LNG

Spain’s foreign trade report covering the first two months of 2023 said that natural gas exports from Spain, including LNG and pipeline natural gas, amounted to €628.8 million ($690M) in total to nations like France, Portugal, Italy, Germany and Morocco.

The data showed that this was 194.3 percent higher than the €213.6M of gas exports in the same January and February period of 2022 and before the impact of the Russian invasion of Ukraine on energy markets.

Analysts note that Spain’s natural gas imports by pipeline from Algeria and by LNG carriers in its countrywide network have traditionally resulted in a big deficit in the trade balance for gas.

However, the latest Spanish trade report shows the gas deficit bill for January and February was reduced by €500M.

“The accumulated deficit in the first two months of 2023 stood at €2.54 billion compared with the €3.04Bln it reached in the same period last year,” said the report.

In the first months of 2023, the report showed that almost all of Spanish traded LNG went to Italy and cost €299M and next was Germany with €132.73M of deliveries, Portugal with €32.1M and the Netherlands €23.3M.

Spanish statistics also show that in the first two months of 2023 a total of 12,402.9 gigawatts hours were exported, of which 60.79 percent was transported through gas pipelines and 39. 21 percent in ships as LNG.

By quantity of gas purchased, France leads in this case the list of countries that have purchased the most gas from Spain.

Interconnections

The French imported 4,526.2 GW/h of gas in January and February, followed by Italy (3,284 GW/h), Portugal (1,897.3 GW/h) and Morocco (1,216 GW/h).

Specifically, pipeline gas exports through the interconnections with France broke records in the first two months to exceed 35 terawatt hours (TWh), the equivalent of 3.88 billion cubic metres of natural gas.

In total, through the interconnections with France and Portugal, Spanish exports reached 41 TWh, the highest figure since 2016.

Spain has six LNG import terminals operating and is currently re-launching a seventh previously moth-balled facility. The El Musel terminal in the Port of Gijón is capable of contributing up to 8 Bcm of additional LNG to the European Union’s supply through trans-shipments.

Spanish grid operator Enagás has capacity at six LNG regasification terminals in Spain.

It owns five terminals at Barcelona in the northeast, at Cartagena in the southeast, at Sagunto in the east of Spain, at Huelva in the southwest and the El Musel terminal in the northwest.

Overall in the whole EU, there were also 13.7 Bcm of pipeline natural gas imports in the month of March alone, which was 14 percent higher than the previous month of February, though 39 percent down on March 2022.

So far in 2023, the EU’s cumulative pipeline gas supply for the first three months decreased by 37 percent year-on-year to 38.3 Bcm, driven by falls in imports mostly from Russia, but also due to lower volumes being received from Norway and Algeria, while imports from Azerbaijan on the Trans-Adriatic Pipeline have risen.

Italian Prime Minister Giorgia Meloni, who has visited Algeria on her first foreign trip since taking office, signed four accords with the North African nation, including one on a new natural gas pipeline between Algeria and Italy.

Algerian energy company and LNG exporter Sonatrach is on track to make $50 billion record earnings this year and the North African nation also attended talks during the week on the 4,000-kilometre Trans-Saharan Gas Pipeline (TSGP) from Nigeria via Algeria to bring African natural gas to Europe.

Algeria, the largest supplier of LNG and pipeline natural gas to the neighbouring countries of the Mediterranean Basin, said it would remain a reliable supplier of gas and oil as Algerian President Abdemadjid Tebboune made a state visit to Turkey and Minister of Energy and Mines Mohamed Arkab spoke at a Southern Europe energy conference at Sorrento in Italy.

Sonatrach, the Algerian state energy company, was continuing a 10-day shutdown of the Skikda liquefied natural gas plant on the Mediterranean coast because of a technical issue, as the nation also continued to implement a curfew in 14 provinces to try and bring the Covid-19 pandemic under control.

Sonatrach said the closure of the Skikda facility came after the sudden failure of a gas turbine control mechanism.

Sonatrach is one of the main suppliers of LNG and pipeline natural gas to Europe.

It operates two LNG plants at Skikda and Arzew on the Mediterranean coast and via three pipelines to Spain and Italy.

Algerian gas supplies are carried from the Hassi R'Mel hub on the Medgaz pipeline via Beni Saf to Almeria in southern Spain and on the Maghreb-Europe Gas Pipeline from the Hassi R'mel field through Morocco to Cordoba in Spain.

Pipeline gas also goes to Italy through the Trans-Mediterranean Pipeline from Algeria via Tunisia to Sicily and then onwards to the mainland of Italy.

Algerian LNG exports have been falling in recent years and amounted to a combined 10.58 million tonnes per annum in 2020 from both the Skikda plant and the main Arzew facility, a decline of 13.5 percent.

Shipments from the North African country go to France, Italy, Turkey, Greece, Spain, the UK, India, Pakistan and several others.

The company said it was still carrying out repairs at Skikda on the affected equipment.

The LNG plant at Skikda has a capacity to produce 4 million tonnes per annum.

“A technical issue occurred on June 11 at the Skikda LNG complex and led to the shutdown of this complex,” said Sonatrach.

“As a safety precaution, Sonatrach has decided to conduct a thorough inspection of the plant,” it added.

So far in 2020, Algeria has exported less than 7MT of shipments, which is around 50 percent of its technical nameplate capacity.

Meanwhile, the oil and gas producing nation is taking more lockdown measures to control Covid-19 in 14 of its 58 provinces.

The partial lockdown measures in the affected areas are from midnight to 04:00 on the morning of the next day and were extended in 14 Algerian provinces for a period of 21 days from June 21 as part of the fight against the spread of Covid-19.

The measures were approved by President Abdelmadjid Tebboune and Prime Minister Abdelaziz Djerad following consultations with the state Scientific Committee.

The Covid-19 measures concern the following 14 provinces: Algiers, Laghouat, Batna, Bejaia, Blida, Tebessa, Tizi-Ouzou, Setif, Sidi Bel Abbes, Constantine, M'Sila, Ouargla, Oran and Boumerdes.

Italian energy company Eni, which has stakes in the leading global LNG projects such as Mozambique and whose offshore discovery of the Zohr gas field transformed the energy fortunes of Egypt, has launched a new business structure to lead the company through the next 30 years.

The Milan-based company said it was creating two new business groups, Natural Resources to develop the upstream oil and gas portfolio sustainably and Energy Evolution, dedicated to supporting the company’s power generation and marketing.

The overhaul will help the implementation of Eni’s strategy to 2050, which it said combined value creation, portfolio sustainability and financial strength.

Eni’s main current LNG asset is its stake in the Rovuma Basin projects in Mozambique as part of the Area 4 resources development with ExxonMobil and China National Petroleum Corp.

The new organisation, presented by Eni’s Chief Executive Claudio Descalzi, sets down the markers for the evolution of the business over the next 30 years.

“The key and unique element of this strategy is the combination of growth objectives with financial value creation as well as environmental sustainability, which will lead to a significant reduction in full life-cycle carbon emissions,” said Eni.

The company stated that the new structure reflected Eni’s pivot to the energy transition.

“To make the plan come true, and position us to accelerate its delivery, we are creating two new business groups in our company,” explained CEO Descalzi.

The two new Eni business groups will maintain close links in the hydrocarbon value chain, with the objective of best managing the different phases of the energy transition.

“The Natural Resources business group will incorporate the company’s oil & gas exploration, development and production activities, natural gas wholesale via pipeline and LNG,” said Eni.

Alessandro Puliti will lead Natural Resources and Massimo Mondazzi will lead Energy Evolution.

A final investment decision on Mozambique LNG has been delayed for now but once it is sanctioned the project will produce LNG from three feed-gas reservoirs located in the Area 4 block.

ExxonMobil is the lead company for the Mamba gas fields and LNG project development and costs are estimated at around $30Bln.

A separate project for Area 4 resources is the Coral floating LNG joint venture with capacity of around 3.4 MTPA already under construction and scheduled to come on stream in 2022.

Eni has already been a leading company in developing LNG projects in other nations such as Nigeria, Angola, Egypt, Trinidad & Tobago and Indonesia.

The Natural Resources division will continue to build up the value of Eni’s oil and gas upstream portfolio, with the objective of reducing its carbon footprint by scaling up energy efficiency and expanding production in the natural gas business, and its position in the wholesale market.

Eni has been very successful in its E&P activities in Egypt and elsewhere.

The company discovered and developed the Zohr field in the East Mediterranean.

Zohr is located within the Shorouk concession, approximately 190 kilometres north of the city of Port Said.

Eni has a 50 percent stake in the block and is responsible for operations there. The other stakeholders are Russia’s Rosneft, BP of the UK and Mubadala Petroleum of the UAE.