LNG

Italian contractor Saipem has revised down its 2026 earnings guidance to factor in extra costs related to the conflict in the Middle East. EBITDA is now forecast at €1.75 billion, down from previously expected €1.9 billion, as the Milan-based group had to spend around €70 million in the first half to improve security for its staff ​in the Persian Gulf region and to overcome ​logistical challenges related to the Strait of Hormuz blockade.

French oil major TotalEnergies expects all its division to post higher second quarter profits, except LNG, where earnings will fall sharply, with the company blaming “an underperformance in gas trading in a broadly flat to declining European [gas] market.” JP Morgan analysts noted TotalEnergies’ rivals in the UK fared better on LNG trading, indicating Total management might decide to increase its share buyback to $2 billion, from the earlier announced $1.5 billion.

ExxonMobil has acknowledged damage to two LNG trains in Qatar was responsible for half of its 6% worldwide production outage, indicating the 3% Ras Laffan shortfall could linger on for up to five years, considering the repair timeline.

Numerous Japanese utilities have withheld full-year earnings guidance as the Middle East conflict drives up LNG costs and clouds fuel supply. Bloomberg reported that Asian LNG prices have surged 70%, exemplifying how exposed Japan’s power sector remains to the global gas market.

Costly investment programmes to facilitate Europe’s green energy transition are weakening the credit metrics of regulated gas and electricity networks. Moody’s Ratings hence changed the outlook of European TSOs to ‘negative’ from ‘stable’.

Transparent and established regulation still supports credit quality, but regulators struggle to facilitate infrastructure investment at an affordable cost. “If shareholders consider allowed returns or cost recovery mechanisms to be insufficient, then support will fall short of maintaining credit quality,” analysts commented.

Europe's power grids and gas network operators are hard pressed to handle the substantial growth in load-related Capex required, and planned investments, said Phil Cope, senior credit officer at Moody’s Ratings.“Pressing demands arise from the need to grid-connect more renewables and accommodate rising volumes of electricity demand other sectors, e.g. heating (heat pumps), transport (electric vehicles), and data centres, where demands for capacity will intensify to support the growth in AI,” he explained.

Capital spending has grown significantly in recent years: Five-year Capex guidance for many networks – especially electricity transmission – is at least double that of five years ago. The current regulatory framework allows many gas and power network operators to recover investment over 20 to 50 years. But analysts warn the surge in Capex dwarfs the rise to network companies’ operating cash flow and this, in turn, weakens cash-flow based credit metrics.

TenneT, the TSO handling the power grid in the Netherlands and part of Germany, has seen its five-year Capex guidance soar from €40 billion in 2023 to over €62 billion this year – with no end in sight. The Belgian/German network operator Elia, meanwhile, has seen the same Capex metric almost double from around €16 billion to €30 billion over the same period.

The French and Spanish utilities ENGIE and Iberdrola have either increased or stated their intention to rise their exposure to regulated electricity networks. Moody’s reckons this is because they aim to improve their risk profile by benefitting from the “growth in higher quality earnings” as these networks carry out their investment programs. Others, notably SSE of Scotland and the German regional utility EnBW have reduced their exposure by selling their minority stakes in their power transmission businesses in recent years.

MISC Berhad, the Malaysian shipping line with 29 LNG carriers, said LNG spot rates rose to a peak in the third quarter after a lacklustre start for the year, fueled by higher Chinese imports as the company expected the spot market to remain good for profits.

TechnipFMC, the Franco-US energy and LNG engineering company, has posted falling second-quarter revenues and net income compared with last year in weak results that were offset by a high level of new orders.

Oct 25 (LNGJ) - Wartsila, the Finnish propulsion equipment and power and project company, posted a 1 percent fall in third-quarter pretax profits to 114 million euros ($134M) as net sales rose 9 percent to 1.17 billion euros from 1.07Bln euros in the same three months a year ago. “Wartsila’s performance in the third quarter was satisfactory,” said Jaakko Eskola, President and Chief Executive. “Although power plant deliveries continued to drive overall sales development, challenges in the offshore segment and low volumes from service projects resulted in lower than expected sales growth,” he added. “I am pleased with the continued growth in order intake. In addition to good demand for our power solutions, we received an order to build our third LNG terminal in Finland, which will be in Hamina,” said the CEO.

Aug 29 (LNGJ) - Sinopec of China, a shareholder in the Australia Pacific LNG venture in Queensland and the leading Chinese oil refiner, posted a first-half fall in net profits of 21.6 per cent because of the lower crude prices. The company made 19.92 billion yuan (US$2.98 billion) in the January to June period compared with 25.42Bln yuan in the same period last year, according to a statement realised by the Hong Kong stock exchange, where it is listed. China National Offshore Oil Corp., the country’s other main energy company and largest LNG import terminal operator, reported a net loss of 7.74Bln yuan (US$1.16Bln) in the first six months of the year.

May 19 (LNGJ) - Teekay LNG Partners, a unit of the global Teekay Corp. shipping line, saw first-quarter distributable cash flow drop to $54.4 million from $66.2M in the same three months a year ago. These decreases were partially offset by the 174,000 cubic metres capacity LNG carrier “Creole Spirit” commencing its charter contract with Cheniere Energy of the US in late February 2016 and shipping a cargo from the Sabine Pass export plant in Louisiana to the Sines import terminal in Portugal.