World Gas Intelligence articles from May 2006

World Gas Intelligence archives from May 2006

BASF go, E.On no go.
May 3, 2006... The framework agreement signed last week at Tomsk, Siberia, by the heads of German chemical major BASF and Russia's Gazprom in the presence of the leaders of the two countries cements an already tight relationship between BASF's energy unit...

Shell resumes LNG imports into India.
May 3, 2006... Royal Dutch Shell has resumed imports of LNG at its receiving terminal in Hazira on India's West Coast after a lull of around five months, reflecting a newfound willingness by Indian users to pay prices for regasified LNG that are several times...

Mexican imports plunge--before LNG.
May 3, 2006... The two LNG receiving terminals under construction in Mexico were launched with the aim of reducing reliance on imported pipeline gas from the US, which as recently as a year ago looked to be spiraling out of control. But they may come too late...

Bolivian shock waves hit Brazil.
May 3, 2006... The decree signed by Bolivian President Evo Morales Monday returning ownership of his country's hydrocarbons to the state effectively reverses the privatization process of the 1990s. Although some action was expected, the extent of the...

Carbon price collapse reverberates widely.
May 3, 2006... European carbon dioxide (CO2) emissions permit prices have collapsed over the past week, falling a precipitous 65% from record highs of 30.60 [euro] ($38.60) on Apr. 24 to a low of 11 [euro] ($13.90) in early trade Tuesday, May 2, for the...

Sakhalin-1 solution.
May 3, 2006... Russian Gazprom has proposed buying the entire gas output from the Exxon Mobil-led Sakhalin-1 consortium as part of a strategy targeting greater control over gas exports, Russian insiders say. However, WGI is told that the Sakhalin-1 gas...

EU regional initiative.
May 3, 2006... The European Regulators' Group for Electricity and Gas (Erceg), which brings together energy regulators from the 25 EU states and is currently chaired by UK Ofgem's John Mogg, unveiled an initiative last week to spur cross-border gas market...

Exxon's Aceh sale could help Arun.
May 3, 2006... The sale of Exxon's 50% stake in Block A in Indonesia's Aceh province to a consortium of state Japex, Indonesian independent Medco Energy and UK-based Premier Oil for $51 million last week may finally spur development of the gas field, filling...

Market insight: US down, not out.(Insight)
May 3, 2006... US gas trading was not for the faint of heart through the last week of April, due to rampant volatility in the physical and futures markets leading up to and during bid week, when many baseload prices for the following month are set. However,...

Texas turns away from gas toward coal-fired generation.(Current)
May 3, 2006... Texas, the largest gas-fired power market in the US, is taking a sharp turn toward coal, possibly setting a trend for other US areas burned by the high price of North American gas over the last few years. With an eye to reducing electricity...

UK fast-track LNG added to Excelerate's business model.(Horizon)
May 3, 2006... The GasPort UK receiving terminal project announced by Excelerate Energy last week adds yet another element of flexibility to a business model already geared to highly flexible trading: Possibly short-lived receiving terminals designed...

New LNG shipping dynamics.
May 10, 2006... The LNG shipping industry--set to expand by more than 70% in the coming years--is experiencing some growing pains. Driven by huge increases in both supply of and demand for vessels, the close-knit club of shippers and the entrenched network of...

Gazprom's Ukraine muddle still muddled.
May 10, 2006... Amid mounting pressure from all sides, the holder of a 50% stake in gas trader RosUkrEnergo (RUE), Vienna-based Centragas, revealed its long opaque Ukrainian ownership late last month. The revelation of Centragas' owners has raised as many...

Dolphin boss looks--far--ahead.
May 10, 2006... With 2 billion cubic feet per day of Qatari gas due to begin flowing to the United Arab Emirates in early 2007 and to Oman shortly afterwards, Dolphin Energy is already looking ahead towards future supplies, Chief Executive Ahmed Ali al-Sayegh...

Exxon's Australia alliances in doubt.
May 10, 2006... Assessing the status of the multiple LNG projects being promoted for offshore Australian reserves looks increasingly like Cold War Kremlinology. The big question this week is which project Exxon Mobil is standing closest to, amid indications...

US setback for open-rack vaporizer.
May 10, 2006... The use of open-rack vaporizers that rely on seawater to raise the temperature of LNG has suffered a setback in the US: Louisiana Gov. Kathleen Blanco has vetoed Freeport McMoRan's proposed Main Pass Energy Hub in the Gulf of Mexico because the...

Spare UK LNG slots being publicized.
May 10, 2006... BP says there were no takers for its May 7 landing slot at the UK's Grain LNG terminal, after it was offered to third parties. The UK major had no cargo booked, so put the slot up for auction last month, marking a first for the new UK terminal....

Qatari GTL delays.
May 10, 2006... A year ago, Royal Dutch Shell executives were saying they expected to award the engineering, procurement and construction (EPC) contract for the 140,000 barrel per day Pearl gas-to-liquids (GTL) plant in Qatar in the first quarter of 2006. ...

UK, Norway faultline.
May 10, 2006... British energy regulator Ofgem last week set off a firestorm at home and lit a slow fuse on a cross-border dispute with Oslo by announcing that its supervisory board Gema had accepted a key change to gas network rules, known as "Mod 006,"...

Market insight: Tepid Asian demand.(Insight)(Industry overview)
May 10, 2006... Asian demand for spot LNG is tepid, with recent offerings from Atlantic Basin suppliers mainly staying on that side of the globe, trading sources report (WGI Apr.12,p6). "Some cargoes were picked up by Japan [last month], but there was no...

US generators seek relief from rail-related coal contracts.(Current)
May 10, 2006... Coal shortages predicted for parts of the US this summer look to be arriving early (WGI Apr. 19,p4). US generators asked Congress last week to improve the way the "run-away" railroad industry operates, claiming oversight agencies have fallen...

European demand propels global LNG growth in 2005.(Horizon)
May 10, 2006... Worldwide deliveries of LNG were up nearly 8% last year to 141.7 million metric tons, equivalent to 176.7 billion cubic meters of gas, the 2005 report on global LNG trade from the Paris-based International Group of LNG Importers (GIIGNL) shows...

Indonesia halts renewals.
May 17, 2006... Indonesia's intention to trim LNG exports to a few million tons per year by the turn of the decade, from 23.5 million tons in 2005, was confirmed when Indonesian Vice President Jusuf Kalla in a recent interview expanded the scope of such...

US, Russia tensions affecting Shtokman?
May 17, 2006... Every week that passes without an announcement by Gazprom on what companies it will take as partners in developing the giant Shtokman LNG project in the Barents Sea is adding to concern in Washington that two US companies--and plans to use the...

UK terminal trouble.
May 17, 2006... Objectors to two massive UK LNG terminals already being built at Milford Haven have welcomed a UK Appeals Court decision to hold a further oral hearing--after the court decisively rejected their request for a block on the projects in March (WGI...

Chinese gas flows soar, sector booms.
May 17, 2006... China's gas sector looks to be booming on all fronts. Domestic gas production is shooting up at a breakneck 30% clip on the back of hefty exploration and production commitments to the fuel by the country's big state-controlled oil companies....

BHP's McDonald says its terminal on track.
May 17, 2006... Constructing any sort of energy infrastructure at any site in California is a challenge. Trying to install a fixed facility in the waters off upscale Malibu might seem to have the same prospects for success as Don Quixote's tilt at Spanish...

Wintry cheer enjoyed by European sellers.
May 17, 2006... A chilly first quarter has buoyed gas sales volumes and profits at Germany's leading marketers E.On, RWE and Wingas. Weather has given a boost to Gaz de France (GdF) and OMV, as weil. However, consumer PKN Orlen, a Polish refiner, took a hit....

Nigeria-Algeria pipe.
May 17, 2006... Years after the project was first mooted, and one year after a feasibility study was commissioned, state Algerian Sonatrach and Nigerian National Petroleum Corp. (NNPC) can now weigh the technical pros and cons of a proposed 4,400 kilometer...

EU probes Distrigas.
May 17, 2006... Belgian marketer Distrigas, part of the Suez group, is being investigated by EU competition officials, who claim that it is using long-term contracts to lock new entrants out of Belgium's gas market. The firm has four weeks to respond...

Israeli pipe progress.
May 17, 2006... Israel's Merhav Group, part of the East Mediterranean Group (EMG) consortium set up to deliver Egyptian gas to Israel by subsea pipe, says that it is on track to deliver first gas to Ashkelon, in Israel, in late 2007. EMG agreed last year to...

Market insight: carbon crash karma.(Insight)
May 17, 2006... The recent collapse of prices for carbon dioxide (C[O.sub.2]) emission permits in Europe's emissions trading scheme (ETS) has deflated electricity prices and may reduce demand for gas from generators in favor of cheaper coal for the entire...

Europe split on question of whether nuclear has a future.(Current)
May 17, 2006... A split in European public opinion on the desirability of nuclear power could give rise to two quite different models of energy use, one where nuclear remains and another where the gap will have to be filled by a mix of LNG, gas, coal and...

North Sea: proving ground for rival power-to-C[O.sub.2] concepts.(Horizon)
May 17, 2006... European energy companies are taking a growing interest in projects to link power generation to carbon capture and storage, especially in the North Sea, where carbon dioxide (C[O.sub.2]) may be used for enhanced oil recovery (EOR) in depleting...

Asian LNG market milestone.
May 24, 2006... After a slow buildup, Asia's new LNG importers China and India are starting to make their presence felt in the global LNG trade. China is to receive its first LNG cargo this week from Australia--in the process reducing spare supply available to...

Pemex's LNG entree may be Manzanillo.
May 24, 2006... Mexico's state oil company Pemex could end up owning part of the 1 billion cubic foot per day (7.5 million ton per year) LNG receiving terminal that state utility Electricity Federal Commission (CFE) aims to build at Manzanillo on Mexico's...

E.On still top NEGP contender, not Eni.
May 24, 2006... Last week's emergence of Italy's Eni as an alleged new contender for a stake in the West Siberian gas field designated to feed a pipeline that would run under the Baltic direct from Russia to Germany looks to be more an attempt by Gazprom to...

Two Canadian LNG projects advance.
May 24, 2006... To use a baseball analogy, developers of proposed LNG regasification facilities in Atlantic Canada are batting two-for-five. That's not bad compared to what's happening along the US Gulf and East Coasts, where maybe one in five of the ventures...

EU raids gas firms, but Paris issues snub.
May 24, 2006... The European Commission has followed up raids last week on 20 offices of several gas companies in five member states with some tough talk by a top official on the kinds of penalties that can be meted out for anticompetitive behavior in the...

Busy NW Europe hubs.
May 24, 2006... Liquidity at mainland Europe's most active hubs increased last year, operators report (WGI Sep.7,p8). Dutch gas grid operator Gasunie said last week that traded volume at its Title Transfer Facility (TTF), its virtual trading platform,...

Spanish gas growth.
May 24, 2006... Spanish gas sales this year have continued to grow, although not as rapidly as in recent years, due in part at least to mild weather. Sales in the first quarter were up 9.8% from year-ago levels to 9.83 billion cubic meters (3.85 billion...

Oil and Money 2006: the end of cheap oil costs, consequences and opportunities.
May 24, 2006... Sep. 18-19, 2006, at the Hilton on Park Lane in London The 27th Annual Oil and Money conference will explore the costs and opportunities of the end of the era of cheap oil. Key decision makers from the global oil industry will debate such...

BG drops Israel sale.
May 24, 2006... BG last week decided to focus on Egypt rather than Israel in efforts to sell gas from its Gaza Marine concession offshore the Gaza Strip. Israel's proposal to buy the gas, made in February, fell short in terms of price, volume and guaranteed...

Euro gas auctions.
May 24, 2006... Germany's E.On Ruhrgas conducted its fourth annual gas release auction on May 17--and for once it was a sell-out. Some 3.7 billion cubic meters (39 terawatt hours) of gas that E.On-Ruhrgas earlier contracted to buy was auctioned to seven...

Market insight: US storage play.(Insight)
May 24, 2006... The US is currently offering LNG exporters the lowest netbacks in the world, with front-month Henry Hub futures prices stuck in a relatively low $6-$6.50 per million Btu range (see table below). India's state Gail has joined a still-active band...

Gas use finally set to take off in North American power.(CURRENT)
May 24, 2006... The US could well end up burning substantially more gas this summer for power generation than in previous years, whether the season is an abnormal scorcher--as some long-term forecasts now suggest--or not. The reason? New gas-fired capacity...

Renewables offer no quick cure to fossil fuel addiction.(Horizon)
May 24, 2006... With both oil and gas at prices exponentially higher than those seen just a few years ago, the moment for renewable energy should be now. But for some reason it's not. Although high prices have undeniably put greater impetus behind investment...

Summer LNG outlook.
May 31, 2006... The outlook for summer LNG flows is coming into clearer focus, as the voluminous US market sucks in record amounts of supply despite low gas prices. However, supply to the US could flip on a dime if Europeans suddenly agree to pay more or...

China receptive to initial LNG.
May 31, 2006... A highly receptive market looks to have greeted China's first-ever LNG shipment, which duly arrived last week at the Guangdong Dapeng LNG terminal from Australia's North West Shelf aboard the 125,000 cubic meter Northwest Seaeagle (WGI May...

Russia's Lukoil sees big future in gas.
May 31, 2006... Lukoil, Russia's largest oil producer, has big plans for its gas business. Indeed, over the next decade, gas should account for the bulk of the company's hydrocarbons output growth amid tapering oil volumes. Although state-controlled Gazprom...

OMV's options, as merger collapses.
May 31, 2006... The collapse of Austrian OMV's planned takeover of state-controlled power utility Verbund last week did not universally disappoint. But it may well mark the end of OMV efforts to buy its way into power generation in order to give a more...

Bangladesh runs short of gas amid plenty.
May 31, 2006... An exploration-deterring ban on gas exports has left Bangladesh facing just the sort of gas shortage the ban was designed to avoid--and this shortage, in turn, threatens the viability of what would be the biggest foreign investment in the...

Oil sands producers try cutting gas use.
May 31, 2006... Soaring North American gas prices are taking a bite out of profit margins for Alberta's oil sands producers, pushing these companies to consider other fuels to power their expanding operations. The result could be to free up slightly more...

Privately anti-enron.
May 31, 2006... Kinder Morgan Chairman and Chief Executive Richard Kinder became a billionaire by creating a hard-assets, midstream-energy company at a time when trading gas and electricity was all the rage. Most one-time US energy merchants have since...

Japanese join Qalhat.
May 31, 2006... Osaka Gas and Japanese trading houses Mitsubishi and Itochu have each agreed to buy 3% equity in Qalhat LNG, which developed Oman's third, 3.7 million ton (5.1 billion cubic meter) per year export train. Qalhat has shipped cargoes since...

Market insight: euro price rises slow.(Insight)
May 31, 2006... For industrial end-users in Europe, gas prices continued to climb during the first quarter, but at a much reduced pace from that of previous months. Prices were typically about 2% higher in April than in January 2006 across much of Western...

Third Medgaz sale.(Insight)
May 31, 2006... Endesa, Spain's largest power generator, in May signed up to buy nearly 1 billion cubic meters per year (96.7 million cubic feet per day) of gas from Algerian state Sonatrach. The gas is to flow through the planned 8 Bcm/yr Medgaz pipeline...

Power trading sets new volume records across Europe.(Current)
May 31, 2006... The Western European electricity trade saw its highest levels of activity ever in 2005, with total power exchange and over-the-counter volumes in major markets--Germany, the Nordic region, the UK, the Netherlands, France, Italy and...

Latin American politics promise higher prices, more LNG.(Horizon)
May 31, 2006... When President Evo Morales nationalized Bolivia's 49 trillion cubic feet of gas reserves on May 1, he bolstered his populist credentials by ending what he termed the exploitation of his country's hydrocarbon wealth by foreign energy companies....

WGI supplement: European end-user prices (euro cents/kWh).(Energy Intelligence)
May 31, 2006... WGI SUPPLEMENT: European End-User Prices (euro cents/kWh) Gas Prices: 100,1000 cm/yr 1 Million cm/yr Typical High Low Typical High Low ...