Politics, Geopolitics & Conflict
Poland’s state-run refiner is using strategic reserves to artificially keep diesel prices low. It’s selling diesel that it has imported at prices below what it paid, forcing private refiners to stop selling to avoid selling at a loss. The hefty subsidizing has pushed prices down between 8% and 12% while global prices rise and comes just before the October elections. Lower prices at the pump will aid the Law and Justice party that is currently in power.
In response to rising threats from China over Taiwan, the U.S. Navy is reviving a top-secret undersea surveillance network dating back to the 1950s. The multi-billion-dollar project will modernize a network of underwater acoustic spy cables and outfit surveillance ships with the latest technology.
Renewed armed conflict earlier this week between ethnic Armenians and Azerbaijanis in Nagorno-Karabakh led to a truce deal on Wednesday, though ethnic Armenians have demanded security guarantees before handing over their weapons. On Wednesday, Azerbaijan declared it had retaken the region.
In Ukraine, a new wave of Russian strikes has targeted the country’s national power grid, cutting power in five regions in a campaign reminiscent of those in the winter of 2022. The strikes come as Zelensky meets with U.S. lawmakers in Washington to drum up more support.
Market Movers
Gazprom will perform routine preventative maintenance on the Power of Siberia pipeline from…
Politics, Geopolitics & Conflict
Poland’s state-run refiner is using strategic reserves to artificially keep diesel prices low. It’s selling diesel that it has imported at prices below what it paid, forcing private refiners to stop selling to avoid selling at a loss. The hefty subsidizing has pushed prices down between 8% and 12% while global prices rise and comes just before the October elections. Lower prices at the pump will aid the Law and Justice party that is currently in power.
In response to rising threats from China over Taiwan, the U.S. Navy is reviving a top-secret undersea surveillance network dating back to the 1950s. The multi-billion-dollar project will modernize a network of underwater acoustic spy cables and outfit surveillance ships with the latest technology.
Renewed armed conflict earlier this week between ethnic Armenians and Azerbaijanis in Nagorno-Karabakh led to a truce deal on Wednesday, though ethnic Armenians have demanded security guarantees before handing over their weapons. On Wednesday, Azerbaijan declared it had retaken the region.
In Ukraine, a new wave of Russian strikes has targeted the country’s national power grid, cutting power in five regions in a campaign reminiscent of those in the winter of 2022. The strikes come as Zelensky meets with U.S. lawmakers in Washington to drum up more support.
Market Movers
Gazprom will perform routine preventative maintenance on the Power of Siberia pipeline from Sept 21 to Sept 27. Gazprom said in a statement that it would temporarily halt gas flows during that time. The contracted volume from Russia to CNPC via the Power of Siberia is 22 billion cubic meters for the year.
Shell has expectedly shuttered a unit at its Pernis refinery in Rotterdam–Europe’s largest refinery–after experiencing a leak earlier in the week. The refinery is still operating, but its Hycon unit has been shut, impacting the supply of diesel in an already tight market. The shuttered Hycon unit has a capacity of 25,000 bpd. The refinery has a capacity of 400,000 bpd. Shell suffered a leak at an unknown unit at this refinery back in June as well, triggering a halt of operations in that unit. Pernis underwent months of maintenance starting in March.
Deals, Mergers & Acquisitions
Engie could spend EUR 3B this year on biomethane production, boosting its current biomethane production capabilities 10 times by 2030 in Europe to 10 TWh. About one-third of that could come in the form of its own projects, while the remaining two-thirds could be spent on acquisitions and subsequent modernizations. Engie announced an $80 million acquisition of Ixora Energy Ltd this week.
Canada will loan $2.2B in funds for nuclear energy projects in Romania, specifically for two additional CANDU-6 reactors at the current Cernavoda plant. The funds will not only boost Romania’s energy security but will create Canadian jobs. Romania will use part of the funds to purchase supplies and services from Canadian companies. Emphasis has been placed on the need to diversify away from Russian nuclear technology and fuel. After the two reactors have been built, the Cernavoda plant will generate 36% of Romania’s total electricity.
Oil pipeline company Magellan Midstream Partners (NYSE:MMP) shareholders voted 55% in favor of its proposed merger with ONEOK (NYSE:OKE)--an Oklahoma.-based pipeline company that ships mostly nat gas and nat gas liquids, in a deal valued at $19B. ONEOK plans to acquire Magellan at a premium compared to its pre-announcement trading price, at $67.50 per share. Magellan’s CEO said that there are better growth prospects in shipping nat gas.
Santos plans to farm down half of its working interest in 148 exploration leases on more than 270,000 acres of state land on the eastern portion of Alaska’s North Slope in a deal with APA Alaska LLC1 and Lagniappe Alaska LLC2. Santos's working interest in the leases will be 25% following the farm-down agreement. Santos plans to focus on its Pikka development in Alaska.
Discovery & Development
After 12 years, Japan’s Kansai Electric Power has restarted its Takahama No. 2 nuclear reactor, which was shut down after the Fukushima disaster. The restart of the 826MW reactor could mean less LNG imports for feedstock as pressure on gas-fired power generation eases. The Japanese utility said it would still utilize to the fullest extent its coal-fired Maizuru plant. The restart of Takahama No. 2 is Kansai’s last shuttered reactor that was waiting to come back online.
Equinor submitted declarations of commerciality and development plans for two nat gas fields in Brazil’s Campos Basin to the country’s energy regulator. It will be the first project that will treat gas offshore and connect to Brazil’s national grid without onshore processing. The concession contains recoverable nat gas and oil/condensate of 1 billion boe. Suggested field names are Raia Manta and Raia Pintada. The development will include an FPSO vessel capable of processing 16 million cubic meters of gas per day without additional onshore processing.
BP and Shell are thought to be nearing a deal with Trinidad and Tobago to explore three deepwater blocks: 25a, 25b, and 27. Trinidad rejected the consortium’s bids nine months ago, citing that the group did not meet minimum thresholds. Shell and BP amended their bids to include three deepwater wells. Shell and BP already hold a stake in Trinidad’s 15 MTPA Atlantic LNG export project, which has only been producing 10 MTPA due to insufficient supplies of gas.
