LNG

Naturgy Energy, the power company with LNG operations from Puerto Rico to Europe and pipeline gas networks from Algeria to South America, has seen its shares jump by more than 6 percent amid moves for a takeover by a company from Abu Dhabi in the United Arab Emirates.

Spain increased its imports of Russian liquefied natural gas in 2022 despite Western sanctions over the invasion of Ukraine and with only the UK out of leading European importers voluntarily ending LNG cargo deliveries from Russia and later joined by the Baltic nation of Lithuania.

Spain, France, the Netherlands have continued to receive LNG cargoes, which are not on the formal Western sanctions list.

The shipments to Spain and other European Union nations mostly come from the Yamal LNG export plant in northeast Siberia and operated by Russian natural gas company Novatek.

Latest Spanish data showed that 12.6 percent of Spanish natural gas was imported from Russia in the form of LNG and regasified to enter the state gas grid or re-exported to other EU nations.

With the start of the war in Ukraine in February 2022, energy supplies from Russia collapsed with oil accounting for just 1 percent of Spanish imports and with only LNG surviving as a seemingly essential Russian commodity.

Regarding LNG imports, the data showed that Spain received 56,021 gigawatt hours (GWh), or 4.24 million tonnes, of LNG from Russia in 2022, which was 54.8 percent more than in 2021 when it imported 37,027 GWh, or 2.80MT of LNG.

Rise in deliveries

As a consequence, Spain’s share of LNG shipments from the Russians increased by 3.7 percentage points in 2022 from 8.9 percent to 12.6 percent.

The data showed that Russia remained the fourth largest natural gas supplier to Spain after LNG deliveries from the US, pipeline natural gas from Algeria and LNG cargoes from Nigeria.

In the last month of 2022, Russian deliveries from the Yamal plant to northwest Spain and other Spanish ternminals surpassed LNG deliveries from Nigeria and consolidated itself in third place.

This meant that in the month of December, 5,453 GWh, or 414,400 tonnes, of LNG were received by Spain from Russia .

This increased the December cargo volumes of Russia’s LNG received by Spanish terminals to 14.3 percent of the total.

The LNG deliveries contrasted with the shipment of oil cargoes to Spanish refineries.

Russia exported 698,000 tons of crude oil to Spain in 2022, which was 72.8 percent less than in 2021 when 2.6 million tons were received.

In this case, Russia’s share of crude deliveries to Spain fell from 4.6 percent of the total to 1.1 percent.

After this collapse, Russia’s became Spain’s 17th largest oil supplier, down nine places from 2021.

The European Union’s Commissioner for Energy Kadri Simson is in Algeria for two days of talks on strengthening the EU’s energy cooperation with the Algerians after the failure of an EU summit last week to agree a natural gas price cap that would have affected LNG trading.

Naturgy Energy Group, the Spanish global utility company with LNG supplies from the US and Russia and natural gas and utility businesses in South America as well as renewables in the US and Australia, reported a more than 40 percent rise in annual net profits and an increase in gross earnings of over 7 percent.

Connect LNG, the Norwegian technology provider of jettyless solutions for marine loading and bunkering, has re-branded itself as ECONNECT Energy to reflect a broader focus on clean energy transfer solutions.

“The new focus aims to make clean energy accessible globally to realise solutions for not just LNG, but also renewable fuels and the carbon-capture value chain,” said the Oslo-based company.

Connect LNG was founded in 2012 based on the belief that clean energy should be accessible and affordable.

The Connect LNG floating jettyless system, the IQuay (previously named the UTS), can also be used for carbon capture and storage (CCS) and renewable fuels such as ammonia, bio LNG and hydrogen.

The first the IQuay called “La Santa Maria” was used in Norway in February 2019 for an operation involving Norwegian state-backed energy company Equinor and Naturgy Group, the Spanish utility and participant in the LNG market with global supplies, also now including US and Russian volumes.

The successful operation took place offshore Langesund in Norway, an area renowned for harsh weather during winter time.

The new ECONNECT company will leverage its experience in the LNG energy market to enable a seamless transition into new, carbon-free area.

It explained that with a focus now switched to include the potential of renewable energies, a new name was required to align with the company’s ambitions.

“A passion for change and a desire to challenge ‘common practice’ are in the company’s DNA,” said ECONNECT Chief Executive Morten Christophersen.

“When we designed our transfer solution we always wanted to apply it to more than just LNG,” explained Christophersen.

“With our current focus and success in the LNG market coupled with experience with CCS and renewables, we are well-positioned to broaden our scope to include new, carbon-free energy solutions,” stated the CEO.

Italian energy company Eni said the final agreement has been finalized that settled the dispute over operations at the Egyptian Damietta LNG export plant near Alexandria and the facility has been ramped up and cargoes are flowing.

Italian energy company Eni said Egypt was on track to regain its former full LNG export capacity as the first cargo was shipped from the Damietta plant east of Alexandria, shut down in 2012, firstly because of feed-gas shortages and then from 2017 over a dispute among shareholders.

Eni said the re-start was made possible after an agreement was reached in December 2020 aimed at settling all disputes between the shareholders linked to the long shutdown.

“At this stage the agreement has already received all the authorizations of the competent authorities and its final closing is expected in the first half of March,” explained Eni.

“The agreement comes at an important moment, when also thanks to the fast time to market of Eni's natural gas discoveries, especially the ones in the Zohr and Nooros fields, Egypt has regained its full capacity to meet domestic gas demand and can allocate surplus production for export through its LNG plants,” stated Eni.

With Damietta back on stream, Egypt can add 4.5 million tonnes per annum of output to its export volumes now totalling 12.5 MTPA.

The move forward for Damietta came after the resolution of the long-standing dispute between the shareholders over contracts because of the closure.

Naturgy, the Spain-based European utility, agreed to sell its stake in the Damietta plant and to rescind its Egyptian gas contracts on departing from the Unión Fenosa Gas (UFG) joint venture.

Naturgy’s UFG partners, Eni and the Egyptian Natural Gas Holding Company (Egas), reached the agreement under which Naturgy would receive a series of payments adding up to US$600 million.

The Spanish utility is also receiving most of UFG’s assets outside of Egypt as well as being released from the 3.5 billion cubic metres annual gas procurement contract to supply its gas-fired power stations in Spain, which was due to end 2029.

Under the settlement deal, these Spanish interests are being taken over by Eni.

The Damietta LNG plant had been idle since November 2012 when Egypt suffered natural gas shortages.

In addition to Damietta LNG, Egypt has a second export plant, the Idku facility operated by Royal Dutch Shell, and which has been back in commercial operation since 2017.

As regards Damietta plant shareholdings, the Naturgy 80 percent in Damietta liquefaction was transferred with Eni receiving 50 percent and 30 percent going to EGAS.

The resulting shareholding of the Damietta holding company sees Eni with 50 percent, EGAS holding 40 percent and Egyptian General Petroleum Corp. with 10 percent.

Eni has also taken over the contract for the purchase of natural gas for the plant and receives corresponding liquefaction rights.

Algerian state energy company Sonatrach, one of the main suppliers of LNG and pipeline natural gas to Europe, said it planned to increase production and sales in the coming year amid upgrades at its liquefaction plants at Skikda and Arzew on the Mediterranean coast and new natural gas discoveries for export in the future alongside industrial development in petrochemicals.

Naturgy Energy Group, the Spanish utility with major US and Russian liquefied natural gas supply contracts as well as gas and power businesses in six Latin American countries, returned to a net profit in the first half of 2019 from a heavy loss in the year-ago period.

Naturgy posted a first-half net profit of 592 euros ($660M) compared with a loss of 3.28 billion euros reported in the same six months of 2018.

The utility had approved a new strategic plan in 2018 through to 2022 as well as a company overhaul. This meant that assets were impaired to the amount of 4.85Bln euros due to the re-measurement of the estimated future cash flows.

Naturgy is one of the companies that have signed 20-year agreements for US cargoes from Cheniere Energy’s Sabine Pass and Corpus Christi plants and is also a main contract holder for cargoes from the Yamal LNG plant in Arctic Russia operated by natural gas company Novatek.

The US and Russian volumes were booked under Naturgy's previous name, Gas Natural Fenosa.

The utility’s international LNG earnings in the first half dropped by 32.2 percent to 158M euros from 233M euros in the 2018 first-half.

European power generation earnings fell by 27.7 percent to 120M euros from 166M euros a year ago.

“In Gas & Power, the first half results have been driven by a notable improvement in services sales, which has experienced a strong margin recovery in power supply, more than offsetting a more challenging scenario in International LNG and Europe Power generation,” said Naturgy.

“The company’s new commercial policies and de-risking efforts, together with efficiencies, have also helped offset the global decline in gas prices during the period,” it added.

“The company has continued to work on improving the risk profile of its merchant activities. As such, in International LNG, for example, Naturgy has already secured approximately 90 percent of its LNG volumes for the year while in Power supply, it has continued to reduce its portfolio of fixed price sales contracts,” the company explained.

Overall gross earnings in the Gas & Power division rose 7.6 percent to 640M euros from 595M euros in the same six months of last year.

Natural gas sales in Spain declined by 8.3 percent in the first half to 116,131 gigawatt hours compared with 126,587 GWh in the first half of 2018.

“This was mainly as a result of lower sales in the Spanish residential and industrial segments (down 11.8 percent and down 14.4 percent respectively), partially compensated by higher sales to combined-cycle gas-fired power plants (up 14.0 percent) and third parties (+17.7 percent),” said Naturgy.

In its other divisions European, Middle East and Africa Infrastructure earned 919M euros, up 3.1 percent.

The Latin America South Infrastructure earnings rose 23.8 percent to 448M euros, while Latin America North Infrastructure, comprising Mexico gas and Panama electricity, came in at 189M euros, up 53.7 percent.

Latin America South includes, Chile electricity, Chile gas, Brazil gas, Argentina gas and electricity and Peru gas.

Therefore, Naturgy posted a 7.5 percent rise in first-half gross earnings of 2.15Bln euros versus 2.00Bln in the same period of 2018.

Naturgy’s net sales dropped 4.4 percent to 11.63Bln euros from 12.17Bln in the first half of last year.

The company’s diverse LNG supply portfolio also includes shipments from Algeria, Qatar and Nigeria. The company additionally owns a small fleet of LNG vessels.