Market talk
1.4 GW Norway-Scotland
cable viable – NVE
A mooted 1.4 GW electricity
interconnector between Norway
and Scotland would be profitable,
said Norwegian energy regulator
NVE. However, it would be up
to the country’s government to
decide whether to award a licence
to the North Connect project, it
added, referring to an expected
decision from the government this
year. NVE’s analysis showed the
cable would increase local power
prices but that it still would have a
“socioeconomic benefit” of around
NOK 8.5bn (EUR 0.8bn) over a
period of 40 years. RF
Fresh Olkiluoto delay
“bullish” from Q2
Nordic power prices could rise
from Q2 onwards due to another
delay to the start-up of Finland’s
1.6 GW Olkiluoto 3 nuclear reactor,
analysts said. Operator TVO said in
December that the reactor would
not be ready to start commercial
operation before March 2021,
six months later than previously
announced and 12 years behind the
initial start-up date. The fresh delay
to the European pressurised reactor
would remove 1.5-2 TWh of supply
that participants had anticipated
to come to market during the unit’s
test phase initially scheduled from
June to October, said chief analyst
Sigbjorn Seland at StormGeo. “This
is clearly bullish for the Q2 and Q3
contracts and also for the 2020
contract.” GOM
Analysts raise Nordic
price expectations
Market analysts polled by Montel
have raised their overall price
forecasts for 2025 Nordic spot
power by EUR 0.40 on average to
EUR 40.20/MWh compared to a
year ago, though estimates vary by
as much as EUR 20. The prospects
for a faster coal phase-out in
Germany and the Netherlands,
more ambitious EU climate policies,
fast consumption growth and new
interconnectors between the Nordic
region and continental Europe
would offset the bearish effect of
surplus renewables capacity, said
the analysts. Price estimates varied
from EUR 51/MWh (Jamtkraft) to
EUR 31/MWh (Modity). AT
Ukraine, Russia sign full
gas transit deal
Ukraine’s Naftogaz and Russia’s
Gazprom signed a five-year gas
transit agreement in early January.
“New gas transit contract to
Europe – inked!,” said Ukrainian
prime minister Oleksiy Honcharuk.
The deal is made up of several
contracts that encompass a large
package deal which has “restored
the balance between the interests
of the parties”, said Gazprom CEO
Alexei Miller. “This is a great day
for Europe’s energy security, as all
the pieces have fallen into place.
I welcome the signature of the
transit contract between respective
companies in Russia and Ukraine,
building on our political agreement
from last week,” said Maros Sefcovic,
the vice-president of the European
Commission. SRS
WoodMac sees gas price
plunge continuing
Last year’s plunge in European gas
prices will likely continue into 2020,
according to consultancy Wood
Mackenzie. It expected prices on
the Dutch TTF hub to average EUR
11.65/MWh this year after spot
gas tumbled roughly 40% to EUR
13.50/MWh in 2019. Expanding
global LNG supplies would struggle
to find a market amid record full
European gas stocks and stalling
Asian demand growth. WoodMac
tipped LNG supply to rise by 7%, or
26m tonnes per annum, this year,
largely due to US projects. Asia’s
JKM price was likely to average USD
4.60/MMbtu (EUR 14.10/MWh) and
could trough at USD 3.60/MMbtu in
summer. NW
Nord Stream 2 faces delay
to Q1 2021 – Putin
Work on the Nord Stream 2 gas
pipeline to Germany looks set to be
completed by early 2021, Russia’s
president Vladimir Putin said. “I
hope that by the end of this year,
or in the first quarter of next year,
work will be finished, and the gas
pipeline will start operating,” Putin
told media after talks with German
chancellor Angela Merkel in Moscow.
Putin’s comments come in the wake
of a statement by Russian energy
minister Alexander Novak who
vowed to finish the pipeline later
this year. Work on the pipeline has
ground to a halt due to the threat of
US sanctions on companies involved
in the project. MC
US LNG exports to grow
55% by 2021 – EIA
US LNG exports will grow 55%
over the coming two years, despite
an expected slowdown in gas
production, the country’s Energy
Information Administration (EIA)
said. LNG exports would rise to
6.5bn cubic feet per day (bcfd)
this year, from 4.98bcfd in 2019,
with the EIA anticipating a further
increase in 2021 to 7.7bcfd.
“[The] EIA assumes US LNG export
capacity will reach 8.9bcfd by the
end of [2020] as Cameron, Freeport
and Elba Island place their remaining
trains in service,” it said, regarding
three east coast export terminals.
LW
Tighter LNG market in
sight – Cheniere
The global LNG market is poised to
tighten, according to US exporter
Cheniere, even as Europe struggles
to absorb volumes amid some of the
lowest winter spot gas prices in at
least a decade. “We are getting to
that point where we are at the top
of the supply cycle and we are going
to start seeing the market rebalance
fundamentally,” said Andrew Walker,
Cheniere vice president for strategy,
at an industry event. “We’ve got
a significant ramp-up in supply
coming on in the first half of this
year and then we kind of reach
the peak.” Last year saw a possible
record volume of gas supply enter
the market at just short of 40m
tonnes, around the same as the
previous peak of 2010, Walker said.
NW
Gazprom launches
31.5bcm TurkStream
Russia’s Gazprom has started up its
31.5bcm TurkStream gas pipeline,
which links Russia with Turkey and
southern Europe via the Black Sea.
The 930km gas pipeline has two
strings, with the first delivering
gas to Turkey, while the second is
intended for gas transit to southern
and south-eastern Europe, through
Turkish territory. “Gas supplies via
TurkStream will help strengthen
energy security in Turkey and
Europe,” the Russian supplier said.
LW
Montel Magazine 1–2020
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