The future of the European Gas and LNG markets are uncertain. The past year has been a rollercoaster, with LNG prices reaching both record highs…
Sep 02, 2021
The future of the European Gas and LNG markets are uncertain. The past year has been a rollercoaster, with LNG prices reaching both record highs and lows, storage inventories nearing capacity and changing attitudes to the industry in the race to decarbonization. How have supply and demand dynamics shifted, and what does the future bring for the industry?
Join us for the 15th Annual Platts European Gas and LNG Conference, where we’ll be bringing together the region’s leading gas and LNG producers, suppliers, TSOs, regulators, traders, banks and analysts to explore the challenges, opportunities, and policy developments affecting the gas and LNG markets into 2022 and beyond.
You will gain expert insights on the changing supply dynamics for gas and LNG as Europe attempts to diversify it’s gas supplies, an update on global pricing, and understand gas and LNG’s role in the energy transition in light of regulatory developments and new energies such as Hydrogen.
Do more with your registration. You’ll receive access to our online networking and event companion tool in advance of the conference. Use it to:— Build your network—You can’t “work a room” like you used to. Now you can see who else is registered, help people find you, and exchange contact information digitally.
— Connect—Use 1:1 messaging to introduce yourself. Conversations are saved and searchable for your convenience.
— Enjoy extra content—Get Platts market news, exclusive content, and more leading up to the event. Find out about event updates as they happen.
— Share—Add your social media profiles to the tool to easily post, share, and connect. Check the real-time activity feed to learn what other attendees are thinking right now.
— Take it all with you—Use the tool to take notes, then export them (and share with other attendees). Look up contacts and conversations later. Visit the replay for a refresher and to download speaker presentations. Install the mobile app version for easy access from anywhere.
Aug 23, 2021
President Joe Biden took a strong stance against fossil fuels right away, essentially canceling the long-simmering Keystone XK Pipeline and implementing a moratorium on all new oil and gas lease sales on federal lands and waters.
Since then though, his administration has refused to oppose other key crude oil pipeline projects, such as the expansion of the Dakota Access Pipeline and the nearly completed Line 3 replacement pipeline from Canada.
Also, while his campaign promised to cancel new oil and gas permits on federal lands, those permits have kept flowing during the ongoing leasing moratorium that’s currently being fought in courts.
Supporters say he’s taking a balanced approach for a country that still needs oil and gas as it transitions toward more renewables, while critics have called his administration hypocritical or, at best, intentionally inconsistent.
Stick around after the interview for the Market Minute with senior editor Starr Spencer, a look at near-term oil market drivers.
Aug 25, 2021
It has been 30 years since the collapse of the Soviet Union transformed global energy markets and set Russia on a pathway to gaining a seat at the OPEC table along, with tremendous pricing power over oil and natural gas.
The world’s largest exporter of crude and gas to Europe has grown its influence from the shattered remnants of the communist bloc when the future of its energy sector looked in doubt. A year after the period leading to Russia’s democratization known as “Perestroika” the country’s share of the global oil markets was a fraction of the 12% it currently holds.
“Turbulence in the immediate aftermath of the Soviet Union’s dissolution caused the region’s crude and condensate supply to fall by 4.2 million b/d between 1990 and 1994 alone,” said Paul Sheldon, chief geopolitical adviser at S&P Global Platts Analytics. Today, Russia produces around 9.64 mil b/d, according to the Platts OPEC Survey for July, and Platts assessed Russia’s key crude grade Urals CIF Med at $68.145/b on Aug. 25.
At the beginning of January 1984, Platts assessed Russia’s key crude grade Urals CIF Med at $28.55/b. On Jan. 31, 1986, prices fell to $19.95/b and remained below $22/b until August 1990, when global prices rose sharply following Iraq’s invasion of Kuwait.
“The oil glut of the 1980s, which followed the 1979 oil price shock, was a direct contributor to the collapse of the Soviet Union in 1991. The USSR had just before that become a major global oil producer; lower prices immediately resulted in a substantial loss of hard-currency export revenue, forcing the USSR to deplete its official reserves amid growing deficits of almost everything across the union,” said George Voloshin, head of the Paris branch of Aperio Intelligence.
This new economic and political reality also created fresh opportunities. Privatization of oil and gas assets allowed foreign investors to enter post-Soviet markets and introduce cutting edge technology to production sites. They also helped to expand the geographical scope of Russian production through new projects developed in eastern Russia, including offshore Sakhalin, as well as in the far north of the country.
“Subsequent periods of Russian oil company privatization ultimately triggered more focused investment, increased efficiencies and technological advances, all of which paved the way for nearly unabated production growth since 1998,” Sheldon from Platts Analytics added.
Other former Soviet states have followed similar policies.
“Outside of Russia, landmark foreign investment deals in Kazakhstan and Azerbaijan continue to bear fruit, helping to lift total FSU production by over 7 million b/d between 1998 and 2019, before OPEC+ cuts caused a rare drop in 2020,” Sheldon said.
Foreign investment has also enabled oil and gas producers to develop new infrastructure projects, transforming the customer base for the region’s oil and gas.
“The emergence of new export infrastructure, in addition to the Druzhba oil pipeline which was built in the 1960s, has contributed to the expansion of oil producing areas within Russia,” Aperio’s Voloshin said.
Key new projects include the Eastern Siberia-Pacific Ocean oil pipeline commissioned in 2009 to export to China and the broader Asia-Pacific region. The Baltic Transport system increased export capacity from projects in the Volga Urals and West Siberia as well as northern Russia. In recent years, the government has prioritized development of oil and LNG shipping via the Northern Sea route, which supplies Europe and Asia through Arctic waters.
“I look at how Putin was able to become friends with China and to send more oil to the east and especially start sending more gas to the east and in the Arctic, you look at what’s happening on Yamal, you look at what’s happening on the second Arctic project, there’s going to be a lot of gas flowing to the east and that’s going to be in direct competition with Qatar and Australia,” independent economist and energy adviser Cornelia Meyer said.
However, more exports and the battle for market share have led to some problems, particularly over Europe’s reliance on imports of gas from Russia as well as the influence the Kremlin has on countries that transit Russian gas to Europe. New export infrastructure has also been a key target for US sanctions introduced in 2014 over Russia’s role in the conflict in Ukraine.
Russia’s dependence on oil and gas revenues has also evolved over the past 30 years. In 1998, a drop in oil demand sparked by the Asian financial crisis led Russia to default and the ruble to significantly devalue.
From 2000, when Vladimir Putin became Russia’s president, a steady rise in oil prices allowed the Kremlin to pay off large amounts of foreign debt and establish a stabilization fund as protection against price volatility. This mitigated the impact of the global financial crisis in 2008 and has helped the country cope with subsequent price volatility, including the impact of growing US shale output since the mid-2010s.
In recent years, Russia’s improved budget resilience has allowed it to bargain for increased output volumes within the OPEC+ agreement, as many other members of the coalition’s state budgets are more sensitive to oil price volatility.
As the region marks 30 years since the collapse of the Soviet Union, these trends continue to drive political and commercial priorities. The energy transition will add an extra dimension, as producers attempt to balance plans for new hydrocarbons production and export projects with growing concerns about the environment and the increasingly evident impact of climate change.
While pressure mounts on the EU to reduce its reliance on Russian gas supplies, Brussels’ most ambitious supply diversification project, the Southern Gas Corridor, is…
Sep 15, 2020
While pressure mounts on the EU to reduce its reliance on Russian gas supplies, Brussels’ most ambitious supply diversification project, the Southern Gas Corridor, is nearing completion with the launch of its final stretch, the TAP pipeline, close at hand. Initially delivering 10 Bcm per year of Azeri gas annually to Italy, Greece and Bulgaria, the volumes involved may seem small. But TAP will still have an impact on the receiving markets. This report analyzes the changes that Italy and Central and Eastern Europe will see in the short and the long term.
As August comes to a close, Washington, DC, is ramping up again with energy issues before the Federal Energy Regulatory Commission. On the natural gas…
Aug 30, 2021
As August comes to a close, Washington, DC, is ramping up again with energy issues before the Federal Energy Regulatory Commission.
On the natural gas side, the commission could start answering longstanding questions about how it will evaluate pipelines and LNG facilities in the face of opposition and pressure to weigh climate change impacts.
In terms of electric markets, FERC recently kicked off a new proceeding that could revamp its transmission policies to help connect more renewable energy sources to the grid. The commission will also examine PJM’s proposed “focused” minimum offer price rule, a contentious proceeding aimed at limiting the exercise of buyer-side market power.
Additionally, there have been several recent noteworthy actions pertaining to the US Department of the Interior’s pause on new federal oil and gas leasing.
Platts senior editor Maya Weber and editor Ellie Potter join DC bureau chief Chris Newkumet to discuss some of the major debates before FERC and the potential implications of an evenly split commission.
Stick around after the interview for the Market Minute with Chris van Moessner for a look at near-term oil market drivers.
Jun 25, 2021
Powering Connection The S&P Global Platts Nodal Trader Conference gathers senior-level traders, investors, utilities, regulators, and representatives of the ISOs and RTOs. Get crucial updates…
Jul 21, 2021
The S&P Global Platts Nodal Trader Conference gathers senior-level traders, investors, utilities, regulators, and representatives of the ISOs and RTOs. Get crucial updates on the past year, and examine the future as markets emerge from the pandemic. We will explore the challenges for nodal traders working in ISOs and RTOs, and explore the approach that regulators take as they make the markets work for traders, independent power generators, demand response providers, and utilities.This year we are excited to welcome everyone back to a face-to-face event located in lower Manhattan. Meet with your colleagues from around the country and discuss the outlook for nodal trading in 2021 and beyond.
— Power markets in 2021 and beyond
— Lessons from the Texas power outages
— Rulemaking on price formations and impact on markets
— New policy considerations with the Biden administration
— Environmental markets – national and regional markets, voluntary and nonvoluntary carbon and emissions markets, ESG investment priorities
— Renewables and nodal trading
— Current and emerging priorities for FERC
— Role of financial traders in ISO-RTO markets
— Compliance assessment
— Evaluating potential anti-competitive behavior
— Near-term growth of electric vehicles/ electrification, and impact on power markets
— New initiatives in California and other states
— Evolution of views on trading and compliance
— Remote workforce – Issues for recruitment and team building
And much more. The full agenda is in development and will be available shortly
Sep 02, 2021
European gas, power and carbon markets are starting Q3 at multi-year highs after a cold winter saw significant gas storage drawdowns amid record CO₂ prices.…
Jul 01, 2021
European gas, power and carbon markets are starting Q3 at multi-year highs after a cold winter saw significant gas storage drawdowns amid record CO₂ prices. A reluctance on the part of Russia to send additional gas volumes via Ukraine and strong competition for LNG from Asia has further boosted prices.
Power fundamentals are less bullish with improved French nuclear availability and continued wind and solar capacity gains more than offsetting the forecast for a small increase in demand. Heatwaves and a lack of wind power generation remain risks to the upside that could see power prices spike.
Related feature: All eyes on Europe’s tight gas market going into Q3
With the world headed into a low-carbon energy future, Alaska, rich in fossil fuels, is trying to hitch a ride on the green bandwagon. A joint…
Aug 24, 2021
With the world headed into a low-carbon energy future, Alaska, rich in fossil fuels, is trying to hitch a ride on the green bandwagon.
A joint project underway by the University of Alaska Fairbanks and the US Department of Energy’s Pacific Northwest National Laboratory is looking at whether ammonia could be made from vast proven natural gas reserves on the North Slope with the hydrogen in the ammonia used as a carbon-free fuel.
The research is being supported by the US Department of Energy’s Advanced Manufacturing Office.
“It’s an interesting concept,” said Corri Feige, Alaska’s commissioner of natural resources. But Feige noted there could be technical problems with liquid ammonia as it is “very corrosive to steel,” and introducing it into the Trans-Alaska Pipeline System, or TAPS, for shipment “could have detrimental effects.”
Others are interested in Alaska’s ammonia-to-hydrogen connection, however. Tim Fitzpatrick, spokesperson for the Alaska LNG Project, a proponent of an 800-mile gas pipeline from the North Slope, said ammonia could be made in an existing, although mothballed, ammonia plant at Nikiski near the terminus in south Alaska.
“We think ammonia could add a lot of value to our project,” which would also ship LNG, Fitzpatrick said. Agrium Corp. has been studying a restart of the plant but is stymied by a lack of sufficient natural gas supply.
There’s large upside if problems can be solved. Hydrogen is increasingly seen as the fuel of the future because its emissions are essentially water, and industries and companies worldwide studying how to use it.
“There’s a huge amount of interest in hydrogen today, and some big money is flowing into research on how it can be used,” said Nathan Prisco, the principal investigator on the DOE/university project.
Daimler-Benz recently announced it will incorporate hydrogen-powered fuel cells in heavy trucks, reducing reliance on diesel.
Hydrogen’s downside is that its production, transportation and storage can be expensive. The process to make green hydrogen, basically splitting water molecules with renewable energy, isn’t cheap, and making it from natural gas, called blue or sometimes gray hydrogen, doesn’t have the same environmental advantages.
Prisco said using ammonia as an intermediate “carrier” for the hydrogen solves some of the problems. Making liquid ammonia from natural gas is a conventional process, and liquid ammonia can be shipped like propane through pipelines, he said.
Interest in the ammonia-hydrogen connection is growing. Mitsubishi recently concluded a deal to buy ammonia from Saudi Arabia for use as a no-carbon fuel in power plants, the only pollutant being nitrous oxide, which power plants are equipped to handle.
“Japan’s largest electric utility, JERA, plans to burn ammonia as a clean fuel at its coal power stations,” Prisco said. “This is just for a quick energy transition. In the future, Japan plans to use high-efficiency ammonia turbines or fuel cells.”
The ammonia would also be shipped to new hydrogen fueling stations being built in the European Union which are being equipped to “crack” the hydrogen out of the ammonia at the location.
“Maritime shipping is a big source of carbon emissions, comprising about 2% of emissions worldwide,” he said. Japanese companies are also leading in the demonstration of maritime vessels powered by ammonia.
The idea for Alaska is for the ammonia to be manufactured from part of the 8 Bcf of gas now produced on the slope but mostly injected back underground, and at a stiff cost.
The gas is produced along with about 280,000 b/d of crude oil in the Prudhoe Bay field. The crude is shipped to market through the TAPS, but the gas is reinjected because there is yet no natural gas pipeline from the North Slope producers.
Research so far indicates an optimal project for the North Slope might involve 120,000 b/d of liquid ammonia produced from 330 million cf/day of gas from a set of three 10,000 mt/day ammonia plants, Prisco said. TAPS is now moving less than 500,000 b/d of crude oil and has ample spare capacity (the pipeline once moved 2 million b/d).
However, there may be technical problems in blending ammonia with crude oil in TAPS, and that’s the major point of the current research, Prisco said. It must be also shown that the ammonia can be economically separated from the blended liquids stream at Valdez, the TAPS southern terminus.
“Most of the ammonia can be recovered in bulk, but excess ammonia will likely end up in the vapor recovery system at Valdez, where it must be treated,” Prisco said.
There could be effects of the ammonia on the chemistry and sales quality of the crude shipped in TAPS, which will have to be compensate for in the Quality Bank mechanism TAPS shippers use to adjust for quality differentials of the various crudes produced on the North Slope.
There is also the problem of what to do with the carbon left on the North Slope when ammonia is made from methane. As a rule of thumb, “for each metric ton of ammonia produced there are 2 metric tons of carbon dioxide emitted,” Prisco said.
“However, capturing carbon dioxide from an ammonia plant is less costly than capturing it from power plant flue gas,” and costs might range between $40-$60/mt, he said. The overall cost of producing the ammonia with the carbon dioxide extracted might be $200-$240/mt, compared with $120/mt without carbon capture, Prisco said.
However, new federal tax credits on carbon capture could help. If the carbon dioxide is used in enhanced oil recovery on the North Slope, which producers there believe is possible, a $35/mt tax credit might apply. The US carbon capture credits are being phased in and will be fully in place in 2026.
If geologic sequestration can be done, the CO2 could be injected into depleted oil reservoirs. This is done now with hazardous waste on the slope.
Murphy, at Platts Analytics, sees potential roadblocks in the cost of facilities and adaptations of TAPS, as well as in mixing the ammonia with crude oil, but he is intrigued by the possibility that depleted North Slope oil reservoirs could be used for carbon storage and infrastructure is now in place on the slope to do the injection.
Prisco said Alaska’s cold climate is another advantage. Certain carbon capture technologies perform better in the cold, just as the large oil processing plants on the slope become more efficient in the winter, Prisco said.
There’s a geographic advantage, too. Valdez is also closer or as close to to Japan compared with other sources of ammonia, Prisco said. Costs of shipping liquid ammonia from the Persian Gulf are estimated at $40/mt and from the US Gulf Coast $80/mt; while the cost from Valdez is likely to be closer to $40/mt or below, Prisco said.
However, one competitor in the market, Murphy said, will be the big projects planned in Australia to make green hydrogen, with water with power supplied by renewable solar and wind facilities.
But he agreed Alaska could be competitive in the market if problems can be solved. Prisco believes large volumes of ammonia could be shipped to customers in Asia as a low-carbon fuel for power generation and ultimately as a source of pure hydrogen for use in vehicles and other applications.
“Compared with other project around the world, Alaska has a strong hand to play in the coming transition,” Prisco said.
Feige agrees: “Alaska has a vast array of natural resources that could be used as new technologies are developed that use feedstocks found here and benefit from environmental conditions like cold temperatures for efficiency.”
Join Us in New York City This Year! Don’t miss the S&P Global Platts 23rd Annual Financing US Power Conference on October 19-20 at the…
Jul 21, 2021
Don’t miss the S&P Global Platts 23rd Annual Financing US Power Conference on October 19-20 at the New York Marriott Downtown Hotel.
With compelling topics such as battery storage, Biden’s infrastructure plan, Environmental, Social and Governance (ESG), and more, you’ll want to meet your peers this Fall at the premiere power financing conference.
We are excited to be hosting this event live and in-person and are looking forward to seeing you there.
Meeting space is limited this year, so please register early to save your seat!
If you cannot join us in-person, please register to attend the conference via live stream.
For further details, please visit our pricing page.
Building a Bridge to Bankability for Energy Innovation
Jigar Shah, Director, Loans Program Office, Department of Energy
Do more with your registration. You’ll receive access to the conference mobile app for online networking and conference resources prior to the event. Use it to:
— Build your network— See who else is registered, help people find you at the event, chat in the message boards or through direct messages, and exchange contact information digitally.
— Enjoy extra content—Get Platts market news, conference sponsor digital content, and more leading up to the event. Find out about program updates as they happen.
— Take it all with you—Use the mobile app to take notes, export them, and share with other attendees. Look up contacts and conversations later. Install the mobile app version for easy access from anywhere.