Global Energy, Sept 18-24
Here's a summary of last week’s top global energy news that have the potential to impact global energy supply and demand.
Australia/ LNG
Chevron’s Wheatstone LNG export facility returned to full production after a fault at the plant cut output by around 25% last week. The problem coincided with escalation of labor strikes at other Chevron facilities that collectively account for about 6% of global LNG supply. That strike was resolved on Sept 21.
Canada/ Oil exports
The long-delayed Trans Mountain oil pipeline expansion (TMX), which will nearly triple the flow of crude from Alberta to the Pacific Coast, will launch early next year. This will shake up North America's supply by diverting barrels now mainly delivered to refiners and exporters in the U.S. Midwest and Gulf Coast.
Congo/ Hydropower
The Democratic Republic of Congo is still looking for partners in potentially the world’s biggest hydropower project. Talks with Australia’s Fortescue Future Industries have stalled regarding development of the 44 GW Grand Inga project.
Oil prices
This week, Brent crude climbed above $95 a barrel, but ended the week at $94.10, as supply cuts by Saudi Arabia and Russia raised concerns of a shortfall. “Saudi Arabia and Russia are in solid control of the oil market,” said Bjarne Schieldrop of Norwegian bank SEB. In 2024, Brent prices are expected in the $80 and $105 per barrel range, said Goldman Sachs.
Qatar/ Natural gas
Qatar contract awards could exceed $20 billion this year as expansion projects gain momentum. The two expansion phases at North Field are expected to increase Qatar’s LNG production from 77 million tpa to 126 million tpa by 2027.
Russia/ Oil and gas
Russia's oil and gas revenues are set to rise to around 733 billion roubles ($7.6 billion) in September, up 14% from August, according to Reuters calculations. The corresponding figure in September 2022 was 688 billion rubles.
UAE/ Oil
In August and September, the UAE began receiving the first cargoes of CPC Blend from Russian producers. This opens up a new export route as Moscow looks to find new customers and skirt Western sanctions. Russia is the world's third largest oil exporter, and has rerouted most of its oil to China, India and Turkey over the past year.
UK/ Nuclear power
The UK plans a 3.2 GW nuclear power plant, Sizewell C. But the govt is creating new security criteria for investors. Last year, the UK bought out a Chinese company's share in the project due to security concerns. The UK has set a target of building 24 GW of nuclear capacity by 2050, a huge ambition that’s been met with skepticism due to the costs.
Uruguay/ Oil exploration
State-run energy company Ancap will issue seven offshore exploration licenses. While no oil or gas has been found in Uruguay’s waters, there’s much interest due to recent discoveries in Namibia, across the Atlantic. 120 million years ago the two areas were connected.
U.S./ Coal
Billionaire Michael Bloomberg pledged $500 million to fight fossil fuel power generation. He wants to close “every last coal plant in America” and cut natural gas capacity in half by 2030. Bloomberg already has spent over $500 million to support the Sierra Club's Beyond Coal campaign, which originally aimed to retire 30% of the U.S. coal fleet by 2020.