On February 18-19, in Thessaloniki, dozens of major oil&gas companies gathered to network, listen to successful cases and enjoy Greek hospitality. Among them were noticed National Technical University of Athens, Regulatory Authority for Energy (RAE), Cyprus Energy Regulatory Authority (CERA), Port Authority of Alexandroupolis, Reganosa, Cepsa Gas Comercializadora S.A., ADNOC, and many others.
The Congress opened with a welcome speech from the Project Director, Natalya Kuznetsova and continued with sessions, dedicated to all key aspects of pipeline transportation, oil&gas trading and supply as well as to oil&gas storage. One of the most intense sessions was the plenary session that comprised discussions about:
- Innovations in Construction – Case Studies, presented by Consolidated Contractors Company
- The energy transition: implications for the oil and gas industry, presented by DNV GL and
- Gas infrastructure development in the Baltic and CEE region – North-South Corridor, presented by Gaz-System S.A.
Delegates said that they mostly came to get new business leads as the Congress had a focus exhibition area with limited competition. The second most common reason to attend was brand promotion and visibility, mostly through sponsorship opportunities.
The MOGC Congress was organized by BGS Group, who is known as the organizer of closed-door congresses in Europe, including AUTOMA Congress, PRC Europe, Exploration and Production Offshore Congress Hub and some more.
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Enel, through its renewable subsidiary Enel Green Power RSA (EGP RSA), has begun construction of its 140 MW Nxuba wind farm in the Amatole District, making it the Group’s third wind project in South Africa’s Eastern Cape province. The construction of Nxuba, which is expected to be completed by September 2020, will involve an overall investment of more than 200 million euros.
“Through the start of construction of the Nxuba wind farm, which is the first out of the five projects awarded to the company in South Africa’s 2015 renewable tender to begin construction, Enel confirms its commitment to grow and strengthen its presence in the country,” said Antonio Cammisecra, Head of Enel Green Power, the Global Renewable Energy business line of the Enel Group. “This new project reaffirms EGP RSA’s contribution to further diversify South Africa’s generation mix, while supplying sustainable energy to Eskom, and promoting the socio-economic growth of local communities.”
Once fully up and running, Nxuba is expected to generate over 460 GWh per year, avoiding the emission of around 500,000 tons of CO2 into the atmosphere each year. The wind farm will be supported by a 20-year power supply agreement with the South African energy utility Eskom, as part of the South African government’s Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) tender, which awarded in April 2015 a total of five wind projects for 700 MW to the Enel Group in its fourth round.
EGP RSA will employ innovative tools and practices to build Nxuba such as advanced digital platforms and software solutions to monitor and remotely support site activities and plant commissioning, digital tools to perform quality controls on site and smart tracking of wind turbine components. These processes and tools will enable swifter, more accurate and reliable data collection, improving the quality of construction and facilitating communication between on-site and off-site teams.
In addition, the company, with its local partners, has committed to ensure meaningful socio-economic and enterprise development, preferential procurement, and job creation in the surrounding communities, involving local businesses as suppliers, providing free WiFi to communities in the area and holding wind technology training courses for locals. EGP RSA also focused on education, which is key for socioeconomic development, by supplying schools with clean energy through mini-PV systems, awarding scholarships to students and supporting a school feeding programme.
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Black Sea Oil & Gas SRL (“BSOG”) together with its co-venture partners, Petro Ventures Resources SRL (“Petro Ventures”) and Gas Plus International B.V. (“Gas Plus”) are pleased to announce that they have approved the Final Investment Decision (“FID”), to proceed with the $400 million Midia Gas Development Project (“MGD Project”), offshore Black Sea.
FID has been taken in good faith and on the assumption that BSOG and its joint venture partners will successfully be able to restore all of their rights with respect to the removal of any newly imposed supplemental taxes and fees as well as removing any restrictions, in accordance with EU Directives, on the free movement of gas on a fully liberalized market in order to not only make MGD Project a viable investment but also to encourage further gas developments in the Black Sea.
The MGD Project, which is the 1st new offshore gas development project in the Romanian Black Sea to be built after 1989, consists of 5 offshore production wells (1 subsea well at Doina field and 4 platform wells at Ana field) a subsea gas production system over the Doina well which will be connected through an 18 km pipeline with a new unmanned production platform located over Ana field. A 126 km gas pipeline will link the Ana platform to the shore and to a new onshore gas treatment plant (“GTP”) in Corbu commune, Constanta county, with a capacity of 1 BCM per year representing 10% of Romania’s consumption. The processed gas will be delivered into the NTS at the gas metering station to be found within the GTP.
BSOG has secured a long-term gas sales agreement with a Romanian subsidiary of ENGIE. The contracted volumes refer to all MGD Project gas production, reduced by the volumes that the producers are currently obliged to sell on the centralized market. BSOG has also secured a gas transmission contract with Transgaz S.A. (“Transgaz”) for the transport of the MGD Project production into the National Transmission System (“NTS”) for a contractual period of 15 years.
The entire project infrastructure, including all offshore and onshore facilities, has been contracted to be built, installed and commissioned under an EPCIC Contract with GSP Offshore SRL, with a contracted delivery date Q1 2021. The development drilling of the five production wells will also be performed by GSP for which GSP Uranus jack-up rig will deployed.
BSOG is pleased to confirm that all the contracting activities for this project will, in total, have Romanian content of roughly 70%.
In 2019, BSOG anticipates having completed the detailed engineering for the MGD Project, commenced the fabrication of the Ana Wellhead Platform at the shipyard in Agigea, commenced the civil constructions at the GTP site in Corbu and have purchased a number of long lead company items.
Mark Beacom, BSOG CEO commented: “This project is very much a pioneering project with many firsts having been successfully achieved in Romania. Together with our joint venture partners we very much appreciate all the help we have received along the way from the many Romanian institutions, contractors, Transgaz and our community of Corbu which were vital for reaching this critical milestone of FID and we look forward to build and operate this game changing project for Romania’s energy industry.”
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Albanian total installed capacity in hydropower has reached at 2100 MW. Further, projects granted, but yet not developed, at 1785 MW and the hydropower potential studied, still unexploited, at around 615 MW. Therefore, in a synthesis, considering the theoretical potential by 4500 MW, today only 46% are exploited. As it is worth noting that the country can offer one of the lower cost of production (LCOE) of hydropower in the region.
Therefore, taking into consideration the large number of awarded projects but still not developed, in this analyse, firstly, based in my daily empirical experience, it will concentrated in a briefly analysis of the legal framework on procedures to obtain a HPP, for the better understanding of the complexity of an A&M and the approach needed to address it by interested developers.
Then starting with the explorer of the framework in which base the granting rights of hydropower investments, in summary, there are basically two procedures, and a third one is emerging, on the rights of granting of hydroelectric sources. Firstly, the authorization procedure is followed for the project up to 2 MW, considered as small investments and fundamentally of interest to local investors. A framework based on the principle that leaves the great load (or major risk) of the work to be followed by the investor. However, on the other hand its approval within the ministry is perceived as a fast procedure.
Then, for the most relevant projects, considering the level of difficulty and depending on the nature of the hydroelectric risk, are based on the regime of public-private partnership (PPP). What is necessary, from the already existing framework, is a qualified wise reflection of all the rights recognized by the law to the contract between the parties, based on the fact that the legal provisions governing the project contract provide clear guidance on the key issues that will be dealt, allowing the parties to freely negotiate the flexible terms of the concession contracts.
Based on the contractual conditions for plants up to 15 MW, the sale of energy generated by the operator is guaranteed through a long-term contract (PPA) for 15 years, signed with the operator charged of the public service obligation, with regulated tariffs, through a “feed-in” scheme, determine by an independent authority. The construction of power plant, that is subject from 15 to 20 permits and complex licenses of various bodies, it is secured and facilitated by the assumption and provisions as a co-responsibility of the public authorities.
Regard the third procedure, recently, the Ministry of Energy opened the tender for the selection of the bidder for the construction of the PV plant above 50 MW in the southern Albania. A first project based on pure principle of the capacity tender, which has been partially applied in many HPP projects at least over the last 2-3 years. Thus, it represents a large-scale innovation, where everything is prepared in the package by the public authority, giving the maximum support to investors interested. A practice thought to act as a model for further hydroelectric concessions.
As perceived by above procedures, consider the multi-importance for the economy and the complex challenges in their deployment in practice, the current legal framework has seen a continuous revision with the goal of improvement. Despite that, the importance of legal framework is in some way limited to the taken period of the sign of contract, and the core of investments in long term based on accurate technical studies. In addition, their preparation from the earliest stages is also crucial for gaining access to the financial system with a convenient interest rate.
Therefore, the development of sound technical studies, well above the minimum required by law, becomes fundamental. Normally their width and depth vary according to the relevance of the project. In any case, regardless of the technology used, or even the form of investment as an unsolicited proposal or capacity offer, the studies should provide sufficient technical, economic and financial reliability, as well as guarantees in its environmental and social impact.
In final of the above analysis, considering the high number of projects awarded but not yet realized, despite the continuous interest in the acquisition and transfer (A&M), the current situation shows all the complexity in this direction. The factors are different, where the legal procedure in the transfer rights first requires the consent of the public authorities, in the same form given for their approval. Furthermore, a problem is the reliability of the projects, if considers that a good one is sold by itself. In addition, it cost more in financial terms, as well as time and energy, because it necessitate the redo the evaluation along the entire chain. Then, finally, the general problem lies in the developers’ approach, as far they are way to what is request form whom is offered to manage renewable resources.
For more on above please find the related slides on Albania hydroelectric sector towards large and sustainable developments, kept by Dr Lorenc Gordani, at 2th Edition Summit “Hydropower Balkans 2018” organised by Vostock Capital, among 6-8 November 2018, at the Splendid Conference & SPA Resort, Budva, Montenegro.
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Thanks to the future-oriented technologies the energy landscape and the urban areas are changing. The traditional solutions are being replaced with cost-effective and sustainable alternatives for energy production, distribution, storage and saving; cities are transformed, linked and digitized.
EE & RES and Smart Cities (16-18 April, Sofia, Bulgaria) is an annual exhibition and conference for energy efficiency, renewables, intelligent buildings, ICT, transport, public services organized by Via Expo.
Running alongside with Save the Planet (waste management), the event is one of the most important B2B initiatives that brings novelties to the market, meets buyers and suppliers. The synergy of the great business environment during the show and numerous promotional services for exhibitors helps them get the maximum value out of the participation and to achieve their marketing goals: to enter a new market and to find local distributors and clients from SEE. Leading companies from Austria, Bulgaria, Germany, Greece, Italy, Poland, Romania and Switzerland have joined EE & RES and Smart Cities. For 10 years in a row an Austrian Pavilion will be realized.
Some highlights of the exhibitors’ presentations
‘In Sofia we will present M7-A03D – it is among the most efficient gas turbine in its power class and has the industry’s lowest level of NOx emissions, at 9 ppm.‘ announces Mr. Cristian Athanasovici, Business Development Manager at Kawasaki Gas Turbine Europe. The company is looking to expand in the South-East European market.
After the great interest on the high efficiency (106%) pellets boiler with condensing technology showcased during the last edition of EE & RES, Herz will draw attention to its latest developments: the first wood chip boiler Herz firematic Condensation 20/35 with condensing technology, Air-to-Air heat pump with inverter technology “commotherm LWi-Split 9-16”.
The improving the quality of biogas has a significant impact on the efficiency of the used equipment and operating costs. This is why Belfrie will focus on cutting-edge sulfur-purifying technologies and biogas plant equipment.
‘Municipalities can reduce green-house gas emissions by using Kompogas technology.’ – says Mr. Rolf Hunt, Sales Manager at Hitachi Zosen Inova. The company is a global leader in energy from waste and exhibitor at EE & RES.
iSentinel® will be presented for the first time on the Bulgarian market. It is a smart earthquake protection system and saves the user’s life by triggering an early warning alarm seconds to tens of seconds before the destructive shock wave arrives and protects the buildings.
Green Embedded Systems will make a debut at the show. An emphasis will be on the latest company development, which is a novelty on the global market – a 60A direct energy meter for home use, with built-in Wi-Fi and with the size of a standard fuse.
Innova (management system for municipal waste collection processes, from startup to collection monitoring), VAiOS Sales Group (Smart home and business automation), Intracom Telecom (smart lighting, parking, metering, eHealth), etc. have already joined Smart Cities.
This year the parallel Conference will create again a great networking atmosphere for knowledge exchange.
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The global LNG shipping spot market is expected to remain strong in 2019 on the back of higher spot LNG demand and trading volume growth outpacing LNG vessel supply, according to analysts and ship brokers.
Higher spot freight rates could make inter-regional arbitrage less economic, making it costlier to ship LNG to Asian customers and impacting long-haul trades like the US-Asia trade route and reloads from Europe into Asia. However, in the long term higher rates could incentivize shipping companies and other stakeholders to invest in building new LNG ships to meet transportation demand and further develop the spot market.
The Asia Pacific Day Rate averaged $80,771/day in 2018 compared with $39,800/day in 2017, according to S&P Global Platts assessments. It had hit an all-time high of $190,000/day in November 2018, with a daily average of $183,333 for the whole month.
By the end of 2018, spot freight rates had corrected to $85,000/day, having averaged $133,944/day in December 2018, compared with $78,000/day in the same month a year earlier.
Market participants expect average spot charter rates in 2019 to remain strong, but said that exceeding the record high levels of $190,000/day is dependent on short-term trading strategies and market fundamentals that are not always sustainable.
“For 2019, the spot market will be equally strong or even stronger than what we have seen in 2018,” Poten & Partners’ shipbroker Rolv Stokmo said on the sidelines of a conference in December.
Spot charter rates dipped in the first quarter of 2018 partly because of the shutdown at PNG LNG due to the earthquake, Stokmo said. However, the rates bounced back up in the following quarters, and the third and fourth quarters of 2019 should be strong at similar levels.
LNG fleet growth slows
The global LNG fleet numbered around 536 vessels by the end of 2018, having posted a record growth of 12% during the year, mainly from the 120,000-199,999 cu m segment, according to Italian shipbroker Banchero Costa’s head of research Ralph Leszczynski.
Roughly 50 new LNG vessels were delivered in the first 11 months of 2018 and another 60 ordered for the full year, compared with 31 new deliveries and 23 new orders placed in 2017, mostly with capacity of 150,000-180,000 cu m each, industry data showed.
Despite this, LNG fleet growth is expected to slow considerably in the years to come with 2019 and 2020 posting an increase of 6% and 7%, respectively, Leszczynski said.
Much of the historic LNG fleet growth had been on account of vessels tied to long-term LNG projects as well as speculative ordering by investor groups such as Greek shipowners who bet on the growth of the spot market.
However, spot shipping rates between 2015-2017 often hovered under $30,000/day, below breakeven levels, discouraging new orders and tightening the spot market.
In 2019, only six uncommitted vessels are expected to hit the market and the rest are already committed to LNG projects as they come out of the shipyard, so very few uncommitted ships will be available to ease spot rates, Stokmo said.
He said spot freight rates depend on whether charterers want to lock-in ships for the longer term, in which case the number of cargoes or spot shipping requirements will drop, but it is unlikely that there will be fewer spot fixtures in 2019 than in 2018.
New LNG ship orders could also benefit from newbuilding prices falling to around $180 million for a standard 170,000 cu/m vessel at a South Korean shipyard, from over $210 million in 2009-2010, due to the decline in the shipbuilding sector.
“The downward trend is now reversed, but newbuilding prices still appears to be on the cheap side compared to the past,” Leszczynski said.
There is anecdotal evidence that investor interest in new LNG ships is gradually recovering, although it will take time to gather pace.
But LNG spot market grows
Overall, market expectations are for higher average spot LNG trades in 2019 than in 2018, as more liquefaction capacity comes online, mainly from the US, as well as continued growth in market liquidity.
Since US-origin LNG is flexible and new Asian spot demand has been centered in China, the US-China trade was projected to drive spot volumes. The surge in Chinese winter demand in 2017 was almost entirely on the spot market.
However, tepid winter demand in 2018 has kept JKM prices depressed at around $9/MMBtu and the US-China trade war has seen only two US-origin cargoes land in China in the fourth quarter of 2018, putting several of these projections at risk.
“Non price-responsive demand in Asia will be easily met, and forecasted JKM spot prices in the $7-$9/MMBtu range for H2 2019 will not be low enough to trigger substantial economic switching from coal to gas in power generation,” according to S&P Global Platts Analytics.
Platts Analytics said this means 2019 may see Europe finally playing its long-forecasted role of being a liquid market where suppliers, portfolio players and traders are able to market surplus LNG.
Shorter haul trades from the US to Europe are less supportive of shipping tonnage than shipping to Asia, and a lot will depend on how trading dynamics evolve. With new US-based portfolio players like Cheniere controlling an increasing number of LNG vessels on term-charters, growth in spot trade still has potential.
Small LNG projects crucial for the market
Low prices, abundant supply and an aggressive shift towards cleaner gas for energy generation are creating strong demand for LNG, not just from large buyers, but also from small importers, said Drewry.
In its market opinion report, Shefali Shokeen, Senior Research Analyst, Drewry Maritime Research said that small-scale LNG projects (production and regasification capacity of less than 500,000 tonnes per annum) have reduced capex and are suitable for countries with low LNG consumption.
For example Gibraltar has set up a small LNG import terminal with a total storage capacity of 5,000 cbm, which will directly provide fuel to the power plant located near the port.
It is also true that it is becoming increasingly difficult to secure investment for mega LNG export projects by fixing cargoes on long term contracts. Due to the increasing number of LNG suppliers, importers are opting for shorter term volume contracts. This makes small scale LNG projects attractive, which are cheaper to build and where there is less risk.
Although the number of small LNG export projects is currently limited new facilities are beginning to emerge. In the US for example, a small-LNG export project in Florida with three trains of 0.33 MTPA capacity has already been approved by the FERC.
Asian countries such as Indonesia, Philippines and China, along with some European countries will also see growth in the number of small-scale LNG imports terminals and in turn this will create demand for small LNG vessels.
On the export side, the list of LNG exporters will continue to diversify in the future as countries with moderate gas reserves develop opportunities to export LNG. In the near term, we expect countries in Africa to follow the lead set by the US by investing in small-scale LNG export projects. In turn, this will generate demand for appropriate shipping capacity.
The existing fleet of small LNG (less than 50,000 cbm) vessels consists of 27 LNG carriers and 17 LNG/LPG carriers, plus some LNG bunkering units. But most of the LNG and LNG/LPG ships are engaged in petchem gas trades and they are not expected to service new small scale LNG export projects.
LNG bunkering vessels are a potential source of competition, but the existing fleet is dedicated to LNG bunkering operations, while all of the vessels on order are also earmarked for LNG bunkering.
In order to achieve first mover advantage, some shipowners have already started ordering small LNG vessels. Five small-scale LNG carriers were in fact ordered in 2018 and in 2019 and beyond we expect to see more orders for small LNG carriers. Small is therefore likely to become the new big for the LNG shipping market.
Integrated oil companies, EPC, oil&gas majors, pipeline owners and operators, as well as storage and transportation companies will discuss their recent cases and current projects in Thessaloniki, Greece, at the Midstream Oil and Gas Congress. Annual event will take place on February, 18-19, 2019.
Among already confirmed companies are ELINOIL S.A., Baltic Connector Oy, Natural Gas Public Company (DEFA), Makedoniki, EKME JGC Corporation UK Limited, LBC Tank Terminals, Regulatory Authority for Energy (RAE) and many others.
Business programs comprises sessions dedicated to:
– Oil and Natural Gas Pipelines Transportation
– Offshore Pipelines Planning and Construction
– Oil and Gas Storage
– Pipelines Inspection, Testing and other Quality Assurance
– Pipelines Maintenance and Repairs
Contact BGS Group, the organizer, to know more about every package by calling +312 0808 7321, or sending your request through the MOGC website https://goo.gl/XrwmC8
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Exploration and Production Offshore Congress Hub takes place on September 16-17, 2019 in Greece, Thessaloniki. The annual upstream event gathers Oil Companies, EPC and Drilling Contractors, and Governmental bodies. The Congress is host by BGS Group and Hellenic Petroleum.
Being one of the most important players on the market, EPC attract a lot of attention from delegates and media during congresses. Here are some you may want to meet face-by-face:
- Francesco Cammarata, Vice President Business Development North Africa and East Mediterranean, TechnipFMC
- Subrata Bhowmik, Senior Riser Analyst, McDermott
- Julien Ginestet, Lead Flowlines Engineer, Saipem
They will present their cases during the business program. To get full program, please fill in a request form: https://bit.ly/2Dj5gtH
Among topics to be discussed are:
- The new balance in MENA to monetize gas resources
- Life Extension of Offshore Structure integrating Big Data, IOT and Machine Learning
- Exploration and Production Perspectives in Greece
- Digitalization – Software Solutions for Deepwater Production
- Drilling Expansion plans in the Emerging markets
To receive one-to-one consultation regarding participation terms, please fill in the form: https://bit.ly/2QTpvSd
The Congress Organizer, BGS Group, is known as the organizer of closed-door congresses in Europe, including AUTOMA Congress, Midstream Oil and Gas Congress, PRC Europe, and others.
Additional information is available at the website: https://bit.ly/2sxVlKl
The Norwegian capital plans to cut emissions by 95 percent by 2030, despite being one of Europe’s fastest growing cities. As European Green Capital 2019, it hopes to set an example for others.
Oslo’s waterfront was once a mass of shipping containers and a vast intersection jammed with cars pumping out fumes.
Today, traffic is diverted through an underwater tunnel, and much of it is made up of electric or hybrid cars. Above, the scene is becoming dominated by a new Edvard Munch art museum and central library — both due to open in 2020.
The new development has impressive environmental as well as cultural credentials, with all new buildings meeting energy efficiency standards for low energy use, explains Anita Lindahl Trosdahl, project manager for Oslo’s Green Capital year.
Her office lies further along the waterfront, just a stone’s throw from another cultural behemoth nearing completion — the new national museum.
Meanwhile, new housing is shooting up across the city.
These buildings aren’t just designed to function sustainably, the city council is also making sure their construction has a limited environmental impact, too.
“We’re using our market power to introduce fossil fuel-free construction,” Trosdahl told DW. “So not only will the build in its lifetime be as sustainable as possible, but also during the construction period itself.”
Bees and local power plants
Further north, away from the waterfront, lies the Vulkan neighborhood — another hotspot for eco-conscious building. Back in the 1800s, it housed much of Oslo’s manufacturing industry. Today, you can find bee hives on the rooftop of one of the modern buildings here — the Scandic Vulcan Hotel.
“This summer we had 500,000 bees which produced 271 kilos of honey,” Monica Egeberg, the hotel’s general manager, told DW.
The hotel chain likes to see the bees as a symbol of its wider approach to the environment. “We are also nearly self-sufficient with energy,” Egeberg says.
The hotel was built in 2011, when the rest of the old industrial area was redeveloped into a hip and happening neighborhood with bars, restaurants, entertainment, offices and housing.
A power plant built into the basement of an old industrial hall, which now also serves as Oslo’s largest food court, provides more than 80 percent of all the electricity needed for the entire neighborhood using a heat recovery system from the food court, geothermal wells and thermal solar panels.
Green role model
Green urban initiatives like these helped Oslo beat 13 other cities to the title of European Green Capital 2019. The competition, launched in 2008 by the European Commission, aims to showcase solutions that other cities might imitate or draw inspiration from.
On a global scale, Oslo is a small city. It has a population of less than 700,000. Its worthy efforts to cut emissions won’t slow climate change much on their own. But Trosdahl says it’s perfectly suited to pioneer ideas that could make a real difference internationally.
“We’re big enough that we can test solutions that can also be transferred to larger cities,” she says. “We’re world-class when it comes to the introduction of electric vehicles for instance, and other cities can use our model.”
Nearly half of all new cars sold here are fully electric. There are trams, electric buses and ferries, all running on renewable hydroelectric power. During the icy winters, a waste incinerator plant heats many of the city’s homes.
The city aims to cut emissions by 36 percent from 1990 levels by the end of next year, and 95 percent by 2030. To achieve this, the city council has introduced its own climate budget — possibly the first of its kind in the world.
“We count carbon emissions in the same way as we count money,” Oslo’s mayor Raymond Johansen told DW. “All parts of Oslo need to report back how much they can reduce their emissions, on very clear significant goals.”
The climate budget gives the council an overview of measures taken all across the capital, so it always knows whether Oslo is on track to reach its climate goals. So far, it is.
Will Oslo give up its cars?
Johansen heads a city government coalition comprising his own Labor Party, the Greens and the Socialist Left. Since coming to power four years ago, it has pushed its green agenda relentlessly, which some have resisted.
Businesses in particular have opposed making much of the city center car-free, and plans have been scaled back. Cars will be banned from some key streets, while in other areas more space will be given over to pedestrians and cyclists.
Road traffic is Oslo’s largest source of emissions.
Road tolls have already led to a considerable cut in traffic. But because prices have increased year on year — from €3.2 ($3.60) in 2016 to €5.6 in 2019 for a private car — critics say the breaking point has been reach for many.
“The main challenge for us going forward now, is to reduce the number of private cars,” Johansen says. But he admits it’s a tough sell and says the city can’t put too much economic pressure on drivers.
Fully electric vehicles are exempt from the tolls, helping the rapid increase in sales of non-fossil fuel cars. But it’s a tactic that favors the better-off, with many who can’t afford to trade in their petrol or diesel vehicles feeling unfairly punished.
Still, most Oslo citizens do support the city’s emissions goals. A recent survey found that three quarters of residents agreed it was important to do what is necessary to cut emissions by 95 percent by 2030.
Just over half said they supported the aims of making the city center car-free, while 63 percent said the measures introduced to reach the climate goals would make Oslo a better city to live in.
Source: Deutsche Welle
(Bloomberg/Wall Street Journal)
More than a third of America’s nuclear plants could close in the next decade. But when plants shut down, utilities often turn to harmful fossil fuels.
In light of the recent stark warning from the United Nations that the world is on course to reach the limit of tolerable warming in a scant 21 years, nuclear power is getting some overdue attention and enthusiasm.
The UN Intergovernmental Panel on Climate Change is coming around to the view that nuclear power has a crucial role in climate protection. The Nature Conservancy, long silent on nuclear, is calling for capacity to be expanded — enough to provide a third of the world’s energy by 2050 (from a little more than a tenth today). Most striking of all, the Union of Concerned Scientists — a leading watchdog for nuclear safety for decades — is now pushing to prevent existing plants closing before their time.
The energy gap
Nuclear accounts for almost 60 percent of emissions-free power in the U.S., and when plants shut down, utilities mostly turn to fossil fuels to fill the void. More than one-third of the country’s plants, representing 22 percent of total nuclear capacity, are either scheduled to close or at risk of closure within the next five to 10 years, says a new UCS study. This could lead to a 4-6 percent increase in carbon emissions from the power sector by 2035.
Nuclear power is expensive, and it’s under pressure from market forces — notably, the falling price of solar and wind power. Then why not simply let it lose market share to those safe, clean fuels? Because wind and solar can’t immediately fill the gap. They still account for less than 8 percent of energy produced in the U.S. (nuclear is 20 percent). It’s crucial that their growth displaces coal and natural gas, not nuclear.
The role of nuclear power
In principle, a carbon tax is the best way to keep nuclear power competitive. As the voters of Washington state have again demonstrated, however, taxes on fuel remain prohibitively unpopular. (French President Emmanuel Macron has just made the same discovery.) Nonetheless, states can reward nuclear power’s climate advantage in other ways — by giving zero-emissions credits for nuclear power, as Illinois, New York and New Jersey have done, or by revising their energy portfolio standards to stop utilities’ switching from nuclear to fossil fuels.
If enough states take such measures, old plants could be kept running until the next generation of nuclear plants is ready. Building these might also require subsidy — for example, in the form of investment tax credits. These and other options need to be on the table as the world wakes up to the role nuclear power must play in avoiding a climate catastrophe.
Energy Department Initiative Aims to Keep U.S. Competitive on Nuclear-Plant Fuel
Worried the U.S. may be falling behind rivals in nuclear-power technology, the Energy Department plans to spend $115 million to help develop advanced fuels for next-generation reactors.
Under a three-year pilot project, the money would go to an Ohio company to produce a more energy-dense uranium, which the nuclear industry has been asking for to support a budding industry of smaller reactors.
Department officials say they plan to award the contract to American Centrifuge Operating, a unit of Centrus Energy Corp. , unless rival companies can make a compelling case by Jan. 22. Shares of Centrus were up roughly 20% in early-afternoon trading.
The U.S. nuclear industry is at a crossroads that has jeopardized its workforce in the U.S. and helped fuel the rise of U.S. rivals abroad. The industry, faced with safety concerns, expensive regulations and competition from other fuels, is pushing to reinvent its core technology to be simpler, cheaper and often much smaller.
As the U.S. ponders its nuclear future, China has become one of the few countries building nuclear-power capacity, and Russia has taken a dominant position in developing projects elsewhere.
That has sparked global security concerns among nuclear experts and government officials fearful of weaker standards on weapons proliferation and environmental safety from Russia in particular.
Russia is the only country capable of producing the higher-enriched uranium the Energy Department’s new program would produce. Without it, the U.S. risks being left out of the global industry’s next stage, said Dan Brouillette, Deputy Energy Secretary.
“It’s critical to our future and our energy security,” Mr. Brouillette said on a call with reporters. “Lots of these companies are pursuing the advanced-reactor technology, but without fuel they run into very natural and understandable stumbling blocks.”
Companies pushing advanced-reactor technology are divided between those that use conventional fuel and those that need a more enriched uranium. Most of the companies closest to reaching commercial viability have opted to use the type of uranium currently available. But access to more energy-dense nuclear fuel is likely essential to some earlier-stage companies, especially those pushing microreactors small enough to fit in a semitrailer that can power defined areas, such as a military base.
The Energy Department has placed a priority on support for advanced reactors, but it comes with risks. The business is still likely years away from proving whether its reactors can catch on, especially as the price of wind, solar and gas-fired power is dropping.
Several nuclear advocates also said they were uncertain how much the new program would provide the help they need. Many have previously pushed the government to use its own stockpiles of nuclear material to more immediately feed the industry with fuel it can use for research.
The Energy Department wants the new capacity to be ready by October 2020. And despite some uncertainty, advocates said the commitment will boost investor confidence in nuclear.
“This isn’t the endgame. We still need more investment in building the infrastructure out,” said Everett Redmond, a senior adviser at the Nuclear Energy Institute, the trade association for the industry. “This is definitive steps in the right direction. So it’s an important effort.”
Amidst the backdrop of rapid urbanisation, population growth and aging infrastructure, transport systems remain the beating heart of the modern metropolis. Arcadis’ 2017 Sustainable Cities Mobility Index has created a global index for the most pioneering cities for urban mobility, decided across 23 individual indicators (under the sub-sections of ‘People’, ‘Planet’ and ‘Profit’). But which city sits top?
10 | Frankfurt
Due to its trade route-friendly setting, Frankfurt is home to numerous major businesses in Europe, with 360,000 people heading there for work. It tops the chart for the ‘Planet’ sub-index, owing to its low air pollution, green spaces and promotion of low emission vehicles, electric cars and cycling. Although motorised private transport still represents 80% of journeys, road traffic will fall due to a limit on parking spaces, a preference for tenants over commuters and a ‘Bike + Ride’ scheme.
9 | Stockholm
Renowned for its public transport – with more than 328mn riders every year – Stockholm ranked 11th for the metrics pertaining to the human impact of mobility systems. But it was within the ‘Planet’ sub-category that saw the Swedish capital prosper, placing fourth. With a plan to go fossil-fuel free by 2040, many cars and taxis regularly use biofuel made from sewage.
8 | Singapore
Braced for its population to swell to 6mn by 2030, the city-state’s government has pledged vast investment to improve mobility and connectivity. Among the plans are two new underground lines, a high-speed rail link between Singapore and Kuala Lumpur, plus a new airport terminal and runway. A mighty 66% of journeys are already via public transport, yet the government seeks 75% by 2030.
7 | London
Boasting the world’s first underground railway network, under-river tunnel, international airport and orbital ring road, London has a track record for innovation. Today, 43% of journeys are completed using public transport, while developments such as HS2, Crossrail and the proposed Crossrail 2, seek to further increase capacity and connectivity for the global business hub.
6 | Vienna
Though it ranks sixth for its environmental factors, and ninth for its efficiency to grow and support businesses using its mobility system, Vienna will become the global headquarters for sustainable cities in March 2018, hosting the Urban Future conference. Thereafter, its 2020 tourism strategy seeks to make its 20 sq km of green spaces accessible within three minutes’ walk from anywhere in the city.
5 | Prague
With solid scores for its commuting travel time, economic opportunity, affordability of public transport and utilisation of the transport system, Prague placed second in the ‘Profit’ category. Yet the medieval-looking city is also embracing green technology. Initiatives include mass-cycle rides, electric car hire and packaging-free ‘zero waste’ stores.
4 | Seoul
More than half of total trips taken in Seoul are made by public transport. Like its Asian neighbours Hong Kong, Tokyo and Beijing, it’s the sheer reliability, paired with its comprehensive coverage, that sees its citizens shun private vehicles. Of course, the metro system’s TV screens, Wi-Fi and heated seats, likely help matters.
3 | Paris
Among the first cities on Earth to pioneer a bike-sharing scheme, and convert a highway for walking and exercise, Paris is famed for its aggressive commitment to make its city pedestrian-friendly. While it has always encouraged public transport, its Grand Paris Express investment, tram line extensions and dedicated bus lanes will be transformative for Parisians.
2 | Zurich
In 2012, Switzerland’s largest city ensured it was future-proofed with its ‘Strategien Zurich 2025’ framework. Additional lines are being added to its Züricher Verkehrsbetriebe network, more train and tram lines are to come, whereas a switch from diesel buses to electrified trolleybuses will help safeguard the environment. Most excitingly, an underground logistics network – Cargo Sous Terrain – will transport goods via tunnels, using automation.
1 | Hong Kong
Beating a bevy of European locations, Hong Kong tops the rankings. Some 12.6mn passenger journeys take place across its transport system daily, and its Mass Transit Railway is long lauded for its efficiency. Add an international airport operating at 99% capacity – with a third runway incoming – and Hong Kong’s world class mobility, plus the socioeconomic prosperity it brings to natives and tourists alike, makes it a worthy winner.
There is another player who follows energy developments and cooperation between Greece, Cyprus, Israel and Egypt and so far remains outside the equation. Turkey did not hide its interest for energy reserves of the Eastern Mediterranean. This interest is related to its goal of becoming an important energy hub, leaving behind other political issues that affect developments.
A series of documents was forwarded as part of the discussion organized by the think tank Turkish Policy Quarterly in cooperation with the Atlantic Council, which focus on the energy issue and its importance for the whole region, in parallel to how Turkey is affected by these developments.
Daphne Arslan noted that “Turkey is a country with few sources of mineral wealth”. This is why the country needs “to secure supplies” of energy through a combination of imports and indigenous production. She estimates that because of its position, Turkey is “an ideal and developing market for producing countries and in a good spot to make use of recent natural gas discoveries in the Eastern Mediterranean”, even to forward LNG to international markets. She further notes that “Turkey’s strategic position between producing countries in the Middle East and in the Caspian and the consuming European market, offers the prospect of acting as a bridge and contributing to European energy security”.
Turkey, says Alparslan Bayraktar, underwent an important change in its energy market between 2002 and 2017. During that period, according to the energy minister, there was a focus on policy and legislature with the result of making great steps and changes in the market. At the same time, investments in renewables were also forwarded.
Turkey, after 16 years, proceeded in its transition through its National Energy and Mining Policy (NEMP). This policy, according to Alparslan Bayraktar, stands on three pylons: Security of supply, finding and securing markets.
Through NEMP, Turkey aims to achieve energy autonomy, security in its peripheral supplies and facilitate international partnerships. This new era in energy policy is expected by Al. Bayraktar to raise Turkey from a powerful peripheral player today to a global one.
According to the International Energy Agency (IEA), there will be faster growth in the energy sector within its members. Alparslan Bayraktar mentions that IEA expects fossil fuels to continue to be the primary energy sources worldwide until 2040 and notes that this was one of the reasons why Turkey moves on with its own exploration. The Turkish government’s decision is to go forward with its own exploration. The drilling ship “Fatih” commenced surveys last September in the Mediterranean. A second ship, said the Turkish minister, is planned to begin its own activities within the next few months. Furthermore, the two surveying ships “Barbaros Hayreddin Pasa” and “Oruç Reis” will begin exploration in the Black Sea and the Mediterranean.
Speaking about the Eastern Mediterranean, he noted that it is a region with prospects if one takes into account recent natural gas and oil discoveries. He noted that oil and gas discoveries by Turkey will enhance his country’s energy security. In the event of discovering significant reserves, then reality in the region will change.
As for Turkey’s next steps, Alparslan Bayraktar mentions three goals that are connected to crucial investments:
1) Offshore exploration for gas and oil. TPAO will be more active in the near future when it comes to drilling.
2) More activity and international cooperation between production companies.
3) More merges and buyouts should be expected in the near future, since foreign investors are attracted to available properties.
Sandra Oudkirk, Deputy Assistant Secretary of the State Department, underlined that the US support the 40 billion dollar Southern Gas Corridor or SGC. It is a grand project for the transferring natural gas from the Caspian to Europe. Despite the fact that the US are not actively involved, she said that they support this project.
The American official noted that SGC’s importance relies partly on opportunities created for each country. For Azerbaijan and other possible suppliers, this corridor means access to Europe’s huge market and creates the prospect of steady longterm income. For consumers in Turkey and Europe, the corridor enhances longterm energy security. At the same time it reduces reliance on just one source.
She brings Russia as an example that moves in two directions when it comes to transferring its own natural gas to Europe. One is to Germany through the Baltic with the Nord Stream pipeline. The other is through the Black Sea and Turkey with the TurkStream pipeline.
Sandra Oudkirk’s evaluation is that these two projects can maintain and also expand Russia’s already dominant position in European energy markets. The Russian government, she added, has already used Gazprom repeatedly to achieve its geopolitical goals.
It is not accidental that “taking into account that Russia uses energy as a political weapon”, the Us believe that Europe “will have to differentiate its energy supplies in order to react effectively to possible complications in the delivery of natural gas from Russia”.
Catalyst for collaboration
In Washington there is the belief that energy can act as a catalyst for collaboration between competitors in regions such as the Eastern Mediterranean. The American official noted Egypt and Israel as an example, who have redefined their peripheral relationship because of natural gas and their governments are constantly seeking cooperation. This is why there is hope that recent discoveries will further contribute to the change of climate in the Eastern Mediterranean. This will take first and foremost political cooperation.
The other side of the coin
There is the constant remark that energy can become a driver for peace and cooperation between Eastern Mediterranean countries. As a source of cooperation, under strictly business and economic terms, this can be achieved through participation of all the regional players. Apart from that, what many politicians in the US, Europe and our region say is very hard to achieve.
Brenda Shaffer of the Atlantic Council has a different view than the politicians. She believes that “natural gas discoveries in the Eastern Mediterranean will probably not promote peace between players of the region”. Nonetheless, she claims that gas trade between the region’s states can contribute to internal prosperity, thus enhancing stability.
The phrase “we must become an energy hub” has been said many times. Brenda Shaffer’s view might bring many back to reality: “Many of the Eastern Mediterranean’s states – including Turkey, Egypt and Cyprus – have declared their ambition to act as hubs in the region. It is hard to understand why that desire prevails among these states”. She further notes that in the best case what will come is some of these states becoming transit centers.
She brings Turkey as an example, which is currently an important center, since it is situated between significant energy sources and a large market in Europe. “The prospect of Turkey becoming a hub is small and even if it is achieved, it will not bring greater geopolitical value than today as the main transit country for natural gas”, Shaffer adds.
Moving one step further, she shows to those who believe that natural gas will solve the region’s problems, but also Cyprus’s, that “until today there is not a single case of a ‘peace pipeline’ globally, where the energy prize acts to solve conflict”. And she concludes that in the best case, natural gas can act as a source of energy towards other directions, such as desalination plants and to offer water to nations of the region and to avert another cause of conflict.
Source: Andreas Pimpisiis, Phileleftheros of Cyprus
Energyworld, January/February issue 2019
Romania: The Russians are rising the price of the gas sold in Romania, invoking the tax imposed by the Government to energy companies
WIEE Romania, one of the two companies approved by the Russian giant Gazprom to sell Russian gas in Romania, has notified its Romanian customers that, starting January 1st 2019, has increased the sale price of natural gas by 2%.
Wiee Romania was established in 2000 as a private company owned by Gazprom AG, Switzerland. The information was provided by one of the WIEE clients in Romania, a significant customer who requested anonymity, according to e-nergia.ro.
The 2% price rise is exactly the percentage that all companies in the energy and gas sector, licensed by ANRE, have to pay starting this year, according to the provisions of GEO 114, published in the Official Monitor on the last day of 2018. The tax is applied to the turnover of the previous year and ANRE has to elaborate the specific legislation for its collection.
As a result, WIEE immediately transferred the tax that the Romanian Government imposed, to the Romanian consumers.
Romania consumes about 11 billion cubic meters of gas annually, about 10 billion coming from domestic production, provided by Petrom and Romgaz, and one billion imported from Gazprom.
Mihnea Cătuți, EPG Affiliated Expert
On November 12 and 13, 2018, the European Parliament has debated and voted on the most recent version of the Regulation of the Governance of the Energy Union. This legislative act establishes the framework for cooperation and coordination on energy and climate change matters, having significant implications at both the national and EU levels. It also represents the umbrella piece of legislation that should ensure the achievement of the 2030 energy and climate targets.
The 2030 EU Climate and Energy Framework, endorsed by the European Council in 2014, set three highly ambitious targets to be achieved collectively by the EU before 2030: (1) a 40% reduction of greenhouse gas (GHG) emissions compared to 1990 levels, (2) a minimum share of 27% of renewable energy in the energy mix, and (3) a minimum of 27% increase in energy efficiency compared to a ‘business-as-usual’ scenario. A crucial aspect of this framework is that no binding targets for individual EU member states have or will be established. Therefore, in order to successfully meet the collective obligations, the European Council recognized the need for creating a robust, reliable and transparent governance system within the Energy Union framework.
In response, the European Commission presented in November 2016 the Clean Energy for All Europeans Package, consisting of eight legislative proposals, including a regulation on a new governance framework that establishes a series of coherent and coordinated actions to be taken at both national and EU levels. After two years of intense negotiations between the Commission, the Council and the European Parliament, an agreement was finally reached on June 20, 2018.
In its final form, the regulation directly responds to some of the main challenges of the current governance paradigm of the EU energy policy, while also enforcing the Commission’s commitment to Better Regulation. Therefore, this new framework aims to significantly reduce the administrative burden at both EU and national levels by:
Streamlining a plethora of current planning, reporting and monitoring obligations. A study by the Commission2 has found a severe lack of policy coherence and consistency among the current obligations, which can lead to duplication and conflict. This regulation integrates 31 existing obligations and deletes another 23. The Climate Monitoring Mechanism is one of the most important such obligations that has been integrated in this framework;
Updating the current energy and climate goals from the 2020 to the 2030 targets, while also incorporating the EU commitments under the UNFCCC 2015 Paris Climate Change Agreement;
Responding to the insufficient capacity for cross-national planning, problem highlighted in the Commission’s impact assessment for this regulation.
One of the most important outcomes of this legislative act is the requirement for governments to produce Integrated National Energy and Climate Plans. These plans must elaborate on the main priorities, strategies and actions to be taken within a 10-year period, covering all the five main areas of the Energy Union (security of supply, the internal energy market, energy efficiency, decarbonisation, and research and innovation). According to an amendment by the European Parliament, the plans have to also include a 50-year perspective and must be aligned with the international climate goals. It should be noted that while the governance regulation also provides binding templates for these national plans, it simultaneously allows the member states a great deal of flexibility in deciding what measures and policies they want to adopt.
From 2021, each country will need to produce a progress report every two years, which will complement the Commission’s evaluation of the implementation of the national plans. Member states are obliged to take into account the recommendations of the Commission and must provide explanations in their subsequent progress reports on how these are being incorporated. This double monitoring process is designed to overcome the difficulties created by the absence of binding national targets. This framework must ensure not only that the collective EU objectives are met, but also that there are no instances of free-riding and that all member states are contributing to a shared effort. To further enable this process, the regulation also requires the creation of national and EU inventory systems for GHG emissions, policies and measures.
Overall, this regulation has two key consequences for the governance of energy policy in the EU:
(1) The Commission will have increased responsibilities for monitoring member states and issuing recommendations on both national plans and policies. Crucially, if the Commission considers that the progress is too slow and that the national measures are insufficient for meeting the 2030 targets, it can ask that member states contribute to a shared financial instrument. This fund would be managed by the Commission and it should be used to support cost-effective renewable energy projects across the Union;
(2) The necessity and scope of regional coordination will increase. Not only do the national plans have to include considerations on regional cooperation, but the regulation allows the unique opportunity for governments to issue their opinions on the plans of their neighbouring countries before these are finalised.
The European Union and member states need to work together to increase energy security, which is a goal that will be continued during Romania’s six month EU Presidency.
“Yes, definitely, we need to work together on energy efficiency but also on the diversification of supplies, the security of transit routes – security, not only meaning the safety of the pipelines, which is important, but the secure flow of energy,” Romania’s ambassador to Athens, Lucian Fatu, told New Europe on January 11, when asked if energy security was high on the agenda given that Romania is a Balkan country and some countries in the region are very dependent on one supplier.
After presenting his country’s rotating EU Presidency priorities, Fatu told New Europe that energy security is an ongoing issue and what the Presidency will definitely support diversification. He noted that while energy is not a political issue, it needs political will to push the diversification projects forward.
“There is an activity where we deal with states, we deal with companies but, at the end of the day, we deal with consumers so there is a need for political will but also for investment and for strategic view on these issues,” Fatu said.
He noted that while Romania has its own resources it plans to work with Bulgaria, Greece, Serbia and other countries in the region to increase security of supply.
“We are interested in providing best opportunities and best treatment for our customers, for our consumers. But also we do it as a way of integrating countries in the EU but also connecting to countries outside such as Moldova and this is a way not only Romania but also the EU can make a difference in that country. This is an example. The same goes for Serbia,” Fatu said.
He also referred to the Romania-Bulgaria reverse-flow pipeline, which runs under the Danube River, and will allow Bulgaria to import gas from Europe.
Bulgaria, which currently buys more than 90% of its gas from Russia gas monopoly Gazprom, is also building gas pipelines with neighbouring Greece, Serbia and Turkey.
During a press conference in Athens, Fatu said earlier on January 11 that energy transit and distribution is important for the EU member states and countries in the region. “As a country, we are very much interested in working with Greece, Bulgaria and other countries in the region to ensure the best conditions for energy security, diversification of supplies – the vertical corridor as well as the IGB (Interconnector-Greece-Bulgaria),” the Romanian envoy said, adding that other regional pipelines and interconnector projects, are vital for the bloc’s energy security.
The 182-kilometre IGB Pipeline is a strategic gas transportation infrastructure providing diversification of gas supply to the Bulgarian and Southeast Europe gas market and supply security to Greece. IGB will provide a direct link between the national natural gas systems of Greece and Bulgaria with an Entry Point in the vicinity of Komotini and an Exit Point in the vicinity of Stara Zagora.
IGB can also supply gas from the planned floating storage regasification unit (FSRU) in Alexandroupolis in Greece to Bulgaria and other Balkan countries. The FSRU will further expand options for liquefied natural gas ensuring that Greece and its neighbours have multiple options, enhancing diversification and security of supply in Europe.
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As one of Europe’s most strategic projects, TAP successfully completed financial close in December 2018, securing Euros 3.9 billion – the largest project finance agreed for a European infrastructure project in 2018.
Luca Schieppati, TAP’s Managing Director, said: “With the financial close now achieved, TAP has reached another major milestone of the project’s progress. TAP has voluntarily committed to comply with environmental and social standards required by the international financial institutions. As such, all necessary assessments to substantiate this commitment have been undertaken and met by TAP. This also included a thorough environmental and social assessment. With project financing now concluded, TAP can progress to the final completion of the project and delivery of Shah Deniz II gas in 2020.”
“As the EU Bank, the European Investment Bank recognises the important contribution to improving security of energy supply in Europe that the Trans Adriatic Pipeline will bring and has provided EUR 700 million for this, the largest energy project in Europe currently being built. The EIB is pleased to have been an anchor lender to the project, alongside the EBRD and other leading financial institutions, to successfully finance this complex and ambitious project and welcomes the continued close cooperation between all project partners to ensure that environmental, social and technical best practice is followed.” said Andrew McDowell, European Investment Bank Vice President responsible for energy.
Nandita Parshad, EBRD Managing Director Sustainable Infrastructure, said: “The Trans-Adriatic Pipeline will set the foundation for an integrated gas market across south-eastern Europe and enhance the region’s strategic status as an energy hub. We believe that gas remains an important transition fuel in this region that can help displace coal and facilitate penetration of renewables.”
The financing is provided by a group of 17 commercial banks, alongside the EBRD and the European Investment Bank (EIB). Part of the financing is covered by the export credit agencies – bpifrance, Euler Hermes and Sace. The project raised EUR 3765 million in third party senior debt with a door-to-door tenor of 16.5 years, combining commercial debt along with development financial institutions (DFI) and export credit agencies (ECA) related financing:
- EIB Direct Facility, benefitting from a guarantee from the European Union under the European Fund for Strategic Investments EFSI: EUR 700 million
- EBRD A-Loan: EUR 500 million
- EBRD B-Loan: EUR 500 million funded by commercial banks
- ECA facilities, benefiting from comprehensive cover by:
- Bpifrance Facility, EUR 450 million Euler Hermes Facility, EUR 280 million
- A SACE Facility, EUR 700 million;
- Commercial term loan facility: EUR 635 million directly provided by commercial banks without any ECA or multilateral involvement.
Costs have previously been funded in full by TAP’s shareholders: BP (20%), SOCAR (20%), Snam (20%), Fluxys (19%), Enagás (16%) and Axpo (5%).
TAP was advised by Société Générale (SG) as Financial Advisor and Allen & Overy as Legal Advisor; lenders were advised by Clifford Chance.
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Energean Oil and Gas has signed a Gas Sales and Purchase Agreement (GSPA) with I.P.M. Beer Tuvia Ltd. (IPM) to supply an estimated 5.5 BCM of gas from its Karish and Tanin FPSO over a period of 19 years. The contract is subject to necessary approvals and is contingent on results of the 2019 drilling program, which includes the drilling of four wells in Israel and commences with the spud of Karish North in March 2019, targeting 36.8 BCM (1.3 Tcf) of gas with a volume weighted geological chance of success of 69%.
The agreement adds between 0.265 and 0.38 BCM/yr of gas sales, commencing in approximately 2024. Energean estimates that the agreement will contribute revenues of approximately $0.9 billion over the life of the contract. Energean may supply IPM with limited volumes between 2021 and 2024.
IPM holds an option to increase volumes up to 0.55 BCM/yr.
Energean has now signed GSPAs for 4.6 BCM/yr from its Karish and Tanin FPSO, which is being built with a total capacity of 8 BCM/yr. Energean targets filling the remaining 3.4 BCM/yr of FPSO spare capacity in the medium term, which it believes will deliver attractive incremental economics.
IPM is an independent power producer that will supply the national power grid and large private consumers with power. IPM is building a new power plant that is due to start operating in 2H 2020, and gas purchased from Energean will provide part of the total quantity of gas required for its operations. The remaining gas supply will be purchased in accordance with IPM’s existing Gas Agreements.
The Karish and Tanin development remains on track for first gas in 1Q 2021.
“This additional Gas Sales Agreement aligns with Energean’s strategy to secure offtake for the remaining spare capacity in our 8 BCM/yr FPSO and to commercialize the resource being targeted by our upcoming drilling program, providing competition and energy security to the Israeli domestic market,” noted Mathios Rigas, CEO of Energean Oil & Gas. “The signing of this contract ahead of results from our 2019 drilling program demonstrates not only the attractiveness of the Karish and Tanin fields but the strong incremental demand that we have identified for our gas and we will continue to target additional sales. Our future sales contracts will target both the growing domestic and regional export markets, delivering attractive incremental economics for all of our stakeholders.”
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With 28 countries and a combined population of around 512 million people, the European Union is something of a prized market — and political battleground — for the world’s largest energy exporters, particularly when it comes to natural gas.
Russia has long been the dominant source and supplier of natural gas to Europe’s mass market but the U.S. is looking to challenge Russia by stepping up its imports of U.S. liquefied natural gas (LNG) — gas which is super-cooled to liquid form — making it easier and safer to store and transport.
Europe certainly appears keen to wean itself off Russian gas, and all the geopolitical implications that reliance entails, while making overtures to the U.S. Last July, European Commission President Jean-Claude Juncker and President Donald Trump agreed to strengthen U.S.-EU strategic cooperation with respect to energy and the EU said it would import more LNG from the U.S. “to diversify and render its energy supply more secure.”
Twenty-four percent of U.S. LNG went to the EU in October 2018, a month which saw the largest volume ever of EU-U.S. trade in LNG of almost 0.6 billion cubic meters. In the whole of 2017, only 10 percent of U.S. LNG exports went to the EU. The Commission, the EU’s executive arm, expects U.S. gas exports to the region could double by 2022 and has vaunted the construction of LNG terminals across Europe.
“The fact is that U.S. LNG, if priced competitively, can play and increasing role in EU gas supply, enhancing diversification and EU energy security,” the EU said in a document detailing the state of EU-U.S. LNG trade in late November.US vs Russian gas
The U.S. became a net natural gas exporter in 2017 for the first time in almost 60 years, according to the country’s Energy Information Administration (EIA). It saw exports of its LNG rise 58 percent through the first half of 2018, compared with the same period in 2017. In fact, while U.S. LNG exports have continued to grow in 2018, U.S. natural gas pipeline import and export volumes have either remained relatively flat or declined from 2017 levels, the EIA noted.
U.S. exporters looking to Europe have a big obstacle in the region, however, and that’s Russia.
Russia remains the largest supplier of natural gas to the EU in 2018, according to the Commission’s latest data on EU imports of energy products in October. The other main suppliers are Norway and, at a lower level, Algeria and Qatar.
Showing the extent of much of the EU’s reliance on Russian gas, the Commission noted that 11 member states (Bulgaria, Czech Republic, Estonia, Latvia, Hungary, Austria, Poland, Romania, Slovenia, Slovakia and Finland) imported more than 75 percent of total national imports of natural gas from Russia in 2018, largely due to their proximity to the country.picture alliance | picture alliance | Getty Images View of the pipe end of the Baltic Sea pipeline ‘Nord Stream 2’ at the receiving station in Lubmin. The 1,200-kilometer-long gas pipeline will transport around 55 billion cubic meters of Russian natural gas from Russia to Germany every year.
Gas from Russia is supplied to the continent by state-owned gas company Gazprom via pipelines, giving it an advantage in terms of cheaper transportation costs and established infrastructure and supply. It has a number of major pipelines in operation, or under construction, with European energy and infrastructure companies.
As well as the Nord Stream pipeline and its expanded version, Nord Stream 2, linking Russia to Europe via the Baltic Sea (the expanded pipeline is seen as a way to bypass transit countries like Ukraine), Gazprom and partner companies in Poland, Belarus and Germany oversee the 2,000 kilometer Yamal-Europe pipeline that sends gas from one of its production centers in Torzhok (via Belarus and Poland) to Germany.
The company is also constructing the TurkStream pipeline for gas exports from Russia across the Black Sea to Turkey and south eastern Europe.Geopolitics
Pipeline projects have prompted criticism in Europe and in the U.S., with Trump accusing Germany (the largest foreign buyer of Russian gas) of being “captive” to Russia. His former Secretary of State Rex Tillerson said earlier in 2018 that Nord Stream 2 undermined Europe’s energy security.
Despite its reliance on Russia for gas, the EU’s relationship with the country is a rocky one. Relations deteriorated when Russia annexed Crimea from Ukraine in early 2014 and supported a pro-Russian uprising in east Ukraine, after which the U.S. and EU placed sanctions on Moscow.
Penalties were placed on Russian oil companies (including Gazprom and its oil arm Neft) in 2014 that sought to hinder these companies exploration and production of energy. The U.S. warned in November it could still seek to thwart the Nord Stream 2 project with further sanctions (essentially fines) on companies involved in the project.
Five EU companies are involved in the construction of Nord Stream 2 and the EU has expressed concern over such sanctions. Given Russia’s established and growing infrastructure in Europe, commodity strategists like RBC Capital Markets’ Christopher Louney said the geopolitical dimension to the U.S. promotion, and European adoption, of LNG is hard to ignore.Bloomberg | Bloomberg | Getty Images The Cheniere Energy Inc. liquefied natural gas (LNG) export terminal stands under construction in Corpus Christi, Texas, U.S., on Wednesday, Oct. 3, 2018.
“There is definitely a geopolitical nature to it (the competition for European LNG customers),” Louney told CNBC Monday.
“The geopolitical nature of the U.S. gaining market share in European gas is highlighted by Trump’s opposition to Nord Steam 2 (I’d note that there is also some more critical debate happening in Germany itself now).”
While there are other reasons to increase imports from the U.S. right now, including having a diversity of supply source and pricing, “it’s hard to argue against geopolitics being at play here as well,” he said.
Louney believes there’s a long way to go before Russia’s natural gas dominance is challenged, however.
“Europe taking U.S. LNG and U.S. LNG challenging Russian pipeline supplies for dominance are two very different things,” he noted. “Europe has already taken U.S.-sourced LNG over the past two years with just a couple of export terminals in operation (i.e. U.K., Netherlands, Italy, Spain, Portugal etc.).”
“With more U.S. export facilities coming online, the number of takers and volume taken can both increase, but there is a long way to go to compete (with Russia) for pre-eminence,” he said. “That said, Europe’s imports will likely grow leaving room for the U.S. to send additional volumes given the growth of exports here in the U.S.”
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The European co-funded Poseidon Med II programme (PMII), organised a workshop at the Technological Educational Institute of Crete (TEI) in the context of its dissemination activities. The subject of the workshop, which took place on December 17th, 2018 was to present the appropriate framework for the adoption of Liquefied Natural Gas (LNG) as a marine fuel in the Eastern Mediterranean.
The event was opened by the Rector, Mr N. Katsarakis and was followed by a welcome note by the President and Managing Director of the port of Heraklion, Mr. A. Philippis. The event was attended by Professors and students of the Technological Educational Institute of Crete, as well as representatives from the Port Authorities and other stakeholders from the port of Heraklion.
The links comprising the LNG supply chain that is the subject of the studies of PMII (M. Fotiadou, DEPA), the measurements of air pollutants at the port of Heraklion (A. Mitsotakis, CERTH) and the contribution of the large scale LNG infrastructure at Revythousa towards the successful development of small-scale LNG infrastructure in the ports of the programme (T. Eleftheriadou, DESFA), were some of the issues presented by the PMII partners. The studies of the programme on the selection of the optimum position for small-scale LNG facilities within the Heraklion port (A. Boutatis, ROGAN), shipbuilding and ship conversion studies for the use of LNG (G. Pratikakis, NAP) and the regulatory framework for LNG bunkering operations (A. Kouvertari, Lloyd’s Register) were also discussed.
What is Poseidon Med II project?
Poseidon Med II project is a practical roadmap which aims to bring about the wide adoption of LNG as a safe, environmentally efficient and viable alternative fuel for shipping and help the East Mediterranean marine transportation propel towards a low-carbon future. The project, which is co-funded by the European Union, involves three countries Greece, Italy and Cyprus, six European ports (Piraeus, Patras, Lemesos, Venice, Heraklion, Igoumenitsa) as well as the Revithoussa LNG terminal. The project brings together top experts from the marine, energy and financial sectors to design an integrated LNG value chain and establish a well-functioning and sustainable LNG market.
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