LNG

European utility E.ON whose main businesses in terms of volume span nations like Germany, the UK, the Netherlands and Eastern Europe reported a 33 percent plunge in first-quarter revenues, though swung to a quarterly net profit in the first three months of the year from a previous loss as the business was overhauled.

E.ON’s sales from January through March 2024 decline to €22.64 billion ($24.45Bln) from €33.54Bln in the first quarter of 2023.

Net profits at Essen, Germany-based E.ON came to €838 million compared with a loss of €72M in the first three months of 2023.

Earnings per share moved into positive territory at €0.22 per share from losses of €0.03 per share in the prior-year period.

Natural gas sales

Sales of natural gas to consumers declined to 63.4 billion kilowatt hours from 76.2Bln kWh in the first quarter of 2023.

E.ON’s first-quarter electricity sales dropped to 35.4 billion kilowatt hours from 40.9Bln kWh in the first three months of 2023.

E.ON has overhauled its business segments and the changes started in January 2024 whereby there are now three divisions, Energy Retail combining Energy Networks and Customer Solutions, while the Energy Infrastructure Solutions (EIS) is now a separate division that was carved out of Customer Solutions.

In addition, a number of regional markets at the Energy Networks division were reassigned.

This means that East-Central Europe and Turkey is now divided into East-Central Europe, including the Czech Republic, Slovakia and Poland and South Eastern Europe, taking in Hungary, Croatia, Romania and the E.ON stake in Enerjisa Enerji in Turkey.

Furthermore, the E.ON Group’s central commodity procurement unit, E.ON Energy Markets GmbH, is now part of Energy Retail from January 2024 after previously being part of Corporate Functions.

Bond sales

The German company listed among its highlights some successful bond sales of €3.3Bln and an arbitration proceedings against Spain.

The E.ON group, E.ON Financial and E.ON Iberia Holdings are plaintiffs in arbitration proceedings in which the three E.ON entities are asserting claims for damages for changes to Spain’s remuneration scheme for renewable energy.

“The E.ON Group’s sales in the first quarter of 2024 declined and in Germany this development is attributable in particular to the discontinuation of government subsidies for transmission network tariffs, which led to an increase in network tariffs in the first quarter of 2024,” the company explained.

“Higher sales in Sweden resulted from an increase in wheeling volume along with adjusted network tariffs due to improved regulatory parameters,” the company added.

In the power industry, wheeling is the delivery of energy from a generator to an end-user located in another area through the use of an existing distribution or transmission network.

“A decline in sales in South Eastern Europe is mainly attributable to a reduction in network tariffs that reflect lower procurement costs for network losses due to reduced electricity prices,” said E.ON.

The E.ON Group’s cash-effective investments of €1.28Bln in the first quarter of 2024 were 24 percent above the prior-year figure of €1.04Bln. The spending was on property, plants and equipment.

Customer data

The Germany company’s Energy Retail business has 47 million customers with the top three power markets being Germany 14M customers and 25 percent of sales,
the Netherlands with 4M customers and 24 percent of sales and the UK with 9M customers and 18 percent of sales.

E.ON also published energy statistics for key markets for 2023 compared with 2022.

German retail gas sales in 2023 amounted to 187.5 terawatt hours versus 179.2 TWh in the 2022, while UK gas sales were 66.3 TWh in 2023, down from 152.9 TWh in the 2022 as business structures also changed.

Natural gas sales in the Netherlands increased to 85.2 TWh from 74.5 TWh in the previous year.

Italian oil and gas major Eni said it closed the sale to Anglo-French energy company Perenco of Eni’s participation interest in several upstream permits in the Republic of the Congo in West Africa.

July 3 (LNGJ) - Equinor, the owner of the recently re-opened Hammerfest LNG export plant after a September 2020 fire, reported a second fire on July 3 at its Mongstad refinery in Norway. “The incident was reported today at 5:46 am local time to Equinor’s emergency response organisation. The plant has been evacuated apart from critical personnel handling operations and emergency response. No personnel injuries are reported,” stated Equinor.

“Public rescue services and authorities have been notified and Equinor's emergency response organisation has been mobilised. A controlled burning of trapped volumes through pressure relief is being conducted, with continuous cooling of the surrounding equipment,” the company added. Mongstad is located in western Norway and is Equinor's largest refinery.

Shell plc, the leading LNG trader and oil and gas major, has issued a profits warnings saying that first-quarter 2022 results would include the post-tax impact of between $4 billion and $5 billion from impairments of non-current assets and additional charges relating to Russia activities.

Eni, the Italian major developing Mozambique LNG and with stakes in liquefaction plants in Angola and Nigeria, said the Mozambican Coral South floating LNG project would start up in the second half of 2022.

Eni made the point on Coral South FLNG as it reported upstream adjusted gross earnings in the first nine months of €5.7 billion ($6.6Bln).

On Coral South FLNG, Eni added that there would be 3.4 million tonnes per annum and the LNG would be entering the market at the right time.

Eni also gave a limited update on plans for the Area 4 natural gas resources in the Rovuma Basin of Mozambique.

“Regarding Area 4, the updated project and the new final investment decision date will be defined and based on the results of the ongoing optimization phase,” said Eni.

“We will also take into account the evolution of the security situation in the northern part of Cabo Delgado Province in Mozambique,” it added.

This was a reference to violence in the area from insurgents that shut-down the TotalEnergies-led onshore LNG project for Mozambique’s Area 1 Rovuma Basin natural gas resources.

The third-quarter results for Milan-based Eni amounted to €2.4Bln ($2.8Bln), which was above the pre-Covid levels even as production was still ramping up after the maintenance season.

Project ramp-ups

Eni said the ramp-ups in Indonesia, Sharjah in the United Arab Emirates and in Angola more than offset the negative effects of US Hurricane Ida.

The company said its cash flow from operations before working capital for the nine months was strong at €8.1Bln, more than covering capital expenditure of €4Bln in the same period.

For all of 2021, Eni expects cash flow from operations before working capital to be close to €12Bln, based on a Brent crude oil price of around $70 a barrel.

Eni expects overall production to further recover in the fourth quarter at 1.76 million barrels per day.

Eni also explained the positive prospects for a discovery made in September 2021 offshore the Ivory Coast in West Africa.

“The first well discovered light oil and associated gas in a new play concept in the deep water Baleine Prospect, with preliminary estimate of more than 2 billion barrels of oil equivalent,” said Eni.

The company explained that the Baleine project would be designed to target fast-track development to meet the West African nation’s domestic natural gas need in an environmentally-friendly manner.

Eni said it had additionally signed an agreement with Russia’s Gazprom to revise the terms of existing long-term pipeline gas supply contracts in Europe.

“This is in the light of the current and future market evolution, including the settlement of the ongoing disputes between the parties,” explained Eni.

“The agreement underlines the importance of the role played by gas in the decarbonization process and sustainability strategies,” it added.

Norway, the LNG producer whose export plant at Hammerfest is still offline after last year’s fire, has offered four production licences in the Government’s 25th licensing round split between seven energy companies and with one block located in the Norwegian Sea and three in the Barents Sea.

The 25th licensing round is facilitating exploration and production activity on the Norwegian Continental Shelf.

“This is important for employment and value creation in the Norwegian oil and gas industry,” said Minister of Petroleum and Energy Tina Bru.

“The (licence) allocations are in line with the goals we presented in the White Paper Energy for Work. They are also an important part of the framework conditions for the companies on the NCS,” added Minister Bru.

The 25th licensing round had been announced on November 19, 2020 and the application deadline was February 23, 2021.

Companies could apply for licences in nine different areas, eight in the Barents Sea and one in the Norwegian Sea.

The successful companies have committed to acquiring 3D seismic surveys and to initiate some wildcat drilling.

Two licences were awarded to Norwegian state-backed company Equinor, operator of Hammerfest LNG, now shut until March 2022 after the fire on September 28 in 2020.

The first Equinor licence (50 percent stake and operator) is in partnership with state company Petoro AS (20 percent), Sweden-based company Lundin Energy (20 percent) and Idemitsu Petroleum, part of the Idemitsu Group of Japan (10 percent).

The sole Norwegian Sea licence went to the UK’s Ineos (60 percent) and in partnership with Royal Dutch Shell.

Their 1055-B block is located between two previous large natural gas finds.

The two other Barents Sea licences were awarded to Equinor with Lundin Energy and Petero, and one went to Austria’s OMV (30 percent) with Vår Energi (70 percent and operator), a joint venture between Italy’s Eni and the private equity investor HitecVision.

Norway, Western Europe’s largest oil and gas producer and the third-largest exporter of natural gas in the world after Russia and Qatar, has announced its 25th licensing round on the Norwegian Continental Shelf for February 2021.

European oil and gas major Total said its liquefied natural gas sales would reach 50 million tonnes per annum by 2025 and would double between 2020-2030, creating value from scale, arbitrage and integration along the value chain.