EBRD has no plan to fully ban gas investment soon

  • : Natural gas
  • 24/04/12

The European Bank for Reconstruction and Development (EBRD) has no plan to completely ban gas investments in the near future, its chief economist, Beata Javorcik, told Argus.

"We do not finance upstream gas, in rare and exceptional cases we will finance selective downstream and midstream natural gas projects," Javorcik said on the sidelines of the Financial Times Global Commodities Summit in Lausanne. For projects to receive support from the bank it is necessary to demonstrate "strong ambition to accelerate the low-carbon transition" in the economies where EBRD operates, particularly in those that rely heavily on fossil fuels and coal for electricity and heating, Javorcik said.

Certain gas projects can help to bring about a faster decline in Europe's CO2 emissions and ensure energy security while accelerating the deployment of renewables, Javorcik said.

In many countries where the EBRD operates "the usage of energy per capita in residential heating and residential appliances is lower than in advanced Europe", but CO2 emissions per capita are roughly equal to or higher than in western Europe, according to the bank. "So, in other words, energy sources in our countries of operations are more intensive in emissions which makes their decarbonisation more challenging and it is why in some cases selective gas projects can support acceleration of the energy transition," Javorcik said.

Europe is "well positioned in terms of gas supply" for the next year thanks to the historically high storage inventories at the end of gas winter as well as the prolonged decline of gas use, Javorcik said.

"The good news is that prices of LNG in Europe are back to the average level of 2017-21. The bad news is that prices of natural gas in Europe are about four times as high as natural gas in the US," Javorcik said, stressing that it reduces "European competitiveness". Industrial exports from western Europe, in particular Germany, may also remain relatively low in the coming year, which will influence gas demand in the region. "In turn, less positive growth in western Europe translates into lower demand for imports from emerging Europe."

"There is also a risk if Donald Trump becomes the new president, the US will impose a 10pc tariff on European exports as has been promised by Trump," Javorcik said.

UK bank Barclays has decided not to provide project or other direct finance for existing clients' upstream oil and gas expansions. The bank also said that it would no longer finance new energy clients if more than 10pc of their planned oil and gas capital expenditure is in expansion.

Other banks, including HSBC, BNP Paribas and Societe Generale, have promised to stop or limit new oil and gas financing.


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24/06/24

Industria mexicana se enfrenta a un peso más débil

Industria mexicana se enfrenta a un peso más débil

Mexico City, 24 June (Argus) — La depreciación del peso mexicano después de las elecciones ha afectado al comercio e inversión en energía, con un dólar estadounidense más caro elevando el precio de las importaciones de combustible y gas natural. El peso perdió aproximadamente 11pc de su valor frente al dólar estadounidense a medida que los mercados reaccionaron a la abrumadora victoria electoral del partido en el poder Morena en las elecciones del 2 de junio. El tipo de cambio saltó de Ps16.65/$1 solo una semana antes de la votación a un pico de Ps18.99/$1 en los días siguientes. Desde entonces, la tasa se ha estabilizado en Ps18.30-Ps18.50/$1 en los últimos días. "El nuevo umbral para el tipo de cambio probablemente será de Ps18 por dólar", afirmó Gabriela Soni, directora de inversiones de UBS Asesores México. Añadió que, aunque el movimiento ha sido abrupto, "creemos que está justificado dada la aprobación esperada de las reformas constitucionales que tienen el potencial de erosionar el sistema de división de poderes y afectar a las decisiones de inversión en el país." Soni se refirió a la consolidación histórica del poder político asegurado por Morena y los partidos aliados en las elecciones que les entregó no solo la presidencia, como se esperaba, sino el control de 27 de las 32 gubernaturas estatales, y solo a unos pocos escaños en el senado de obtener mayorías calificadas en ambas cámaras del congreso. Con los resultados, el camino está muy claro para que el presidente Andrés Manuel López Obrador apruebe las controvertidas reformas judiciales durante su último mes en el poder en septiembre. Esto podría significar la eliminación de las reformas energéticas promercado aprobadas en 2014, la disolución de los reguladores del sector energético de México y el endurecimiento de la visión estatista de López Obrador de un sector energético dominado por la empresa estatal de petróleo y gas Pemex y la empresa de electricidad CFE. El tipo de cambio podría bajar aún más en los próximos meses si la economía se mantiene estable, dijo Pedro López, director adjunto de análisis económico de Banco BASE, un banco especializado mexicano que apoya a las empresas internacionales con operaciones en el país. Dicho esto, el tipo de cambio frente al dólar estadounidense "continuará estando sometido a presiones más elevadas estos meses hasta las elecciones presidenciales de EE. UU. en noviembre", dijo López. López dijo que el mercado debería tener una imagen más clara de México para finales de año, después de las elecciones estadounidenses y con mayor claridad después de la próxima sesión legislativa mexicana. Añadió que las presiones inflacionistas derivadas del aumento del tipo de cambio probablemente llevarían al banco central a mantener la tasa de interés de referencia en 11pc, manteniendo tasas de interés altas en México. Estas, a su vez, atraen a los inversionistas globales de nuevo al peso bajo la dinámica actual de tasas, suponiendo que no haya perturbaciones adicionales. Balance de energía Dado que México es un importador neto de energía desde 2015, "una depreciación del peso mexicano tiende a empeorar el balance del petróleo", afirmó Soni. "Sin embargo, México es un exportador neto en sectores no energéticos, especialmente en la fabricación, y la balanza comercial se beneficiaría en estos sectores." Y aunque el tipo de cambio puede ayudar a México a ganar más dinero por las exportaciones de petróleo, "tenemos que recordar que son cada vez menos", dijo Víctor Herrera, jefe de estudios económicos del Instituto Mexicano de Ejecutivos Financieros (IMEF). Pemex está redirigiendo el petróleo hacia sus refinerías, bajo el mandato del presidente para aumentar la producción nacional de combustible. Como resultado, las exportaciones de petróleo crudo mexicano cayeron 31pc año con año en abril a 618,000 b/d. A pesar de los esfuerzos, los productos refinados importados de EE. UU. siguen representando aproximadamente 72pc de su consumo nacional de gasolina, diésel, gas natural y turbosina, según los datos de la secretaria de energía. Se necesitará tiempo para saber qué beneficios, si los hubiera, aportan las ventas de petroleo de Pemex al extranjero, que se traducen en pesos adicionales, afirmó Herrera. Mientras tanto, añadió: "pagaremos dólares más caros para importar gasolina." Por James Young Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

MVP start-up shows permitting troubles in US


24/06/24
24/06/24

MVP start-up shows permitting troubles in US

Washington, 24 June (Argus) — The start-up of the Mountain Valley Pipeline (MVP) after a delay of over five years highlights the difficulty the US gas industry faces in building greenfield pipelines under current permitting rules — which are unlikely to change any time soon. The 500km natural gas pipeline began commercial operations on 14 June, at a $7.85bn price tag that was more than double the cost expected when the project was first proposed in 2015. The 2bn ft³/d (20bn m³/yr) pipeline will move shale gas from a mountainous region in West Virginia to demand centres in Virginia, with the possibility for future expansions. MVP is expected to run at just 35-40pc of its nameplate capacity until downstream bottlenecks are removed, according to analyst groups RBN Energy and East Daley Analytics. The pipeline offers the promise of eventually easing price pressure in markets in southeastern US and increasing Appalachian gas output that would otherwise remain constrained. The pipeline — soon to change ownership once US independent EQT closes its $5.5bn all-stock acquisition of operator Equitrans Midstream — is the sole survivor of a round of eastern US pipeline cancellations in 2020-21 caused by permitting issues. MVP was also delayed by permitting lawsuits that forced construction crews to repeatedly halt work, adding billions of dollars to project costs as inflation increased the price of both labour and materials. Construction on the project resumed last year only after extraordinary intervention from the US Congress, which approved all remaining pipeline permits as part of an unrelated law that raised the limit on federal debt. The permitting obstacles for pipelines in the eastern US show no signs of fading, despite smaller changes to speed permitting negotiated through legislation last year. Retiring US senator Joe Manchin, a Democrat from West Virginia, is circulating a comprehensive permitting package he says would fast-track the approval process for pipelines and renewable energy projects. Gas groups say any meaningful permitting bill will have to revise the judicial process and limit the ability of states such as New York to continue using water permits to veto new pipelines. In exchange, renewable energy projects could follow a faster permitting schedule for electricity transmission. But that is a deal many progressive Democrats are reluctant to take, particularly as they face the prospect that former president Donald Trump will win in US presidential elections in November. Far-right Republicans are hesitant to give President Joe Biden a permitting win when they believe they can get a better deal if Trump is elected. But without legislative changes industry officials expect permitting delays to continue whoever is in the White House. "This is not a left or right thing," EQT chief executive Toby Rice says. Sticky red tape Trump's campaign says if he is elected he will speed up approval of gas pipelines serving the Appalachian basin by removing "all red tape". But his regulatory changes when in office failed to make a material difference in permitting timelines, and he repeatedly failed to broker a legislative deal to hasten permitting. Gas industry officials say they want to expedite permitting regardless of the election results, and believe momentum could occur when voters start feeling the effects of delays. "The motivation for pipeline reform I think will increase when the American consumers believe that their energy needs are impacted by the lack of infrastructure," Iowa-based Berkshire Hathaway Energy's gas transmission president, Paul Ruppert, says. The difficulty and time required to permit large greenfield pipelines in the eastern US has led developers to focus on adding capacity to existing pipelines or pursuing shorter expansions instead. By Chris Knight Mountain Valley and its peers Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Western Australia’s Strike plans gas-fired power plant


24/06/24
24/06/24

Western Australia’s Strike plans gas-fired power plant

Sydney, 24 June (Argus) — Australian independent Strike Energy plans to build and operate an 85MW peaking gas-fired power plant that could come on line by October 2026 near its South Erregulla operations in Western Australia (WA). Strike applied to the Australia Energy Market Operator (Aemo) for capacity credits and network access to develop the power plant. It is targeting a final investment decision in November this year subject to Aemo's decision. Gas supplies of around 1.3 PJ/yr (34.7mn m³/yr) would come from Strike's South Erregulla reserves . The power plant would be on land owned by Strike 280km north of Perth and around 15km of existing power transmission lines within the South West Interconnected System, the electricity network that covers Perth and the southwest region of WA. The WA system will need around 3.9GW of new flexible gas-fired power capacity by 2042 to firm increasing renewable generation as the state exits coal-fired power generation, the state government said last year. It plans to close the two remaining state-owned coal-fired power plants by 2030 , while the private-sector Bluewaters coal-fired power plant is expected to retire by 2030-31, according to Aemo. Aemo has identified a supply shortfall of 391MW emerging in 2027-28 because of a progressive coal-fired power phase-out and increasing electricity demand. The shortfall could reach as high as 2.88GW by 2033-34, highlighting the need for continued capacity investment particularly from 2027 onwards, Aemo said in its latest electricity statement of opportunities for WA's Wholesale Electricity Market, which is not connected to east Australia's National Electricity Market. Strike estimates total annual revenues of A$40mn-50mn ($26.6mn-33.2mn) for the gas-fired peaking plant over the first five years of operation, of which almost 40pc would come from payments under WA's capacity credit scheme. The plant would operate for over 25 years, with investment costs currently estimated between A$120mn-160mn. By Juan Weik Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Western Australia’s Wheatstone LNG fully back on line


24/06/24
24/06/24

Western Australia’s Wheatstone LNG fully back on line

Singapore, 24 June (Argus) — Operator Chevron fully resumed output at the 8.9mn t/yr Wheatstone LNG in Western Australia (WA) over the weekend, after restarting its two production trains and domestic gas plant. This is days ahead of an initially targeted supply restart by 27 June . Operations at an offshore platform were interrupted from 10 June, disrupting supplies to Wheatstone's LNG production and domestic gas facilities located near WA's Onslow in the Pilbara region. The WA Gas Bulletin Board's medium-term capacity outlook operated by the Australian Energy Market Operator earlier showed Wheatstone's domestic plant off line until 26 June, meaning supplies could return the following day. But restarts may have been attempted from as early as 14 June, said offtakers contacted by Chevron. While the shutdown of Wheatstone initially raised concerns about potential supply disruptions, the resulting spike in spot prices were short-lived. The front half-month of the ANEA, the Argus assessment for spot LNG deliveries to northeast Asia, was last assessed at $12.44/mn Btu on 21 June, 73¢/mn Btu lower than when prices peaked on 14 June. But this still 66¢/mn Btu higher than on 10 June before the disruption and subsequent repairs. It is unclear how many LNG cargoes have been lost as a result of the incident, with the disruption only resulting in a July term cargo being deferred by a few weeks, a Wheatstone offtaker said. No known term cargo cancellations have emerged. By Rou Urn Lee Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

PetroVietnam, South Korea’s Mubo partner on gas


24/06/21
24/06/21

PetroVietnam, South Korea’s Mubo partner on gas

Singapore, 21 June (Argus) — Vietnam's state-owned PetroVietnam (PVN) today agreed an initial financing deal with the Korea Trade Insurance Corporation, also known as Mubo, to strengthen and streamline South Korean companies' participation in natural gas projects with PVN and its subsidiaries. The $1bn package has both mid- to long-term financial tranches available if South Korean companies secure PVN's natural gas projects. PVN has plans to expand its gas field development, pipeline construction and gas-fired power plants in projects valued at around $12bn. This is aligned with the government's plan to achieve carbon neutrality by 2050 through increased reliance on gas-fired power generation. PVN manages at least four gas-fired power plants, two coal-fired power plants and two hydropower plants, with 5404MW of total capacity, according to the firm. State-owned PetroVietnam Gas (PV Gas) is at the forefront of the gas power sector projects. It operates the 1mn t/yr Thi Vai LNG terminal, commissioned in July 2023 and has started supplying gas-fired power generation to industrial customers since 15 March. Vietnam is expecting to import more LNG, in anticipation of the start-up of the 1.6GW Nhon Trach LNG thermal power plant in November this year. The plant is comprised of two units that could require as much as 775,000 t/yr of LNG each, assuming a generating efficiency of 60pc. It is also building the 3.6mn t/yr Son My LNG import terminal in Binh Thuan province in southcentral Vietnam. The first phase of commercial operations is scheduled for 2027. A second and third phase at Son My will lift's Vietnam's overall LNG import capacity to 10mn t/yr. PV Gas is to supply 70,000t of LNG to state-owned utility EVN for use at its 715MW Phu My 3 thermal power plant in April and May, marking the first LNG supplies to the county's power sector. Russia has also expressed interest to partner with Vietnam for oil and gas supplies, including LNG, following a state visit by Russian President Vladimir Putin to Hanoi on 20 June. By Naomi Ong Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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