Natural Gas Daily: August 26th, 2020
US Gulf Coast Braces for Hurricane Laura
Energy infrastructure in the US Gulf Coast region has seen major disruptions because of the risk from the arrival of Hurricane Laura later this week.
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- US LNG exporter Cheniere Energy has temporarily halted operations at its Sabine Pass LNG terminal in Louisiana ahead of the storm's arrival, it told Reuters on August 25.
- The nearby Cameron LNG plant will run at "a reduced rate with a ride-out team of essential operations personnel," its operator told the news agency.
Gail's Weaker EBIT Highlights US LNG Price Risks: Fitch
Indian Gail’s 82% yr/yr decline in earnings before interest and taxes (EBIT) to rupees 4.8bn ($65mn) in the three months to June 30 (Q1) reflects price risks under Gail's long-term Henry Hub (HH)-linked LNG contracts from the US, Fitch Rating said in a note on August 23.
- “HH linked contracts expose Gail to price risk, especially during a low crude-price environment such as 1QFY21, when spot LNG was cheaper than the landed cost of HH-linked US LNG,” it added.
Novatek Launches Small-Scale LNG Plant in Urals
Russia's largest private gas producer Novatek has brought on stream a small-scale LNG plant in the Urals region of Chelyabinsk, it announced.
- Its output will be primarily sold as motor fuel in Chelyabinsk and the surrounding area. Russia is looking to expand to market for gas as a vehicle fuel, having recently approved a joint subsidy programme with Gazprom to support vehicle owners that want to switch from diesel or petrol.
- Novatek on August 25 unveiled new targets for reducing the environmental impact of its operations, in line with Paris Agreement goals.
Second Unit of Fukushima Gas Fired Power Plant Starts
Japan Petroleum Exploration (Japex) on August 24 announced that the second unit of Fukushima gas fired power plant has started commercial operations.
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Japan’s LNG imports in July were down 11.5% yr/yr, according to the provisional data released by the country’s finance ministry on August 19. Despite the declining trend in imports in recent months owing to the coronavirus outbreak, Japan remains the world's biggest LNG importer.
Greece-Bulgaria Link Operator Draws on Loan
Pipeline operator ICGB, which is building the Greece-Bulgaria gas interconnector, has used the first tranche of the €110 ($130)mn loan from the European Investment Bank (EIB), it said August 26. The EIB financing is secured by a guarantee from the Bulgarian state, owner of Bulgaria Energy Holdings (BEH) and was agreed last year.
- Among the sources of the gas is the planned 5.5bn m³//yr Alexandroupolis LNG import terminal in Greece, in which Bulgaria has booked some capacity along with its equity.
Oil Search Reports 85% Drop in H1 Underlying Profit
Sydney-listed Oil Search’s underlying profit, which strips out one off items, dropped 85% yr/yr during the six months to June 30 (H1) thanks to a sharp decline in oil and gas prices, it said on August 25 in a statement.
- Last month, the company said it would recognise a non-cash, pre-tax impairment charge of $360-400mn ($250-300mn on a post-tax basis).
- In Papua New Guinea, the company said, ExxonMobil has now re-engaged with the government. In February, the government called off negotiations on the P’nyang gas agreement saying it was disappointed by ExxonMobil’s unwillingness to agree to reasonable terms in line with other international gas projects.
