interactions between the countries, among other topics. Brazil's public bank BNDES is already financing the construction of a 583km (362-mile) stretch of Argentina's Nestor Kirschner pipeline, the kind of deal that matches Lula's past policies of help develop Latin American neighbors that is expected to continue in his new term.
Lula's team also asked Petrobras to freeze any privatization projects underway, which will be reevaluated at a later date. Petrobras still controls pipeline company TBG, which was on track to be sold as part of Petrobras' commitment to antitrust agency Cade, bringing gas from Bolivia into the Brazilian southeast. Gas consumers fear that Petrobras will not resume the sale, allowing Petrobras to control all gas trade with Bolivia and possibly with Argentina, a source told Argus.
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Chevron’s oily DJ basin buy boosts gas output
Chevron’s oily DJ basin buy boosts gas output
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.
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
London, 3 May (Argus) — Austrian energy regulator E-Control has revised up its planned increase in gas tariffs from the start of 2025 but adjusted its commodity charge lower. E-Control on Friday published draft amendments to its gas system charges ordinance that would codify planned changes to how it calculates tariffs. It largely retains its revised methodology from April, but has modified its planned outright tariffs and commodity charge. The regulator had in February proposed a shift to a capacity-weighted distance (CWD) model for its reference price methodology, along with a change to a 50:50 entry-exit revenue split from roughly 20:80 at present. The proposed changes would have tripled entry costs from Germany and quadrupled them from Italy from 2025, as well as other significant changes for the distribution system and storages. Austria's system operators supported the changes , but almost all other respondents to the consultation were highly critical , warning that the changes could threaten diversification, lower utilisation and increase tariffs further and harm liquidity. E-Control last month walked back on several of the proposed changes . Most significantly, it revised the entry-exit split to 25:75, limited the increase in exit tariffs to the distribution zone, introduced a 50pc discount on exit fees to storage facilities, and equalised entry tariffs at all points. The switch to a CWD model was retained, however. The most notable modification from the changes proposed in April is a roughly 7pc increase in capacity-based tariffs, as the new amendments use final prices as opposed to indicative prices previously (see table) . The difference "results from the findings over the course of the cost approval procedure during the past few months", E-Control told Argus . In contrast, the commodity charge on gas entering and exiting the Austrian grid has decreased as a result of "lower expected fuel energy costs", E-Control told Argus . It now plans to charge around €0.04/MWh on entry flows and €0.13/MWh on exit flows, compared with €0.12/MWh and €0.13/MWh, respectively, in the original proposal. There is no commodity charge in place for this year. The final change is an update of the multipliers for capacity bookings depending on their duration. The regulator now proposes multipliers of 1.25 for quarterly products, 1.5 for monthly, two for daily, and three for within-day. Interested parties may submit comments to the regulator by 16 May. Final tariffs will then be published in June, and will be applicable from 1 January 2025. By Brendan A'Hearn Austria 2025-28 estimated tariffs €/kWh/h/a Entry/Exit Capacity type* 2025 (final) 2026 (preliminary) 2027 (preliminary) Baumgarten Entry FZK 1.30 1.37 1.48 Oberkappel Entry FZK 1.30 1.37 1.48 Uberackern Entry FZK 1.30 1.37 1.48 Uberackern Entry DZK 1.17 1.23 1.33 Uberackern Exit FZK 4.25 4.59 4.98 Uberackern Exit DZK 3.82 4.13 4.48 Arnoldstein Entry FZK 1.30 1.37 1.48 Arnoldstein Entry DZK 1.17 1.23 1.33 Arnoldstein Exit FZK 5.96 6.62 7.39 Murfeld Exit FZK 3.73 4.19 4.71 Mosonmagyarovar Exit FZK 2.15 2.49 2.80 Distribution area Exit FZK 1.26 1.45 1.67 Storage Penta West Exit FZK 2.12 2.29 2.49 Storage MAB Exit FZK 1.07 1.19 1.34 *FZK = Firm, freely allocable capacity; DZK = dynamically allocable capacity — E-Control Austria 2025 final tariff vs current €/kWh/h/a Entry/Exit Capacity type* 2025 Current ±% Baumgarten Entry FZK 1.30 0.85 53 Oberkappel Entry FZK 1.30 0.97 34 Uberackern Entry FZK 1.30 0.97 34 Uberackern Entry DZK 1.17 0.88 33 Uberackern Exit FZK 4.25 3.26 30 Uberackern Exit DZK 3.82 2.93 31 Arnoldstein Entry FZK 1.30 0.97 33 Arnoldstein Entry DZK 1.17 0.68 72 Arnoldstein Exit FZK 5.96 4.35 37 Murfeld Exit FZK 3.73 1.90 97 Mosonmagyarovar Exit FZK 2.15 1.23 75 Distribution area Exit FZK 1.26 0.42 200 Storage Penta West Exit FZK 2.12 0.44 383 Storage MAB Exit FZK 1.07 0.44 144 *FZK = firm, freely allocable capacity; DZK = dynamically allocable capacity — E-Control 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
US job growth nearly halved in April
Houston, 3 May (Argus) — The US added fewer jobs in April as the unemployment rate ticked up and average earnings growth fell, signs of gradually weakening labor market conditions. 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. 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.
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