News

* Another bumper year for LNG contracting
Long-term LNG contracting activity is off to a strong start in 2024. Since the beginning of the year, 58 million tpy of LNG sales purchase agreements (SPAs), capacity agreements, and heads of agreements (HOAs) have been signed despite the Biden Pause. This follows over 94 million tpy of new LNG SPAs and HOAs agreed upon in 2023.

Contracting by traditional buyers (end users) for use in their home markets has been particularly strong with 38 million tpy already signed. Another 12 million tpy of long-term deals is required to break last year’s record.

Volume trends: Middle East sellers capture market share

Large deals are back in vogue with 60% of the volumes signed this year having a deal size of greater than 2 million tpy. QatarEnergy is leading the way having signed long term deals with existing customers in particular, with Taiwan’s CPC (4 million tpy), Kuwait Petroleum (3 million tpy) and India’s Petronet (7.5 million tpy). Other large deals signed include Aramco’s 5 million tpy HOA from Port Arthur LNG Phase 2 and Amigo LNG in Mexico entering into an HOA with E&H Energy of Malaysia for a long-term supply of 3.6 million tpy of LNG.

Qatar’s deal with Petronet underlines a trend of Indian buyers returning to the long-term market. This has been supported by falling contract prices, which have been dragged down by a lower spot price outlook. Some sellers have been offering oil linked slopes in the low 12% DES range and this has brought Indian buyers back to the market, particularly GAIL and Petronet.

Alongside Qatar, other Middle Eastern suppliers have been active, taking advantage of the Biden Pause to capture buyer attention. Oman LNG has converted its binding arrangements with Shell, Jera, SEFE, and BOTAS signed in 2022 – 2023 to SPAs. ADNOC has announced 15-year HOAs for LNG supplies with European and Asian buyers totalling 3.4 million tpy from its Ruwais projects alongside HOAs for a total of 1.6 million tpy with portfolio players Shell and Mitsui & Co, who will also take equity interests in the project. These agreements gave ADNOC the confidence to FID the project in June 2024.

Deals have continued to be signed in the US, despite the Biden Administration pause announced in January, but total volumes contracted from US projects have fallen. At the time of writing (end August) New US LNG SPAs and HOAs inked since the beginning of the year account for 18.9 million tpy (including the 5 million tpy Aramco deal).

Activity has often focused on projects which are less affected by the pause. Notable deals include Rio Grande LNG Train 4 with ADNOC for 1.9 million tpy and Aramco for 1.2 million tpy. Texas LNG has also signed tolling agreement, SPAs and HOAs for 3 million tpy with EQT and other counterparties bringing it close to the commercial thresholds required to raise debt financing for its project.

Meanwhile, on the west coast of North America, in April 2024, Cedar LNG signed the second 20-year LNG capacity deal for 1.5 million tpy with Pembina Pipeline Corp following a similar deal with ARC Resources signed a year before. Woodfibre LNG is fully booked following a third deal with BP, and Mexico Pacific has completed marketing for its first three trains.

Moving forward, Wood Mackenzie expects contracting activity to remain high. Additional North American LNG contracting is required for projects to move forward.

(Source: LNG Industry)

* India Needs Climate Funding for Renewable Energy – Study
India will need increased climate finance to scale up wind and solar capacities to over 600 gigawatt, a study said on Tuesday.

Enhanced international cooperation, including the provision of grants and concessional finance help to mobilise private capital, is urgently needed to ensure emerging and developing countries benefit equally from the renewables rollout, the report by Climate Analytics and NewClimate Institute said.

For India, the study said, “The country has made impressive progress on wind and solar but would need more international climate finance to scale them five-fold to over 600 GW to meet growing demand and move away coal dependence.”

As per official figures, India’s cumulative wind power capacity stands at 47,192.33 MW, while solar is 89,431.98 MW as of August 31, 2024.

(Source: PTI)

* Zelestra Secures €132 Million Financing for 435 MW Solar Plant in India
Zelestra, a global renewable energy company, has successfully secured a €132 million project financing package for its Gorbea solar photovoltaic plant in Rajasthan, India. The financing deal, denominated in Indian Rupees (INR), was arranged with major international banks, including HSBC, Credit Agricole, MUFG, and Bank of America. This facility qualifies as green financing under Zelestra’s Green Financing Framework, adhering to the Green Loan Principles established by the Loan Market Association.

The Gorbea solar plant, with a total installed capacity of 435 MW, is expected to generate enough energy to power over 128,000 Indian households annually. Over the project’s lifetime, it is projected to prevent the emission of approximately 13.3 million tons of carbon dioxide. The generated electricity will be supplied to the Solar Energy Corporation of India (SECI) for 25 years, aligning with India’s renewable energy goals.

(Source: Solar Quarter)

* Why this analyst expects crude prices to stabilise around $80 per barrel
The recent decline in oil prices was largely due to an overestimation of the slowdown in Chinese demand, which, although weaker, has not seen a significant collapse, according to Dayanand Mittal, Oil & Gas Analyst at JM Financial Institutional Securities.

Mittal noted that crude oil is unlikely to rise beyond $85-90 per barrel due to ongoing demand concerns and expects it to stabilise around $80 per barrel.

“Our view on crude price is based on the first on the presumption that OPEC plus still continues to have a very strong pricing power they will try and use that to ensure crude stays around that $80 per barrel level, which is a fiscal breakeven for Saudi,” he said.

(Source: Cnbc Tv 18)

* Coal India sets up joint venture to promote renewable energy in Rajasthan
In a further effort at sustainability, Coal India has announced a joint venture to add to the renewable energy resources of Rajasthan. This joint venture would be an extension of India’s agenda for shifting towards cleaner sources of energy, which would go a long way in propelling the country towards efforts at curbing carbon emissions and ecological responsibility.

Coal India has entered into a joint venture with Rajasthan Rajya Vidyut Utpadan Nigam Ltd (RRVUNL) to pursue renewable energy projects in Rajasthan. Coal India will hold a 74 per cent stake, while RRVUNL will have 26 per cent. The joint venture will be a private limited company with an initial paid-up share capital of Rs 10,00,000 according to a report by the Press Trust of India.

In a filing with BSE, Coal India stated that the public sector Undertaking (PSU) and RRVUNL with have the right to nominate four and two executives as directors of the joint venture respectively. Further, the joint venture company will be incorporated as a private limited company with an initial paid up capital of Rs 10,00,000

(Source: Wion)

* TotalEnergies, HD Hyundai Chemical strike 200,000-tonnes-per-year LNG deal
Total Energies has signed heads of agreement with Hyundai Chemical for delivery of 200,000 tonnes per annum (tpa) of LNG from 2027 to 2033.

The LNG will be delivered from TotalEnergies’ production facilities in Australia and Oman to one of HD Hyundai Chemical’s industrial sites in South Korea, said a joint statement on Tuesday.

With prices indexes to both to Brent and Henry Hub, the deal enables TotalEnergies to strengthen its long-term position in South Korea, where the company already has solar, wind and petroleum ventures.

TotalEnergies senior vice-president of LNG Gregory Joffroy said: “This agreement allows us to continue securing long-term sales in Asia and reduce our exposure to spot market gas prices.”

TotalEnergies had a global LNG portfolio of 44 million tons per annum (mtpa) in 2023 from interests in liquefaction plants, including access to more than 20mtpa of regasification capacity in Europe.

(Source: Offshore Technology)

* India’s petroleum exports plunge in first five months of FY25 on lower demand, supply disruption
India’s petroleum exports saw a steep decline during the first five months of fiscal year 2025 due to lower demand from key markets and disruptions along the supply route, especially in the Red Sea region.

In value terms, petroleum exports during April-August stood at $31.84 billion, down from $35.30 billion in the same period of the previous year, according to data from the ministry of commerce and industries.

During August, India’s petroleum exports registered their steepest monthly fall. In value terms, petroleum exports during August 2024 stood at $5.96 billion, down 37.56% from $9.54 billion reported during August 2023.

As a result of a sharp dip in petroleum exports and a rise in gold imports, India’s goods trade deficit widened to a 10-month high in August at $29.65 billion.

Interestingly, while petroleum exports rose during April and May, they have fallen steeply every month since then.

India’s petroleum exports reported an 18.3% and 22.5% annual drop in value terms, during June and July, respectively.

“The drop in India’s petroleum exports in the last three months (June-August 2024) was mostly due to the Red Sea issue, which led to higher shipping costs and time taken for these exports to reach their required destinations,” said Ajay Srivastava, former trade service official and the founder of economic thinktank Global Trade Research Initiative (GTRI).

“This made the low-value and high-volume exports less competitive,” he added.

The Red Sea crisis, which began in October 2023, with Iran-backed Houthi rebels disrupting trade in the area, has intensified in recent months.

(Source: Mint)

* Owner of 40-strong fleet wraps up oil & gas platform jacket job for McDermott in India and jack-up rig lift-off ops at Norwegian yard
Boa Offshore, a Norwegian owner of a 40-vessel fleet that provides support services to the marine and offshore oil, gas, and wind industry, has tucked two milestones under its belt by completing its assignments in India and Norway

The firm describes the first project milestone as a significant one, entailing the transportation and launch of the living quarters and utility platform (LQUP) jacket from Lumut, Malaysia, to ONGC’s deepwater KG-DWN-98/2 oil and gas field located offshore India’s east coast.

The U.S.-based McDermott tapped Boa Offshore for the work after winning a deal with the Indian oil and gas giant in November 2023. The Norwegian player’s scope put its Boabarge 33semi-submersible to work. The offshore installation segment saw the LQUP jacket lifted using a combination of barge submersion and lifting by the DB50 heavy lift vessel.

While explaining that the completion of the project demonstrates the project management, operational expertise, and capabilities of its fleet, Boa Offshore emphasized: “This project highlights BOA’s commitment to delivering complex offshore engineering solutions with precision and safety.

“We are very proud of our project team’s dedication and the seamless collaboration with McDermott, which was essential in overcoming the logistical and technical challenges presented by this operation. We extend our thanks to McDermott for entrusting us with this critical operation and to our dedicated team, whose expertise and hard work made this achievement possible.”

(Source: Offshore Energy)