LNG

Enagás, the Spanish natural gas operator of six large LNG terminals and with gas assets in other European countries and overseas, reported a fall in net profits as Spanish gas and power demand dropped, offset by a one-time gain from the sale of a stake in a gas pipeline in Mexico.

Enagás, the Spanish natural gas operator of six large LNG terminals and with gas assets in other European countries, has successfully sold €600 million of bonds as it also allocated half of its available regasification capacity for the next 15 years.

The Enagás 10-year bonds will mature in 2034 and have an annual coupon of 3.625 percent.

The bonds had five-times more offers to buy than the issuance required.

“Although the company does not have relevant maturities until the end of the year, it has taken advantage of the good market conditions at the beginning of the year to carry out this issue, extend the average life of its debt and thus have part of the upcoming maturities covered,” the Madrid-based company explained.

“The success of the placement, both in term and in financing cost, contributes to improving the good financial situation of the company, which has diversified financing sources,” it added.

Slot allocations

Spain’s Enagas said that its recent LNG allocation represented nearly all of the slots it had offered to date, reinforcing Spain’s status as key hub for LNG imports in Europe.

The prominence of the Spanish in the LNG sector is further highlighted by the fact that its regasification terminals accounted for almost one-third of LNG storage in Europe as of mid-January 2024.

Enagás also started up the El Musel LNG trans-shipment terminal in 2023 in the Port of Gijón in northwest Spain to supply other EU nations and assigned its logistics services to the European utility Endesa.

The grid company owns five large Spanish terminals at Barcelona in the northeast, at Cartagena in the southeast, at Sagunto in the east of Spain, at Huelva in the southwest and the El Musel facility.

Enagás additionally holds a 50 percent stake at another northwest facility serving the northwest port of Bilbao and owns two small regasification terminals in the Canary Islands.

Spain’s storage levels are still at around 85 percent filled and the LNG is supplemented by pipeline gas supplies from Algeria.

Other stakes

Enagás in July 2023 closed an agreement to acquire an additional 4 percent stake in the Trans-Adriatic Pipeline (TAP), taking its stake in the pipeline bringing Azerbaijan gas to Europe up to 20 percent.

In other LNG activities outside of Spain, Enagás became an industrial partner with a 10 percent stake in the Hanseatic Energy Hub consortium planning an onshore LNG import terminal at the German North Sea port of Stade.

Serbia, the Balkan state that was part of the former Yugoslavia and has been a candidate nation for 10 years to be a member of the European Union, has completed an interconnector pipeline to Bulgaria giving the Serbs supply options of regasified LNG from Greece or pipeline gas from Azerbaijan to replace Russian supplies.

Russian natural gas giant Gazprom has found another outlet for its resources stranded by Western sanctions over the war with Ukraine by signing new supply deals with the Central Asian republics of Uzbekistan and Kazakhstan.

Gazprom signed an agreement with Uzbekistan to supply gas volumes and also signed an accord with Kazakhstan’s QazaqGaz to provide services for the transportation of Russian natural gas through Kazakhstan to customers in Uzbekistan while also promising more volumes to the Kazakhs.

The two-year agreement will provide 9 million cubic metres per day, or around 2.8 billion cubic metres per annum, of pipeline natural gas to Uzbekistan.

Oil focused

Uzbekistan is an oil and natural gas producer, though its output leans mostly towards oil.

The overall deal is for the transit of 6 Bcm of gas annually, which implies that other Central Asian countries may also come to import more Russian gas via this route.

The details of the natural gas supply deal were revealed on October 7 at a ceremony attended by Russian President Vladimir Putin, Uzbekistan President Shavkat Mirziyoyev and Kazakhstan President Kassym-Jomart Tokayev.

The search for new pipeline gas customers by Gazprom has continued after Western sanctions on pipeline gas to Germany and the European Union, though there were no specific sanctions on LNG and cargo deliveries continue.

The Gazprom-operated Sakhalin LNG plant in the Russian Far East lost Shell as a shareholder but Japanese shareholders remained on board as they rely on the more than 9 million tonnes per annum of deliveries to Japanese terminals.

Kazakhstan is the largest southern neighbour of Russia in Central Asia and Uzbekistan lies to the south of Kazakhstan.

There is also a Central Asian natural gas pipeline in the region that is connected to China and supply flows to the Chinese are increasing year-on-year,

China pipeline

The pipeline supplying the Chinese from the west originates on the Turkmenistan-Uzbekistan border and passes through Kazakhstan on the 3,665 kilometres (2,277 miles) route to Horgos in the Xinjiang region of China.

A statement on the Gazprom deal with Uzbekistan and Kazakhstan said that the “blue fuel” from Russia would be sent to Uzbekistan via Kazakhstan, with a share of it also going to Kazakhstan. 

“Firstly, this is an important factor in the energy security of our country and the entire region. Secondly, the supply will provide for additional volumes of gas for the uninterrupted supply to economic sectors and the population,” said the President of Uzbekistan Shavkat Mirziyoyev.

According to Mirziyoyev, the implementation of this project was a “vivid example” of successful mutually beneficial cooperation between Russia, Kazakhstan and Uzbekistan in the energy sector.

“The implementation of this project will have obvious benefits for all three countries. Uzbekistan will get an additional source of energy, allowing it to guarantee an uninterrupted supply of heat and electricity to households and socially important facilities. Kazakhstan will be able to solve the issue of gasification of its northern and eastern regions,” said Gazprom 

The European Union may face pipeline natural gas supply issues again this winter because of a military conflict, this time by Azerbaijan against the ethnic Armenian enclave of Nagorno-Karabakh.

Sept 15 (LNGJ) - Turkey said it would construct a physical hub in the country’s western region of Thrace to connect all existing gas pipelines. “Turkey can also receive LNG from different countries like the US, Algeria and Qatar,” said Energy and Natural Resources Minister Alparslan Bayraktar in describing the plan

   “We also take pipeline gas from Iran, Azerbaijan and Russia,” said the minister. “What we are trying to do in Thrace is build a physical hub that will connect to all respective pipelines and to our underground gas storage at Silivri as well as to LNG import terminals,” Bayraktar added.

Italian energy company Eni said Italy needed to significantly increase its LNG import capacity as in 2023 Russian natural gas imports will be in single digits compared with a year-ago and the amounts could be down to zero.

Eni Chief Executive Claudio Descalzi said at a business event in Milan that for security of supplies Italy would need four LNG import facilities rather than the three currently operating.

“The change in the flow of natural gas from Russia means Italy must expand its energy infrastructure in the South to eliminate bottlenecks in the gas grid and to enlarge its storage system,” explained Descalzi.

The Eni CEO noted that natural gas flows from Russian sources had fallen from around 38 percent of Italy's total consumption to around 10 percent in recent months.

“Next year, we expect Russian natural gas be around 6 percent to 7 percent of the total, if even that,” he added.

The country currently has three LNG terminals, which have a capacity of around 17 billion cubic metres of gas.

Operators

SNAM, the gas gride operator whose name comes from Societa Nazionale Metanodotti (National Pipeline Company), operates the onshore Panigaglia LNG facility as well as having a controlling stake in the LNG facility, the “FSRU Toscana”, the floating storage and regasification unit moored off the Italian port of Livorno.

In addition to these two terminals, there is also the offshore Adriatic LNG facility owned  by units of QatarEnergy and ExxonMobil and receiving cargoes from Qatar and other sources.

SNAM has also agreed to purchase two FSRUs for deployment on the East and West coasts of Italy, though Eni believes a further two terminals are needed to give the country a total of seven LNG facilities.

Grid company SNAM also intends to invest more than €3 billion ($3.11Bln) to boost gas network efficiency and to construct more gas storage sites.

SNAM is bringing two FSRU into the Mediterranean to increase the quantities of LNG available, including the FSRU “BW Singapore” from BW Group of Singapore.

It has also bought the “Golar Tundra” for $350M from shipping group Golar LNG.

Italy is additionally seeking more pipeline gas from Algeria, while continuing to receive volumes on the Trans-Adriatic Pipeline from Azerbaijan.

“We have moved from Russian gas coming from pipelines to gas coming on ships,” explained Descalzi.

“We currently don't have enough LNG terminals so we believe that we need four additional facilities,” added the Eni CEO.

Enagás, the Spanish natural gas grid and LNG terminals operator. posted a 15 percent increase in net profits and said the network of six LNG terminals had saved the country money and confirmed the opening in early 2023 of a seventh and existing LNG export terminal dedicated to European Union supplies.