LNG

Naturgy Energy, the power company with LNG operations from Puerto Rico to Europe and pipeline gas networks from Algeria to South America, reported a more than 20 percent rise in annual net profits.

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.

GasLog LNG Partners with an operational fleet of 12 vessels reported annual profit of $119 million on revenues of $379M amid a strong charter market with signs pointing to very positive prospects for the rest of 2023.

The US Government has issued a waiver of Jones Act shipping rules to help the US territory of Puerto Rico attract LNG shipments amid a tight market and high prices after the recent hurricane damage affected power supplies and energy stocks.

Egypt said it expected to reopen the Damietta liquefied natural gas export plant east of the Port of Alexandria by the end of February 2021 after an eight-year closure caused by the Arab nation’s previous gas supply crunch.

“With Damietta back on stream with its 4.5 million tonnes per annum of output, Egyptian export volumes would total around 12.5 MTPA,” said the Petroleum and Mineral Resources  Ministry in a statement.

The move forward for Damietta comes after the resolution during the latter part of 2020 of a 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, Italian energy company 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 utility will also receive most of UFG’s assets outside of Egypt as well as being released from 3.5 billion cubic metres annual gas procurement contract to supply its gas-fired power stations in Spain, which was due to end 2029.

Settlement

Under the settlement deal, these Spanish interests would be taken over by Eni.

The LNG plant has 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, Segas, sees Eni with 50 percent, EGAS holding 40 percent and Egyptian General Petroleum Corp. with 10 percent.

Eni will also take over the contract for the purchase of natural gas for the plant and will receive corresponding liquefaction rights.

Italian company Eni, one of the biggest energy players in Egypt, said it was trying to find an agreement to allow the restart of the idled Damietta LNG export facility, located east of Alexandria, and one of two Egyptian liquefaction facilities on the East Mediterranean coast.

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.

Italian energy company Eni has signed a series of agreements with the government of Egypt and state-owned companies to prepare for the re-opening of the nation’s Damietta liquefaction plant by June 2020.

Naturgy Energy Group, the Spanish utility and importer of US and Russian LNG, posted an annual net profit after the previous year’s losses amid continuing challenges in its businesses in Europe and South America.