October 2023, Vol. 250, No. 10

Global News

Global News October 2023

Petrobras Signs on with Compagas for Natural Gas Supply 

Brazil’s Petrobras signed contracts for the supply of natural gas with gas company Compagas for $1.28 billion (6.4 billion reais), Compagas told Reuters. 

Compagas, which is controlled by Companhia Paranaense de Energia (Copel), said the contracts run from 2024 to 2034. 

Compagas Chief Executive Rafael Lamastra Jr. said the new contracts will enable a 10% reduction in natural gas costs as of January of next year. 

“We will make natural gas more competitive for users, especially for the industry,” he said in a statement. 

About 20% of the contracts will be indexed to the Henry Hub, used as a reference in the gas market in the United States, while the remaining portion will be indexed to Brent oil and the dollar, Compagas said. 

According to Lamastra, index diversification will reduce the volatility of contracts in the face of variations imposed by macroeconomic and political conditions. 

The new agreements follow other contracts signed by Petrobras, which in July  agreed $11.23 billion (56 billion reais) gas contract with Comgas, a company that has a concession for the distribution of natural gas in Sao Paulo state. 

Enbridge Buying Dominion Utilities for $14 Billion  

Enbridge will buy three utilities from Dominion Energy for $14 billion including debt, the Canadian pipeline operator said. The move will produce the largest natural gas provider in North America. 

The deals for East Ohio Gas, Questar Gas and Public Service Co. of North Carolina will consist of $9.4 billion in cash and $4.6 billion of assumed debt. 

Enbridge President and CEO Greg Ebel described the assets the company is acquiring as “must-have” infrastructure for providing safe, reliable and affordable energy. 

The agreement, which doubles the company’s distribution business, is seen as a bet on the future of natural gas in a regulated market even as energy companies and consumers are transitioning to a greener future by phasing out fossil fuels. 

Upon closing, Enbridge would supply over 9 Bcf/d of gas to customers in Ohio, North Carolina, Utah, Idaho and Wyoming. 

Williams CEO Not Interested in Buying of Utility Companies 

Williams Companies is not interested buying utilities in a move similar to pipeline operator Enbridge’s recent acquisition of Dominion Energy, according CEO Alan Armstrong, who said the return rate would be too low. 

“When we look at our use of equity in a transaction like that ... that kind of lower return does not make much sense for us,” Armstrong said at the recent Barclays CEO Energy-Power Conference in New York. 


Many companies are taking advantage of grant funding from the Department of Energy (DOE) for electrification projects at facilities, including ports and airports, which along with the electric vehicles, is expected to drive power demand, he said. 

“Natural gas, and in particular pipeline and storage capacity, will be the beneficiary of that continued electrification,” Armstrong said. 

The sale by Dominion followed a strategic change focusing on its regulated operations. In July, Dominion sold its 50% stake in Cove Point LNG to Berkshire Hathaway for $3.3 billion. 

The deal is expected to close in 2024, subject to approvals from the Federal Trade Commission and Committee on Foreign Investment in the United States, among others. 

Armstrong said Williams is trying to add to its pipeline network to transport even more gas in the U.S. 

Peyto to Buy Repsol’s Canada Unit for $468 Million 

Canadian natural gas firm Peyto Exploration & Development will acquire Spanish company Repsol’s assets in Canada for $468 million, the two companies said in separate statements. 

The Deep Basin assets will add about 23,000 boe/d of mainly gas production. The deal is expected to close in mid-October. 

Repsol Canada Energy Partnership includes an upstream oil and gas business and related midstream facilities and infrastructure located predominantly in the Deep Basin in the province of Alberta. 

“The Repsol assets fit perfectly with Peyto’s existing Deep Basin acreage and offer a significant number of top-tier undeveloped locations that will immediately compete for capital within our portfolio,” Peyto CEO Jean-Paul Lachanc said in a statement. 

Repsol said the sale is part of its strategy to pursue oil and gas production in a few countries, primarily the United States and Brazil. 

The company sold part of its assets in Alberta to the Canada Pension Plan Investments Board-backed Teine Energy in 2022. 

Tellurian to Sell Driftwood LNG Supplies to Non-Equity Holders 

Tellurian will sell LNG supplies to non-equity holders to bring its much-delayed Driftwood LNG project to fruition, company Chairman Charif Souki said in a video report on the project. 

Tellurian hopes to supply 11 mtpa of its 27.6 mtpa output through offtake agreements in order to get the project completed, he said. 

Only a year ago, Tellurian canceled an agreement to supply 3 mtpa to Vitol, a commodities trader, after a decision to offer equity stakes to potential customers initially. 

Offering sale and purchase agreements (SPAs) as part of its strategy is a good move, Ira Joseph, an LNG expert and Senior Research Associate at the Center on Global Energy Policy at Columbia University, told Reuters, citing historical precedent. 

At the Gastech Conference in Singapore, Tellurian said it hoped to announce equity partners by year end. 

LM Energy Sells 130 Miles of Pipelines in New Mexico 

LM Energy Holdings entered into definitive agreements to sell assets related to its Touchdown Crude Oil Gathering System in New Mexico’s Eddy and Lea counties. The transaction is expected to close during the fourth quarter. 

LM began development of its crude oil gathering business in 2019 and has constructed  over 130 miles of pipelines, two terminals with 136,000 barrels of combined storage capacity. The company said its volumes have grown to 75,000 bpd on a 100% greenfield basis. 

“This transaction positions LM as a stronger and even better capitalized company that is focused on our gas business,” CEO Elliot Gerson said. 

The company has constructed over 70 miles of pipelines to-date and will commission its sixth compressor station during the fourth quarter of 2023. 

“Gas volumes in the Northern Delaware Basin continue to outperform expectations, and meanwhile operators and regulators are increasing their focus on eliminating flaring. That combination creates a massive need for additional gas gathering and processing infrastructure,” said Gerson. “With our existing team, assets, and relationships, we are extremely well positioned to continue growing our gas business.” 

India Seeks More Natural Gas in Effort to End Blackouts 

India hopes to add volumes of natural gas and has requested that utilities move faster to complete power plant maintenance as part of emergency steps to stop electricity outages, according to Reuters. 

The move follows extension of an emergency law that forces power plants running on imported coal to maximize output, as dry weather in August caused a sharp decline in hydro- and wind-energy output. This resulted in the country’s biggest electricity shortage in 16 months. 

“States may ensure that all gas-based power plants with whom they have power purchase agreements must be brought into use, during high demand days and non-solar hours,” the power ministry said. “All efforts to be made to bring back the units under forced outage as quickly as possible.”  

The move could boost demand for natural gas, and push India to seek more LNG cargoes on the spot market. India’s LNG imports have fallen for three consecutive financial years ended March 2023, government data shows. 

India’s power demand has been growing rapidly after the pandemic, with strong economic growth boosting demand from factories and the summer heat increasing household consumption. 

Coal accounted for over 73% of India’s power generation during the year ended March 2023, while renewable energy sources including wind and solar make up over 11% of total generation. 

Eni, Snam Aim for Italy’s First Carbon Storage Project 


Carbon capture and storage (CCS) technology is seen as essential to ensuring competitiveness among several Italian industries, including steel, cement and chemicals, energy group Eni and gas grid operator Snam said jointly.  

The two groups joined forces last year to set up the first CCS project in Italy. The hub they hope to build in the Adriatic Sea will store 16 mtpa of carbon dioxide, nearly half of the net annual emissions from the country’s most carbon-intensive industries, they said. 

The project could also help to decarbonize gas-fueled power stations and make it possible to produce low-emission hydrogen, contributing to energy transition targets, analysts said. 

CCS technology removes from the atmosphere carbon dioxide (C02) produced by industrial processes or captures it at the point of emission and stores it underground. 

The International Energy Agency (IEA) said the move can play a vital role in achieving global climate goals. However, critics say it risks prolonging the use of fossil fuels and question the project’s commercial viability. 

A study compiled by the two groups and think-tank Ambrosetti estimates that the Eni-Snam CCS hub will be able to store 300 million tons of CO2 by 2050, supporting industrials that generate $67.8 billion (62.5 billion euros). 

Saudi Aramco to Acquire Stake in EIG’s MidOcean Energy  

Saudi Arabia’s oil group Aramco will buy a minority stake in LNG company MidOcean Energy for $500 million, with an option to increase the size of the shareholding. 

MidOcean is owned and managed by U.S. investment firm EIG Partners, which led a consortium to buy a 49% stake in Aramco’s oil pipelines business in 2021, a deal that raised $12.4 billion for Aramco. 

“This is an important step in Aramco’s strategy to become a leading global LNG player,” Aramco Upstream President Nasir K. al-Naimi said in a written statement. 

MidOcean is in the process of buying interests in four LNG projects in Australia as part of its growth strategy to create a global LNG business, according to a report by Reuters. 

In October 2022, MidOcean agreed with Tokyo Gas to buy the Japanese company’s stakes in a portfolio of four Australian LNG projects for $2.15 billion. 

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