The North Sea, new deals with Iran, and a Shell-BG Group combination featured in the headlines this week. Here is what you need to know about this week’s gas industry news:
David Cameron Announced His North Sea Support Plan: Speaking from Aberdeen, Scotland on Thursday, UK Prime Minister David Cameron announced a £250m City Deal to boost the region’s oil and gas industry. In addition, the PM announced a £20m funding package to help in North Sea seismic exploration surveys to discover new reserves.
According to the BBC, prior to his trip the PM told the House of Commons that he was determined to “build a bridge to the future for all those involved in the North Sea.” The Scottish government has pledged an additional £254m for investment in key infrastructure, bringing the total help package to well over £500m.
The support plan aims to ease the burden of falling crude prices, diversify the region’s economy, and invest in infrastructure and innovation for the future. On Tuesday, Bloomberg reported that the UK will face up to a 40-55% power supply gap as more nuclear and coal stations close by 2025. To close the gap, the UK would need to build the equivalent of 30 gas-fired power stations.
Is the energy outlook grim for the UK? How can support plans like this one make a difference? Leave us a comment.
Italy’s Saipem Signs Pipeline, Refinery Deals as Iran Eyes European Gas Market: On the first day of Iranian President Hassan Rouhani’s official visit to Rome this week, Italy’s Saipem, a subsidiary of Eni, signed a Memorandum of Understanding with the Persian Oil & Gas Development Co. The agreement involves upgrading the Pars Shiraz and Tabriz refineries. On Tuesday, Saipem announced that it had signed a second MoU with the National Iranian Gas Company, envisaging a cooperation on NIGC pipeline projects—IGAT9 and IGAT11—spanning 1800 km. An insider told Reuters that this latter agreement is worth between $4 billion and $5 billion.
Iran has the world’s largest gas reserves, and is eyeing Europe as a next big export market. According to the Wall Street Journal, managing director of the National Iranian Gas Export Co. Alireza Kameli said they were seeking to “join the international LNG club” as Tehran explores several export and infrastructure options.
What promising gas deals can be expected as Iran emerges from sanctions? Let us know your thoughts below.
OPEC Representatives, Saudi Arabia Temper Russia Meeting Talk: Rumors ran high on Thursday when Russian Energy Minister Alexander Novak indicated he was willing to meet with OPEC next month to coordinate oil-output policy and proposed cuts. Four OPEC representatives were quick to reject these claims saying they had not heard of any plans for talks, according to Bloomberg. One Gulf member further quelled talk of a Russia meeting, saying Saudi Arabia had no proposal to trim production by 5 percent—the proposed cuts originally cited by Russia.
OPEC’s next scheduled meeting is in June. Oil rose as much as 7.8 percent to $34.82 a barrel in New York after Novak’s comments were reported, only to close at $33.22 after OPEC representatives said no talks were planned, according to Bloomberg.
How will Russia fare as oil prices continue to plummet and global supply swells?
Royal Dutch Shell to Buy BG Group: Royal Dutch Shell won shareholder approval to buy BG Group on Wednesday, Shell announced. BG Group shareholders also voted in favor of the combination on Thursday. The $52 billion deal will make Shell the biggest LNG trader, according to Bloomberg.
“BG adds attractive deep water and integrated gas positions and will act as a catalyst for accelerating the re-shaping of our business,” said Ben van Beurden, CEO of Shell on Thursday following the announcement that BG investors approved the transaction. The purchase is expected to be completed on 15 February, 2016.
This is Shell’s biggest acquisition amid a challenging oil-industry slump. What do you expect to see after the transaction gone through?
Poland’s PGNiG Seeks to Build Poland-Norway Pipeline: Polish gas company PGNiG plans to build a pipeline linking Poland and Norway, Reuters reported on Thursday. The company is seeking to reduce its dependency on Russian gas as the pipeline project’s objective is to introduce several billion cubic meters of annual gas capacity by 2020, the Warsaw Voice cited PGNiG plenipotentiary Janusz Kowalski speaking at an industry event.
The pipeline would therefore be brought online by the 2022 expiry of PGNiG’s current deal to buy gas from Russia’s Gazprom, but Gassco, Norway’s offshore pipeline operator, says it has no immediate plans to build a pipeline to Poland, according to spokeswoman Lisbet Kallevik in an email to Reuters.
Check back with Gastech News to stay apprised of developments in a potential pipeline project.
Sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.