Natural Gas Daily: August 20th, 2020

China Cnooc's H1 Profit Drops 66%

Chinese state-run Cnooc said its profit during the six months to June 30 (H1) dropped by 65.7% yr/yr due to lower realised oil and gas price.

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• China’s natural gas consumption during the first six months of the year was 155.61bn m³, up 4% yr/yr, National Development and Reform Commission said on July 31 in a statement.

• China’s gas production in 2020 is likely to maintain the strong growth momentum seen in the past two years, as the country’s top officials plan on a greater reliance on domestic resources to ease a reliance on foreign imports.

GE, Iraq Ink Power Capacity Deals

US energy engineering giant GE has signed agreements worth over $1.2bn with Iraq's electricity ministry to underpin peak electricity supply across the country, it said August 19. It signed contracts valued at $500mn to upgrade and maintain key power plants in the country, which are mission-critical to sustain the power supply of over 6 GW and scale up operational efficiency.

• The International Energy Agency in May said that one solution to Iraq's energy needs would be to flare much less gas and use it for power generation, but short-termism meant that all resources available were directed at oil production without capturing the associated gas.

• But Iraq imports gas from Iran for power generation.

Oz Origin Energy's Full Year Profit Down 93%

Australian gas and power retailer, Origin Energy, reported a 93% yr/yr drop in profit for the 12 months to June 30 (FY2020) owing to charges related to Origin’s equity stake in Australia Pacific LNG (APLNG).

• APLNG, a joint venture comprising Origin, ConocoPhillips and Sinopec, is Australia’s largest producer of coalbed methane and supplies gas to Queensland’s domestic gas market, while also processing CBM into LNG for exports.

• Last month, Origin said it would recognise non-cash post-tax charges in the range of A$1.16bn-A$1.24bn for FY2020 with the bulk of the losses relating to its equity stake in APLNG.

Polish Gas Co Has Record First Half

Polish gas monopoly PGNiG reported record results for its first-half 2020 activities, as the arbitration case with Gazprom finally bore fruit this year.  The company recorded a settlement gain of zlotys 5.9 ($1.6)bn – the same amount as the company's net income – reflecting overpayments to Russia under the old, oil-indexed pricing clause since 2014.

• The company is in merger talks with PKN Orlen as the state is bringing together its major energy companies. Generator Energa and refiner Lotos are already either absorbed or on the way to becoming part of the major refiner PKN Orlen. An exclusive NGW interview with Kwiecinski and a feature on the merger may be read here.

Vietnam Adds EVC-Kogas Project to Power Plan

Vietnam has included a gas-fired power plant planned by a consortium led by Energy Capital Vietnam (ECV) in its national power development plan, EVC said on August 19.

• Last year, EVC and South Korean Kogas signed a memorandum of understanding that provides the framework for the development of a LNG regasification terminal, storage, gas supply system and 3.2-GW gas-fired power project near Mui Ke Ga, Binh Thuan province.

• Despite Covid-19, emerging Asia remains a bright spot for LNG demand growth.

Canada’s Spartan Delta Sees Q2 Profit

Canada’s Spartan Delta, which in June embarked on a strategy of acquiring under-valued assets by purchasing gas-focused producer Bellatrix Energy for C$108.8mn (US$82.5mn), said it had net income of C$47.4mn in Q2 2020.

• Unlike many of its peers, Spartan is banking on a resurgence of the natural gas market in the Western Canadian Sedimentary Basin, and has linked all of its existing gas production to the Aeco hub in Alberta.