LNG

Enagás, the Spanish natural gas operator of six large LNG terminals and with gas assets in other European countries and overseas, reported an increase in first-quarter 2024 earnings even as gas demand in Spain declined because of warmer weather.

Singapore wealth fund Temasek is close to completing a seven-month long sale process for the Asian island nation’s Pavilion Energy set up by Temasek in 2013 to develop liquefied natural gas assets.

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.

Spanish natural gas and LNG terminals operator Enagás has signed an agreement with the Port of Huelva in southwest Spain to promote various gases including bioLNG made from waste.

Enagás, the Spanish gas grid and terminals operator, said the El Musel liquefied natural gas re-loading facility in Northwest Spain designated to supply the European Union has awarded the services contracts to utility Endesa after a tender process.

Endesa is the largest Spanish electric utility while being a majority-owned subsidiary of the Italian utility group Enel.

Enagás said the award to Endesa of logistics services for the El Musel terminal at the Port of Gijón on the Bay of Biscay followed a capacity allocation process.

“The open season had aroused strong interest among trading companies. In total, 13 were received between June 5 and 30, the period during which this last part of the process was developed,” explained Enagás.

“The logistics services offered for this infrastructure are LNG unloading, storage and loading operations,” Enagás said.

Regulated régime

“Within the regulated access regime, the El Musel plant contemplates a minimum regasification for the exact management of the terminal, as well as the tanker-loading service,” it added.

Enagás has re-activated the existing El Musel terminal to meet growing LNG needs in the EU after the closure of Russian pipeline gas supplies and a US commissioning cargo was delivered recently by the 174,000 cubic metres capacity carrier “Cool Racer”.

The Spanish terminal will contribute up to 8 billion cubic metres of additional LNG to Europe’s supply when commercial operations start.

El Musel will specialise in the unloading of LNG carriers from various producing countries and the rapid re-loading of ships for different European destinations.

The terminal berthing can accommodate the largest vessels and it has two storage tanks each with capacity of 150,000 cubic metres.

The re-opening of El Musel is part of the Spanish Government’s “More Energy Security Plan” and will add to Spain’s role as an energy hub for Europe as the nation also receives pipeline gas imports from Algeria.

Enagás operates six other LNG regasification terminals on mainland Spain.

Enagás, the Spanish gas grid and terminals operator, said the El Musel liquefied natural gas re-loading facility in Northwest Spain designated to supply the European Union has received its first cargo that was loaded on the US Gulf Coast.

Enagás has re-activated the existing El Musel terminal on the Bay of Biscay to meet growing LNG needs in the EU after the closure of Russian pipeline gas supplies and a commissioning cargo was delivered by the 174,000 cubic metres capacity carrier “Cool Racer”.

Shipping data showed that the cargo had been lifted from the Calcasieu Pass export plant in Louisiana on June 16. 

The Spanish terminal in the Port of Gijón will contribute up to 8 billion cubic metres of additional LNG to Europe’s supply when commercial operations start.

“The unloading of this first LNG vessel is a necessary prior step, from a technical point of view, before the final start-up as a logistics plant,” said Enagás.

Enagás has already conducted the second phase of a capacity allocation process, or open season, for El Musel after interest was expressed by 16 trading companies.

The binding phase just closed on June 30 after receiving binding offers from marketers for the capacity offered by the terminal.

Cool-down process

“As part of the usual technical process in this type of start-up operation, the initial cold start-up with liquid nitrogen of the infrastructure has already been carried out, prior to the arrival of the ship,” said Enagás.

“The LNG from the ship gradually replaces the inert gas (nitrogen) inside the tanks. With this, a progressive cooling of the tanks occurs until reaching cryogenic temperatures in which LNG can be stored at minus-160ºC,” Enagás explained.

The aim of the logistical use of the El Musel facility is to contribute energy supply to the EU because of the end of dependence on Russian pipeline natural gas after the events such as sanctions and retaliatory pipeline shutdowns that followed Russia's invasion of Ukraine in February 2022.

El Musel will specialise in the unloading of LNG carriers from various producing countries and the rapid re-loading of ships for different European destinations.

The terminal berthing can accommodate the largest vessels and it has two storage tanks each with capacity of 150,000 cubic metres.

The re-opening of El Musel is part of the Spanish Government’s “More Energy Security Plan” and will add to Spain’s role as an energy hub for Europe as the nation also receives pipeline gas imports from Algeria.

Enagás operates six other LNG regasification terminals on mainland Spain.

It owns five of those terminals at Barcelona in the northeast, at Cartagena in the southeast, at Sagunto in the east of Spain, at Huelva in the southwest as well as 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.

Enagás, the Spanish natural gas grid and LNG terminals operator, said first-quarter net profits excluding one-time items dropped by 21 percent and revenues also fell even as LNG and pipeline gas delivers rose and 43 percent of the LNG stored in Europe during the quarter was in the tanks of the six Spanish regasification terminals.

Spain’s foreign trade report covering the first two months of 2023 said that natural gas exports from Spain, including LNG and pipeline natural gas, amounted to €628.8 million ($690M) in total to nations like France, Portugal, Italy, Germany and Morocco.

The data showed that this was 194.3 percent higher than the €213.6M of gas exports in the same January and February period of 2022 and before the impact of the Russian invasion of Ukraine on energy markets.

Analysts note that Spain’s natural gas imports by pipeline from Algeria and by LNG carriers in its countrywide network have traditionally resulted in a big deficit in the trade balance for gas.

However, the latest Spanish trade report shows the gas deficit bill for January and February was reduced by €500M.

“The accumulated deficit in the first two months of 2023 stood at €2.54 billion compared with the €3.04Bln it reached in the same period last year,” said the report.

In the first months of 2023, the report showed that almost all of Spanish traded LNG went to Italy and cost €299M and next was Germany with €132.73M of deliveries, Portugal with €32.1M and the Netherlands €23.3M.

Spanish statistics also show that in the first two months of 2023 a total of 12,402.9 gigawatts hours were exported, of which 60.79 percent was transported through gas pipelines and 39. 21 percent in ships as LNG.

By quantity of gas purchased, France leads in this case the list of countries that have purchased the most gas from Spain.

Interconnections

The French imported 4,526.2 GW/h of gas in January and February, followed by Italy (3,284 GW/h), Portugal (1,897.3 GW/h) and Morocco (1,216 GW/h).

Specifically, pipeline gas exports through the interconnections with France broke records in the first two months to exceed 35 terawatt hours (TWh), the equivalent of 3.88 billion cubic metres of natural gas.

In total, through the interconnections with France and Portugal, Spanish exports reached 41 TWh, the highest figure since 2016.

Spain has six LNG import terminals operating and is currently re-launching a seventh previously moth-balled facility. The El Musel terminal in the Port of Gijón is capable of contributing up to 8 Bcm of additional LNG to the European Union’s supply through trans-shipments.

Spanish grid operator Enagás has capacity at six LNG regasification terminals in Spain.

It owns five 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 terminal in the northwest.

Overall in the whole EU, there were also 13.7 Bcm of pipeline natural gas imports in the month of March alone, which was 14 percent higher than the previous month of February, though 39 percent down on March 2022.

So far in 2023, the EU’s cumulative pipeline gas supply for the first three months decreased by 37 percent year-on-year to 38.3 Bcm, driven by falls in imports mostly from Russia, but also due to lower volumes being received from Norway and Algeria, while imports from Azerbaijan on the Trans-Adriatic Pipeline have risen.

Enagás, the Spanish gas grid and LNG terminals operator, has acquired the Reganosa gas pipeline network in Northern Spain while Reganosa is becoming a 25 percent shareholder in the El Musel regasification and import terminal on the Bay of Biscay previously 100-percent owned by Enagás.

Enagás, Spain’s natural gas grid and LNG network operator, reported slight declines in 2022 net profits and revenues after a year of high volatility in the energy markets with the Spanish Gas System operating without halt and Enagás infrastructure helping maintain the security of supply of the European Union.