UK GAS: Prices plunge as weak LNG prices add pressure to oversupplied market
Prompt British wholesale gas prices dropped on Thursday with the market oversupplied and as weak liquefied natural gas (LNG) prices added to bearish sentiment. * The within-day contract was down 2.35 pence at 22.75 p/therm, as of 0906 GMT. * The day-ahead contract was down 1.80 pence at 23.00 p/therm. * Traders said the falls were due to an oversupply of gas and exacerbated by LNG markets, where prices have slumped due to warmer-than-usual winter temperatures and the coronavirus outbreak. * Asian and India LNG prices hit unusually low levels of below $3 per million British thermal units (mmBtu) this week, but analysts said it was still unclear how much impact the coronavirus is likely to have on energy markets. * “This (the virus) could certainly post further bearish risks to European gas prompt prices as the global LNG oversupply would grow even more if Chinese importers would declare force majeure,” analysts at ELS Analysis said in research note. * China National Offshore Oil Corp (CNOOC) has declared force majeure on prompt LNG deliveries from at least three suppliers, two sources told Reuters on Thursday. * Britain’s gas system was oversupplied by 12.7 million cubic metres (mcm) with demand forecast at 329.9 mcm and flows at 342.6 mcm/day, National Grid data showed. * Peak wind power generation is forecast at 3.7 gigawatts (GW) on Thursday soaring to 12.4 GW on Friday, Elexon data showed. * Demand for gas from power stations was expected to plummet on Friday, with analysts at Refinitiv forecasting day-ahead gas for power demand at 45 mcm, down 31 mcm from Thursday. * Further out on the curve prices also slipped. * The March contract was down 0.89 p at 21.96 p/therm. * The Summer 2020 contract was down 0.65 at 23.40 p/therm. * The day-ahead gas price at the Dutch TTF hub was down 0.37 euro at 9.18 euros per megawatt hour. * Benchmark Dec-20 EU carbon contract was down 0.12 euro at 23.65 euros per tonne.
Energy firm Total beats quarterly forecasts, lifts dividends despite low oil price
Total beat forecasts on Thursday by keeping net adjusted profit for the fourth quarter steady at $3.2 billion and fulfilled its pledge to boost dividends despite low oil prices, lifting the French energy major’s shares by 3 per cent. Analysts had forecasts net profit of about $2.7 billion. “This performance is better than that of our rivals in terms of resisting to low oil prices,” Total Chief Executive Officer Patrick Pouyanne told journalists. He said the group reported solid fourth quarter 2019 results with debt-adjusted cash flow (DACF) at $7.4 billion, an increase of more than 20 per cent compared with the fourth quarter of 2018. Total’s oil and gas production grew by 9 per cent in 2019 compared with the previous year thanks to start ups and ramp ups of projects, while its liquefied natural gas (LNG) business doubled, boosting its cash flow. Pouyanne said the exceptional production growth was unlikely to continue in the years to come and output growth for 2020 was seen at 2 per cent to 4 per cent, a more typical level in the industry. Pouyanne said the group rewarded shareholders with a 6 per cent increase in the final dividend for 2019 to 0.68 euros per share. It bought back $1.75 billion of its shares in 2019 and plans to buy back $2 billion of its shares in 2020 with oil at $60 per barrel. “Taking into account the strong visibility on cash flow, the group will continue to increase the dividend with the guidance of 5 per cent to 6 per cent per year,” the company said in the statement.
French group Total strikes renewable energy deal with Adani Group
French oil and gas group Total on Thursday signed a new deal with Indian company Adani Group to expand their partnership towards the renewable energy sector. Total said it would create a 50/50 joint venture company with Adani Green Energy Limited, to set up green energy projects in more than 11 Indian states with a cumulative capacity of over 2 GW. Total added that the deal with Adani had a value of around $500 million.
Oil and gas giant Shell restricts travel to Hubei Province on virus
Royal Dutch Shell has banned business travel to and from China’s Hubei province due to the coronavirus, the company said in a statement. Shell has restricted non-essential business travel to mainland China, Hong Kong, Macau and Taiwan.
IOCL signs contract with Rosneft to import 2 million tons Russian oil to India
Indian Oil Corporation Limited (IOCL) on Wednesday signed a contract with Russia’s Rosneft Oil Company for importing two million tonnes per annum of Russian crude oil. The agreement was signed during India-Russia delegation-level talks. While the Indian side was led by Union Minister of Petroleum and Natural Gas Dharmendra Pradhan, CEO of Rosneft, Igor Sechin, headed the Russian delegation. Calling it an important milestone, Pradhan said, “This is yet another important milestone in our efforts to diversify sourcing of crude oil and in enhancing India’s energy security.” The two sides reviewed the ongoing investments between Indian oil and gas PSUs and Rosneft and discussed further enhancing energy cooperation and strengthening the hydrocarbons engagement both on investment front as well as sourcing natural gas and crude oil. Speaking on the occasion, Pradhan said, “Hydrocarbon is an important pillar of the Strategic and Privileged Partnership between India and Russia. Indian oil and gas companies value their association with Rosneft, one of the important companies partnering in our energy security objectives.” The two sides agreed to take forward mutually aligned priorities discussed during Minister Pradhan’s visit to Russia in September last year, including exploring a roadmap for Indian investments in the Vostok (Eastern Cluster) project of Russia. They also explored opportunities for involvement of Indian companies in infrastructure development projects in the Siberian and Arctic regions. CEO, Rosneft, Sechin indicated his readiness to intensify cooperation to further strengthen India’s energy security and work jointly with Indian oil and gas companies. (Source: Livemint) Russia’s Rosneft says India firms agree deal to join Vostok Oil project Russia’s state oil giant Rosneft has agreed a deal in principle for Indian companies to join the Vostok Oil project in the Russian Arctic, it said on Wednesday. In order to negotiate the terms of Indian companies’ entering Vostok Oil in the shortest time possible the parties agreed to create a regular working group of representatives of Russian and Indian companies, the statement said. Rosneft added that it had signed a contract with Indian Oil Corporation Limited to supply up to 2 million tonnes of oil to India via the port of Novorossiisk by the end of 2020. (Source: Reuters)
Adani Gas to start operating all ‘geographical areas’ by FY 21-end
Adani Group’s city-gas distribution (CGD) arm, Adani Gas Limited (AGL), is aggressively expanding its network coverage, as the company looks to operationalise all the 38 Geographical Areas (GAs) by the end of next fiscal. “Currently, work is going on for laying down steel pipeline (for the network) in all the GAs. And, we have simultaneously completed the identification of the CNG stations in these GAs. We are working in full-swing and by next fiscal we will start operating in all GAs,” said Suresh P Manglani, Chief Executive Officer of AGL. Addressing a media-analyst call on Wednesday, Manglani also stated that the company currently has a footprint (with its PSU partner Indian Oil Corporation) in 38 GAs spread across 71 districts in different parts of the country. Volume demand On the gas volumes, Manglani stated that the company aims to penetrate faster in the GAs, where there is faster and higher volume demand. “Our volumes come more from the existing four GAs, while the new GAs are slowly and steadily adding to it. This will be more in the nature of modular process, in which we will keep adding more volumes as we see demand coming in. For now, we are having a steady growth of close to about 9 per cent on year-on-year measure,” he added. So far in the current year, with four GA licenses under the 9th round, AGL has invested close to ₹13 billion, while going forward for the other new GAs, the company plans to have a capex of “a little over ₹50 billion in a five-year horizon,” he said after the company’s financial results announcements. In a statement, Gautam Adani, Chairman, Adani Group, said, “Adani Gas has delivered all round good performance both for third quarter and nine-month period of fiscal 2020 and further aims to expand its footprint in the natural gas sector across the country. The partnership with TOTAL will further enhance Adani Gas capabilities in building the best in class assets and creating a world class organisation”. Q3 net up 150% AGL posted a standalone net profit of ₹1.14 billion for the quarter ended December 2019, which is up about 150 per cent from ₹455 million logged in the corresponding quarter a year ago. Standalone revenues from operations stood at ₹5.19 billion (₹4.85 billion). On consolidated basis, AGL’s net profit for the quarter stood at ₹1.16 billion (₹470 million). Consolidated revenues from operations stood at ₹5.19 billion — up from ₹4.85 billion.