Daily Digest: February 27th, 2020
PETRONET, TELLURIAN TALKS DRAG ON
The talks between Indian Petronet LNG and US developer Tellurian regarding the finalisation of the deal in which the former will pick up an equity stake in the Driftwood LNG export project are continuing with no result so far.
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The Big Picture:
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In September last year, Tellurian signed a memorandum of understanding (MoU) with Petronet LNG to negotiate the supply of up to 5mn metric tons/year of LNG from Driftwood project.
- As per the MoU, Petronet LNG, India's biggest LNG importer, was also to pick up an equity stake in the project.
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MARKETS SHIFT FROM BAD TO WORSE AS COVID-19 SPREADS
The coronavirus epidemic (Covid-19) has weighed down on already low oil and gas prices, while also putting upstream projects at risk of delay. It has exacerbated the global LNG supply glut, raising questions about where this cheap gas will go.
The Big Picture:
- The virus has made a bad market situation worse.
- China – the world's biggest LNG importer – has been calling forces majeures on some of its purchase contracts, in response to weak demand.
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Europe was key in absorbing cheap extra LNG supply last year, but there are doubts that the market can perform the same role again.
ENI OUSTS NATURGY FROM EGYPTIAN LNG
Italian producer Eni has signed a series of agreements with Cairo, Egyptian state energy entities Egas and EGPC and Spanish utility Naturgy. The documents end a lengthy $2bn legal dispute and strengthen Eni's position in the east Mediterranean in an "important reorganisation," it said.
The Big Picture:
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The "amicable" agreements dissolve Union Fenosa Gas (UFG), the 50-50 joint venture it owns with Naturgy, and also pave the way to restarting the mothballed 7.6bn m³/yr Damietta LNG export plant this summer, subject to conditions precedent.
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Damietta was turned off in 2012 as the gas was needed at home.
TRADERS BACK ANALYSIS OF MARKET APPROACH TO EU GAS
A report that the European Federation of Energy Traders (Efet) commissioned from Frontier Economics (Frontier) will help inform the conversations its members will hold with industry and policy-makers on market coupling, Efet said.
The Big Picture:
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The new report explores how price signals and the inherent flexibility of the gas system – such as storage and line-pack – can be harnessed to enable the cost-effective decarbonisation of the gas system and efficient coupling of the gas and power sectors.
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"Increasing use of power to gas technologies – and other technologies, such as hybrid heat pumps – will result in a closer linking between the electricity and gas sectors than is currently the case."
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MOL, DSME SIGN FSRU DIGITALISATION AGREEMENT
Japanese shipowner Mitsui OSK Line (MOL) and Korean shipbuilder Daewoo Shipbuilding & Marine Engineering have reached an agreement for joint development of technologies and solutions for the digitalisation of floating storage and regasification unit (FSRU), MOL said February 26.
The Big Picture:
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Through this collaboration, detailed operational data will be collected from FSRU and stored in a cloud-based data platform to develop applications for advanced remote operation monitoring and optimising.
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The project will enhance safe and efficient operation, which will further deepen cooperation between FSRU and shore-based facilities,” the company said.
UK HAULIER BUYS NATGAS VEHICLES
Online supermarket delivery company Ocado Group has ordered a further 30 gas-powered trucks for its distribution fleet, it said.
The Big Picture:
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In January 2019, the online supermarket became the first UK retailer to self-fund the purchase of an onsite grid-connected gas refuelling station.
- Apart from emitting 99% fewer particulate emissions and 70% less nitrogen oxide than the latest diesel standard, natural gas powered vehicles are also, on average, 10 decibels quieter than diesel vehicles.