LNG

Naturgy Group, the Spanish global utility company with LNG supplies from the US and Russia and natural gas and utility businesses in Spain and South America as well as renewables projects in Europe, the US and Australia, reported a first-half surge in revenues and net profits.

The US Government has reduced its previous benchmark Henry Hub price forecast my over $1 per million British thermal units while LNG exports are set to rise and American consumers will pay 45 percent more for their winter heating oil compared with last winter.

Naturgy 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, has held a successful annual meeting in Madrid where it revealed continuing help for customers hit by soaring bills.

Naturgy Group of Spain, the utility with LNG deliveries from both the US and Russia, has confirmed with Algerian oil and gas company Sonatrach that the expansion project on the Medgaz natural gas pipeline from Algeria to Spain would start operations in the fourth quarter of 2021.

Naturgy Group, the Spanish-based global utility and LNG market participant, saw nine-month earnings drop but still turned a profit and its earnings report gives an insight into the natural gas and power sectors from Spain to South America during the Covid-19 era.

July 22 (LNGJ) - Naturgy Group of Spain, an importer of both US and Russian LNG volumes, said its first-half gross earnings came to €2.03 billion ($2.34Bln) down by around 11 percent on the 2019 figure despite the market challenges. Naturgy also completed negotiations with BlackRock, the world’s largest equity fund, to partner with the Spanish company in a joint venture that will hold 49 percent of the Medgaz subsea natural gas pipeline from Algeria to Spain. The deal provides Naturgy with joint control over the company without enlarging its operations or investing any additional sums.

   “For us, this deal is very attractive. BlackRock coming aboard the investment vehicle attests to the appeal and uniqueness of Medgaz as strategic infrastructure,” said Naturgy Chairman Francisco Reynés. Algerian state energy company Sonatrach holds the majority 51 percent of the shares in Medgaz, which is 210 kilometres in length and has capacity to transport 8.2 billion cubic metres per annum of natural gas.

Brazilian state-controlled energy company Petroleo Brasileiro SA said it had pre-qualified nine bidders, including European-based majors Royal Dutch Shell, BP of the UK and Total of France, for the long-term lease of one of its liquefied natural gas import terminals in the northeast of the country.

The bidding is for a lease on the Bahia LNG terminal site and its associated pipeline in the northeast state of Bahia as well as access to the Brazilian gas market network.

The move by the company, known as Petrobras, is in line with an agreement made with the nation’s antitrust regulator in July 2019 to open up the Brazilian natural gas market to more competition.

“The lease bidding process is in line with the strategy of improving and building a favourable environment for new investors to enter the natural gas sector, while improving capital allocation,” Petrobras said in a statement.

The facility is located at Baía de Todos os Santos in the port city of Salvador and has regasification capacity of 14 million cubic metres per day of natural gas.

Analysts say there was still tremendous scope for increasing natural gas use in Brazil for the energy transition.

Currently natural gas is in third place in the country’s use of primary energy behind oil (46 percent) and hydropower (29 percent).

These three are followed by a growing renewables sector made up mostly of wind and bio-fuels at 8 percent. Coal use is reducing annually and is now down to about 5 percent.

Petrobras did not issue a schedule for the next stages of the bidding process for the Salvador LNG terminal.

Other companies included in the short list to lease the terminal are Spanish major Repsol, floating import terminal pioneer, Excelerate Energy of the US, and Golar Power, a joint venture project of Golar LNG and US equity fund, Stonepeak Infrastructure Partners.

Spanish utility Naturgy also pre-qualified along with the local Brazilian utilities, Bahiagas and Compass Gas and Energy.

Any final lease agreement will not include the 173,400 cubic metres capacity floating storage and regasification unit “Excelerate Experience”, which is currently deployed at Salvador.

However, other infrastructure included in any deal will be the 45-kilometre associated pipeline. It originates at the LNG terminal landfall and has two gas exit points at Sao Francisco do Conde and Sao Sebastiao do Passe.

The Bahia terminal in Salvador is one of three controlled by Petrobras in Brazil.

The two others at Pecem in the northeast state of Ceara and at Guanabara in the state of Rio de Janeiro, which has been idle since 2018.

While Brazil’s three terminals have been significantly under-utilized, Petrobras and the government are just now making efforts to allow third-party access.

In March 2020, the 170,000 cubic metres capacity FSRU “Golar Nanook” became the first independent terminal to begin operating in Brazil for Golar Power in a private project.

The FSRU is deployed in the small northeast Brazilian state of Sergipe as part of gas-fired power plant venture that will enable Brazil to increase its energy security and natural gas use while continuing to expand its development of renewables.

About 130 cargo loadings have been cancelled at US LNG export plants since April 2020, including 40 liftings that would have been scheduled for July and the same number for August.

Naturgy, the Spanish utility with Latin American assets and LNG volumes from the US and Russia, swung to a profit after losses last year linked to restructuring as it invested in natural gas infrastructure and renewables.

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, reported lower sales and margins in the short-term LNG market offset by strong long-term sales growth.