Sonatrach (Algeria) signs 12 bcm/year gas contracts with Spain and Italy

The Algerian oil and gas company Sonatrach has announced a nine-year gas supply contract with Spain for 9 bcm/year. Algeria is intensifying commercial relations with Europe, as Gas Natural Fenosa renewed its gas supply agreement with Sonatrach until 2030 in June 2018. Sonatrach currently supplies around 9.8 bcm/year to Gas Natural Fenosa.

In addition, Sonatrach has signed a contract with the Italian oil and gas company Eni for 3 bcm/year of gas; the timeframe of the contract was not disclosed. Eni currently produces 100,000 boe/d in Algeria and operates 32 mining permits in the country.

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Energy Ministry pulls back on Euro-IV standard (Philippines)

The Philippines Ministry of Energy has announced that oil companies will be allowed to commercialize the more pollutant (and cheaper) Euro-II compliant automotive diesel oil, in an attempt to reduce the effect of rising international fuel prices on the national inflation rate. The motion shifts the country from a Euro-IV standard stated by the Environment department in 2016 to reduce pollution, since Euro-IV fuels have sulphur content of 50 ppm, compared to 500 ppm for Euro-II fuels.

The Ministry also ordered the National Oil Company-Exploration Corp to raise imports of low-priced oil products (especially diesel) to mitigate volatile oil prices.

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India will open a 25 GW bid for solar energy

The Indian government plans to open a single tender for 25 GWsolar capacity with a storage component in Ladakh, the highest solar potential area in India (potential of around 35 GW).

India has set a target of 175 GW of renewables by 2022 and is 59 GW away from achieving it. Currently, 16 GW of renewable energy sources capacities are in development, and 28 GW were already awarded. The new bids have also component requirements in order to attract manufacturing company and incite the manufacturing industry.

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Tanzania plans to build gas pipeline to Uganda

The Tanzania Petroleum Development Corporation (TPDC) is looking for a contractor to carry out feasibility studies in order to assess current and future gas demand, potential gas buyers and the most economically viable route for a future gas pipeline that would connect Tanzania and Uganda.

Tanzania's natural gas reserves are estimated at 57 tcf (1,610 bcm) and are mostly located in offshore fields. The proposed gas pipeline would connect Dar es Salaam, Tanga near the Indian Ocean and Mwanza on Lake Victoria; it would then cross the border to Uganda.

The project is part of a cooperation energy agreement between the countries. In 2016, the countries agreed to build an oil pipeline to transport Uganda's land-locked crude oil to offshore markets.

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Shandong province (China) plans to cut coal capacity

The Environmental Protection Bureau (SEPB) of the Shandong province of China has released a 3-year plan against pollution. Among its main objectives, the SEPB plans to reduce coal production by 10% by 2020, from 156 Mt to 140 Mt, to boost gas consumption to 15.8 bcm by 2020 by increasing LNG imports and ensure that LNG reaches an 8% share of energy consumption in the province. In addition, it plans to raise gas imports from other provinces and targets a 70% share of clean energy sources in rural areas originates by 2020.

The plan is a part of a national strategy against pollution released by China’s State Council, whose main pillars are to cut coal consumption, incite electric vehicle sales and shut outdated steel and coke facilities.

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China plans to grant private companies access to oil, gas infrastructure

The National Development and Reform Commission (NDRC) of China has issued the draft rules to concede private companies access to national oil pipelines, gas pipelines, LNG terminals and gas storage infrastructures. The motion was requested by the country’s energy operators and should mark the first concrete plan to promote fair access to gas-related facilities.

China is reforming its oil and gas sector and removing state companies' monopolies and private energy companies are being encouraged to sign term contracts to utilize the national infrastructure.

The NDRC also contemplates changing standard units for measuring energy flows, from tonnes to thermal units in order to facilitate the calculation of transportation costs.

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Westinghouse sale to Brookfield for US$4.6bn complete (US)

The sale of the bankrupt US nuclear technology company Westinghouse to the financial services firm Brookfield Business Partners has been completed as previously announced in January 2018. The transaction has become effective and enables Westinghouse to successfully emerge from Chapter 11 bankruptcy protection file submission, which was submitted in March 2017 by Westinghouse's former parent company Toshiba. Toshiba had been seeking a buyer for more than a year.

Westinghouse is in charge of all AP1000 nuclear projects worldwide, including four in the United States (two units at VC Summer in South Carolina and two at Vogtle, in Georgia), and four in China (two at Sanmen and two at Haiyang). Toshiba purchased Westinghouse in 2006 from British Nuclear Fuels (BNFL), expecting a significant growth of the global nuclear power generation and a 130 GW growth of the global nuclear capacity between 2006 and 2020. However, only a fourth of this figure was achieved between 2006 and 2017 (+28 GW), which means that Westinghouse's growth potential was not that high.

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Record-high global GHG concentrations were recorded in 2017

According to the 28th annual State of the Climate report released by the United States National Oceanic and Atmospheric Administration (NOAA), the levels of greenhouse gas (GHG, including CO2, CH4 and NOx) concentration have reached a new high at 405 ppm, the highest data measured in the last 38 years.

2017 was the third-warmest year on record, only behind 2016 (1st) and 2015 (2nd). Observed land and ocean surface temperatures were 0.38-0.48°C above the 1981-2010 average, placing 2017 as the second-third warmest year since records began in the mid- to late 1800s. Heat in the upper ocean and the surface temperatures have also hit a near-record high.

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Germany's solar capacity addition increases by 50% in first half of 2018

According to the German solar power industry group (Bundesverband Solarwirtschaft, BSW), 1,340 MWp of new solar capacities were commissioned in Germany in the first half of 2018, which is 50% more than in the first half of 2017 (901 MWp). The domestic solar power output also went up by 8% in the same period as 23.6 TWh were injected into the grid.

The recent data meet BSW’s expectations for the first time in the last years and are more in line with the annual PV expansion target set by the Federal Government. The constant decrease in the solar PV installation costs is the main factors for the boost in PV systems demand. The government is trying to slow down the momentum: a slight regulation of the subsidies will be implemented and the funding rates will be adjusted to avoid overcapacity. In August 2018, the German Federal Network Agency already announced additional cuts for solar PV projects commissioned between 1 August 2018 and 31 October 2018 by 1% per month.

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TransCanada's Keystone XL pipeline secures environmental review (US)

TransCanada's proposed 830,000 bbl/d Keystone XL oil pipeline secured a positive environmental review from the US State Department, which ruled that a plan for an alternative route through Nebraska (United States) would have no significant environmental impacts. The Public Service Commission of Nebraska approved the project in December 2017 but not TransCanada’s preferred route.

Keystone XL would link the Alberta oil sands through Nebraska (US) to the Mexico Gulf coast refiners over a 1,897 km route and has been repeatedly delayed by the US Government. Following the recent election of US President Trump, the US State Department approved the pipeline permit in March 2017. However, the project is still opposed by environmental groups, Native American tribes and some landowners and facing a case before the Nebraska Supreme Court, which TransCanada expects to be resolved by the end of 2018. Preparatory works are expected to start in autumn 2018 in Montana and full construction could begin in 2019.

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Total acquires two 400 MW CCGT plants from KKR-Energas (France)

The French oil and gas company Total has acquired two gas-fired combined cycle power plants (CCGT) in France from the US-based private equity firm KKR-Energas.

The two plants have a total combined capacity of 825 MW (roughly 400 MW each) and are located in Toul (Meurthe-et-Moselle, France) and in Pont-sur-Sambre (Nord, France). They were previously sold by Verbund (Direct Energie) to KKR-Energas (Direct Energie) in 2014 for a total consideration of approximately €150m. The two assets experienced significant difficulties and their margins were squeezed by low power prices and high gas prices. Verbund considered mothballing the two plants but sold them to KKR-Energas instead.

With this acquisition, Total continues to integrate its activities along the gas and electricity value chain, from production to marketing. Once the acquisition is completed, it will have around 1.6 GW of gas-fired capacity in France and Belgium thanks to its 73% share in Direct Energie.

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EDF delays Flamanville EPR project startup by another year (France)

The French utility EDF has completed in-depth examination of 148 out of the 150 welds in the main secondary system of the 1,650 MWe Flamanville-3 EPR reactor (France): 33 have quality deficiencies that have to be repaired, while 20 fail to meet high quality requirements and will be reworked. The schedule and the construction costs of the project have been revised accordingly. The loading of nuclear fuel is now scheduled for the fourth quarter of 2019 instead of the fourth quarter of 2018, while the construction costs will increase to €10.9bn from the €10.5bn expected previously (up from a December 2012 estimate of €8bn).

The project is facing other challenges and even though the French nuclear watchdog (ASN) cleared the reactor pressure vessel (RPV) of the unit, it will have to be replaced by 2024 at the latest. Even if the reactor comes onstream in 2019 as planed, a planned maintenance will have to be scheduled before this date to replace the RPV once a new one has been produced.

The Flamanville project was initially expected to be commissioned in 2012 at a cost of €3bn; it will now start at least 7 years behind schedule, posting a cost escalation of nearly €8bn. This delay will also postpone the planned closure of the Fessenheim nuclear power plant by one year.

More energy news: https://goo.gl/JX6nho

Belgium establishes a capacity market system to offset nuclear phase-out

The Belgian government has agreed to subsidize new electricity capacity to offset the country's nuclear phase-out in 2025. A capacity remuneration mechanism (CRM) has been approved and is set to replace the strategic reserve program, which was implemented since the winter 2014-2015. A two-tier auction system should be implemented by 2021, to give enough time to project developers to build new gas-fired power plants (based on an average 4-year construction length) before the nuclear phase out of 2025. Both existing and new power plants will be able to participate in the scheme and no technology is excluded except nuclear power. According to the government, foreign capacity may also participate but under well-defined conditions.

The first auction should be organized in 2021. Besides, the government will also organize yearly auctions to adjust fluctuating needs for capacity. This scheme will enable the government to subsidize capacity in a bid to guarantee security of supply. By 2025, the scheme is estimated to cost Belgian consumers an annual €345m. According to a study unveiled by the domestic grid operator Elia, 3.6 GW of new thermal capacity will be needed to offset the closure of the country’s nuclear plants.

More energy news: https://goo.gl/JX6nho

China's CNOOC will invest US$3bn in Nigerian oil and gas operations

The state-run company China National Offshore Oil Corp (CNOOC) plans to invest US$3bn in its Nigerian oil and gas operations, which are jointly run through joint ventures (JVs) with its state-held counterpart Nigerian National Petroleum Corporation (NNPC). So far, the Chinese firm has spent roughly US$14bn in the country, which is looking forward to boost its crude oil production and reserves through partnerships with major oil ans gas players such as CNOOC, ExxonMobil, Shell and Chevron.

In November 2017, NNPC signed a US$1.7bn financing agreement with Chevron that would increase the Nigerian crude oil output by 39,000 bbl/d. The deal is expected to last until 2045 and the project will focus on oil, gas and condensate production from the Sonam and Okan fields located in leases OML 90 and 91 in the Niger Delta offshore Nigeria.

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