Natural Gas Daily: November 4th, 2020

ENGIE, NEXTDECADE STOP US LNG DEAL TALKS

French utility Engie has ended talks with US project developer NextDecade over an LNG purchase contract they had been negotiating, it told NGW.

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• Reports had been circulating for some weeks that the contract was not welcomed by the French government, which has ruled out hydraulic fracking on its own soil.

• A US senator had urged Engie to press ahead with the deal in order to protect its environment and to bolster US-France trade.

GAZPROM RECORDS RECORD GAS FLOW IN KARA SEA

Russia's Gazprom flowed a record daily volume in the Arctic after testing a discovery it made last month at the Leningradskoye field in the Kara Sea, it said on November 3.

• The company discovered the Dinkova and Nyarmeyskoye fields in 2019, assessed to hold 389.7bn and 120.8bn m3 of recoverable gas respectively. It found another field 75 Let Pobedy in May this year, thought to hold 202.4bn m3 of gas.

• Gazprom, Russia's biggest gas producer, has cut back supplies to its main market Europe this year because of the impact of coronavirus pandemics, high levels of gas in storage and competition from LNG. October saw the highest monthly export volume so far this year.

GAZPROM BREAKS GROUND ON 2ND POWER OF SIBERIA SECTION

Russia's Gazprom has begun laying the second 800-km section of the Power of Siberia gas pipeline, running between the Kovyktinskoye field Irkutsk to the Chayandinskoye field in Yakutia, the company said in its corporate magazine on November 2. It also said that China was upping its nominations, meaning an increase in flows in October.

• Russia’s Power of Siberia pipeline to China opened on December 2, connecting the world’s largest gas exporter with its largest importer.

• Chayandinskoye has been flowing gas to China via Power of Siberia since December last year, but the completion of the new section will enable Kovyktinskoye to contribute flows as well.

SHELL TO FARM INTO S AFRICAN BLOCKS

Shell has agreed to farm into the Transkei and Algoa blocks off South Africa held by London-based player Impact Oil & Gas, the latter said.

• The Algoa and Transkei blocks cover 45,840 km2 in waters up to 3,000 m deep east of the 11B/12B block, where France's Total made a "significant" gas condensate discovery at the Luiperd prospect in October, following up on the Brulpadda find in February 2019. 
  

DESFA TAKES 20% STAKE IN GREEK LNG PROJECT

Greek gas grid operator Desfa has agreed to take a 20% stake in an LNG import project southwest of Alexandroupolis, it announced.

• Bulgaria's grid operator has also agreed to buy a 20% interest.

• The Alexandroupolis terminal will comprise a floating storage and regasification unit stationed off Greece's coast, connected to the national grid via a 28-km pipeline, and 170,000 m3 of storage capacity. 

GAS EXPORTERS MEET OPEC MEMBERS TO SWAP IDEAS

Members of the oil exporters' cartel Opec met their counterparts at the Gas Exporting Countries Forum (GECF) for the first time virtually. In a joint statement, they talked of "growing co-operation between the two organisations under the framework of the Opec-GECF Energy Dialogue."

• When the GECF was set up, gas contracts were still mostly long-term and oil price indexed and so any curtailment of supply to prop up prices would have violated the sales contracts.

• There has been a decisive shift towards spot pricing and short-term contracts, giving producers more discretion in their output than before.