2022 Global Power Markets

December 14, 2021 8:30 am - 3:30 pm CST Online Pricing: Complimentary Where energy connects The South American Virtual Forum offers attendees an in-depth look at the South American commodities markets, with a particular emphasis on Argentina and Colombia. We’ll examine oil and gas, LNG, biofuels, petrochemicals , and the impact of the energy transition on these industries. Join us from the comfort of your desk, to explore the issues impacting the markets today, and projections for the future, in topical sessions featuring Platts’ methodology, assessments, and pricing. What's included You can expect live presentations, real-time interaction, and the opportunity to engage in questions and answers with the speakers throughout, right from your desk. Key topics we'll cover -Latin American economic overview-South American upstream-Refined products markets-Shipping and freight markets-Petrochemicals demand and outlook-Biofuels and biodiesel in regional markets-Natural gas and LNG outlook-South American metals outlook  REGISTER NOW MORE INFO

The next few months will be "critical" for Europe to build up sufficient gas stocks to make it through the upcoming winter given uncertainty over Russian gas supplies, the head of the International Energy Agency said July 18. In a new commentary, IEA executive director Fatih Birol said an additional 12 Bcm of gas needed to be saved in the next three months that could then be stored across the EU to bolster stocks. EU gas storage sites are currently 64% full, but Birol warned that the EU would need to reach a level of more than 90% should Russia cut supplies to Europe from the start of the heating season in October. "And even then, it could still face supply disruptions in the latter part of the heating season," Birol said. "Achieving that 90% storage level is still possible, but Europe needs to act now and make every remaining day count," he said. Under new EU storage rules, member states must ensure their gas storage sites are filled to an average 80% of capacity by Nov. 1, 2022, and to 90% by Nov. 1 in subsequent years. However, the EC has said in a draft winter preparedness communication that without demand reduction measures, EU stocks could be filled to just 65%-71% of capacity in the event of a full Russian supply halt. Birol warned that if Russia decided to completely cut off gas supplies before Europe can get its storage levels up to 90%, the situation would be "even more grave and challenging." 'Big ask' Birol said the first immediate step toward filling European gas storage to adequate levels before winter was to reduce Europe's current gas consumption and to put the saved gas into storage. "Some of this is happening already because of sky-high gas prices, but more is required," Birol said. Concerns over storage have seen European gas prices remain at sustained highs through 2022. The Dutch TTF month-ahead price hit a record Eur212.15/MWh on March 8, according to Platts price assessments by S&P Global Commodity Insights, and was last assessed at Eur159.50/MWh on July 15, up by 86% since the start of 2022. Birol said significant additional demand reductions were needed to prepare Europe for a "tough" winter ahead. He said 12 Bcm of additional gas savings represented some 130 LNG tankers. "This is a big ask, but it does not exaggerate the scale of what is needed," he said. Birol said it was "categorically not enough" to rely on gas from non-Russian sources. "These supplies are simply not available in the volumes required to substitute for missing deliveries from Russia," he said. Birol said that would be the case even if gas supplies from Norway and Azerbaijan flowed at maximum capacity, if deliveries from North Africa stayed high, if domestic output followed recent trends, and if inflows of LNG increased at a similar rate as the first half of 2022. "That is already a lot of 'ifs'," Birol said. Five--point plan To encourage gas saving, Birol unveiled a five-point plan that the EU could follow. First, he said the EU should introduce auction platforms to incentivize EU industrial gas users to reduce demand. "Industrial gas consumers can offer part of their contracted gas supply as demand reduction products for compensation, which can lead to efficiency gains and a competitive bidding process," he said. Such a process has also already been outlined in the draft EC communication that is due to be officially proposed on July 20. The second point is to minimize gas use in the power sector, which could be done by temporarily increasing coal- and oil-fired generation while accelerating deployment of low-carbon sources, including nuclear, Birol said. The third point in the plan is to enhance coordination among gas and electricity operators across Europe, including on peak-shaving mechanisms, to help reduce the impact of lower gas use on power systems. Fourth, Birol said, would be to bring down household electricity demand by setting cooling standards and controls, and finally the EU should harmonize emergency planning across the EU at the national and European level. "If these types of measures are not implemented now, Europe will be in an extremely vulnerable position and could well face much more drastic cuts and curtailments later on," he said.

Canada is to allow gas turbines used to flow gas through the Nord Stream pipeline from Russia to Germany that are repaired on Canadian territory to be returned to Germany under a sanctions waiver, a senior Canadian government official said July 9. In a statement, Canada's natural resources minister Jonathan Wilkinson said Germany's economy would suffer "significant" hardship in the event of a shortage of gas. Russia's Gazprom on June 16 cut gas supplies via the Nord Stream pipeline to Germany to just 40% of capacity, citing maintenance issues with gas turbines at the key Portovaya compressor station. One turbine that had been sent by Germany's Siemens to a factory in Montreal, Canada, for maintenance had been stuck in the country after Ottawa imposed sanctions against Moscow that meant the turbine could not be returned. Another turbine was shut down after Gazprom said its window for undergoing required maintenance work had passed. "Canada will grant a time-limited and revocable permit for Siemens Canada to allow the return of repaired Nord Stream turbines to Germany," Wilkinson said in the statement posted to his Twitter account. This, he said, would support Europe's ability to access "reliable and affordable energy" as it continues to transition away from Russian oil and gas. "Absent a necessary supply of gas, the German economy will suffer very significant hardship," he said. High prices European gas prices remain at sustained highs following the Nord Stream cuts and further uncertainty over future Russian gas flows. The benchmark Dutch TTF month-ahead price is now back close to the all-time high of Eur212.15/MWh reached in early March, according to Platts price assessments from S&P Global Commodity Insights. The TTF month-ahead price was last assessed at Eur168.98/MWh on July 8, up 105% since the start of June and 420% higher year on year. The market remains concerned about the fate of Nord Stream flows. Its annual maintenance shutdown began July 11 and is scheduled to last until July 21, and there are fears over whether the pipeline will restart at all following the work. With Nord Stream flows cut to zero, Russian pipeline gas is currently only reaching Europe via Sudhza in Ukraine and via the TurkStream pipeline to Southeast Europe and Turkey. Flows at the Sudzha point -- the only route for Russian gas deliveries via Ukraine at present -- were nominated at at 41 million cu m/d for July 11, according to data from Ukrainian grid operator GTSOU, in line with recent daily flows via Sudzha. The head of Germany's Uniper on July 8 said he hoped it was not too late for Gazprom to remedy the situation regarding Nord Stream flows. "I hope Nord Stream will come back at full capacity and that the technical problems can be solved," Uniper CEO Klaus-Dieter Maubach said at a press conference. "I haven't given up hope yet that things will go back to normal," he said, adding that the level of Nord Stream flow post-maintenance would be "decisive" for Uniper for the coming months.

The UAE Port of Fujairah's growing profile as an energy hub is set for another boost, with Abu Dhabi National Oil Co.'s plans to build a 9.6 million mt/year LNG plant in the eastern emirate. The project, currently in the design phase, is expected to be complete between 2026 and 2028, sources told S&P Global Commodity Insights – not in time to ease the current gas crunch, as the world scours for new supplies to replace Russian volumes. But analysts say it could be well-poised to capture growing demand for the fuel, if high prices do not set long-term consumption back and environmental regulations in Europe do not close off that market. Fujairah, which is already the world's third largest oil bunkering hub, is hoping to benefit from the project, with new stakeholders expected to be attracted. The facility, which will include two 4.8 million mt/year trains, will raise ADNOC's LNG production capacity to 15.6 million mt/year, giving neighboring Qatar – currently the world's largest LNG exporter – a formidable regional rival. ADNOC, which declined to comment on the project, owns a 70% stake in the ADNOC LNG joint venture, which has a current capacity to produce 6 million mt/year at Das Island in the Persian Gulf. Other shareholders in ADNOC LNG are Mitsui & Co. with a 15% stake, BP with 10% and Total with 5% ADNOC is in talks with those partners to take part in the Fujairah facility, sources said, and Japan's INPEX intends to consider participating, its CEO told S&P Global. ADNOC's new project comes at a time when the world's demand for LNG is high as Russia restricts piped gas supplies to Europe and countries around the globe seek gas as a transition fuel to replace dirtier crude. Gas prices in Europe and Asia have soared to record highs in 2022 as Europe wrestles with Asia over LNG cargoes in a tight market. The JKM spot LNG price for delivery into northeast Asia hit a record $84.76/MMBtu in March and was last assessed at $41.65/MMBtu July 4, according to Platts assessments from S&P Global. Asia destinations ADNOC has traditionally sent its LNG to Asia and up until 2018 supplied around 90% of its volumes to Japan under long-term agreements but has sought since to diversify its customer base by signing multi-year contracts. Adding Europe as a potential new destination for ADNOC's LNG will depend on several factors, including the ability to lock in long-term contracts. The destination for LNG "will depend on which parties want to sign contracts for the LNG (most likely Asia), the state of the global LNG market and prices when the plant comes on stream," said Jonathan Stern, a research fellow at the Oxford Institute for Energy Studies. However, he added, "it will be difficult for European companies to make long-term commitments because of their emission targets." Since 2019, India has been the UAE's top LNG customer, based on Kpler shipping data. Platts Analytics, in a June 13 report, noted that none of ADNOC LNG's term customers sent any cargoes to Europe, despite lucrative LNG spot prices. The last time ADNOC LNG sent any volumes to Europe was in June 2009, it said. However, as demand destruction from high LNG prices seeps into Asia, Europe may become a more attractive destination. "Europe's need to replace 160+ Bcm of Russian gas will create huge need for additional LNG in the medium term," said Robin Mills, CEO of Qamar Energy. "Sellers can name their terms at the moment and buyers are realizing the danger of exposure to volatile and potentially very high spot prices. The question is what 'long term' means for European buyers given their decarbonization targets, 10 years or longer?" Platts Analytics has revised its Indian LNG demand forecast down an average of nearly 10 billion cu m/d from 2022 through 2025 on the back of higher prices expected during this period. "South Asia, once thought to be one of the key drivers of global demand in the medium term, could disappoint to the downside amid lingering elevated spot prices and limited cover by long-term contracts," Platts Analytics said in an April 29 report. New gas The expansion of ADNOC's LNG capacity comes as new gas developments are set to increase alongside its expansion of oil production capacity to 5 million b/d by 2030 from about 4 million b/d currently, which will yield higher associated gas. ADNOC had announced in December a rise in national gas reserves of 16 Tcf, bringing the UAE's gas reserves base to 289 Tcf. The location of Fujairah for the new LNG production will also be of added value to ADNOC, given the aging facilities at Das Island, located far offshore. The fact that Fujairah lies outside the problematic Strait of Hormuz in the Persian Gulf reduces its geopolitical risk profile. "For the UAE this [project] is very important and may replace the Das Island plant in future, as that plant is now very old dating from the late 1970s," said Stern. Fujairah will also gain from the growing number of LNG tankers that will call on the port, which is considering adding LNG bunkering services, its managing director, Captain Mousa Murad, said. "Fujairah can also benefit that available gas will attract industrial companies that will use gas instead of, for example, diesel to set up projects," said Murad.

Japan's Ministry of Economy, Trade and Industry expects no immediate disruption to imports from Russia’s strategically important Sakhalin 2 LNG project following a decree transferring ownership of the operator -- hitherto led by Shell and Gazprom -- to a new entity, METI minister Koichi Hagiuda said July 1, adding that contingency planning was underway. Russian President Vladimir Putin issued a decree June 30 transferring all rights and obligations held by Sakhalin Energy, the operator of the Sakhalin 2 project, to a new Russian company citing unspecified “actions by the US and linked foreign countries and organizations that are unfriendly and incompatible with international law.” It comes after Shell, Gazprom’s main partner in the project with a stake of 27.5% minus one share, announced its withdrawal from Russia on March 8 in light of the invasion of Ukraine. "We are currently in the midst of scrutinizing the impact on Japanese companies' stake holdings in the Sakhalin 2 project as well as on Japanese companies' LNG imports from the project based on this presidential decree," Hagiuda told reporters. "We believe we are not in a situation where Sakhalin 2 LNG cannot be imported immediately," Hagiuda said. "To be prepared for various contingency situations, we will need to take carefully thought-out measures.” Japan had already warned in June of a rising risk of disruption to Russian LNG supplies, vital for power generation in the country, amid rising tension and global competition for LNG as Europe tries to reduce its dependence on Russia. The two-train Sakhalin 2 LNG facility -- which was launched in 2009 -- produced and shipped a record volume of LNG in 2020, reaching 11.6 million mt. It had an original design capacity of 9.6 million mt/year, but upgrades have seen output consistently exceed capacity. The operator also produced over 100,000 b/d of Sakhalin Blend crude in 2020. Shell has had a rocky history at Sakhalin, where it was originally the majority stakeholder before being obliged to surrender part of its stake in 2006. Analyst George Voloshin of Paris-based Aperio Intelligence said the decree came after inconclusive efforts by Shell to sell its stake, reportedly involving Chinese counterparties. Operational 'paralysis' Voloshin described the decree as a “clear and unambiguous expropriation,” but went on to say it was also intended to “normalize the production situation” amid a state of “paralysis” following Shell’s decision to exit. The decree stipulates existing stakeholders, also including Japan’s Mitsui and Mitsubishi, with 12.5% and 10% stakes respectively, have a month to submit their approval for the transfer of stakes to the newly created company, after which the government will rule on the admissibility of the submissions. It was unclear on what grounds the government would or would not allow the existing shareholders to hold proportional stakes in the new company. In the event of refusal or the deadline being missed, the corresponding stakes are to be sold, with the proceeds transferred on behalf of the shareholders to government-designated Russian bank accounts, from which any expenses incurred to date can be deducted. A Shell spokesperson said: “As a shareholder, Shell has always acted in the best interests of Sakhalin 2 and in accordance with all applicable legal requirements. We are aware of the decree and are assessing its implications.” However, Voloshin questioned the likelihood of the foreign stakeholders assenting to the transfer on the terms set out and suggested the eventual buyers would most likely be from China or India, potentially at steeply discounted prices and leading to an “inevitable” switch of LNG exports away from Japan. “Shell's plans to withdraw from Sakhalin 2 have resulted in a paralysis at the operating company. Its inability/unwillingness to sell its stake quickly enough [reflecting] the geopolitical and economic context… and the prospect of steep losses suggests the paralysis will last for as long as Shell is a shareholder,” Voloshin said, adding Shell had been the “driving force” behind operations. Japan’s Hagiuda, however, was more moderate. "We recognize that this presidential decree is not about a seizure. It is questioning existing stakeholders’ consent to move to a new entity after having transferred all of the rights and obligations from Sakhalin Energy to the newly establishing entity," Hagiuda said. "Either way we will give rigorous consideration from a standpoint of ensuring stable supply for Japan's power and gas," he said, adding the country currently has two to three weeks’ worth of LNG inventory held by power and gas companies. Japan exposure Russia accounted for 9% of Japan's total LNG imports of 74.32 million mt in 2021, its fifth-largest supplier, according to data from Japan's Ministry of Finance. Almost all of Japan’s Russian LNG imports come from Sakhalin 2. Officials from Mitsui and Mitsubishi said they would consider their response following discussions with other stakeholders and Japan’s government. A Mitsubishi spokesperson added that Sakhalin 2 was producing as normal. Tokyo Gas does not currently see any impact on its Sakhalin 2 LNG procurement, a company spokesperson said.

The US Supreme Court's June 30 ruling restricting the US Environmental Protection Agency's authority to regulate climate pollution from existing power plants will likely hamper the Biden administration's ability to issue future climate and energy rules that have a major economic impact, according to legal experts. In a 6-3 decision, the conservative justices on the high court, for the first time, invoked a legal line of reasoning known as the "major questions" doctrine in finding that the Obama-era Clean Power Plan exceeded the EPA's authority. The major questions doctrine, according to the majority, holds that courts should not defer to agencies on matters of "vast economic or political significance" unless the Congress has explicitly given them the authority to act in those situations. In repealing and replacing the Clean Power Plan, the Trump administration found that doing so would have no practical effect on the US power sector, in part because the industry had already met the program's emissions reduction goals before its 2022 start date. But the Supreme Court, siding with a coalition of red states and coal producers that challenged the Obama-era rule, found that its approach to generation shifting went too far. The court's decision also focused on the possible inclusion of similar systemwide measures in a future EPA regulation. The June 30 ruling in West Virginia v. EPA (No. 20-1530) was largely based on the idea that the EPA "must point to clear congressional authorization" in issuing regulations under Section 111(d) of the Clean Air Act, although experts predicted it will also curtail other agencies' rule-writing abilities. "Capping carbon dioxide emissions at a level that will force a nationwide transition away from the use of coal to generate electricity may be a sensible solution to the crisis of the day," Chief Justice John Roberts wrote for the majority. "But it is not plausible that Congress gave EPA the authority to adopt on its own such a regulatory scheme in Section 111(d)." Court expected to scrutinize 'major' rules Supporters of the Clean Power Plan's "beyond the fence line" approach were quick to note that the US electric utility industry has long relied on generation shifting and emissions trading schemes as cost-effective ways to comply with Clean Air Act rules. The Clean Air Act's landmark Acid Rain Program, for example, allowed older, dirtier coal-fired power plants to pay cleaner coal-fired units for emissions allowances that reduced overall compliance costs for the industry. EPA rules addressing interstate smog pollution have also adopted a similar approach. "This notion that rules can't be controversial, that they can't be creative or expansive, is troubling," Jack Lienke, regulatory policy director of the Institute for Policy Integrity at New York University School of Law, said in an interview. "The traditional approach is when statutes are written in broad terms and are susceptible to multiple reasonable interpretations, courts defer to agency readings of that text so long as they're reasonable." Jay Duffy, an attorney with the Clean Air Task Force, said he did not interpret the court's ruling as prohibiting generation shifting entirely. Indeed, the court's majority said it has "no occasion" to decide whether Section 111(d)'s statutory phrase "best system of emission reduction" refers "exclusively to measures that improve the pollution performance of individual sources." "I think you could have inside the fence approaches paired with market mechanisms, and I don't think that is eliminated by this decision," Duffy, who briefed the Supreme Court case for public health organizations, said in an interview. Nevertheless, legal experts on both sides of the debate agreed that future EPA efforts to tackle climate pollution under the Clean Air Act will be subject to far more scrutiny by the high court. "The majority had no trouble finding that the question of how the US electricity sector should be structured (and how much electricity should come from coal as opposed to other sources) was a major question," Jeff Holmstead, a former EPA air office chief in the George W. Bush administration, said in an emailed statement. "Because it is a major question, EPA can make such determinations only if there's a clear statement that this is what Congress intended." Nathan Richardson, an attorney and assistant professor at the University of South Carolina School of Law, said the court's focus on the Clean Power Plan's "novel approach" could also spell trouble for other climate- and energy-related administrative rulemakings. The EPA is in the process of finalizing rules to control methane emissions from existing oil and gas facilities. And in March the US Securities and Exchange Commission proposed requiring publicly traded companies to reveal climate risks and carbon emissions data in financial filings. That proposal has already sparked a fierce debate. "Every time an agency tries to do something, it's subject to this kind of inquiry: is it like what you did before?" Richardson said in an interview. "Any time an agency does something that is new and different and major, with major being totally up to the whims of the judges, then there's the potential for it to get thrown out, or more precisely, thrown back to Congress." US Rep. Frank Pallone, D-N.J., who chairs the House Committee on Energy and Commerce, said in a June 30 statement that the decision "does not derail our commitment or ability to achieve our climate goals." "EPA continues to have many powerful tools at its disposal and there is more both Congress and [US President Joe Biden] can do to meet the climate crisis head-on," Pallone said. "I am determined to get the job done."

Countries in the Asia-Pacific region are grappling with the fallout from high energy prices, fuel supply disruptions and growing shortages of oil, gas and coal, and the situation is likely to worsen in coming months. The widening energy crisis has forced regulators to intervene, ranging from the suspension of electricity markets to self-imposed blackouts and clamping down on non-essential energy consumption. Click here for the full-size infographic Related factbox : Asia-Pacific economies face escalating energy crisis

As part of its commitment to open and transparent pricing and product specifications, Platts, part of S&P Global Commodity Insights, would like to invite feedback on its Global LNG specifications guide, specifically the guidelines described in the methodology guide posted online at https://www.spglobal.com/commodityinsights/PlattsContent/_assets/_files/en/our-methodology/methodology-specifications/global_lng.pdf. Platts reviews all methodologies annually to ensure they continue to reflect the physical markets under assessment, and regularly assesses the relevance of methodologies through continuous contact with the market. Feedback on methodologies is always welcomed by Platts. Please send all feedback, comments or questions to lngeditorialteam@spglobal.com and pricegroup@spglobal.com. For written comments, please provide a clear indication if comments are not intended for publication by Platts for public viewing. Platts will consider all comments received and will make comments not marked as confidential available upon request.

The German government is advancing plans to reduce gas demand this summer in power generation and industry to boost storage for winter after Russia reduced deliveries, the energy ministry said June 19. European gas prices have jumped 50% since June 13, S&P Global Commodity Insights data showed, as cuts to Russian flows endanger targets to fill gas storage to mandatory levels. "Gas consumption must be reduced further otherwise winter supply will be very tight," energy minister Robert Habeck said describing the situation as "serious." Further measures would be required depending on the situation, Habeck said, with the ministry outlining three further emergency measures in addition to the seven already implemented since the outbreak of war in Ukraine late February. "It's obviously the strategy of Putin to unsettle us, drive up prices and divide us. We will not let this happen," Habeck said. TTF front-month gas was assessed June 17 at Eur118.50/MWh, S&P Global data showed. The contract was seen trading June 20 above Eur127/MWh amid volatile trading, the Intercontinental Exchange data showed. Coal generators to return In power generation, efforts to reduce gas burn are focused on the return of some 10 GW of older coal, lignite and fuel oil reserve capacity for which the government approved a draft law June 8 . The draft law June 8 is on track to be passed by parliament by July 8, the ministry said. In parallel, the ministry is finalizing an ordinance to penalize gas burn in some gas-fired power plants. This would not require parliamentary approval. "We will activate the gas replacement reserve as soon as it becomes law," Habeck said, noting the immediate priority to fill gas stores was greater than qualms about increased lignite and coal burn. The replacement plant law would be a temporary measure until March 31, 2024. Habeck urged plant operators to start preparing units for a return. The law waives set closure dates for 2.6 GW hard coal units and allows some 4.3 GW hard coal and 1.6 GW fuel oil currently in reserve schemes to return to the market. In addition, the 1.9 GW lignite plant current in security reserve will be moved into a new scheme where the government can request a return to market depending on the gas supply situation, it said when the draft law was approved. GERMAN POWER PLANT RESERVES Type Capacity (MW) Notes Selected units, operators Coal closure auction units 2,600 Mandatory closure dates in 2022/23 waived Steag, Onyx, RDK7, GKM8, other Hard coal reserve units 4,300 Option to return to market to Q2 2024 Heyden, Heilbronn, Bexbach, Altbach, Weiher, Walheim Fuel oil reserve units 1,600 Option to return to market to Q2 2024 Ingolstadt 3,4 ; Irsching 3, Marbach Lignite security reserve 1,900 New security reserve scheme Neurath C, Niederaussem E, F (RWE); Jaenschwalde E, F (Leag) Source: BNetzA, BMWK, S&P Global Commodity Insights Auctions to cut industrial gas demand Industrial demand for gas, meanwhile, is to be reduced via an auction model to be developed by the regulator BNetzA, market operator THE as well as the ministry, the energy ministry said. Auctions for gas balancing are to provide compensation to industrial clients that are willing to give up gas supply contracts, with the freed-up gas used to fill storage, the ministry said. In addition, the ministry would provide further credit lines to give Germany's THE gas trading hub liquidity to buy further volumes for storage. An initial program secured 950 million cu m of gas for storage, but has ended, the ministry said, adding that emergency measures helped boost German gas storage levels to around 56% currently, above average for this time of the year. Germany has reformed its gas storage law to achieve 90% capacity by Nov. 1 with an interim target of 65% by Aug. 1. Berlin has already rejected plans to reactivate more modern coal units that closed in 2021 or to extend the running times of Germany's nuclear power plants. Curtailed flows to slow storage injections Gas accounted for around 15% of Germany's power mix in the first quarter, with the share of coal and lignite rebounding to around 30%. German industrial gas demand, meanwhile, accounts for the lion's share with an estimated 44 billion cu m consumed in 2021, according to Platts Analytics. Industrial gas demand in Germany exceeded total gas-for-power demand across Northwest Europe, of which Germany accounted for around a third. Germany received a net 254 million cu m/d of gas in May mainly from Russia and Norway, with Nord Stream inflows averaging 157 million cu m/d, according to data by Platts Analytics. German gas demand averaged around 150 million cu m/d, with and additional 79 million cu m/d of net gas storage injections in May. Following the latest curtailment of flows through Nord Stream , Russian gas exports to Germany have been averaging just below 64 million cu m/d for the period June 16-19, almost 60% lower than the May average.

QatarEnergy said June 19 it signed up Italy's Eni as its second partner in the world's largest LNG expansion program after the Gulf state cemented its lead as the largest global exporter of the fuel, with buyers chasing to replace supplies from Russia. QatarEnergy will own 75% of the shares of the joint venture, and Eni the remainder, for the North Field East project, QatarEnergy CEO Saad al-Kaabi said at a press conference in Doha, marking the first time the Italian company will be involved in Qatar LNG. The joint venture will own 12.5% of the LNG project, equal to half a train, he added. Financial terms of the deal were not disclosed. Qatar took over as the world's largest LNG exporter in April and remained top in May, beating the US and Australia, according to S&P Global Commodity Insights data. Qatar had lagged both countries in March deliveries and was behind the US in February. QatarEnergy said on June 12 that TotalEnergies had become its first partner for the project, winning a 25% stake in a new joint venture company that will be 75% controlled by QatarEnergy. It is equal to one train for TotalEnergies, Kaabi said. That JV will own a quarter of the entire North Field East project, which includes four LNG trains with a combined nameplate LNG capacity of 32 million mt/year. Asian buyers are expected to make up half the market for the project, and buyers in Europe the rest. Kaabi declined to say if the partnerships include rights to sell some of the expanded LNG production. "We're not worried about the market," he said. Qatar enjoys some of the lowest production costs in the world, with an estimated long-run breakeven cost of new expansions at less than $5/MMBtu landed into Asia , according to S&P Global estimates. Eager buyers Both European and Asian gas prices remain high, with the Dutch TTF first month price assessed by Platts from S&P Global Commodity Insights on June 17 at Eur118.50/MWh, up 82% since the end of 2021. The Platts JKM Asian LNG price for August, meanwhile, was assessed June 17 at $37.889/MMBtu, up 31.6% this year. Prices have surged due to Russia's invasion of Ukraine, which has prompted many European buyers of Russian gas to seek alternatives, including from Qatar. Kaabi and other Qatari officials have held several talks with European and Asian counterparts in recent months, though analysts say the country's ability to boost exports in the short-term is largely limited, until the expansion projects come along. The North Field Expansion includes six LNG trains that will ramp up Qatar's liquefaction capacity from 77 million mt/year to 126 million mt/year by 2027, consolidating its status as the world's largest exporter. QatarEnergy is expanding capacity at the four-train North Field East Project to raise production capacity to 110 million mt/year in the first phase. The second phase expansion, which is also known as the North Field South Project, will raise the LNG production capacity to 126 million mt/year. The country is targeting a 2027 timeline for the completion of the two-phase project. In all, four trains for 32 million mt/year of capacity for North Field East will cost $28 billion, Kaabi has said. QatarEnergy will be announcing three gas deals and one in petrochemicals this week alone, is working on another solar project and plans a tender for a gas turbine power plant for electricity in the country, all involving some $80 billion to $100 billion of investment over the next seven years to 2030, Kaabi said. "We're going to need the private sector," he said. "After all this construction, it will greatly enhance the GDP of the country and total revenue stream coming into the state."

Singapore has chartered vessels to be used as LNG floating storage to ensure fuel supply and hedge against disruptions due to the war in Ukraine, according to the operator of its main LNG import and storage terminal Singapore LNG Corp, shipping fixtures and vessel-tracking data. Vessels are used for temporary fuel storage when access to onshore terminals is limited or too costly, and they also provide flexibility in moving cargoes around. While floating storage has been a popular tool for traders looking for optionality, importers have found it useful to make up for insufficient storage infrastructure. SLNG has chartered LNG ships to use as floating storage units on a short-term basis to enhance energy security, a company spokesperson said June 17, but declined to provide more details. On June 16, the energy regulator Energy Market Authority said Singapore had "established a standby LNG facility (SLF), which power generation companies can draw from to generate electricity when their natural gas supplies are disrupted", without providing further details. Shipping fixtures showed at least two vessels on short-term charter, although not whether the vessels were currently loaded or were loaded in recent months. There was a likelihood they could be used for restocking in the months before the coming winter, according to market participants. In early March, the Bermuda-flagged LNG carrier Gaslog Singapore was signed up for a 12-month charter, fixtures showed. The 155,000 cu m capacity tri-fuel diesel electric ship arrived in Singapore March 20, according to Platts cFlow. It entered the Sudong Special Purpose Anchorage off southern Singapore April 13 and has remained there. The 263,000 cu m Bauhinia Spirit, one of the world's largest floating storage regasification units was also fixed in March for about 6 months, according to fixtures. The Bahamas-flagged vessel arrived in Singapore April 11, and has been there for 67 days, according to Platts cFlow. The Bauhinia Spirit was previously named MOL FSRU Challenger and deployed at an LNG terminal in Turkey in 2017, after which it moved to Hong Kong where it was renamed Bauhinia Spirit. According to MOL's specifications, the vessel has LNG re-shipment and gas transfer capabilities and its specifications allow for the re-export of LNG and supply of LNG to neighboring regions where the vessel is located". The has regas discharge capacity of 540 MMcf/day, making it as large as the Q-Max vessels operated by Qatar, which are the world's largest. On Feb. 25, SLNG was seeking a March delivery LNG cargo, with the tender closing on the same day. More recently, on June 13 SLNG had closed a tender for an LNG cargo for delivery in the first half of August. Typically Singapore's LNG imports are met by designated suppliers like Pavilion Energy while SLNG has played the role of an infrastructure operator. However, even before the demand surge last winter, SLNG was looking in mid-October 2021 at options to boost LNG inventory at its terminal due to market disruptions at the time. Pavilion Energy and EMA declined to comment on the floating storage.

Qatar, one of the world's biggest exporters of liquefied natural gas, has chosen TotalEnergies as among partners to develop its massive offshore North Field East project, the country's energy minister said June 12 in the wake of growing demand for the fuel in Europe and around the world after Russia's invasion of Ukraine. The value of the deal was not disclosed but it was the "biggest" between the French energy major and QatarEnergy, Saad al-Kaabi said. He didn't name other partners, but did say the selection process for other partners is finished and details will be announced later. First liquefied gas production will begin in 2026, he said. Other partners are reportedly ExxonMobil, Shell and ConocoPhillips. TotalEnergies will have a 25% interest in the North Field East project, equivalent to one LNG train with capacity of 8 million mt/year, the company said. QatarEnergy will have the remaining 75% stake in the project that will run for 25 years, Kaabi said. The other partners will not have the same percentage stakes, he said. Qatar may do projects with TotalEnergies in other parts of the world, he added. QatarEnergy is expanding capacity at the four-train North Field East Project to raise production capacity to 110 million mt/year from 77 million mt/year in the first phase. The second phase expansion, which is also known as the North Field South Project, will raise the LNG production capacity to 126 million mt/year. The country is targeting a 2027 timeline for the completion of the two-phase project. In all, four trains for 32 million mt/year of capacity for North Field East will cost $28 billion, Kaabi said. "The LNG market will need the extra volumes as there is very little coming until 2025 and there will be even more required to replace Russian pipeline gas into Europe," Robin Mills, CEO of Qamar Energy, said. State-backed QatarEnergy awarded the engineering procurement and construction contract for the North Field East Project to a joint venture between Spain's Tecnicas Reunidas and China's Wison. Qatar said in early 2021 that it would announce the international partners for the first phase of the project within a six-month timeframe. 'High volatility' Deciding on the partners has likely been delayed due to "high volatility in the LNG market [that] would have led to protracted negotiations," said Mehrun Etebari, associate director, global LNG, at S&P Global Commodity Insights. The company's latest announcement comes amid the backdrop of Russia's invasion of Ukraine, which has forced the EU to consider cutting off supplies from Moscow. "Market tightness and demand for new LNG volumes has only risen since Russia's invasion of Ukraine, so it is likely that QatarEnergy has aimed to take advantage of the current market conditions by securing more favorable terms in its negotiations with partners and offtakers," Etebari said. The EU has pledged to reduce demand for Russian gas by two thirds by the end of 2022 through higher LNG supplies from the global market, increased biomethane production and energy efficiency. Lower Russian pipeline gas flows have contributed to the recent European price strength, while Europe also faces competition from Asia for LNG cargoes. Both European and Asian gas prices remain high, with the Dutch TTF day ahead price assessed by Platts from S&P Global Commodity Insights on June 10 at $24.452/MMBtu, more than double the price of a year earlier. The Platts JKM spot Asian LNG price, meanwhile, was assessed June 10 at $23.561/MMBtu, up almost double on the year. "The announcement keeps Qatar on pace to complete the six-train North Field expansion on or close to its target of 2027," Etebari said. Accelerating expansion at the North Field will allow the gas producer to overtake Australia, which has the lead in LNG export capacity, he said. "The tight market is also boosting the prospects of proposed new liquefaction in the United States, and we forecast that US exports will remain just ahead of Qatari exports. However, Qatar has spoken of potentially expanding beyond six new trains, potentially adding one or more new trains to the North Field South phase, and the partnership selection at North Field East only helps its progress," Etebari added. Rising European demand There is currently more demand for gas in Europe, Kaabi said. It is not clear if the Ukraine-Russia dispute will end in months or in years, but Kaabi said he didn't think Russia would be cut off forever. "Our view is that approximately after we finish all of our gas investments, we will have about half of our markets in Asia and half in Europe. This is what we aspire to in the future. "We aspire to distribute our gas to as many countries as possible," Kaabi said.

Global Power Markets Interview: Steve Zwolinski

Doug Moorehead, Chief Operating Officer at Broad Reach Power touches on the current energy storage industry and EV fast charging solution.

Daniel Dormar, Executive Director for Operations of U.S. Nuclear Regulatory Commission discuses nuclear licensing, the mutual education process, safety, and small reactor for licensing.