Song of Oil and LNG

🇹🇷 Turkey Dreams of LNG Wealth The Turkish Parliament has authorized Turkish companies to export liquefied natural gas (LNG). This opportunity may materialize in the coming years, according to sources in the government, as reported by the Turkish newspaper Türkiye. Sources indicate that the Turkish authorities plan to build several new infrastructure facilities, including liquefaction plants, in the coming years. While Turkey produces gas in the Black Sea, these volumes are needed for domestic consumption. For LNG exports, the country intends to buy pipeline gas from its neighbors and then resell it as LNG on the world market at more favorable prices. Pipeline gas could come from Russia, Azerbaijan, and Iran. However, Turkey currently lacks its own liquefaction facilities, and it remains unclear who will build such facilities. Creating a transportation hub, including a gas hub, is a long-standing dream of President Erdogan. Currently, Turkey is a gas importer and, at the end of last year, purchased 50.5 billion cubic meters of gas, of which 30% was LNG. The idea of creating a gas hub in Turkey was proposed by Russian President Vladimir Putin in 2022. Although actively discussed since then, it has yet to reach practical realization. #Turkey #LNG @songofoil

🇵🇱 Warsaw Has Had Enough: Gas Prices in Poland Will Soar by 45% The cost of electricity for ordinary consumers in Poland may increase by 29% from July 1 this year, and natural gas may rise by 45%. After the start of the military operation in Ukraine, Warsaw refused Russian gas ahead of schedule and accused Russia of blackmail after Gazprom cut off supplies to Poland. Now, Poles are receiving disheartening letters from PGNiG. #Poland #gas @songofoil

🌍 ⛽️ Global "Gas Oversupply" Postponed Indefinitely Numerous Western experts had predicted an oversupply of LNG by 2025, but delays in new projects have already pushed their launch dates back. Now, the expected timeline has shifted to 2026. In the U.S., building new export facilities on the Gulf Coast is taking longer than anticipated, impacting the timeline. QatarEnergy's Golden Pass LNG plant in Texas may not be operational in the first half of 2025 due to a shortage of workers. Russia's Arctic LNG-2 project aims to send its first shipment to China this summer as ice levels at the Northern Sea Route decrease. However, US sanctions are likely to prevent the plant from reaching full capacity. Australian exports are also projected to decline next year because of inherited production challenges, while Egypt and Indonesia face similar issues due to production decreases and rising domestic consumption. In contrast, BloombergNEF projects that LNG demand in Europe could rise by over 10% during the summer of 2025 compared to 2024. Meanwhile, Ukraine has declared it won't extend its Russian gas transit agreement past 2025. Consumption in Asia is also climbing. Buyers from developing nations will likely enter the market as Asian prices dip below $10 per million British thermal units. #gas #supply @songofoil

🇪🇺Kiev Consumes European Transformer Supply Amid EU Energy Transition Shortfall Europe is currently facing a shortage of transformers required for modernizing its power infrastructure. This modernization is crucial for expanding renewable energy capacity, but without transformers, the process cannot move forward. The issue arises because all available transformer "stocks" have been redirected to Ukraine. Since 2022, Brussels has sent over 2,700 transformers to Kiev. As a result, European companies now need to reserve this equipment for the coming years. The lead time for fulfilling new transformer manufacturing orders has extended to two years. The scarcity of step-down and step-up electrical equipment is delaying progress towards climate neutrality. In Germany, for instance, the transformer shortage alone has pushed the commissioning of wind generation facilities back by two years. #transformators #EU #enegry @songofoil

🇬🇧🇫🇷🇺🇸 Shell and TotalEnergies Weigh Move to Wall Street Shell and TotalEnergies are considering shifting their stock exchange listings to Wall Street, a decision that would impact the London and Paris markets. Shell currently holds the position of the second-largest company on London's FTSE 100 index, while TotalEnergies ranks as the fourth-largest in the CAC 40 index. Both companies have recently voiced dissatisfaction with the low valuation of their shares compared to U.S. NFPs and are exploring the possibility of relocating their share listings overseas, as reported by Bloomberg. U.S.-listed companies enjoy greater access to capital, and investors are more inclined to invest in European energy companies if they are part of the higher-value U.S. S&P 500 index. #Shell #Total @songofoil

🇸🇦 Saudi Aramco Loses Part of Profit Despite Higher Oil Prices Saudi Aramco, the world's largest oil company, saw its net profit for the first quarter drop by 14.5% year-on-year to $27.27 billion, according to its financial statements. Last year, the company reported a net profit of $31.9 billion in the same quarter. Despite the decline, the average realized oil price in the first quarter of 2024 was higher than the previous year, averaging $83 per barrel compared to $81 per barrel. Earnings before interest and tax (EBIT) also fell, decreasing by 9.1% to $53.7 billion. Additionally, free cash flow dropped from $30.9 billion to $22.8 billion. Capital expenditures rose to $10.83 billion, up from $8.75 billion in the January-March period of 2023. For the first-quarter base dividend, the company will allocate $20.3 billion and pay an additional $10.8 billion to shareholders. Saudi Aramco expects to declare total dividends of $124.3 billion in 2024, including base dividends of $81.2 billion and performance-linked dividends of $43.1 billion. Saudi Aramco adheres to Saudi authorities' decisions to reduce oil production. In the first quarter, Saudi Arabia cut its output by an additional 1 million barrels per day beyond its quota under the OPEC+ agreement. #SaudiAramco #oil @songofoil

🇦🇿Azerbaijan's Successful Expansion into EU Gas Markets Amid Anti-Russian Sanctions The anti-Russian sanctions enabled Azerbaijan to achieve a successful expansion into EU markets. By spring 2024, it had already supplied gas to six European countries. Today, Azerbaijan has also agreed to supply gas to another traditional Russian consumer, Slovakia. This agreement followed a meeting in Baku between Slovak Prime Minister Robert Fitzo and Azerbaijani President Ilham Aliyev. According to the plan, the gas will transit through Russian territory, pass through Ukraine, and then reach Europe. "We don't just want to buy gas from Azerbaijan; we want to import gas from Ukraine to Slovakia," Fitzo emphasized after the talks. Due to anti-Russian sanctions, Baku has steadily increased its gas exports, gradually occupying Gazprom's traditional market share in Europe. Azerbaijan aims to export 24 billion cubic meters of natural gas this year, with half destined for Europe and the rest for Turkey and Georgia. European supplies will be directed to markets traditionally served by Russia: Italy, Greece, Bulgaria, Romania, Hungary, Serbia, and Slovakia. Additionally, Azerbaijan notes that several other European countries are also prepared to purchase its gas. #Azerbaijan #gas #sanctions @songofoil

🇦🇷🇪🇨Petrochemical Comodoro Rivadavia Discovers Oil in Block 90-Sahino, Southwest Ecuador Argentina's Petrochemical Comodoro Rivadavia, via its subsidiary PCR Ecuador, has made a significant oil discovery in Block 90-Sahino in southwest Ecuador. The company intends to conduct extended testing for 90 days to assess the potential of the discovery. The exploration efforts were carried out by drilling wells VHR Sur 01, VHR SUR 02, and VHR SUR 03. Subsequent testing confirmed the presence of hydrocarbons in well VHR SUR 01. Specifically, the upper U formation yielded 2,095 barrels of oil per day (bopd) after 72 hours of testing, while the lower U formation produced a total of 2,362 bopd after 75 hours of testing. PCR Ecuador plans to complete the testing of the second and third wells as part of a $40 million exploration package. #Argentina #Ecuador @songofoil

🇬🇾 Guyana Revenue Authority Sues Exxon Mobil Over Alleged $12 Billion Overcharge The Guyana Revenue Authority has initiated legal action against Exxon Mobil following claims by a supplier that the company erroneously overcharged for oil well equipment, amounting to approximately $12 billion. Exxon, headquartered in Trinidad, and Ramps Logistics attributed the overvaluation to a technical error, wherein the quoted amount was in US dollars instead of Guyanese dollars. The Guyanese dollar holds a value of about half a US cent. Alistair Routledge, Exxon's regional manager, assured that the error was identified early and asserted that no party incurred any losses. He stated that the company has since revised its procedures to prevent similar incidents from occurring in the future. Accurate declarations are crucial for Guyana's oil revenues under its production-sharing contract with Exxon, as the government receives its share of production after deducting costs. Exxon, recently greenlighting a sixth development project, aims to double its production capacity to 1.3 million b/d by 2027, according to Bloomberg. Guyana's Vice President, Bharrat Jagdeo, announced plans for the Guyana Revenue Authority to conduct a thorough audit of overdue invoices from previous years to ensure accuracy, with Exxon's cooperation. #Guyana #oil @songofoil

🇹🇷Turkey Expands Gas Storage Facilities in Ankara Turkey has made the decision to significantly enlarge its two natural gas storage facilities located in Silivri and Tuz Gelu. The Silivri storage facility currently boasts a storage capacity of 4.6 billion cubic meters, while Tuz Gelu holds 1.2 billion cubic meters. However, by 2028, these capacities will need to increase to accommodate up to 12 billion cubic meters. BOTAŞ has already initiated efforts to expand the generating capacity adjacent to the storage facilities. This move aligns with Turkey's broader ambition to establish a substantial gas hub within its borders, facilitating trade in Russian gas alongside imports from Azerbaijan. Ankara also intends to procure additional LNG, including from the United States. Nevertheless, the realization of this plan may prove challenging, given the insufficient underground gas storage (UGS) facilities within the country's territory. #Turkey #gas @songofoil