Natural Gas Daily: December 2nd, 2020

NORD STREAM 2 CONSTRUCTION TO RESUME DEC 5

Construction of the Nord Stream 2 gas pipeline running from Russia to Germany will resume on December 5, according to a notice published by the maritime authority of the German city of Stralsund.

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• Nord Stream 2 faces obstacles on several fronts. Washington expanded its sanctions regime in October to target any companies providing assistance to the vessels engaged in laying pipes, and this led Norwegian certification company DNV GL, hired to verify the safety and technical integrity of the pipeline, to drop out of the project in late November.

• At full capacity Nord Stream 2 will flow 55bn m³/year of Siberian gas to Germany and other European markets, enabling Russia to limit flows via Ukraine after their transit contract expires at the end of 2024.

EXXON IN TALKS TO BUY STAKE IN INDIAN FIELD: MINISTER

US major ExxonMobil is in talks to buy a stake in producing oil and gas fields in India, country’s petroleum and natural gas minister Dharmendra Pradhan said during a webinar organised by Swaraj Magazine, according to Press Trust of India.

• The move to acquire interests in fields would mark ExxonMobil's entry into India's upstream sector, at a time when the US major is scaling back its exploration and production operations in other regions such as Europe, to boost its cash reserves and channel more investment into core projects.

• Indian state-run ONGC signed a memorandum of understanding with ExxonMobil in October last year to undertake joint technical studies and to co-operate in frontier areas. 

SEMPRA STREAMLINES STRUCTURE

US LNG developer Sempra Energy announced a series of offers aimed at simplifying its energy infrastructure investments under a single platform, "creating scale, unlocking portfolio synergies and better positioning the business for growth."

• The company plans to launch a stock-for-stock exchange offer for the publicly-traded shares of its Mexican unit IEnova, with its own shares due to be listed on the Mexican stock exchange. 

• IEnova took a final investment decision in mid-November on the first phase of its Energia Costa Azul (ECA) LNG project on Mexico's Pacific coast, marking the first approval of new liquefaction-export capacity this year.

RUSSIAN PIPELINE FLOWS TO EUROPE DIP IN NOVEMBER

Gazprom used all routes less in November except Turk Stream. The drop was, in total, a massive 9.4% vs last year as then Gazprom had to push as much gas as possible before December 29 and the end of the Ukraine transit deal.

• Gazprom reached its first deal to sell gas to Turkey via its electronic sales platform, with the 700,000 m³ of gas due to be delivered to Malkoclar on the country's border with Bulgaria in December.

• As we explained back in August, Gazprom’s flexible strategy, to reduce severely volumes in Jan-July 2020 (-17.9bn m³ or -17.6%) vs last year and then to increase exports is turning out to be less costly than slower-moving LNG suppliers that are turning down volumes only when price start to recover.

TELLURIAN WITHDRAWS PERMIAN PIPE APPLICATION

LNG developer Tellurian has asked the US Federal Energy Regulatory Commission (Ferc) to withdraw its proposed 2.3bn ft³/day Permian Global Access Pipeline Project (PGAP) from the commission’s pre-filing process. It made the request in a December 1 filing with Ferc.

• It was one of four pipelines Tellurian has in various stages of development. The others – the 4bn ft³/day Driftwood pipeline, the 2bn ft³/day Haynesville Global Access pipeline and the 2bn ft³/day Delhi Connector project – are all in Louisiana and remain on the company’s development roster.

• Tellurian maintains that PGAP, at some point in the future, will be a viable project with “significant” benefits.