LNG

Gas Infrastructure Europe (GIE), the association representing the interests of European Union gas infrastructure operators in gas transmission, storage and liquefied natural gas, said the flow of LNG to European terminals hit its lowest since December 2021.

The GIE, which is based in Brussels and represents 70 member companies from 26 countries, provided the information from its gas grid data.

LNG supplies from the main terminals in the EU in nations such as Belgium, France, the Netherlands, Spain, Italy, Portugal and Germany plunged in May 2024.

The decline in regasified LNG flowing into gas grids dropped by a quarter to around 6.75 million tonnes.

Regasified LNG flows were also down by 13 percent compard with April 2024.

Total LNG supplies from terminals to Europe’s gas pipeline system was also lower in the January to May period 2024.

More FSRUs 

The decreased regasified LNG volumes were logged even as the EU had more terminals in operation as floating facilities came on line in Italy and Germany.

The total for the year to date though May fell by 10 percent compared with the first five months of last year to reached around 37.5MT.

Another body in the EU, the European Network of Transmission System Operators for Gas (ENTSOG), said that by the end of May the share of LNG was still the largest among sources of gas supply to Europe in 2024, standing at 32 percent.

Thus compared the 28 percent of gas provided from the Norwegian Continental Shelf and another 18 percent that came from gas storage facilities.

Other sources of gas received in Europe included 10 percent recived by pipleines from Algeria.

The Algerian volumes were delivered directly to Spain or via Tunisia to Italy by way of Sicily.

The share of gas supplies from Russia and volumes via Ukraine came to 9.5 percent.

Another 2.5 percent of European gas volumes originated from the UK North Sea.

The US remained the largest supplier of LNG to import terminals in EU and the UK followed by Qatar.

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.

Intercontinental Exchange Inc. (ICE) reported another trading surge on natural gas and LNG futures and options with very high liquidity and including record open interest in the US benchmark Henry Hub.

Moody’s Investors Service, the US credit rating agency, said that record high natural gas storage of almost 98 percent as of end November helped by LNG deliveries positions the European Union well to meet the needs of this winter season with very limited risks of energy shortages.

Cheniere Energy, the largest US LNG exporter from its Sabine Pass plant in Louisiana and the Corpus Christi facility in Texas, has agreed to extend an LNG sales accord  with the French utility Engie.

Cheniere said it has agreed with Engie, based in Paris, to amend the LNG sale and purchase agreement (SPA) the parties previously entered into in June 2021.

The Houston, Texas-based company said that under the revised SPA, Engie had agreed to purchase approximately 900,000 tonnes per annum of LNG from Corpus Christi on a free-on-board basis for 20 years and whereby the French provide their own ships.

The FOB contract began in September 2021. Cheniere said the purchase price for LNG under the SPA is indexed to the Henry Hub price, plus a fixed liquefaction fee.

Engie had previously agreed in June 2021 to purchase between 400,000 tonnes per annum and 1.1 million tonnes per annum of LNG for 11 years.

“We are pleased to build upon the long-term agreement we signed in 2021 with Engie, one of Europe’s energy leaders in low-carbon solutions, to increase the volume and extend the term beyond 2040,” said Jack Fusco, Cheniere’s President and Chief Executive .

“This SPA reflects the importance of a diverse and reliable long-term supply of natural gas for Europe and reinforces the value the LNG market places in Cheniere’s commitment to climate and sustainability initiatives,” added Fusco.

Flexible

“We look forward to continuing to supply Engie with flexible, cleaner burning LNG as part of our shared vision of a lower carbon future,” stated the CEO.

Cheniere is now moving forward with the lump sum, turnkey, engineering, procurement and construction contract with US LNG and energy engineering firm Bechtel Inc. for the Corpus Christi LNG plant expansion.

Cheniere has asked Bechtel to commence early engineering, procurement and other site work for the Corpus Christi expansion, known by Cheniere as the Stage III Project.

Corpus Christi Stage III is a fully permitted project consisting of up to seven mid-scale Trains, each with an expected liquefaction capacity of about 1.49 MTPA with a total production capacity of more than 10 MTPA.

Cheniere said that it was pleased to once again partner with Bechtel following the engineering firm’s “unmatched track record for execution excellence” while successfully building Cheniere’s LNG platform.

Cheniere in February 2022 announced the completion of Train 6 at Sabine Pass plant Cameron Parish in Louisiana, formally taking nameplate capacity to 27 MTPA. 

European wholesale natural gas prices and LNG values skyrocketed to record levels over $60 per million British thermal units on March 7 as the North Sea Brent crude oil price soared to over $139 a barrel after the US pushed for its allies to stop buying Russian oil over the Ukraine invasion.

North Sea Brent crude oil prices rose to their highest level in seven-and-a-half years as European natural gas and LNG cargo prices gained 20 percent after Russia said it was taking military action in neighbouring majority ethnic-Russian areas of Ukraine.

Equinor, the Norwegian LNG production plant owner and pipeline natural gas supplier to the European Union and the UK, has entered into an agreement with Canada’s Vermilion Energy to sell its non-operated stake in the Corrib natural gas project in Ireland.

The Corrib field started production in 2015 and is located 83 kilometres (51 miles) off Ireland’s northwest coast in water depths of almost 350 metres.

The equity gas volumes to Equinor for 2021 are estimated at 58 million standard cubic feet per day.

Equinor and Vermilion have agreed a consideration of US$434 million, before closing adjustment, with an effective date set at 1 January 2022.

The transaction is organised through a share sale of Equinor’s 36.5 percent of the Corrib project, alongside Vermilion, the operator with 20 percent, and Dublin-based Nephin Energy with 43.5 percent.

Hedging

As part of the transaction, Equinor and Vermilion have agreed to hedge approximately 70 percent of the production for 2022 and 2023, and have also agreed a contingent payment that will be paid on a portion of the revenue if European gas prices exceed a given floor level.

“The Corrib field has been an important non-operated project for Equinor for several years,” said Arne Gürtner, Equinor senior vice president responsible for the United Kingdom and Ireland.

“We have taken the decision to sell the asset to focus our portfolio, in line with our strategy, to capture value from the current strong market and to free up capital that we can re-invest elsewhere,” added Gürtner.

The deal is subject to approval by partners, the Irish government and regulatory bodies.

The sale of Corrib means that Equinor will no longer have active business presence in Ireland, after also deciding to withdraw from an early phase offshore wind project in the country.

Equinor’s Hammerfest LNG plant on Melkoya island in northern Norway is currently closed after a fire occurred on September 28 last year.

The facility, which supplies European LNG terminals, is expected to re-open after repairs in the first quarter of 2022.

The main Continental European natural gas price and benchmark for LNG values, the Dutch Title Transfer Facility (TTF), has risen to a 2021 record high on demand in Europe as industry prepares for a full relaunch after the Covid-19 economic slowdown.

GRTgaz, the French natural gas grid operator and parent company of the main LNG terminals operator, has signed an agreement with the network operator of the Baltic state of Latvia for the French utility to support the modernization of the Latvian gas system and its energy transition process.