LNG

Norway’s national energy company Equinor, a main pipeline natural gas and LNG supplier to Europe as well as being a prominent trader, made total tax contributions of over $49 billion in the last tax year, including $1Bln in environmental taxes under the EU Emissions Trading System, as prices surged following Russia’s invasion of Ukraine.

Equinor said it focused on securing safe and reliable delivery of energy and became the largest provider of natural gas to Europe as supplies from Russian supplier Gazprom virtually ended.

“Equinor is dedicated to contributing to progress for the societies where we operate, and paying tax where value is created is an important part of this,” said Equinor Chief Financial Officer Torgrim Reitan.

Special year

“It was also a special year in 2022 in the energy markets with high and volatile prices, followed by substantial tax contributions,” Reitan added.

Equinor group companies contributed with tax, host government entitlements, royalties and fee payments totalling $49.2Bln. Of this, $44.3Bln was paid to Norway, where Equinor has the largest operations.

The company explained that financial results in 2022 were strengthened by the higher prices across energy markets compared with 2021 and with particularly high prices and higher production of gas to Europe.

“Tax payments from Equinor provides governments and authorities with opportunities to increase welfare and strengthen their societies,” said Equinor.

Governance

The Tax Contribution Report provides information about the corporate income tax Equinor paid in countries and locations where it does business.

“The report discloses Equinor’s approach to tax and tax strategy, compliance, and governance,” it added.

Equinor also emphasized that it supported policies promoting the goals of the Paris Agreement and backed a price on carbon emissions as a measure to drive emissions reductions.

“The CO2 tax in Norway has promoted development of technology and solutions to produce oil and gas with lower emissions from operations on the Norwegian Continental Shelf,” said CFO Reitan.

In 2022, Equinor said it paid $1.1 billion in environmental taxes and fees, including carbon quotas within the EU Emissions Trading System.

The Russian Finance Ministry said that that the federation’s oil and gas revenues decreased by 26 percent in the first 10 months of the year amid warnings that natural gas and LNG producer Gazprom was heading for record losses and another gas company Novatek faced financial disruption to its Arctic LNG II project.

Freeport LNG has updated the timing of the initial restart of its liquefaction facility on Quintana Island in Texas after repairs and refurbishment following the June 2022 fire.

“The company continues to make notable progress on its path towards the restart of liquefaction operations,” said Freeport.

“As of December 23rd, the reconstruction work necessary to commence initial operations is substantially complete, and the company is submitting responses to the last remaining questions included in the Federal Energy Regulatory Commission’s data request,” added the company.

Freeport explained that given the time needed for the regulatory agencies to review the company’s responses and to seek any necessary clarification, Freeport LNG now does not anticipate commencing the initial restart of its liquefaction facility until the second half of January 2023.

“The company continues to have close, collaborative engagement with the regulatory agencies and that engagement will continue as Freeport LNG works towards the safe restart of its facility,” stated Freeport.

When the explosion occurred, Freeport’s Chairman and Chief Executive Michael Smith and his team had been planning for an expansion from 15 million tonnes per annum of output from three Trains to 20 MTPA with the construction of a fourth Train.

Customers

Freeport LNG's main customers include Japan’s largest importer JERA Co. Inc., the Japanese utilities Kansai Electric and Osaka Gas as well as South Korean company SK E&S and buyers in Europe.

During the first quarter of 2022 before the accident, the Freeport plant exported 55 cargoes mainly to import terminals in Europe and North Asia

Freeport shut on June 8 after a pipe failure caused an explosion due to inadequate operating and testing procedures, human error and fatigue, according to a report by consultants hired by the company to review the incident and suggest action.

Even without Freeport volumes, the amount of gas flowing to US LNG export plants hit 13.0 billion cubic feet per day last week, the most since May 2022, 10 days before the Freeport shutdown.

The Freeport closure meant the nation’s other six large-scale export plants have been operating near full capacity.

Asian spot liquefied natural gas cargo values adjusted to the front-month futures moving to December as Chinese demand was seen returning and European wholesale prices continued to be quoted at higher levels to Asia in the supply windows through to March 2023.

European Union natural gas prices and LNG values hit record levels this week and the benchmark Dutch Title Transfer facility price was still just below $60 per million British thermal units after the Russian gas dispute escalated while Asian LNG spot cargo prices also gained ground on the week, though at a slower pace than the EU market.

Norway, an exporter of LNG and pipeline natural gas as well as oil cargoes, is a frugal country when it comes to its own natural gas demand with annual needs of just 6.3 billion cubic metres.

Australian and African LNG export plants operator, US major Chevron Corp., is increasing its LNG trading role after signing cargo supply agreements with the largest US exporter Cheniere Energy and newcomer Venture Global with one plant in operation in Louisiana and three others under development in the state.