July 2021, Vol. 248, No. 7

Global News

Global News July 2021

11 EU Countries Oppose Plan to Continue Gas Project Funding  

Germany, Denmark, the Netherlands and eight other countries will reject a plan to prolong European Union support for cross-border natural gas projects, and instead push for rules to exclude fossil fuels, according to a document seen by Reuters.  

The EU’s “TEN-E” rules define which cross-border energy projects can be labelled Projects of Common Interest (PCI), giving them access to certain EU funds and fast-tracked permits.  

The EU is rewriting the rules in line with its climate change targets, and in December the European Commission proposed a new version excluding dedicated oil and gas infrastructure.  

That position has the backing of at least 11 EU countries, according to a joint paper from Austria, Belgium, Germany, Denmark, Estonia, Spain, Ireland, Luxembourg, Latvia, the Netherlands and Sweden.  

“TEN-E must not facilitate investments in fossil fuel infrastructure nor blending of hydrogen with fossil fuels,” said the paper, seen by Reuters. “TEN-E must contribute to developing the framework for a viable pathway away from reliance on fossil fuels.”  

The rules will be a “litmus test” of the EU’s pledge to eliminate its net emissions by 2050, it said.  

The intervention comes after Portugal drafted a proposal for member states’ position on the TEN-E revision, which would have prolonged funding for some gas projects.  

That proposal said that until 2030 investments to retrofit gas pipelines to carry hydrogen should be allowed to carry natural gas blended with hydrogen.  

It also said projects in the island countries of Malta and Cyprus with PCI status should retain it until those countries are fully connected to the European gas network. That could help ensure the completion of Greece, Cyprus and Israel’s EastMed pipeline to supply Europe with gas from the eastern Mediterranean. 

FERC Approves Enable’s Proposed Louisiana Pipeline  

The U.S. Federal Energy Regulatory Commission (FERC) approved U.S. energy company Enable Midstream Partners LP’s request to build the Gulf Run natural gas pipeline in Louisiana.  

But in what has become a recurring theme in pipeline approvals, the FERC Commissioners differed on how the Commission should consider greenhouse gas emissions from proposed projects.  

FERC Chairman Richard Glick and Commissioner Allison Clements said they dissented on the Gulf Run decision in part because they said the Commission should have prepared a supplemental environmental impact.  

Most of the gas transported on Gulf Run would go to the Qatar Petroleum-Exxon Mobil Golden Pass LNG export plant under construction in Texas. The first liquefaction train at Golden Pass is expected to enter service in 2025.  

The Gulf Run project includes about 134 miles (216 kilometers) of new pipe and other facilities that will provide about 1.7 billion cubic feet per day of transportation service from Enable’s existing Westdale compressor in Red River Parish, Louisiana, to an interconnect with the Golden Pass Pipeline near Starks, Louisiana.  

Germany: Ukraine Must Remain Gas Transit Country After New Pipeline  

Germany said Ukraine should remain a transit country for Russian gas, the Frankfurter Allgemeine newspaper reported, after President Vladimir Putin said it would depend on the former Soviet republic showing “goodwill” towards Moscow.  

Putin said that Ukraine’s role as a transit country was not assured once the Nord Stream 2 pipeline linking Russia and Germany was complete.  

Germany, which has backed the pipeline in the face of fierce opposition from the United States and many European countries who say it deprives Ukraine of crucial leverage over its eastern neighbor, has always insisted it must remain a transit country.  

“For the German government it remains central that Ukraine should remain a transit country even after Nord Stream 2,” a government spokesperson said. “With their transit agreement, negotiated in part by the EU and Germany, Russia and Ukraine created the framework for this. We expect this agreement to be adhered to.”  

The gas transit treaty expires in 2024 but can be extended.  

Blinken Says Nord Stream 2 Undermines Ukraine  

U.S. Secretary of State Antony Blinken described the Nord Stream 2 gas pipeline as a Russian geopolitical project that undermines the security of Ukraine, adding the United States wants to ensure Russia does not use energy as a coercive tool against any European state.  

Speaking at a joint press conference in Berlin after meeting German counterpart Heiko Maas, Blinken said Washington was determined to see if it can make something positive out of a difficult situation and strengthen Europe’s energy security.  

“Our goal remains to ensure that Russia cannot use energy as a coercive tool as a weapon against Ukraine, or anyone else in Europe,” Blinken said.  

The Nord Stream 2 project, which will double Russian gas exports across the Baltic Sea is about 95% complete.  It could help Russia curtail gas exports via Ukraine, depriving Kyiv of lucrative transit fees.  

A U.S. State Department report sent to Congress in May concluded that Nord Stream 2 AG and its CEO, Matthias Warnig, an ally of Russian President Vladimir Putin, engaged in sanctionable activity. But Blinken waived those sanctions, saying that this was in the U.S. national interest.  

Single Password Allowed Hackers to Disrupt Colonial Pipeline  

Further illustrating the potential vulnerability of pipelines to cyber-attacks, the head of Colonial Pipeline said the hackers who attacked the company in May were able to access the system by stealing a single password.  

Colonial Pipeline Chief Executive Joseph Blount told a U.S. Senate committee that the attack occurred using an older virtual private network (VPN) system that did not have multifactor authentication in place.   

“In the case of this particular legacy VPN, it only had single-factor authentication,” Blount said of the Colonial attack, which shut key conduits delivering fuel from U.S. Gulf Coast refineries to major East Coast markets, “It was a complicated password, I want to be clear on that. It was not a Colonial123-type password.”  

Colonial Pipeline said shortly after the attack that it paid the hackers nearly $5 million in bitcoin. The government recovered most of it.  

LNG’s Share of Indian Gas Demand Forecast to Rise to 70% by 2030  

The share of LNG in India’s gas consumption could rise to 70% from the current 50% in 10 years, and new import terminals are needed, the chief executive of the country’s top gas importer said.  

Prime Minister Narendra Modi has set a target to raise the share of natural gas in the country’s energy mix to 15% by 2030 from the current 6.3% to cut its carbon footprint.  

To meet that target India’s gas consumption needs to rise to 640 million standard cubic meters a day (MMcm/d) from the current 155 MMcm/d, A.K. Singh, chief executive of Petronet LNG.  

Indian companies are investing billions of dollars to strengthen gas infrastructure, including laying 9,320 miles (15,000 km) of pipelines to supply cleaner fuel to households and industries. India currently has 10,563 miles (17,000 km) of gas pipeline network.  

LNG projects of 19 million tons per annum (mtpa) capacity also are under construction and plans are afoot to increase use of LNG in trucks and buses.  

Singh said India needs to increase its LNG import capacity to 155 mtpa “considering 80% utilization” to boost use of the cleaner fuel.  

PipeChina Aims for Peak Carbon Emissions Before 2030  

The China Oil and Gas Pipeline Network, or PipeChina, aims to bring its carbon emission and energy consumption to a peak before 2030, a company manager said.  

The target follows China’s pledge for peak national CO2 emissions by 2030, as it aims to become carbon neutral before 2060. China has not revealed absolute carbon emissions, but analysts estimate they could have exceeded 11.5 billion tons of CO2 equivalent in 2019.  

State-backed PipeChina emitted about 13.2 million tons of carbon dioxide in 2020 and is expected to put out 17.6 million in 2025 before reaching a peak by 2030.  

“Currently, most of the carbon emissions at PipeChina are coming from our electricity and natural gas consumption,” Tang Shanhua, the firm’s deputy general manager of business operations, said at an industrial summit.  

Tang added that PipeChina plans to build more natural gas pipelines and natural gas storage facilities in China from 2021 to 2025, while looking into new businesses, such as hydrogen storage and transport and carbon capture and storage.  

U.S. Pipeline Operators Told to Prepare for Methane Compliance  

The U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) has sent an advisory to oil and gas pipeline operators directing them to update their inspection and maintenance plans for curbing the release of methane, as part of the Biden administration’s broader climate change agenda  

The PHMSA bulletin advised companies to begin to comply with the PIPES Act, a law signed at the end of 2020 that created dozens of new regulatory mandates for the agency, including the oversight of methane leaks by natural gas pipelines and transmission systems.  

Since the requirements enshrined in the PIPES Act are new and will not be enforced until the end of the year, the bulletin takes the first step of delineating what is expected of the operators, a Biden administration official said.  

The bulletin tells operators that they must have inspection and maintenance plans in place by the Dec. 27 to minimize methane emission releases and repair or replace outdated leaking pipes.  It said the agency will begin enforcing those requirements in January.  

Navigator Aims to Expand U.S. Carbon Capture Pipeline Project  

Navigator CO2 Ventures announced the successful conclusion of the non-binding open season of its carbon capture pipeline system (CCS), which seeks to provide biorefineries and other industrial participants a long-term, economic path to materially reduce their carbon footprint.    

Navigator plans to expand the capacity of the pipeline and proceed with multiple sequestration sites, creating an injection capacity of up to 12 mtpa. The project would enable the capture and transport of CO2 through 1,200 miles of pipeline across five U.S. Midwest states to a permanent sequestration site.  

This CCS project is one of the first large-scale, commercially viable, carbon pipelines to be developed in the United States.  

Navigator previously announced its partnership with BlackRock Global Energy & Power Infrastructure Fund to develop the CCS in Nebraska, Iowa, South Dakota Minnesota and Illinois with Valero Energy as the anchor customer.   

Navigator planned to use the information received during the non-binding open season to continue working with interested shippers on binding commercial agreements. Navigator anticipates the CCS project to begin operations in-phases beginning in late 2024. 

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