August 2023, Vol. 250, No. 8
Global News
Global News August 2023
Mitsubishi Power Brings Hydrogen-Ready Gas Turbines to Utah
Mitsubishi Power Americas delivered two advanced-class gas turbines to the Intermountain Power Project (IPP) Renewed project in Delta, Utah, which await installation and on-site testing before becoming operational in 2025.
The gas turbines will use 30% hydrogen fuel at start-up in 2025, with a goal of achieving 100% hydrogen by 2045, ultimately resulting in dispatchable carbon-free utility-scale power generation. This blend of natural gas and hydrogen will reduce carbon emissions by more than 75% when compared to IPP’s present operations.
A pipeline from the ACES Delta hub will feed the IPP Renewed project with hydrogen to operate the J-Class turbines. The hub is a utility-scale renewable energy hub that will produce, store, and deliver green hydrogen to the Western United States.
Additionally, the hub will use renewable energy-powered electrolyzers to split water into oxygen and hydrogen.
Once installed and in operation, the turbines will deliver 840 megawatts of net generation output. Mitsubishi Power will provide service and maintenance for the gas turbines under a 20-year long-term service agreement.
The hydrogen will be stored in two underground salt caverns, each the size of the Empire State Building capable of holding 150,000 megawatt hours of clean energy. It would take more than 80,000 shipping containers of lithium-ion batteries to produce the equivalent megawatt-hours of energy that one hydrogen salt cavern can store.
OMV Confirms Austria’s Largest Natural Gas Discovery in 40 Years
OMV has announced the Wittau Tief-2a exploration well to be a confirmed new natural gas discovery – the country’s largest natural gas discovery in 40 years.
The OMV-operated well is in Lower Austria and was drilled at a final depth of 16,404 feet (5,000 meters) after five months of operations.
‘‘The positive result of our exploration is exciting news for OMV and its customers. As we continue to work on our strategy to diversify our supply sources of natural gas, this new find marks a major contribution to the natural gas supply of our customers especially in Austria, with an expected increase of our local production,’’ Alfred Stern, chairman of the executive board and CEO of OMV AG, said.
A preliminary evaluation indicates potential recoverable resources of approximately 48 TWh (28 MMboe). After full development of the discovery, OMV expects its natural gas production in Austria to increase by 50%.
OMV is currently considering different options to further appraise the field, as well as a fast-track development in conjunction with the OMV-operated natural gas facility in Aderklaa, situated 6.2 miles (10 km) from the new discovery.
Germany’s Hydrogen Plan Sees Heavy Reliance on Imported Fuel
Germany will import up to 70% of its hydrogen in the future as it aims to become climate-neutral by 2045, according to an updated government strategy plan.
The German cabinet endorsed the plan, setting guidelines for hydrogen production, transport infrastructure and market plans.
Europe’s biggest economy hopes to increase reliance on hydrogen to cut greenhouse emissions from its industrial sectors, which cannot be electrified – such is the case with steel and chemical producers.
Even after doubling Germany’s domestic electrolysis capacity target for 2030 to 10 gigawatts (GW), Germany still will have to import 50% to 70% of its hydrogen demand, the strategy showed.
“Instead of relying on domestic potential for the production of green hydrogen, the federal government’s strategy is primarily aimed at imports by ship,” Simone Peter, the head of Germany’s renewable energy association, told Reuters.
The strategy allows for the use of hydrogen produced through fossil energy sources, preferably if the carbon is captured and stored. However, direct government subsidies would be limited to green hydrogen, the plan said.
Funds for the launch of a 1,118-mile (1,800-km) pipeline network in German are expected to be issued by 2027-28, via the Important Projects of Common European Interest (IPCEI) agreement.
All major generation, import and storage centers to customers would then be connected by 2030.
Wintershall Dea CEO Says Exiting Russia Trickier by the Day
Wintershall Dea’s exit from Russia, announced in January has become progressively more difficult due to the nation’s unpredictable business and political environment, CEO Mario Mehren, during a company financial report.
The oil and gas producers’ dealings with Russia, including holding a stake in the Nord Stream gas pipeline are complex, because gas remains one of Russia’s biggest sources of income.
Though Mehren said he doubts Russia will take over foreign energy companies, he cautioned, ‘‘The assets we have shareholdings in were declared to be strategic.”
Obstacles Wintershall has encountered range from approval processes for valuation requirements to the Russian government’s consideration of veto rights on the sale of strategic assets, according to Reuters.
Wintershall Dea was looking into ways to recover at least some of the damages incurred, including arbitration and legal claims.
Vaca Muerta Pipeline Still in Needs of Investment: Experts
Argentina’s Vaca Muerta gas pipeline still requires billions of dollars in investment to turn the nation into a global fuel supplier, energy analysts seem to agree.
The pipeline will carry gas from Vaca Muerta shale formation to the country’s Santa Fe province via Buenos.
Argentina could export about 2 Tcf annually – an amount almost equal to its consumption rate, but it would take $40 billion to make that lofty goal a reality.
“I calculate that this first section of the gas pipeline is barely 5% of everything that needs to be done,” said Javier Iguacel, Argentina’s former energy minister, according to Reuters.
The first section of the 354 miles (570 km) of pipeline was completed July. When two compression plants come online this section alone will add 776 MMcf/d (22 MMcm/d) in capacity.
Capacity will increase to 1.55 Bcf/d (44 MMcm/d) in 2024, when the second stage of construction is completed.
Argentina’s Energy Secretariat expects global demand for LNG to double by 2050.
Shell Expects Venture Global LNG Supply Deal to Be Honored
Shell anticipates that its agreement with Venture Global LNG to supply LNG will be honored eventually, but it does not happen immediately, CEO Wael Sawan said at a news conference.
In July, Reuters reported that Shell and BP have separately filed for arbitration against U.S. exporter Venture Global LNG for failing to supply contracted cargoes, even as it sold to non-contract customers as prices soared, four people familiar with the matter said.
“We're taking the appropriate measures to be able to protect our rights,” Sawan said, during a second-quarter earnings briefing. “In times like this when we are trying to make sure that LNG is flowing around the world … I think we need to be able to make sure that all agreements are honored.”
Shell agreed in 2016 to purchase 1 mtpa of LNG over a 20-year period from the Calcasieu Pass LNG in Louisiana, the first of Venture Global LNG's three planned facilities.
“Venture Global remains in full compliance with our long-term contracts, including with respect to timing,” spokeswoman Shaylyn Hynes said in statement.
Report: North American RNG Market Could Hit 4 Bcf/d by 2050
The North American RNG market looks primed for significant expansion, potentially growing tenfold to reach 4 Bcf/d by 2050, driven by new government incentives for the transportation sector, according to a new report from Wood Mackenzie.
In 2022 alone, the market experienced remarkable growth, with the addition of 60 MMcf/d of new production capacity, showcasing the increasing prominence of RNG, also known as biomethane.
According to the report “North American renewable natural gas state of the market” the number of RNG projects has doubled in the last five years and 66 future projects were announced in 2022. In total, the North American market size sits at 385 MMcf/d, with states such as Texas (62 MMcf/d), California (33 MMcf/d), Pennsylvania (33 MMcf/d), leading the way.
Activity has been spurred by recent mandates and incentives aimed at lowering greenhouse gas emissions, most notably through investment tax credits (ITC) in the Inflation Reduction Act for RNG development and low-carbon fuel programs in the EPA’s Renewable Fuel Standard program.
“RNG has become more popular as it can have five times lower carbon intensity than natural gas projects and helps reduce emissions considerably when used for transportation fuel,” said Natalia Patterson, senior research analyst with Wood Mackenzie. “More than half of RNG production is estimated to be consumed as fuel for natural gas vehicles.”
Landfills make up the largest portion of the capacity by feedstock through methane emissions, but animal waste projects are on the rise, followed by food waste and wastewater treatment projects.
Despite the recent growth, the RNG market currently only makes up 0.5% of the North American natural gas market. Yet with continued policy support and technology development, Wood Mackenzie projects it will growth to 3% of the market by 2050, for a total of 4 billion cubic feet per day.
Crisis-Wary Asian Buyers Hope to Build Strategic Gas Reserves
Asian governments are drafting strategic natural gas reserve policies and building storage tanks and terminals in an effort to head off supply disruptions similar to those experienced in 2022.
LNG in Asia climbed to a record $70 per MMBtu in August 2022 when Russia cut gas shipped by pipeline to Western Europe, following the Ukraine invasion. This led to an unwanted boost in countries moving to coal and oil as a source of power.
Japanese Industry Minister Yasutoshi Nishimura said recently the nation will launch an LNG reserve system this year to guarantee supplies for “unexpected situations.”
The reserve would be similar to Japan’s Strategic Petroleum Reserve, which is among the world's largest.
Japan’s Ministry of Economy, Trade and Industry (METI) is selecting choosing companies to buy and store LNG, with volumes equivalent to at least one tanker a month (70,000 metric tons of LNG), from December to February, when heating demand typically increases. a ministry official told Reuters.
In the event of a supply disruption, METI will direct the companies to sell the stored gas to local utilities, the official added.
Earlier in July, India’s chairman of the Petroleum and Natural Gas Regulatory Board said earlier called on his nation to increase its natural gas storage capacity.
US Crude, Fuel Stockpiles Fall Amid Drip in Imports
U.S. crude oil, gasoline and distillate inventories declined in mid-July, as net imports dropped, according to the Energy Information Administration (EIA).
Crude stocks at Cushing, Oklahoma, fell by 2.6 million barrels last week, the EIA said, with net imports declining by 1.58 MMbpd.
Crude inventories fell by 600,000 barrels in the week to July 21 to 456.8 million barrels, the EIA said. This was considerably less than analysts predicted in most cases.
Refinery crude runs fell by 107,000 bpd, and refinery utilization rates declined by0.9 percentage point to 93.4% of total capacity.
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