A new opportunity is opening for Central Europe’s energy supply, and within it for its natural gas supply, said the Hungarian Minister of Foreign Affairs and Trade Péter Szijjártó, following talks with Slovakian Economy Minister Peter Ziga at the gas compressor station centre operating there.
Major changes are happening in Central Europe and countries need to prepare for these changes.
Firstly, it is uncertain whether the Central European region will be receiving natural gas via Ukraine from the beginning of next year; secondly, based on the permits issued by the Danish authorities the construction of the North Stream 2 natural pipeline may be extended; and finally, the construction work on the Turkish Stream gas pipeline is moving forward at a good pace, thanks to which from October 2021 a north-south gas supply corridor could come about that is capable of transporting Russian gas to Slovakia via Turkey, Bulgaria, Serbia and Hungary.
Mr Szijjártó underlined that we must also prepare for the fact that no gas will be arriving in the region via Ukraine.
“If this is the case, then Hungary must resolve three tasks”, he explained. “Eastern Hungary’s gas supply must be resolved from a western and northern direction, the infrastructure requirements of which will have been met by the end of this year. In addition, the ongoing development project relating to the natural gas pipeline that traverses the Serbian-Hungarian border must be completed, and together with Slovakia we must prepare for the fact that, if shipments of gas from an easterly direction are unavailable, then the two countries are capable of transporting larger quantities of natural gas to each other in both directions.”
The Minister announced that the two countries’ relative energy companies have already begun work on this task, and accordingly the Slovakian-Hungarian gas interconnector will be able to operate with a larger capacity than previously from the beginning of next year, and with further technological development a transport quantity of 7 billion cubic metres will become available in both directions.
“This will provide Hungary and Slovakia with a suitable level of security concerning the fact that we will be able to supply the public and we will be able to operate both Slovakian and Hungarian industry if the supply of gas from the east becomes unavailable in the long term”, Mr Szijjártó stated.
Slovakian Economy Minister Peter Ziga also pointed out that it is extremely important to find a Slovakian-Hungarian solution to the possible termination of gas shipments from the east, because “if no gas arrives from January then neither the European Union nor anyone else will solve the problem instead of Hungary and Slovakia”.KEEP READING
What are the major opportunities and challenges for LNG now, and in the near future?
Liquefied natural gas, commonly referred to as LNG has significantly transformed the natural gas industry from a purely regional commodity delivered via pipeline to a global commodity delivered to markets via specialised tankers. LNG is a significant growth opportunity in the natural gas industry as it represents the fastest-growing segment within natural gas as well as “fuel of choice” to transition the world from coal to clean-burning natural gas as part meeting climate change initiatives globally.
This creates enormous opportunities for sponsors, like NOVATEK, to invest capital into large-scale LNG projects to meet the growing demands of natural gas and deliver affordable, secure and sustainable, but there are many challenges facing the industry as a project delays, cost overruns have plagued many projects, and today, low commodity prices will negatively Influence final investment decisions. We are optimistic that the current supply/demand imbalance will correct in the near term, but LNG spot prices will remain depressed albeit some price recovery during the peak winter season.
What are the main routes of NOVATEK’s cargos currently?
We deliver LNG cargos both eastbound to the Asian Pacific markets and westbound to Europe depending on our ability to use the Northern Sea Route during the seasonal navigational period. Since inception, Yamal LNG has delivered over 310 cargos for more than 22 million tons. Our natural gas molecules are consumed in more than 26 countries, so I would that we have been successful demonstrating the commercial efficacy of Yamal LNG.
At the same, we successfully launched our medium-scale Cryogas-Vysotsk project in northwest Russia, which serves the LNG needs of the Baltic and Scandinavian regions.This project essentially fulfils some of the Region’s bunkering requirements as IMO 2020 approaches, as well as LNG supplies for small users and modal transport. We will eventually link this projects LNG output with our LNG terminal project I the port of Rostock, Germany.
How do you see the competition between pipeline and LNG in Europe?
Frankly, we do not see this distinction as competition for one supply source in the form of pipeline deliveries versus another source delivered in the form of LNG. Natural gas is a fungible product. What is important is our ability to deliver natural gas to the market cost competitively. This fact is crucial to buyers. With the construction of more LNG regasification terminals in Europe, this broadens the consumers’ choice to source gas from multiple sources and this creates market liquidity. Our goal should be to deepen the penetration of natural gas in the total energy mix irrespective of the mode of delivery.
FID was made on Arctic LNG 2 project recently. What is the timing of the project and what will be the impact on the global LNG market?
Yes, you are correct. We announced the FID on the 4 September at the Eastern Economic Forum in Vladivostok after concluding our partner consortium over the summer. As of today, Arctic LNG 2 is the largest LNG project to announce an FID in 2019 with a total nameplate capacity of 19.8 million tons per annum. The consortium includes Total, CNPC, CNOOC and Mitsui/JOGMEC at 10% each, with NOVATEK retaining the remaining 60% participation interest in the project.
It is a large-scale LNG project located on the Gydan peninsula in the Arctic region of Russia, and is approximately 70 kilometres east of the Yamal LNG project across the Ob River. The prolific Utreneyye field containing around two trillion cubic meters of natural gas under the Russian reserve methodology will feed natural gas into the gravity-based platforms. Conceptually different from Yamal LNG, the gravity-based platforms will house all of the main liquefaction equipment, compressor and turbines, power, storage and loading arm, which will be stationed about 500 meters from the shoreline. Arc7 type ice-class LNG tankers will load LNG from the GBS platforms and deliver LNG cargos to our future transhipment terminals in Murmansk (westbound) and Kamchatka (eastbound).
We plan to launch the first and second GBS platforms in 2023 and 2024, respectively, and the third GBS platform launched in 2026. Arctic LNG 2 will be part of the “second wave” projects expected to meet the projected demand requirements in mid-2020; however, the project’s ability to deliver cost-competitive LNG to most consuming markets in a secure and sustainable manner as well as redefining the concept of an LNG project using innovation and technology to build the GBS platforms will ultimately define its impact on the global LNG markets.KEEP READING
The International Energy Agency launched the World Energy Outlook 2019, which focuses on the impact of today’s decisions on tomorrow’s energy systems, and describes a pathway that enables the world to meet climate, energy access and air quality goals while maintaining a strong focus on the reliability and affordability of energy for a growing global population.
This year’s outlook comes in a moment when deep disparities define today’s energy world: the dissonance between well-supplied oil markets and growing geopolitical tensions and uncertainties; the gap between the ever-higher amounts of greenhouse gas emissions being produced and the insufficiency of stated policies to curb those emissions in line with international climate targets; the gap between the promise of energy for all and the lack of electricity access for 850 million people around the world.
The Current Policies Scenario provides a baseline picture of how global energy systems would evolve if governments make no changes to their existing policies. In this scenario, energy demand rises by 1.3 per cent a year to 2040, resulting in strains across all aspects of energy markets and a continued strong upward march in energy-related emissions.
On the other hand, the Stated Policies Scenario incorporates today’s policy intentions and targets in addition to existing measures. It describes a world in 2040 where hundreds of millions of people still go without access to electricity, where pollution-related premature deaths remain around today’s elevated levels, and where CO2 emissions would lock in severe impacts from climate change.
Finally, the Sustainable Development Scenario indicates what needs to be done differently to fully achieve climate and other energy goals that policy makers around the world have set themselves.
“What comes through with crystal clarity in this year’s World Energy Outlook is there is no single or simple solution to transforming global energy systems,” said Dr Fatih Birol, the IEA’s Executive Director. “Many technologies and fuels have a part to play across all sectors of the economy. For this to happen, we need strong leadership from policy makers, as governments hold the clearest responsibility to act and have the greatest scope to shape the future.”
A sharp pick-up in energy efficiency improvements is the element that does the most to bring the world towards the Sustainable Development Scenario. Right now, efficiency improvements are slowing: the 1.2 per cent rate in 2018 is around half the average seen since 2010 and remains far below the 3 per cent rate that would be needed.
Electricity is one of the few energy sources that sees rising consumption over the next two decades in the Sustainable Development Scenario. Electricity’s share of final consumption overtakes that of oil, today’s leader, by 2040. Wind and solar PV provide almost all the increase in electricity generation.
Putting electricity systems on a sustainable path will require more than just adding more renewables. The world also needs to focus on the emissions that are “locked in” to existing systems. This year’s WEO considers three options to bring down emissions from the existing global coal fleet: to retrofit plants with carbon capture, utilisation and storage or biomass co-firing equipment; to repurpose them to focus on providing system adequacy and flexibility; or to retire them earlier.
The International Energy Agency (IEA) is an autonomous organisation which works to ensure reliable, affordable and clean energy for its 30 member countries and beyond. Its mission is guided by four main areas of focus: energy security, economic development, environmental awareness and engagement worldwide.
László Varró, Chief Economist of International Energy Agency, will present the Outlook at the Budapest LNG Summit.KEEP READING
The European regional Development Fund (ERDF) invested 130 million euros to expand the Liquefied Natural Gas (LNG) Terminal in Świnoujście, northwest Poland.
The project will increase the terminal’s capacity to convert LNG into its gaseous form, store it, and ensure that it is easily transported.
“I applaud Poland’s commitment to diversification policy that lies at the centre of our energy union strategy,” said the Vice-President for Energy Union Maroš Šefčovič. “It is yet another key step in strengthening security of supply of entire Central and South Eastern Europe, increasing competition on the regional gas market and providing industry as well as households with secure, reliable and affordable energy.”
LNG from the terminal will be transported through the newly constructed interconnectors to other countries including the Baltic States, Slovakia, the Czech Republic and Ukraine.
The development of the terminal is part of ongoing efforts to achieve energy independence and the EU Climate Goals.
In fact, ensuring that all Member States have access to liquid gas markets is a key objective of the EU’s energy union strategy. LNG can give a real boost to the EU’s diversity of gas supply and hence greatly improve energy security. In 2018, 13 Member States imported a total of 62 billion cubic metres of LNG, and LNG imports made up 14 per cent of total extra-EU gas imports.KEEP READING
70 per cent of the world’s proven natural gas reserves are located in the countries which are members of the GECF.
The Gas Exporting Countries Forum (GECF) estimates that the global primary energy demand will rise by 26 per cent through to 2040, as the population grows by an additional 1.7 billion people, mostly added to urban areas in regions with the lowest energy access. At the same time, global natural gas demand is projected to increase by 46 per cent through to 2040, displacing other sources of energy in a range of sectors.
In this scenario, the GECF will play a major role as its members are the ones meeting this huge gas demand. In fact, over 70 per cent of the world’s proven natural gas reserves are located in those countries which are members of the GECF, Algeria, Bolivia, Egypt, Equatorial Guinea, Iran, Libya, Nigeria, Qatar, Russia, Trinidad and Tobago, United Arab Emirates and Venezuela.
The GECF is a gathering of the world’s leading gas exporting countries which was set up as an international governmental organisation with the objective to increase the level of coordination and strengthen the collaboration among member countries. At the same time, Azerbaijan, Iraq, Norway, Kazakhstan, Oman, Peru and Angola have the status of Observer Members.
GECF also seeks to build a mechanism for a more meaningful dialogue between gas producers and gas consumers for the sake of stability and security of supply and demand in global natural gas markets.
Yury P. Sentyurin will speak on the first day of Budapest LNG Summit.KEEP READING
Denmark approved the construction of the Nord Stream 2 pipeline, of which 146 kilometres runs thorough the Danish Exclusive Economic Zone (EEZ) south-east of Bornholm.
“We are pleased to have obtained Denmark’s consent to construct the Nord Stream 2 Pipeline through the Danish continental shelf area in the Baltic Sea south-east of Bornholm. We will continue the constructive cooperation with Danish authorities to complete the construction of the pipeline,” said Samira Kiefer Andersson, Permitting Manager Denmark at Nord Stream 2 AG.
Preparatory works, such as the installation of concrete mattresses and rock placement for the crossing of existing infrastructure (cables and pipelines), and the subsequent pipelay, will start in the coming weeks. The Danish section of the pipeline will be built with pipes currently stored in Mukran, on the German island of Rügen.
So far, more than 2,100 km of the Nord Stream 2 Pipeline have been laid. Pipelay has been completed in Russian, Finnish and Swedish waters, and for the most part in German waters.
Once completed, the Nord Stream 2 Pipeline will ensure safe and stable supplies of gas to Europe. The projects also will create jobs and growth across Europe, as more than 1,000 companies from 25 countries have been working on it.KEEP READING
A great opportunity awaits those who will participate at the Budapest LNG Summit on the 2nd and 3rd of December.
Amsterdam-based Energy Delta Institute, the institutional partner of the Budapest LNG Summit, offers the opportunity to win one free ticket for a Master Course in LNG, an intense 3-day programme in Barcelona (with a site visit to Barcelona LNG terminal.)
The course will focus on the major developments in the LNG industry, including the impact of new energy sources (such as unconventional gas) on the gas business and global trends in the context of the European security of supply.
LNG is playing an increasingly important role in the region’s energy (and specifically gas) supply mix, both helping to diversify energy sources and enhancing competition, in line with the strategy of the European Union.
The Budapest LNG Summit will be focused on the upcoming trends and challenges of the global and especially of the CEE’s LNG and gas market. The Summit will also focus on various topics such as main infrastructure developments in the CEE/SEE region; how to ensure the security of supply at the best tariffs; and the Ukrainian gas transit after 2019.
Other than getting insights from the best leaders in the industry (such as the CEOs of the three biggest LNG projects in the region), participants will have the opportunity to win the Master Course in LNG where several other recognised experts will discuss all parts of the LNG value chain, from production to transport and end uses, from a variety of perspectives – legal, commercial, political and social.
The programme includes a visit to the LNG terminal in Barcelona and involves e-learning as well as a case study How to produce and sell LNG in 2025.
The winner will be announced during the lottery that will take place at the gala dinner on the 2nd of December at the Spoon Boat Restaurant.
The Energy Delta Institute (EDI) is an international energy business school, whose mission is to bring together world-class knowledge and business skills to educate and inspire energy professionals so they can become the new leaders of a sustainable energy future.
Marcel Kramer, EDI’s president and member of the council of the international Gas union (IGU), will be one of the speakers at the Budapest LNG Summit.KEEP READING
“Croatia has begun constructing its liquid natural gas (LNG) terminal, which will be completed by January 2021, meaning that from that point in time the physical opportunity will exist for Hungary to purchase liquid natural gas from Qatar”, said the Minister of Foreign Affairs and Trade, Péter Szijjártó.
While the opportunity to transport gas to Hungary from Croatia will already be available from the end of this year, the cooperation with Qatar will fundamentally transform the security of Central Europe’s gas supply.
“These countries can currently only acquire natural gas from a single source, but Qatar has become the world’s number one exporter of liquid natural gas, exporting over 100 billion cubic metres each year, and the country plans to increase its LNG exports to 145 billion cubic metres in the upcoming years”, the Minister added.
“Qatar has expressed its clear openness to beginning negotiations with Hungary on gas shipments to Hungary via Croatia,” Mr Szijjártó underlined. “Qatari gas could also appear on the Hungarian market from 2021, contributing to the security of Hungary’s natural gas supply and pushing prices even lower. The more sources we can acquire gas from, the greater our security, and the cheaper we can procure natural gas.”
The annual capacity of the Croatian LNG terminal will by 2.7 billion cubic metres, while the capacity of the interconnector established on the Croatian-Hungarian border is 1.6 billion cubic metres, which is a significant amount in comparison to Hungary’s annual consumption of 9.5 billion cubic metres.
Barbara Dorić, Managing Director of LNG Croatia, will be one of the speakers at the Budapest LNG Summit.KEEP READING
Ukraine’s operator of national gas transport Ukrtransgaz completed the construction and assembly works that will connect the new gas pipeline at the Komarno compressor station to boost gas supplies from Poland to Ukraine.
“A test launch in reverse flow mode, which will be the final stage of completion of work at the facility, is planned before the end of October”, reads a company’s statement.
The updated configuration of the linear part of the gas pipeline will allow gas transportation in both obverse and reverse modes between Ukraine and Poland. The design capacity of the modernised section is 15 million cubic meters of gas per day from Ukraine to Poland and 18 million cubic meters per day in the reverse flow mode from Poland to Ukraine.
The Komarno Complex, located in western Ukraine, is involved in gas transportation across the Ukraine-Poland border. The modernisation of the technological pipeline linkage of the compressor station will significantly improve the manoeuvrability and reliability of the GTS operation in the face of termination of the gas transit from the Russian Federation from January 1, 2020.KEEP READING
The European Investment Bank (EIB) will provide a 110 million loan for the construction of a gas systems interconnection facility between Bulgaria and Greece (ICGB). The loan will be provided to the Bulgarian state-owned Bulgarian Energy Holding company, while ICGB AD will be the project promoter and beneficiary and it will focus on developing, constructing, financing, owning and operating the pipeline.
The interconnector will also help establish a link with the Trans Adriatic Gas Pipeline (TAP), which runs from east to west through northern Greece.
The project is in line with the strategy of energy supply’s diversification in Bulgaria and south-eastern Europe. It is part of a wider plan to better connect energy markets among neighbouring countries (including Romania and Hungary) with the aim of improving the security of gas supplies in the region and the efficiency of the networks.
The 182 kilometres long gas pipeline comprises 151 kilometres in Bulgaria (connected to the Bulgarian gas transmission backbone in Stara Zagora) and 31 kilometres in Greece (linked to the Greek gas system and to the TAP in Komotini).
The initial capacity of the new pipeline will be 3 billion cubic metres per year (bcm/y), with a possible increase to 5 bcm/y by adding a compressor station.
“The systematic and consistent corporate efforts of the ICGB team, the political will of the governments of Bulgaria and Greece and the strong support of the European Commission helped us finalise key documents that regulate the model of operation of the gas pipeline and allow progress in carrying out construction activities”, noted the Executive Officers of the project company Teodora Georgieva and Konstantinos Karayannakos.
The project has been included on the list of Projects of Common Interest (PCI), which are key cross border infrastructure projects that link the energy systems of EU countries.KEEP READING