The mining industry is a productive sector for which there are many different views worldwide. Even in Greece, where the subsoil is acknowledged to be rich in minerals, limited knowledge about the contribution of the sector to our society makes its recognition harder.
The truth is that since their creation, humans have advanced with the help of minerals.
Minerals such as gold, silver, lead, zinc and copper play a crucial part in our lives even if we are unaware. They affect our life in many ways by being an integrated part of every day life through many fields such as medicine, construction, communications, transportation and energy.
Lets learn more about the world of minerals:
Almost all the gold on Earth comes from comets and asteroids that bombarded our planet 4 billion years ago. The most innovative essential application of gold is in medicine. With gold, cancer can be fought thanks to new therapies that combine nanotechnology and lasers, harming only the cancer cells and leaving healthy tissues unaffected. Thanks to its high conductivity, it is an essential mineral in many of our daily appliances, such as computers, TVs, smartphones, white appliances, touch screens and flash memories.
The best electricity conductor after silver, especially resistant to corrosion and scalability, with a high thermal conductivity and antimicrobial attributes, copper is the first metal than humans used 10,000 years ago. Almost its entire production, specifically two thirds of it, is used in electric applications. In cables of domestic or industrial type, inside appliances and also in car cables and other transportation means. The digital world is based on copper, since it is necessary for producing printed circuits, microchips and processors for “smart” devices that are an essential part of daily life.
Lead is often used in construction, while it enforces aircraft fuel, a fact that makes it necessary for modern transportation and the modern way of life. It fuels our car with energy and constitutes the basic part of batteries of any type. It is found in latest tech batteries that are innovative, reliable and sustainable and store energy from wind and solar farms.
A heavy, rare and very shiny mineral we live with is silver. The most well known use of silver is in coins from antiquity until modern times. It belongs to the family of precious metals, which is why many use it as a savings mean, since it retains its value in times of economic hardship. Thanks to its antibacterial attributes, we use it daily in detergents and deodorants, while it is the basic material in jewelry.
On the other hand, zinc is a really enduring metal with non-corrosive attributes, necessary for galvanizing iron, valuable for the human organism and its immune system. One of its most widespread and useful forms is that of the oxide. It is found in plenty of products such as cosmetics,
sun screens, children lotions, soaps and makeup among others. Its contribution is especially important for protecting the immune system, while its administration saves thousands of lives daily in underdeveloped countries.
Growing the economy
What has been mentioned above is only a part of the daily uses of minerals. We have organized our life based on them and the present would be radically different without their presence.
A vital prerequisite for their exploitation is mining, which is conducted with responsibility, respect to environmental law and human life. This is what the global mining sector supports, focused on the sustainable exploitation of mineral resources.
These are the principles of mineral company Hellas Gold, a subsidiary of Canadian Eldorado Gold, which continues a 25 century long history in the Cassandra mines of Halkidiki, turning them into a local and national growth lever.
It is an investment that employs 2,000 people and surpasses 1 billion dollars, providing 5 million Euros of income for the Greek state and 150 million to suppliers annually, 185 million of which were directed to Greek suppliers in 2017.
The responsible exploitation of Greece’s mineral wealth contributes greatly to employment, economic growth and social wellbeing not only on a national, but on a local level as well. As proud members of the local community in Halkidiki, Hellas Gold invests in its longterm cooperation with its neighbors in order to contribute to the region’s sustainable development.
From 2012 it has invested over 20 million Euros for developing infrastructure in tourism, education, social and environmental care, culture and sports in the region.
Moreover, by supporting local employment and the economy, it essentially helps improve quality of life for inhabitants of NE Halkidiki.
The biggest oil producer in Europe is no longer “in love” with black gold. This comment by Bloomberg comes at the aftermath of the Workers Party of Norway removing its support for offshore drilling in the Lofoten islands inside the Arctic Circle.
The opposition party’s radical turn created a strong consensus in the parliament in order for this region to remain outside the scope of oil projects. It is a blow to the oil industry that enjoyed Norwegian support for years, while it possibly shows that the Scandinavian country is closer to the end of an era, which brought it among the richest ones on the planet.
The end of an era?
Oil companies under the state controlled Equinor, the country’s largest producer, have tried to gain access to the Lofoten islands, underlining that this is essential if Norway plans to maintain current levels of production, since other deposits are being depleted. It is calculated that the archipelago, a natural wonder, contains 1-3 billion barrels of oil.
The Norwegian Association of Oil and Gas appeared surprised and disappointed. Also, the Industry Energy association’s members, an ally of the Workers Party for decades, spoke against the party’s change of stance, saying that “it fuels intense imbalances and is not going to be accepted”.
It should be reminded that recently Norway’s state investment fund decided to stop investing in the shares of oil companies in a largely symbolic move, since it was clarified that investments
in oil companies also having renewables projects will continue.
from fossil fuels means
In contrary to Venezuela, Norway is perhaps the only model country when it comes to responsively managing its oil wealth. Norway has a long history as an oil and gas producer and the country used its oil wealth to build the largest state investment fund in the world.
Recently, this fund – the Government Pension Fund Global (GPFG) – made headlines through its announcement that it stops certain investments in fossil fuels. How important is this announcement? It certainly has a symbolic value, due to the size of the fund and the fact that the fund itself is the product of the oil and gas history of Norway. But we should describe this framework.
Even though this piece of news was widely described as “Norway abandons fossil fuels”, as Jim Collins noted in Forbes, “the shares of great energy companies – Exxon, Total, Petrobras, Royal Dutch Shell etc – will continue to be included in the GPFG fund”. More specifically, the fund will retain investments in fossil fuel companies that also have renewables arms.
At the end of 2018, CPFG had a total of 633 billion Euros invested in shares. Of these, the fund participated in 341 companies characterized as “oil and gas” with a total value of over 37 billion dollars.
According to an announcement by CPFG, it will divest from 114 oil and gas companies “in due time”. Companies in the crosshairs include the biggest American producers, such as EOG Resources, Anadarko Petroleum, Apache, Cabot Oil and Gas, Devon Energy, Diamondback Energy and Occidental Petroleum.
Thus, placing things in a specific frame, the fund will retain most of its oil and gas investments. The largest divestment will be EOG Resources. At the end of the year, the fund had a total of 488 million dollars in EOG shares, which constituted a little over 1% of the company’s market capitalization.
According to S&P Global Market Intelligence’s data, energy companies active in the stock market are worth around 5.0 trillion dollars worldwide. This is a sum 135 times larger than the GPFG’s oil and gas participation (most of which stays put).
Among those classified as E&P companies, there are 787 corporations with a total value of 832 billion dollars. The greatest category per value are vertical oil and gas companies and it is dominated by giants such as ExxonMobil and Shell. Globally, there are 51 companies in this category with a value of 2.3 trillion dollars.
The impact in shares
Most of the American oil and gas companies scheduled for divestment recorded liquidation after the announcement. The impact was certainly psychological, but there could be greater effect on the companies where the fund holds a larger share.
There are five participations in oil and gas where the fund controls at least 3%, but none of them are American oil and gas companies. Among those scheduled for divestment, the greatest share is in Delek US Holdings with 2.6%.
Overall, even such an important divestment is a drop in the ocean compared to the scope of the global oil and gas sector. If the world continues to buy fossil fuels, the companies will keep making money and investors keep making money through them.
Greece is ready to enter the era of liquefied natural gas as a marine fuel, since DEPA is conducting the tender to select an advisor, which will select the shipyard to build an LNG bunker vessel.
During the first phase 23 companies expressed their interest. At the end, four of them submitted a binding offer. They are French Gazocen, Greek NAP Engineering, Spanish Seaplace and German-Chinese Schulde.
The Poseidon project
The project is a continuation of the EU’s Poseidon program and it concerns two LNG bunker vessels, one on behalf of DEPA in Greece and one on behalf of Navi Gas in Cyprus. The construction of the two vessels will have a budget of 60 million Euros, while 6 million more will be spent on infrastructure in the two countries. The EU Commission supports the project with 19.8 million (30% of total expense).
The advisor will be chosen according to the offered price in about 1-2 months and will seek the necessary shipyards in cooperation with DEPA and Navi Gas (whether in Europe or elsewhere) in order to build the two LNG bunker vessels. The program will last 45 months. The first phase for selecting a shipyard will take a year. The second phase will follow with the construction of the ships and the third step is to select a managing company.
The ships’ role
The two LNG bunker vessels will take over the supply of ships using liquefied natural gas as a fuel and they will contain 3,000 c.m. using the process of ship to ship. DEPA’s ship will be supplied with LNG from Revythousa and will operate in the Piraeus harbor, but also islands of the Aegean if there is demand. The basic consumers are expected to be new technology cruiseships, but also container ships running with LNG engines. Supply will take place inside the harbor or in the mooring.
When it comes to passenger ships, there are still none using LNG engines. Attica Group has expressed its interest to participate in the European program (which subsidizes 30% of the LNG equipment). As for Cyprus, the ship will be based in Limassol.
The BlueHUBS project
The two ships will be built as part of the European project BlueHUBS with co-financing from the EU. They will be the first LNG bunkering vessels in the wider Eastern Mediterranean region. The goal of the program is to promote as soon as possible Greece’s transition to green fuels, according to regulations by IMO, which impose the use of fuels with lower than 0.5% sulfur from 2020 onwards.
The EU Commission has promoted 49 different projects with a total of 695.1 million Euros to develop sustainable and innovative infrastructure in Europe for all transportation projects.
DEPA’s planning, however, extends even further, since there are plans to build a second bunker vessel in Greece. Its capacity is estimated to be higher, reaching even 7,000 c.m., and it will have the mission to satisfy demand in the Ionian. Initially, the prospect of building an LNG storage in Patras was examined, which will be supplied by the bunker vessel and will also satisfy onshore demand. However, according to “N”’s information from DEPA, the case of Igoumenitsa is also examined.
In following years, demand for LNG as a marine fuel is expected to rise. For example, out of 94 cruiseships under construction around the globe, 18 are designed to use LNG as a fuel. During this period, the global fleet using LNG reached 143 ships in 2018 from 118 in 2017.
Furthermore, 135 ships in total are in the orderbook and another 135 are LNG ready. Orders for ships using LNG concern all types, such as container ships, tankers, cruise ships and VLCCs.
Romgaz Group recorded in Q1 2019 a revenue of EUR 359.77 M, increasing 15.57% compared to Q1 2018. Net profit reached EUR 113.8 M, higher by 16.26%, compared to the same period of 2018. Net earnings per share (EPS) was EUR 0.29.
The achievement of the consolidated net profit margin (31.6%, consolidated EBIT margin (36.8%) and consolidated EBITDA margin (52.2%), show that the high profitability of the Group is maintained.
Natural gas production increased by 4.8%, 65.9 million cubic meters respectively, from 1364.1 MCM in Q1 2018 to 1430 MCM in Q1 2019.
Due to the fact that the power units are unavailable during the works performed at the new power plant, the electricity delivered decreased by 42.11% compared to the similar period in 2018 (170.8 GWh vs. 287.3 GWh).
The natural gas consumption estimated at national level for Q1 2019 was 48.5 TWh, down by 3% compared to Q1 2018. Approximately 9.33 TWh was covered by import gas and the remaining 39.2 TWh by domestic production, to which Romgas contributed with 17.63 TWh, representing 36.36% of the national consumption. The company’s market share decreased by 2.7% as compared to Q1 2018.
The post Romania: Romgaz reports EUR 113.8 M net profit in Q1 2019. Up 16% appeared first on EnergyWorld Magazine.
In Q1 2019, Transelectrica experienced an improvement in profitability for profit-allowed activity, as compared to Q1 2018.
Profit-Allowed Segment: In the main area of core activities (National Power System transmission and dispatching) in Q1 2019, the company achieved better financial results compared to Q1 2018. The EBIT operational profit (profit before income tax and interest) was higher by RON 17 mn (+ 31%) compared to the previous year.
Transmission income grew by +6% amid the higher tranmission tariff (+ 7%) in Q1 2019 as compared to Q1 2018 and an increase in revenues from cross-border transmission capacity sales, these increases fully absorbing the decrease of national power consumption, reflecting in lower billed quantities (-2%).
Q1 2019 was a difficult one, characterized by high operating costs of the transmission system, particularly the costs of power procurement to compensate for technical losses in the grid (OTC). Despite the fact that the physical level of technical losses was lower than in the previous year (technical loss percentage 2.35% Q1 2019 versus 2.83% in Q1 2018), total power procurement costs were significantly higher (+RON
14 mn representing +21%) amid a substantial increase in the price of energy on the wholesale market (the average price paid by Transelectrica was over 50% higher, from RON 194 mn/MWh in Q1 2018 to RON 299 mn/MWh in Q1 2019).
Zero-Profit Segment: Q1 2019 recorded a temporary financial loss of – RON 28 mn versus temporary profit + RON 27 mn registered in Q1 2018. Thus, in Q1 2019, the revenues from technological system services were lower compared to the expenses related to the purchase of technological system services. Revenues from technological system services registered a decrease due to the decrease in the amount of electricity delivered to consumers and the tariff approved by ANRE for these services.M.U. Q1 2019 Q1 2018 ∆ Financial Charged energy volume [TWh] 14,68 15,00 ▼ 2% PROFIT ALLOWED ACTIVITIES Total revenues [RON mn] 317 300 ▲ 6% Average transmission tariff (achieved) [RON/MWh] 18,03 16,85 ▲ 7% Transmission revenues and from other activities on the energy market [RON mn] 290 272 ▲ 7% EBITDA [RON mn] 144 130 ▲ 10% Amortisement [RON mn] 72 76 ▼ 4% EBIT [RON mn] 72 55 ▲ 31% ZERO PROFIT ACTIVITIES EBIT [RON mn] (28) 27 ▼ 205% ALL ACTIVITIES (PROFIT ALLOWED AND ZERO PROFIT) EBIT [RON mn] 44 82 ▼ 47% Net profit [RON mn] 38 68 ▼ 44% Operational Net internal consumption [TWh] 15,3 15,6 ▼ 2% Net internal production [TWh] 15,0 16,8 ▼ 11% Export [TWh] 1,1 1,7 ▼ 38%
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In the Netherlands, once Europe’s largest natural gas supplier, one of the big questions is how to deal with declining production and increasing reliance on imports.
For hundreds of energy traders, utility executives and analysts gathering in Amsterdam this week for the Flame Conference, the Netherlands epitomizes the European energy security situation. Whether through pipelines from Russia or northern Africa or by ship from Qatar or the U.S., more and more imported gas will be needed to feed the region’s power plants, companies and homes.
Increasing Gas Gap
The Netherlands turns into a net importer of natural gas as its output falls
“The Netherlands is set to become a definitive net importer of natural gas,” said Carlos Torres, vice president of gas and renewables markets at Rystad Energy, a Norwegian energy research company. Across Europe, nations are “now taking advantage of low LNG prices.”
The source of gas is a politically charged issue, with Russia supplying around 40% of the European Union’s fuel and building a controversial new pipeline directly into the region. The U.S. says that dependency is dangerous and is urging the EU to build more terminals to ship in gas from its shale boom to bolster the bloc’s efforts at diversification.
LNG is playing a bigger role in Europe after new production plants caused global supply to outstrip demand, with the surplus boosting imports into the region’s liquid markets to record levels. The Gate LNG terminal in Rotterdam has seen renewed interest and could hit full capacity by the end of the year after years of being underused, Torres said.
European LNG imports more than doubled in the first quarter despite a warmer-than-usual winter, demonstrating a “genuine underlying demand,” according to Alastair Maxwell, chief financial officer of LNG tanker owner GasLog Ltd. While buyers took advantage of the lower prices to bring in more cargoes, declines in the region’s production were also behind the increases, he said.Shut Down
The Groningen field, once Europe’s largest, is being phased out and will be closed completely by 2030 as the Dutch government seeks to limit earthquakes provoked by gas exploration. Its production is forecast to fall to less than half the nation’s requirements in the year through October, and will be just a third of peak output in 2013, according to BloombergNEF.
That output decline comes as the European Union needs more gas to compensate for the retirement of coal and nuclear plants. The International Energy Agency estimatesthe 28-nation bloc will have to seek additional imports equal to one-third of anticipated consumption by 2025.
Europe to need additional gas supply as domestic production contracts.Mild Winter
The flood of LNG to Europe has put further pressure on natural gas prices already weakened by reduced demand and mild weather. In the U.K., temperatures topped 20 degrees Celsius (68 degrees Fahrenheit) for the first time during the winter, meaning less need for the fuel for heating.
Europe Getting Warmer
Temperatures have risen around 1.4 degrees celsius since pre-industrial times. The benchmark next-month gas contract in the Netherlands, also Europe’s biggest traded market, has fallen 37% this year. Storage levels in Europe are also well above their five-year average, damping appetite for fuel to inject this summer.
“Europe has the flexibility now to import LNG at a good price, but we expect that in 2022 prices will start to rise as demand in Asia is set to resume growth,” said Torres. “As Europe is increasing its import dependence, that could result in higher electricity prices in the region.”
The advancement of the proposed East Med pipeline is a priority for the US. The 7 billion dollar bet.
In a highly strategic and symbolic move, the US sent the message that they are “back” in the Eastern Mediterranean and active in every way in the effort to reduce Europe’s energy dependence on Russia, since American foreign secretary, Mike Pompeo, participated in the trilateral summit of Greece, Israel and Cyprus in Jerusalem on March 20.
The topic of the second summit taking place within a three month period was “energy and marine security” and the American foreign secretary’s presence surely provided a certain gravitas to the meeting of Tsipras, Anastasiadis and Netaniahu, while it affirmed that the trilateral model creates a new strategic “canvas” for the region as it is not just about alternative energy sources for Europe, but also about maintaining stability and security in the region during this crucial time.
Mr. Pompeo’s participation in this trilateral summit, at a moment when friction in Turkish-American relations is increased because of the S400 issue, was perhaps the most concrete answer to Turkey, which apart from other threats, had illegally claimed space for military exercises south of Limassol.
Pompeo’s presence obviously held importance. Apart from the traditionally warm relations of the US with Israel, there is also the more pro-Israel policy of the Trump administration, during a symbolic time with the decision to move the American embassy to Jerusalem.
Furthermore, there is the friendly relationship of Trump with Netaniahu and it is certain that the American president wanted to help the Israeli prime minister get reelected. In this sense, it is obvious that Pompeo’s presence was a part of an effort to promote Netaniahu’s image as a “global leader” before the elections.
Moreover, in this phase of US foreign policy, with the issue of withdrawal from Syria being open, with the new “cold war” with Russia and increased antagonizing, but also with difficulties in convincing the rest of their allies for an aggressive policy against Iran, it is obvious that Washington views positively any effort to create defensive alliances compatible to their own goals.
It is also obvious that the US support any effort to reduce European dependence on Russian natural gas, under the condition that American companies will gain ground to cover that gap.
The East Med project
The East Med pipeline, which is one of the most important export projects for Eastern Mediterranean gas, a region at the epicenter of energy developments because of recent years’ discoveries, is planned to cross the Israeli, Cypriot and Greek EEZ, reach Greece and from there connect to Otranto, Italy, through an underwater pipeline. From that point, supplies to Europe will be available. It is an important 7 billion dollar project, with a length of 2,200 km, which faces significant technical challenges because of the great depth and the difficult underwater terrain.
The US support East Med for geostrategic reasons, without excluding alternative ways for exporting natural gas, either through Egypt’s LNG plants or a new LNG plant in Cyprus.
For the US, the pipeline will give a permanent character to Israel’s connection with Europe and at the same time it will ensure a stable supply of the European market with “non Russian” gas. Its quantities, however, will only be enough to cover the needs of South and SE Europe, thus leaving a wide space for American LNG exports that have already commenced.
The strategic pylon of American foreign policy, as expressed by Mr. Pompeo during his speech in a top level energy conference in Houston with the participation of major oil companies and energy ministers from many countries (among them Greece, Israel, Cyprus), considers the use of energy as a means of promoting political goals set by American foreign policy.
Russia and Turkey
Russia is not happy with the project, since it stands against any alternative route that will reduce European energy dependence on the cheaper Russian gas. Russia is invested strategically in the expansion of Turkish Stream to Europe, but also in the nominal continuation of Nord Stream II’s construction, which connects Russia to Germany while bypassing Ukraine as a hub and it widens Europe’s dependence on Russia.
Turkey is also opposed to the pipeline, since it steadily supported the export of SE Mediterranean gas through a pipeline on its own soil. Turkey considers that East Med bypasses it, thus reducing its strategic role as an energy hub. Of course, Turkey’s relations with Cyprus, Israel and Egypt are such that they do not allow any space for cooperation when it comes to hydrocarbon management in the region, while the EU would neither wish to obtain another “energy dependence” through Turkey monopolizing the routes of natural gas from the Caspian region (TANAP), Russia (Turkish Stream), northern Iraq and now the Eastern Mediterranean.
Egypt has not publicly turned against the pipeline and it views this project as antagonistic according to its own ambitions to become an export hub in the Eastern Mediterranean using its existing LNG plants in Idku and Damietta. However, it faces the difficult political decision of Israel becoming dependent on an Arabic country, even a friendly one.
European and Greek interest
The EU has provided 100 million Euros for the project’s viability study and has included it in its strategic projects, while the study is expected to be completed in Autumn, in order to subsequently begin the process of finding investors.
For Greece, the strategic importance of the project is evident, since it offers for the first time the role of a real energy hub that connects Greece with other countries such as Israel, Egypt and Cyprus in an energy, economic and security network in the Eastern Mediterranean.
For Israel, the pipeline is mostly of political significance, as it will connect the country to Europe and despite its great cost, it is an “independent” choice for exporting Israeli gas. For Cyprus, it is also politically important because of Turkey, while Nicosia will be mostly benefited by an LNG plant on its own soil, if new discoveries in its EEZ turn this into a viable project.
Experts claim, of course, that according to steps being taken so far, the chances are that there is enough gas to cover local demand and exports through Egypt’s LNG and probably an LNG plant in Cyprus and East Med.
In any case, Mr. Pompeo’s participation in the trilateral summit of March 20 constitutes a pivotal point for the new, upgraded presence and participation of Greece, Cyprus, Israel and Egypt in the new security architecture formed in the Eastern Mediterranean.
By Vinodkumar Raghothamarao*
Oil and Gas companies operate in dynamic and complex environments, where they face constant challenges especially in terms of budget and cost overruns for capital project execution. After the 2014 oil price dip, across energy and process industries, about 55 percent of capital projects were negatively affected by either scaling back projects, postponing investments, or canceling projects all together. Now with oil prices hovering around 65$, capital spending bounced back as companies began to gradually invest, stimulated by the rising price of oil and gas and other raw materials.
The need of the hour is to overcome the challenges faced in the past with respect to productivity and performance improvement related to capital project portfolio execution. In the current environment, it has become increasingly important for oil and gas companies to manage capital projects in the most efficient manner possible – this in order to sustain and improve margins. It is also important to design revamped or new facilities with advanced solutions for the same reason. To manage capital projects efficiently, companies should develop a strategy or roadmap for capital project efficiency and performance improvement, which will help save on schedule, costs and lead to higher margins.
Around 65% of capital projects have more than a 10% overrun on costs and schedules, and nearly a third have more than 25% overrun on costs. Oil and Gas Companies can adopt best-in class project management and Industry 4.0 digitalization technologies to boost capital-project productivity. Value engineering, Design Standardization, digitizing processes and advanced analytics can all yield significant improvements.
Imitating such practices really does not help as each oil and gas project is unique. No oil and gas project is the same as the one that preceded it, and lead times are extremely long. Moreover, the project teams are dynamic and often change. Consequently, each new project brings a new set of challenges and a new learning curve, thus limiting the potential for boosting performance.
If oil and gas companies can adapt these practices to meet the needs of their unique environment, considerable improvement is possible: by our estimate, reducing development time alone has the potential to deliver 12 to 25 percent in cost savings.
Design standardization provides one of the greatest savings opportunities in capital projects. There could potentially be a five-to-tenfold increase in construction productivity possible if construction were to move to a manufacturing-like system of mass production, with more standardization and modularization.
Capital project designs are often bespoke, which may seemingly preclude the potential productivity gains of repeated manufacture and construction. But projects, particularly major capital projects, consist of many separate elements and packages – each of which can provide great opportunity for design standardization. Value engineering of large capital projects typically delivers cost savings of at least 10% vs. previous projects or initial concept designs, and also presents opportunities for value enhancement through additional functionality.
In addition to savings, project owners who incorporate standard designs often benefit from reduced contractor pricing, as contractors can establish facilities tailored to providing standard products. One upstream petroleum major realized a seven-month improvement in time-to-market by abandoning its legacy of tendering projects that required unique execution approaches (bidding, fabrication, and construction) for each project in favor of a standardized and modularized design. This move to standardization was made possible through detailed interviews and problem solving with contractors, partners, suppliers and owners to identify optimal solutions.
Industry 4.0 digitalization has immense potential to greatly improve a wide range of processes used in the oil and gas capital projects. Used in conjunction with automated engineering processes, five-dimensional building-information modeling (5-D BIM) will likely eliminate the manual execution of many repetitive tasks, reduce the effort required for contract management, and make it possible to automate some quality-control functions.
Digital technologies can make oil and gas capital projects more productive as well. Digital twins, real-time digital replicas of physical assets created by laser scanning of a construction site, make it possible to do site inspections and track progress in real time from the office. With the use of RFID tags, the value chain workflow of parts can be automatically tracked from manufacturer to installation site, improving schedule predictability. Used in combination, 5-D BIM and digital twins will likely soon become the new norm for designing and monitoring construction projects.
Virtual-reality tools help users view designs and prototypes, allowing them to interact with them as if they had already been constructed. That means they can see the exact size of various components before physical assets are fabricated. Similarly, advanced surveying tools help users understand as-built conditions and compare them with designs.
Supply Chain and Procurement 4.0 can streamline and improve procurement processes. Automating and digitizing purchase-ordering processes and communications with suppliers can greatly reduce the amount of manual work required, accelerating the supply chain while giving it a whole new level of transparency. Cloud-based should-cost modeling, which evolves from project to project, is used sparingly in the oil and gas capital projects and it is the same with e-auction and electronic-request tools. Digitizing the supply chain can reduce procurement costs for all purchases of goods and services by 20%, reduce supply chain process costs by 50%, and increase revenue by 10%.
Big Data offer a wealth of useful information for O&G capital-project teams. Project data can be used to determine the underlying drivers of better performance, while inspection data can be used to improve project quality. Data produced by tag-and-track technologies can help improve supplier performance measurement and monitoring, predictive site scheduling, and workforce management.
Using machine learning, data-ingestion engines, and innovative pattern recognition, oil and gas companies can now rapidly sort through millions of data points. With this capability, oil and gas capital project owners can compare the impact of hundreds of performance drivers on project or business outcomes. They can also identify the obstacles that raise costs and timelines. In some areas, advanced analytics may produce savings of up to 20 percent.
The time is right for oil and gas capital project owners to innovate themselves and rethink the way they carry out capital projects. Opportunities to improve productivity exist all along the development and construction cycle. Companies that seize them can complete construction projects faster, reduce costs, and improve schedule predictability.
To realize the true potential benefits that these new practices afford, oil and gas capital project owners in collaboration with the EPC/FEED and PMC contractors will need to rewrite the rules of the game related to policies, project management, engineering practices, IT, and supply-chain engagement. They will need to be willing to embrace new technologies. And they will need to instill collaborative practices not only among project owners but also between internal engineering, procurement, and construction teams and external suppliers. Although deep collaborations based on trust are currently rare in the O&G industry, they will be critical in the future.
Forward thinking organizations are using similar practices to improve the value of their capital project performance in terms of budget and schedule: increasing the use of standard designs, adopting greater modularization using low-cost country fabrication yards (where possible), improving procurement contracting practices, and implementing industry 4.0 digitalization and lean construction techniques. Linking project performance to contractors and project team remuneration paired with a deliberate strategy to retain key talent are considered pivotal practices for aligning incentives and project targets.
Oil and Gas Capital Project Owners that want to improve their capital project performance should focus on strengthening their portfolio management, reviewing and improving their project operating model, developing and embedding value-improvement practices in their project processes, and focusing on skill development and talent retention. It will be really interesting to see how oil and gas capital project owners can effectively manage their projects seamlessly coupled with the adoption of best in class capital project performance practices in 2019.
*Vinodkumar Raghothamarao is Director Consulting, Energy Wide Perspectives & Strategy, IHS Markit EMEA
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Volkswagen opened up pre-orders in Europe at a launch event Wednesday for a special edition of the first model in its new all-electric ID brand. Within 24 hours, the company received more than 10,000 registrations, a result that suggests growing demand for electric vehicles.
VW revealed Wednesday the name, some pricing and range specs for the first model in its multi-billion-dollar effort to produce and sell a portfolio of electric vehicles. This first model, known as the ID.3, is an electric hatchback that will be offered in three battery options, with ranges between 330 and up to 550 kilometers (205 miles to 341 miles) in accordance with WLTP. The WLTP, or Worldwide Harmonised Light Vehicle Test Procedure, is the European standard to measure energy consumption and emissions.
Customer interest in the special edition “ID.3 1” — which will be limited to 30,000 vehicles — is “significantly exceeding the brand’s expectations, VW said Thursday, adding that the company’s website has struggled to handle the large number of users accessing the system to pre-order the vehicle.
“This leads to long waiting times and interruptions in the registration process in some markets. Volkswagen is working hard to eliminate the hitches,” Volkswagen said in a statement. “Nevertheless, more than 10,000 registrations were received throughout Europe during the first 24 hours.”
Production of the ID.3 1 is expected to start at the end of 2019; the first vehicles are to be delivered in mid-2020, VW said.
VW customers pay a deposit of €1,000 ($1,122) to pre-order the special edition vehicle. The special edition version of the ID.3 will include free electric charging for the first year, up to a maximum of 2,000 kWh, at all public charging points connected to the Volkswagen charging app WeCharge and using the pan-European rapid charging network IONITY.
The pre-booking special edition, which will cost less than €40,000 ($44,898), before incentives, has an estimated range of 420 km under WLTP (about 260 miles). A base model of the ID.3 will have a smaller battery and will start at less than €30,000 in Germany, according to VW.
Volkswagen has been showing off its ID line of concept electric vehicles for several years. Now, the company is finally starting to prepare some of them for production, beginning with the ID.3. VW aims to sell 100,000 ID.3 vehicles annually.
The ID.3 hatchback is the first model to be built on the automaker’s new Modular Electric Drive Toolkit, or MEB, electric-car architecture. Introduced in 2016, MEB is a flexible modular system — really a matrix of common parts — for producing electric vehicles that VW says makes it more efficient and cost-effective.
Others will soon follow. VW plans to have a portfolio of more than 20 full-electric models. The automaker’s goal is to sell 1 million electric vehicles annually by 2025.
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The results of American ExxonMobil’s drilling in block 10 of the Cypriot EEZ were exceptional, according to Nicosia’s announcements, with energy minister, George Lakkotrypis, saying that the deposit contains 5-8 trillion cubic feet.
Mr. Lakkotrypis said that the biggest discovery of natural gas in Cyprus and globally in the last two years took place in the target “Glaucus” of block 10 in the country’s EEZ, adding that quality of the deposit is very high.
Mr. Lakkotrypis explained that despite the fact that there were no discoveries at the first target in block 10, called “Delphyni”, the final results prove the country’s role as a significant source of supply for the EU.
As he mentioned, these findings are a good basis to explore the prospect of building an LNG plant in Cyprus, however even greater quantities will be needed.
On his part, ExxonMobil’s vice chairman, Tristan Asprey, expressed his enthusiasm for “Glaucus’s” results, saying that the company will continue to analyze them. Mr. Asprey mentioned during a press conference that this is the beginning of a great journey for future development and he spoke of the possibility of new discoveries in block 10 and other blocks of the Cypriot EEZ. Furthermore, he expressed ExxonMobil’s interest for even wider exploration in the Eastern Mediterranean, underlining that block 10 is not disputed, while commenting on Turkey’s usual provocations.
The announcement of Cyprus
According to the Cypriot Republic’s formal announcement: “the well encountered a gas-bearing reservoir of approximately 436 feet (133 meters). Based on preliminary interpretation of the well data, the discovery could represent an in-place natural gas resource of approximately 5 trillion to 8 trillion cubic feet. Further analysis in the coming months will be required to better determine the resource potential. Drilling in target “Delphyne-1” superseded “Glaucus-1” and took place between November 2018 and January 2019 without locating a viable concentration of hydrocarbons”.
In its own announcement, American ExxonMobil characteristically said:
The well, located in Block 10, encountered a gas-bearing reservoir of approximately 436 feet (133 meters). The well was safely drilled to 13,780 feet (4,200 meters) depth in 6,769 feet (2,063 meters) of water.
Based on preliminary interpretation of the well data, the discovery could represent an in-place natural gas resource of approximately 5 trillion to 8 trillion cubic feet (142 billion to 227 billion cubic meters). Further analysis in the coming months will be required to better determine the resource potential.
“These are encouraging results in a frontier exploration area,” said Steve Greenlee, president of ExxonMobil Exploration Company. “The potential for this newly discovered resource to serve as an energy source for regional and global markets will be evaluated further.”
Glaucus-1 was the second well in a program of two wells in block 10. In the first well in Delphyne-1 no viable quantities of hydrocarbons were discovered.
Block 10 is 2,572 sq.km. ExxonMobil Exploration and Production Cyprus (Offshore) Limited is the operator and holds a 60% share in the block. Qatar Petroleum International Upstream O.P.C. holds 40%.
It should be mentioned that drillings in Glaucus and Delphyne were conducted by the ExxonMobil Exploration and Production Cyprus (Offshore) Limited and Qatar Petroleum International Upstream OPC partnership.
Glaucus’s discovery and the LNG plant
The discovery of a potential deposit in Glaucus constitutes a very important turning point in the course of the Cypriot exploration program and the potential geopolitical upgrade of Greek Cypriots, said Theodore Tsakiris, professor of geopolitics and energy in the University of Nicosia and director of ELIAMEP’s energy course.
The announced results are a first order of size, which is smaller than the respective evaluation for “Aphrodite’s” deposit. We then spoke of a deposit of 7-10 tcf with a 50% chance of discovering 9 tcf and a 75% chance of finding 7 tcf. In Glaucus’s case we are talking about 5-8 tcf, a 50% chance of 6 tcf and a 75% chance of 5 tcf. The chances of confirmation are increased as the size of the potential deposit becomes smaller.
This evaluation is not the final size of the deposit and for that exact reason a confirmative drilling will be required to form a complete picture about the size of the possible deposit and this may take time. The confirmative drilling for Aphrodite took place after a two year delay!
The confirmative drilling usually reduces the original scope of the initial exploratory drilling. In the case of Aphrodite, the result of the initial drilling (September, 2013) showed a deposit of 5-8 tcf with a more probable average quantity of 6 tcf. Finally, in August 2018 the government admitted that the deposit only contains 4 tcf of natural gas, while the companies holding the rights to the field had already announced in 2016 an average of 4.5 tcf.
A similar, but not as lengthy evaluation process will follow in the case of Glaucus. The deposit’s evaluation, however, does not mean the end of the process. The time between the initial discovery and the beginning of production is 4-7 years on average. This is the global average, especially when we are talking about medium size underwater deposits. Practically, we will not likely see gas from Glaucus before 2025-2026, according to Mr. Tsakiris.
“It is important to understand that the beginning of production is not something immediate and for that reason it would be a great error to follow propositions saying that Cyprus should not proceed in the selling of gas to Egypt in 2022 and wait until 2026 to see whether we have enough quantities to build an LNG plant”, he notes.
Besides, the discovery of deposits in itself does not guarantee the construction of an LNG plant. In any case, the geographical distance between Aphrodite and Glaucus is such that it makes their common development especially problematic even if cumulatively they offer 10 tcf of gas.
These 10 tcf represent the minimal quantity of gas to support an LNG plant in Cyprus that could exceed 10 billion dollars in cost. Plants are not constructed in a day and the global average for their construction time is between 3 and 4 years, which means that whoever wishes for an LNG plant will have to start now in order for it to be complete by 2022, but quantities from Glaucus will only follow 3-4 years later than that.
“If the block 12 partners (Shell, Delek, Noble) wanted a plant, they would have done so without waiting for anyone to propose it. But why do that if it is not economically viable, when there is already a huge plant at a distance of 400km in Idku, Egypt?” he wonders in another part of his intervention. A plant could be seriously discussed and possibly forwarded if ExxonMobil-Qatar Petroleum discovered in “Delphyni” the 15 tcf they were expecting, but unfortunately they found nothing.
If Aphrodite’s quantities are finally sold in Egypt – and there is no other option – it will take other discoveries apart from Glaucus to acquire the least possible quantities of gas to begin the process of evaluating a plant.
The completion of the permitting process for block 7 to the Total/Eni partnership will accelerate the works for a second drilling in “Calypso”, which extends in block 7. This should be the government’s priority and the first drilling to take place in the EEZ after Glaucus in 2019.
Even more important is to “lock” Aphrodite’s exports to Idku, since the commercial window of opportunity is closing because of the rise of Egyptian production forwarded for liquefaction and they will not wait for Nicosia for ever.
Ankara’s stance is a question mark
A crucial question arising from Cypriot energy developments concerns Turkey’s stance. Already, Turkish energy minister, Fatih Donmez, said to Anadolu that Ankara will attempt to discover gas in Cyprus, while he sent a message to Athens and Nicosia by saying that “I wish the opposite side could see this reality and agree to a model with both sides benefiting”.
Donmez said that Cyprus, Israel and Egypt conduct natural gas exploration in the Eastern Mediterranean, adding that “we know that the region contains possible energy deposits and -God first- with our first exploration we will also succeed”.
He added that “we do not think it is right that the Greek-Cypriot side acts as the only sovereign in the island and manages by itself the energy sources, enhancing its economy. There is a Turkish-Cypriot community and its rights need to be protected fairly”. The Turkish energy minister underlined: “Of course, if the two leaders sit and find a solution we will be satisfied. But right now we do not think it is right for the Greek-Cypriot community to claim its own zones and say that it will unilaterally explore. Because, as you know, the “Turkish Republic of Northern Cyprus” on the other hand did the same by claiming its blocks and authorized Turkey, therefore we also say we are going to explore there. That is my hope, of course. I wish the opposite side sees this reality and agrees to a model where both sides win”, adding that “we do not have a claim on anyone’s ground or fortune, but in our fields we will conduct the exploration and no matter who says what, we are closing our ears”.
Concerns about this Turkish mobilization are obvious among all protagonists in the region, as shown by the US undersecretary of state, Matt Palmer, calling for restraint of everyone involved in the Cypriot EEZ. Athens monitors developments from afar. At no level is there an estimation that Turkey will proceed with some sort of an aggressive act, especially in the Aegean.
As a matter of fact, defence minister, Ev. Apostolakis, described the wider geopolitical situation during a closed-doors meal with about 20 businessmen under the auspices of the Greek-American chamber of commerce. According to well informed sources, Mr. Apostolakis explained to his counterparts the factors according to which he believes that Turkey will not move aggressively and they are primarily connected to the international environment.
Another parameter is that of renewed negotiations for the Cypriot issue. Everything points to Ankara pushing for the beginning of an process that will keep away from the table the abolishment of its interventional rights as a guaranteeing force. Much can be said about the formula and the date of a possible renewal of negotiations. There is however a constant. Greece is now in an election year and the current government could not manage another round of Cypriot talks.
What “Glaucus” means for Greece
In Greece, they are searching the market for prospects for new hydrocarbon drillings after the successful end of the “Glaucus 1” drilling by ExxonMobil-Qatar Petroleum in block 10 of the Cypriot EEZ, which led to a deposit of up to 8 tcf. Specialists said that the great discovery has or may have Greek repercussions.
ExxonMobil, after discovering “Glaucus”, appeared once more willing to continue drillings in the Cypriot EEZ, while also mentioning a new drilling in 2020. The biggest oil company in the world also participates in the Total-HELPE partnership, which has undertaken the exploration south and southeast of Crete. The result in the Cypriot EEZ is estimated to clear the way administratively for necessary permits on behalf of the Greek side.
Furthermore, it is highlighted that any new deposit discovered in the region of SE Mediterranean and especially in Cyprus, Israel and Greece, advances the prospect of building East Med, an ambitious and particularly expensive project that is supported by these countries, Italy and the EU Commission. The pipeline is part of the EU’s effort to reduce its dependence on Russia when it comes to natural gas.
Romanian and Chinese companies signed on Wednesday the Investors Agreement in the preliminary form (PIA) regarding the continuation of the Cernavoda nuclear power plant Units 3 and 4 Project, marking a significant progress in bilateral cooperation under the framework of the Belt and Road Initiative.
Representatives of Romania’s Nuclearelectrica and China General Nuclear Power Corporation (CGN) signed the agreement at the Romanian Ministry of Energy, in the presence of Vice Prime Minister Viorel Stefan, Minister of Energy Anton Anton, Chinese Ambassador Jiang Yu and Chinese Economic and Commercial Counselor Guan Gang.
“New nuclear capabilities will play a key role in decarbonising electricity production in Romania and in the region,” said the vice prime minister, stressing that the project will not only provide clean and safe energy for the future, but also up to 19,000 jobs.
“Reaching a consensus in the negotiation process, mutually advantageous for both parties…is in actuality the effective initiation of the concrete measures to continue and develop the Units 3 and 4 of the Cernavoda Nuclear Power Plant (NPP),” the Minister of Energy said after the signing ceremony.
Chinese Ambassador Jiang Yu said “cooperation in large projects is an important part of the construction of the Belt and Road and the highlight of the bilateral economic and trade cooperation.”
She congratulated the two companies for making the substantial progress after years of efforts in the cooperation of nuclear power projects between the two countries.
“The Chinese government will work together with the Romanian government for the nuclear power project to start as soon as possible, setting a good example for pragmatic cooperation between the two countries,” she added.
The signing of the agreement represents an essential stage of the selection process launched in 2014 from the technical and operational point of view.
The Investors Agreement in the preliminary form envisages the set-up of the project company (JVCO) having as limited aim to be the only technical and operational platform for the subsequent development of the project. The limit date for the set-up of the JVCO is 60 working days from the date of signing the Investors Agreement in the preliminary form.
The JVCO is a joint stock company, set up in compliance with local law and it will have an initial duration of two years.
Bian Shuming, general manager of the CGN Romania Nuclear Power Company, told Xinhua that the signing of the PIA marked a new stage of development for the bilateral cooperation. Going forward, CGN is fully committed to working closely together with its Romanian partner on the successful development of the next phases of the project in line with the agreed principles.
CGN signed a memorandum of understanding with Nuclearelectrica in November 2015 for the construction of two new units at the Cernavoda nuclear power plant in Romania, with an estimated investment of some 8 billion U.S. dollars.
Cernavoda is home to two operating Candu reactors, units 1 and 2, and produces around 18 percent of the country’s electricity. The doubling of the production capacity of the plant through the construction of two new units represents a major competitive advantage in the medium and long term, according to local analysts.
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The new tender for Public Power Corporation’s coal-fired plants in Meliti and Megalopoli has generated only lukewarm interest from the market, as there is a shared view that the new sale-purchase agreement approved by PPC is barely different to that of the original tender.
Investors are expected to make the most of the extension granted until May 28 to reassess their stance, believing that the European Commission has approved a Greek demand for repeating the tender on the condition that PPC accepts the offers regardless of their level.
They will also factor in PPC’s poor 2018 performance.
The post PPC lignite plants: Low interest from the investors appeared first on EnergyWorld Magazine.
Russia’s Investigative Committee identified six suspects in the contamination of millions of barrels of crude, which shut down pipeline shipments to some European countries, according to Bloomberg.
The suspects, including Nefteperevalka OJSC Chief Executive Officer Svetlana Balabay and deputy Rustam Khusnutdinov, repeatedly stole crude volumes worth at least 1 million rubles ($15,340) between August 2018 and April 2019, the investigators alleged.
Four of the suspects have been detained, and the remaining two are wanted, according to a statement on the investigators’ website.
In March and April this year, some of the suspects allegedly supplied oil contaminated with organic chlorides to a pipeline point in Russia’s Samara region to hide oil theft, the Committee said, without elaborating on the details of the crime. The dirty batches then entered the national pipeline system run by Transneft PJSC, it said.
In late April, refineries in some eastern European countries refused to accept oil from the Soviet-era Druzhba pipeline, which starts in Russia, amid reports of an extremely high level of organic chlorides in the crude. This led to the shutdown of both Druzhba export links, which still haven’t resumed work. Organic chlorides contaminated around 30 million barrels of Russian crude, enough to fill 15 supertankers, consultant Energy Aspects Ltd. estimated last week.
Transneft earlier named a facility in the Samara region as the source of the crude contamination. Samaratransneft Terminal, or STNT, which was identified by Transneft as the owner of the facility, denied the allegations saying it sold the property to Nefteperevalka in 2017. “There are no commercial relations between Nefteperevalka and STNT currently,” it said in a statement on its website in late April.
Russia has been working to restore crude exports via both links of the Druzhba pipeline, expecting flows to Europe to resume partially in the second half of May, Russian Energy Minister Alexander Novak said at a government meeting Tuesday. This is later than a previous estimate by Deputy Prime Minister Dmitry Kozak, who said April 27 that exports to Europe would fully resume in two weeks. Belarus, a transit country for crude flows via the pipeline, said it may take “months of hard work” to restore the full-scale operations.
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Romania is the only country in the European Union that does not have a concrete plan to substantially increase its natural gas production. Not connected to other regional markets, and unable to diversify its supply sources, the security of its gas supply is fragile.
The interventions of the head of the ruling Social Democrats, PSD, Liviu Dragnea, the Prime Minister’s counselor, Darius Valcov and Finance Minister Orlando Teodorovici – implemented by Dumitru Chirita, the PSD-appointed head of the energy regulatory agency ANRE – have together had a catastrophic influence on the price of natural gas production.
The provisions of the government’s Emergency Ordinance 114 (GEO 114), adopted in December 2018, have turned Romania from one of the cheapest to one of the most expensive markets in the region.
The recipe of the PSD-ALDE coalition government in the energy sector has been to combine issuing nonsensical statements with unpredictable changes to the fiscal framework. Poor decisions are oriented towards political rather than economic goals.
This amalgamation of factors has put great pressure on the 35 per cent of the electricity mix of Romania that relies on hydrocarbons – coal plus gas.
Against the backdrop of the cost problems facing Romanian coal production, the risk of a tumultuous and disordered energy transition is increasing.
Lack of investment in coal in recent years has had a strong impact on this sector in Romania, which has suffered under the pressure of spiking carbon prices.
The effects of the reduction in coal electricity production will begin to impact the country’s two gas-fired power plants, Brazi and Iernut. To ensure the flexibility of the electricity system, these two production capacities will have to consume more and more natural gas.
With ever-declining domestic gas production and poor coupling with the regional gas market, the limitations of the Romanian energy sector are really beginning to be felt.
On one hand, it has turned Romania into a net importer of electricity when consumption peaks. On the other, because of the limited production possibilities, the pressure on the price of gas is increasing.
If we also take into account system losses due to obsolete infrastructure, the state of the Romanian energy system is directly reflected in consumers’ bill and in the quality of the services offered.
The Romanian market has become increasingly rigid, moreover, when gas and electricity prices in the region are falling.
Frequent changes in the fiscal framework for the exploitation of natural gas, the return of politically driven price regulation and lack of truly diversified sources of supply have made Romania an energy-isolated country.
With domestic gas production going down, and with competition being obstructed by the state itself, prices are far more rigid in Romania than they are in free and flexible markets, where there is a wide range of sources and supply.
Unable to fully cover the consumption needs of its domestic market, Romania imported 25 per cent more Russian gas in 2018 than it did in 2017 – which was, of course, reflected directly in consumers’ bills.
Official data from Russian energy giant Gazprom show Romania imported almost 1.35 billion cubic meters, bcm, of natural gas last year.
In percentage terms, Romania saw the largest increase in imports of Russian natural gas of any country apart from the Netherlands.
Whereas state intervention in Romania has led to an artificial rise in the price of Romanian gas, the case is different in other markets in Europe.
There, developments have been influenced by larger quantities of LNG available on the European market, amid a mild winter in Asia, Australia’s decision to increase LNG production and Japan’s decision to put part of its nuclear power into operation.
US and Russian LNG traders have also flooded the European gas market with cheap LNG, wishing to increase their market share.
The decline of European and North Sea production has been compensated for by the doubling of imported LNG, at the expense of Gazprom’s offer.
With constant inputs of LNG, European gas prices have fallen to one of their lowest levels in recent years, and Gazprom has rallied to this dynamic amid increased competition.
But this has not happened in Romania, where competition is stifled by the state itself.
In March, LNG from EU terminals reached a new monthly record of 9.6 bcm. Overall, since the beginning of the winter, the EU has imported 45 bcm of LNG, compared with less than 20 bcm in the previous winter.
LNG accounted for more than 21 per cent of total EU gas supplies in March, exceeding the EU’s domestic production.
The LNG supply was only 0.5 bcm less than the supply from Norway, the second largest natural gas supplier to the EU.
But with its poor interconnections with Central and Western European markets, Romania is not able to benefit from these price dynamics.
If Romania had the lowest domestic production price in the EU in 2018, due to government ordinance GEO 114, this price has now reached the highest level in the EU.
In the short term, Romania seems to be waiting to see if Russia’s state energy giants extend their gas transit contract through Ukraine. If this does not take place, the flexibility of the Romanian energy system will truly be put to the test.
Meanwhile, political interference in the Black Sea gas project risks putting Romania’s security of supply in jeopardy – and in the hands of Russia.
Source: Balkan Insight / Vlad Epurescu
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Italy will not allow the Poseidon gas pipeline being developed by Italy’s Edison and Greece’s DEPA to make landfall as planned in southern Italy, the Italian prime minister said on Tuesday, according to Reuters.
The Poseidon, which has permits to run from Greece to the southern Italian town of Otranto, is the final section of the EastMed pipeline that aims to bring gas reserves from the East Mediterranean to Italy.
“The government is certainly not interested at present in building the final tract of Poseidon as originally planned,” Prime Minister Giuseppe Conte said at an event near Rome.
Two years ago DEPA and Edison signed a cooperation agreement with Russia’s Gazprom to set up joint efforts to create a southern route for gas into Europe. But Conte said the pipeline could find a fit with the Trans Adriatic Pipeline (TAP) being built to carry Azeri gas into the south of Italy.
The TAP pipeline is seen by many as a way of weaning Europe off over reliance on Russian gas.
Romania: Black Sea Oil & Gas and Transgaz signed the Memorandum of Understanding for the use and development of the gas transmission pipelines network for the MGD Project
Transgaz S.A. (“Transgaz”) CEO, Mr. Ion Sterian, and Black Sea Oil & Gas SRL (“BSOG”) CEO, Mr. Mark Beacom, have signed yesterday in Bucharest the Memorandum of Understanding (“Memorandum”) for the use and development of the gas transmission pipelines network for the Midia Gas Development Project (“MGD Project”) production.
The Memorandum outlines the basic principles, responsibilities and framework for cooperation on the construction of the gas transmission pipeline that will takeover the processed gas at the new gas treatment plant located in Corbu commune, Constanta county, to the National Gas Transmission System operated by Transgaz. It also covers the cooperation in the fields of research, innovation, technology transfer, decarbonisation and the use of new technologies, injecting hydrocarbon in the gas pipeline to extract the green gas, thus contributing to the mitigation of the climate changes.
In 2019, BSOG anticipates having completed the detailed engineering for the MGD Project, commenced the fabrication of the Ana Wellhead Platform at the shipyard in Agigea, commenced the civil constructions at the GTP site in Corbu and have purchased & delivered a number of company items.
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Recent discovery of natural gas in Cyprus paved the way for its further cooperation with China, a Cypriot official said Monday.
Resource discoveries brought opportunities for international cooperation, including infrastructure constructions for gas exploration and exports of oil and gas, as well as the country’s major shipping business, Cyprus’s Deputy Minister of Shipping Natasa Pilides told Xinhua.
Cyprus announced in March that a natural gas field containing 5-8 trillion cubic feet of the resource are found in its exclusive economic zone.
With discovery of natural gas in Cyprus and nearby regions, energy reserves in the Eastern Mediterranean is positively influencing the shipping industry, Pilides said, adding that the region may become a large energy base given the prospects of further discovery in Greece and Lebanon.
As an industrial report released last month by the Shanghai Urban and Rural Construction and Transportation Development Research Institute suggested China’s Shanghai has overtaken Germany’s Hamburg in 2018 as an international shipping center ranking fourth globally, the deputy minister said that “Cyprus does wish to collaborate (with China) more closely in the coming years … and promote the already strong relations between the two countries,” she added.
“We already have a great relationship with Chinese companies, including leasing companies, finance companies, whereas our own companies are collaborating with them and are actively taking part in trading operations,” she said.
Pilides said that she will attend a shipping meeting in China later this month, regarding the event as an opportunity to build relationship with potential partners.
“I believe it is important for the government to express the willingness to expand our cooperation … and I hope we’ll find a lot of common grounds and develop the existing relationship even further,” she said.
Relations between China and Cyprus have been expanding rapidly over the last decade.
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Imports of liquefied natural gas from the US “can play a very important role for our security of supply,” and also contribute to the EU’s emission reduction goals, the European Commission said on Thursday (2 May).
Europe and the US have a “common objective” to further develop trade in liquefied natural gas, the EU’s climate and energy Commissioner Miguel Arias Cañete said yesterday, at the conclusion of the first EU-US high-level business forum on energy.
Speaking alongside US energy secretary Rick Perry, Cañete emphasised the “mutual benefit” of boosting US LNG exports to Europe – both from an energy security and climate perspective.
US LNG exports to Europe have risen by 272% since US President Donald Trump and European Commission President Jean-Claude Juncker met in July last year, according to figures published yesterday.
In the first quarter of 2019, “the EU has imported 13% of its LNG from the United States, compared to 5% last year,” taking a 35% share of US LNG exports during that period, up from 11% the year before, Cañete said.
And demand for US gas in Europe is expected to remain strong at least until 2030. EU gas imports are “projected to increase in the years to come” as domestic production in the North Sea decreases, the European Commission said in a statement.
“We expect that gas, including LNG, will continue to have an important role in the years to come, maintaining more or less the current one quarter share of Europe’s energy consumption,” said the Spanish EU Commissioner.
Demand in Europe is also fuelled by EU goals to cut carbon dioxide emissions from energy, which are the main cause of human-made global warming.
As more coal-fired power stations are being shut, countries like Italy, Spain, Germany and the Netherlands are “likely to see a major switch from coal to gas,” according to Carbon Tracker, a think tank, noting that the UK had already largely achieved its own switch due to domestic policies.
“Natural gas will remain an important component of the EU’s energy mix in the near future as we move towards cleaner sources of energy,” Cañete said. It “will also have role in facilitating the integration of increasing amounts of variable renewable [electricity] production.”
That means demand in Europe “is projected to remain at a comparable level” in the coming years, the European Commission pointed out, saying “gas has been identified as an important transition fuel in the EU’s efforts to decarbonise its economy” in a 2050 perspective.
A study published in scientific journal Nature on 22 April, confirms “the climate benefits of the coal-to-gas shift,” saying it is “a key strategy” to mitigate energy-related CO2 emissions, which is “consistent with climate stabilisation objectives for the next 50–100 years”.
However, the Nature study also highlighted concerns about the potential undesirable side-effects of expanding natural gas production, saying it “may delay the deployment of less carbon-intensive technologies such as renewables,” which risked “postponing the transition to a decarbonised society”.
Those concerns are shared in Europe. Speaking alongside US energy secretary Rick Perry, Cañete said that “the European Union is also strongly committed to reducing greenhouse gas emissions that cause man-made climate change.” And 75% of those emissions currently come from the production and use of energy, Cañete added in a reference to oil and gas.
No data on carbon footprint of US LNG
In private, officials say the window of opportunity for US LNG exports to Europe will start narrowing after 2030 because of the EU’s carbon emission constraint.
“From 2030 onwards, gas consumption in Europe will start to decline,” said an EU official who was briefing journalists after the EU-US meeting.
Nonetheless, there are a number of question marks regarding the carbon footprint of imported LNG, the official pointed out. Although no statistics are available, officials said it was “very clear” that imported US LNG is more carbon intensive than pipeline gas coming from Norway or Russia.
European Commission spokespeople did not respond to EURACTIV’s request for figures on the carbon footprint of imported US LNG. It’s also unclear whether a monitoring, reporting and verification system is being put in place to measure those emissions.
The lack of data was confirmed by the American Petroleum Institute (API), a trade group, which said there are no measurements currently being made of the greenhouse gas impact of US liquefied natural gas.
Any calculation of carbon footprint would be complicated by the many factors coming into play, such as the origin of the gas coming from specific US shale deposits and the destination country to which the LNG is being shipped, EURACTIV understands.
Carbon Tracker, a think-tank, said it doesn’t have data to report on LNG emissions at this moment but will do later this year.
In our daily lives, we depend on the availability of energy. Without electricity, we cannot fill our cars with fuel, withdraw money, and use our credit cards or our mobile phones. The energy system is here to provide these basic services, and it is one of the most complex and largest infrastructures in Europe and the backbone of its economy.
This energy infrastructure has been undergoing very rapid changes in recent years in order to increase the share of renewable energy sources such as wind and sun, which are by nature more distributed and variable. Managing the networks to ensure a permanent match between consumption and production requires a continuously increasing degree of digitalisation. This increasing digitalisation has made the energy system smarter and now enables consumers to benefit more from innovative energy services. However, with an increasingly digitised energy system, and more and more home appliances connected to the grid, cybersecurity has become of paramount importance and a concern for all, with an increasing number of incidents in recent times
In cybersecurity, one size does not fit all. What might work in the internet will not be necessarily adequate in the energy sector. For example, there are energy components such as circuit breakers that need to react so fast that they have no time for standard security considerations, like authenticating a command or encrypting a connection. This makes the new digitised energy grid vulnerable to attacks.
In order to address these challenges, the Commission has adopted today a Recommendation that provides guidance on how to address the specific challenges of the energy sector on cybersecurity. It identifies the main actions required to preserve cybersecurity and be prepared to possible cyberattacks in the energy sector, taking into account the characteristics of the sector such as the real-time requirements, the risk of cascading effects, and the combination of legacy systems with new technologies.
In addition to the Recommendation, the Commission promotes information sharing at a higher-level via dedicated events, and fosters best practices among Member States, under a dedicated work stream on energy of the Cooperation Group established by the Network and Information Security Directive. This work stream brings together Member State Authorities from the cybersecurity and the energy side. Further, cooperation with the specialised entities such as the European Energy Information Sharing and Analysis Centre on cybersecurity (EE-ISAC) has also been enhanced.
The recently completed Clean Energy for All European Package also includes several measures that reinforce cybersecurity:
- The new regulation on electricity risk preparedness mandates Member States to develop national risk preparedness plans and coordinate their preparation at regional level, including measures to cope with cyber-attacks;
- The recast of the Electricity Regulation gives a mandate to the Commission to develop a network code on cyber security for the electricity sector in order to increase its resilience and protect the grid. Since 2017, a dedicated expert group is working to prepare the ground for such a network code.
Finally, the Gas Security of Supply Regulation (Regulation (EU) 2017/1938) requires Member States to consider cybersecurity as part of their common (regional) and national Risk Assessments and to develop measures to address cybersecurity risks.