Forging work begins for Paks II project reactor vessel

30 April 2024

The mayor of Paks in Hungary was among those present in Russia to see the start of forging of blanks for the reactor vessel of the first unit at the Paks II nuclear power plant, which Rosatom is building. 

The final reactor vessel could have a 100-year lifespan (Image: Strana Rosatom)

The mayor, Peter Szabo, and the CEO of Paks II, Gergely Jakli, saw the start of production at the AEM-Spetsstal plant in St Petersburg.

Jakli said: "We are working to ensure that the new power units of the Paks NPP can be connected to the grid by the early 2030s. Work for this is being carried out in parallel both at the construction site in Paks and several thousand kilometres from Hungary ... it is important for us that after the start of casting we can now see up close the initial stages of manufacturing the shells of the reactor vessel."

(Image: Strana Rosatom)

Vitaly Polyanin, vice-president of Atomstroyexport JSC and director of the Paks II construction project, said that at the Paks II site work continues to strengthen the soil prior to the development of the pit. "By the end of 2024 we plan to reach first concrete ... in parallel with this, a lot of work is being done to manufacture the main equipment for the future nuclear power plant - a melt localisation device has already been produced, today the production of blanks for the reactor vessel of power unit 5 has begun, and ahead are blanks for steam generators, pressure compensators, safety system tanks and other products of the primary circuit of the nuclear power plant. nuclear power plant islands. The manufacture of equipment for the primary circuit of the nuclear island is planned in 2028 and 2029, and by then the main construction work will have already been completed."

The Paks II project was launched in early 2014 by an intergovernmental agreement between Hungary and Russia for two VVER-1200 reactors to be supplied by Rosatom, with the contract supported by a Russian state loan to finance the majority of the project. The construction licence application was submitted in July 2020 to construct Paks II alongside the existing Paks plant, 100 kilometres southwest of Budapest on the banks of the Danube river. The construction licence was issued in August 2022 and a construction timetable agreed last year which set out plans to connect the new units to the grid at the beginning of the 2030s.

The Paks II development company said the work was a key part of aiming for that 2030 target, adding: "The rings that make up the reactor vessel and the bottom of the vessel, are formed under about 12,000 tonnes of pressure during forging. The final mass of this piece of equipment is around 330 tonnes, its height is more than 11 metres, its diameter is 4.5 metres and its maximum wall thickness is 285 millimetres."

It added: "The VVER-1200 reactor vessel will not only be tested by the continuous neutron flux, but will also have to withstand temperatures of 300 degrees Celsius and pressures of 162 bar for a guaranteed 60 years. Thanks to its advanced composition and production technology, the reactor vessel might last up to 100 years."

The existing four units at Paks are VVER-440 reactors that started up between 1982 and 1987 and they produce about half of the country's electricity. Their design lifetime was for 30 years but that was extended in 2005 by 20 years to between 2032 and 2037. In December 2022, the Hungarian Parliament approved a proposal to further extend their lifespan, which means the plant could keep operating into the 2050s.

Thailand considers deployment of Seaborg power barge

30 April 2024

Thai innovative and sustainable power company Global Power Synergy Public Company Limited (GPSC) has signed a memorandum of understanding with Denmark's Seaborg Technologies ApS to explore the potential deployment of the compact molten salt reactor (CMSR) Power Barge in Thailand.

The signing of the MoU between GPSC and Seaborg (Image: GPSC)

The MoU was signed at Denmark's embassy in Bangkok on 24 April by GPSC President and CEO Worawat Pitayasiri and Seaborg CEO Klaus Nyengaard.

Under the MoU, GPSC - a subsidiary of Thai state-owned oil and gas company PTT Group - and Seaborg will assess how the CMSR Power Barge could be utilised in Thailand to support the country's transition to net-zero. They will use the assessment to scope an initial project where the commercial deployment of the CMSR Power Barge is feasible and commercially viable.

The study - expected to take about four years to complete - is intended to explore the use of the carbon-free electricity generated from Seaborg´s Power Barge to feed directly into the grid, as well as explore the potential use of the steam generated during operations.

Once the project has matured to investment-ready, both parties intend to attract foreign direct investments to realise the project. Based on the results of the studies, further collaboration, such as the development and deployment of a CMSR Power Barge with a capacity of between 200 MWe and 800 MWe, will be considered.

"GPSC is taking a leading role in exploring nuclear SMR technology in Thailand, and we are very excited to work with them," Nyengaard said. "Our expertise in nuclear will support GPSC development to strictly comply with the international requirements and both parties could exchange best practices for the joint feasibility.  On top, we see new nuclear as a great addition to the Thai energy mix in transforming the future of energy in Thailand, setting a great example for newcomer countries to nuclear."

Seaborg's design is for modular CMSR power barges equipped with between two and eight 100 MWe CMSRs, with an operational life of 24 years. Instead of having solid fuel rods that need constant cooling, the CMSR's fuel is mixed in a liquid salt that acts as a coolant, which means that it will simply shut down and solidify in case of emergency. However, the low-enriched fluoride fuel salt is not yet commercially available, so Seaborg recently announced the initial power barges will be fuelled with low-enriched uranium (LEU).

In September last year, Indonesian power company Pertamina NRE signed an MoU with Seaborg to investigate the deployment of Seaborg's CMSR Power Barge in Indonesia.

The timeline for Seaborg, which was founded in 2014, is for commercial prototypes of its CMSR to be built in 2026 with commercial production of Power Barges beginning from 2028.

Fuel production agreement

On 6 March, Kepco Nuclear Fuel (KNF), GS Engineering & Construction and Seaborg signed an agreement for the feasibility study of CMSR nuclear fuel production development. This agreement follows the MoU for CMSR Nuclear Fuel Production between KNF, Seaborg and GS E&C, which was signed last June.

The signing of the fuel production agreement (Image: Seaborg)

The new agreement will facilitate a joint feasibility study, enabling all parties to determine the project's scope and timeline for establishing fuel salt production in accordance with their respective roles and collaborative endeavours.

"KNF possesses unique technology, enabling us to access future-growth technologies and pave the way for market expansion into Europe," said KNF President & CEO Choi Ik-Soo. "Moving forward, we are committed to advancing nuclear fuel technology through ongoing research and development, while expanding our presence in international markets. Our ultimate goal is to establish ourselves as a prominent global player in the nuclear fuel industry, fostering future growth and innovation."

KHNP and EDF submit updated bids for four new Czech units

30 April 2024

ČEZ and its Elektrárna Dukovany II subsidiary have received binding bids from Korea Hydro & Nuclear Power (KHNP) and France's EDF for the construction of four new nuclear units in the Czech Republic.

Four VVER-440 units are currently in operation at the Dukovany site (Image: CEZ)

The French and South Korean bidders, plus Westinghouse, had submitted binding bids in October for a fifth unit at the Dukovany nuclear power plant and non-binding offers for up to three more units - a sixth at Dukovany and two at the Temelin nuclear power plant. But in February the Czech government announced it was changing the tender to be binding offers for four new units, with Westinghouse not included because it "did not meet the necessary conditions".

Prime Minister Petr Fiala explained at the time that the decision to have binding offers for all four units was the result of the original tender suggesting that contracting for four units, rather than having separate processes, could have a 25% benefit in terms of costs.

Elektrárna Dukovany II (EDU II) will now assess the two offers - using a system based on International Atomic Energy Agency recommendations - from an economic, commercial and technical point of view and submit an evaluation report to the Czech government's trade and industry ministry. The aim is to finalise contracts ready for signing by 31 March 2025. The target date for start of trial operation of the first new unit is 2036, with commercial operation in 2038.

EDF is proposing its EPR1200 reactor, KHNP is proposing its APR1000 - both companies have stressed their agreements with Czech suppliers to localise work if selected.

EDF said its Updated Initial Bid Supplement "covers the supply of engineering, procurement, construction and commissioning activities ... the offer also covers the design and implementation activities for nuclear fuel and delivery of fuel assemblies for this programme".

Its proposal would also see Framatome, GE Steam Power and Bouygues Travaux Publics involved in the project which would have "a tailor-made Czech localisation process, enhancing economic value and skills development for the Czech Republic", with nearly 300 Czech companies identified already.

Luc Rémont, Chairman and CEO of EDF Group said: "By opting for a fleet approach with our European technology (EPR 1200), ČEZ and EDU II will secure a European partner committed to delivering the best technology with the best long-term benefits for the Czech industry and economy. The technological and industrial alignment between Paris and Prague that we propose holds the potential to reshape Europe’s new nuclear industry for generations to come."

KHNP CEO Jooho Whang delivered the company's binding offer, saying: "With successful projects in Korea and the United Arab Emirates, KHNP has proven that it builds on time, with quality and at the agreed price. We believe that KHNP is the best option for the Czech Republic in terms of timely completion of the first reactor by 2036 and energy security."

KHNP said the APR1000 reactor had already received European certification and said it had been designed "specifically for export to European countries and has been localised to meet European conditions and comply with requirements based on the latest International Atomic Energy Agency and Western European Nuclear Regulators Association standards".

It said that cooperation with Czech companies was a long-term priority, with more than 200 potential Czech suppliers identified and 50 memorandums of understanding signed, adding "KHNP is the only bidder counting on a Czech company for the delivery of the turbine, which is one of the most important and largest components in the nuclear power plant".

Also on Tuesday, the European Commission announced it had approved, under EU state-aid rules, the Czech government's support of the construction of the new nuclear. The Commission had opened its investigation in June 2022 and said that the proposals had been modified to take account of concerns during the process and the Commission "concluded that the aid is appropriate to achieve the objectives pursued, as well as proportionate as it is limited to the minimum necessary, while the competition distortions caused by the measure are minimised".

The Czech Republic currently gets about one-third of its electricity from the four VVER-440 units at Dukovany, which began operating between 1985 and 1987, and the two VVER-1000 units in operation at Temelín, which came into operation in 2000 and 2002. As well as the plans for the four new units, the country also has developing plans for small modular reactors.

Lufeng 5 inner dome hoisted into place

30 April 2024

The inner containment dome has been installed at unit 5 of the Lufeng nuclear power plant in China's Guangdong province. It is the first of two HPR1000 (Hualong One) under construction at the site, where four CAP1000s are also planned.

The dome is hoisted into place (Image: CGN)

The steel dome - measuring 45 metres in diameter and almost 14 metres in height, and weighing about 238 tonnes - was raised using 1600-tonne crawler crane and placed on top of the walls of the double containment structure. An outer dome will subsequently be installed over the inner one.

The dome is located on top of the nuclear island. Its main function is to ensure the integrity and leak tightness of the reactor building, and it plays a key role in the containment of radioactive substances.

The hoisting process for the inner dome, which began at 8.08am on 29 April, was completed in 1 hour and 8 minutes, China General Nuclear (CGN) announced.

The dome atop of the containment building (Image: CGN)

CGN said the milestone "marks the full transition of another Hualong One nuclear power unit from the civil construction stage to the equipment installation stage".

The construction of Hualong One reactors as units 5 and 6 at the Lufeng plant was approved by the State Council in April 2022.

First concrete for unit 5 was poured on 8 September 2022, with that for unit 6 following on 26 August last year. Units 5 and 6 are expected to be connected to the grid in 2028 and 2029, respectively.

The proposed construction of four 1250 MWe CAP1000 reactors (units 1-4) at the Lufeng site was approved by the National Development and Reform Commission in September 2014. However, their construction has yet to receive State Council approval. The CAP1000 design is the Chinese version of the Westinghouse AP1000.

According to CGN, once all six units are in operation, the Lufeng plant will generate about 52 TWh, which will reduce standard coal consumption by almost 16 million tonnes and reduce carbon dioxide emissions by more than 42 million tonnes.

Researched and written by World Nuclear News

 

Italy sees role for nuclear in hitting climate goals, says minister

29 April 2024

Italian Energy Minister Gilberto Pichetto Fratin said he hopes there can be a discussion based on science about the renewed role of nuclear, specifically small modular reactors, in the country's future.

(Image: Screengrab from Atlantic Council TV/Youtube)

Pichetto was speaking at an Atlantic Council event on The role of nuclear in the energy transition, on Sunday, ahead of the G7 ministerial meeting taking place in Italy at which he is heading the energy ministers' talks.

He said that Italy currently gets one-third of its energy from renewables and two-thirds from fossil fuels, and it had the aim of reversing those proportions by 2030. But he also said that "we must consider the use of nuclear in the short and medium term" because its contribution would help meet the 2050 net-zero target.

The minister said he was specifically talking about small modular reactors (SMRs) and referenced the research and development funding the government had put into both their development and into nuclear fusion. He also noted the countries which, at COP28, had backed the goal of tripling nuclear energy capacity.

Pichetto, who spoke in Italian with a translator summarising his words in English, said that as well as the environmental benefits of new nuclear power, it would also help "to shield" Italy from the impact of geopolitical events. It was also confirmed that Italy is taking part in the European industrial alliance to develop SMRs. The minister added that he hoped Italy could have a "constructive and scientific discussion and not an ideological one" on the nuclear energy subject.

Italy operated a total of four nuclear power plants starting in the early 1960s but decided to phase out nuclear power in a referendum that followed the 1986 Chernobyl accident. It closed its last two operating plants, Caorso and Trino Vercellese, in 1990.

In late March 2011, following the Fukushima Daiichi accident, the Italian government approved a moratorium of at least one year on construction of nuclear power plants in the country, which had been looking to restart its long-abandoned nuclear programme.

The public mood has changed since then, and in May 2023, the Italian Parliament approved a motion to urge the government to consider incorporating nuclear power into the country's energy mix. In September, the first meeting was held of the National Platform for a Sustainable Nuclear, set up by the government to define a time frame for the possible resumption of nuclear energy in Italy and identify opportunities for the country's industrial chain already operating in the sector.

There are a variety of emerging plans for nuclear energy in Italy, including Edison last October announcing its ambition to construct two nuclear power plants based on EDF's SMR technology between 2030 and 2040 "if the conditions are created for its return to Italy".

Researched and written by World Nuclear News

 

Nuclear's role in reaching climate targets recognised by G7

30 April 2024

The Group of Seven (G7) nations have committed to support the use of nuclear energy in those countries that opt to use it, a communique released at the end of the G7 Ministerial Meeting on Climate, Energy and Environment in Turin, Italy, says.

The meeting of the G7 ministers (Image: G7 Italia)

"Those countries that opt to use nuclear energy or support its use recognise its potential as a clean/zero-emissions energy source that can reduce dependence on fossil fuels to address the climate crises and improve global energy security," the document states.

"These countries recognise nuclear energy as a source of baseload power, providing grid stability and flexibility, and optimising use of grid capacity, while countries that do not use nuclear energy or do not support its use prefer other options to achieve the same goals, taking into account their assessment of associated risks and costs of nuclear energy."

The ministers noted the declaration issued by 25 countries during the COP28 climate conference in Dubai in December last year, setting a goal to triple global nuclear generating capacity by 2050. The communique said the ministers "recognise that, for countries that opt to use it, nuclear energy will play a role in reducing dependence on fossil fuels, supporting the transition to net-zero and ensuring energy security, while other countries choose other energy sources to achieve these goals".

The ministers also said that new reactor designs - including advanced and small modular reactors - "could bring in the future additional benefits such as improved safety and sustainability, reduced cost of production, reduced project risk, waste management improvement, better social acceptance, opportunities for industry by providing at the same time energy, high temperature heat, hydrogen".

They committed to support multilateral efforts to strengthen the resilience of nuclear supply chains and to continue the cooperation for building a robust nuclear supply chain in the framework of G7 and of the Nuclear Energy Working Group established in Sapporo.

The ministers noted that G7 leaders remain committed to reducing reliance on civil nuclear-related goods from Russia and the ongoing efforts by countries that operate Russian-designed reactors to make progress in securing alternative nuclear fuel contracts and to reduce dependencies related to spare parts, components and services.

They also said they would promote research and development initiatives on innovative nuclear power technologies "for those countries that opt to use nuclear energy or support its use".

The communique added that the G7 will "promote the responsible deployment of nuclear energy technologies including for advanced and small modular reactors, including microreactors, and work collectively to share national best practices, including for responsible waste management, enable greater access to project financing tools, support sectorial collaboration, designing licensing procedures and strengthening coordination on development of commercial projects among interested G7 members and third markets".

The ministers said: "We underscore the importance for all countries and their respective people of upholding the highest standards of safety, security, and safeguards and non-proliferation, particularly as more countries adopt nuclear power as part of their energy mix."

Speaking at a joint press conference following the ministerial meeting, which he presided over, Italy's Minister of the Environment and Energy Security, Gilberto Pichetto Fratin said: "When it comes to nuclear energy ... our seven countries indicated in the communique that we will proceed together in order to promote further research and ensure that the conditions are in place to promote the use of nuclear energy, which is a clean form of energy."

He added, without naming Germany: "This is something that is not binding. Obviously, we are aware that in the G7 there is a country that currently does not want to pursue the development of nuclear energy."

The ministers' statement came following a call by the nuclear industry for G7 governments to embrace nuclear deployment as a strategic priority, by maximising use of existing nuclear power plants and setting clear plans for further deployment that would fulfil the targets they set at COP28, to triple global nuclear capacity.

The statement was signed by the heads of Associazione Italiana Nucleare, Canadian Nuclear Association, Groupement des Industriels Français de l'Energie Nucléaire (Gifen), Japan Atomic Industrial Forum, Nuclear Energy Institute, Nuclear Industry Association, Nucleareurope and World Nuclear Association.

The G7 is an informal forum that brings together Italy, Canada, France, Germany, Japan, the UK, and the USA. The European Union also participates in the group and is represented at the summits by the President of the European Council and the President of the European Commission.

Nuclear industry calls for continued G7 support

29 April 2024

Representatives of the nuclear industry have issued a statement calling for Group of Seven (G7) governments to embrace nuclear deployment as a strategic priority, by maximising use of existing nuclear power plants and setting clear plans for further deployment that would fulfil the targets they set at COP28, to triple global nuclear capacity.

The industry statement is presented to Italy's Minister of the Environment and Energy Security, Gilberto Pichetto Fratin (Image: WNA)

The statement was signed by the heads of Associazione Italiana Nucleare, Canadian Nuclear Association, Groupement des Industriels Français de l'Energie Nucléaire (Gifen), Japan Atomic Industrial Forum, Nuclear Energy Institute, Nuclear Industry Association, Nucleareurope and World Nuclear Association.

It was presented to Italy's Minister of the Environment and Energy Security, Gilberto Pichetto Fratin, at an event held alongside the G7 Ministerial Meeting on Climate, Energy and Environment in Turin, Italy. Fratin is President of the G7 for Climate, Energy and Environment.

The associations said they are committed to "ensuring safe and secure operation of nuclear facilities to provide always-on, affordable, clean low-carbon electricity and heat; to complement renewables in the pursuit of achieving net-zero in electricity generation; to decarbonise hard-to-abate sectors, such as heavy industry, and to provide high-quality long-term jobs that drive economic growth."

They noted that nuclear energy's role to support climate change mitigation was "unanimously agreed" in COP28's Global Stocktake, and 25 countries demonstrated greater ambition, setting a goal to triple nuclear capacity globally by 2050 in a declaration during COP.

In March, at the Nuclear Energy Summit in Brussels, more than 30 countries, including six of the G7, re-emphasised that nuclear energy has a key role to play to reduce greenhouse gas emissions, and ensure energy security and industrial competitiveness.

"We applaud the recognition and support expressed for nuclear energy as a strategic global asset at the G7 meeting in Sapporo in 2023, and the actions that have been taken since," they added.

"We urge G7 governments to set out clear plans for nuclear energy deployment that would fulfil the targets they set at COP28 and to demonstrate their commitment to nuclear energy, giving clear signals to markets and investors," the industry statement says. "We therefore encourage governments to help maximise the use of existing nuclear power plants, including by extending the operating period of reactors and restarting those that have shutdown, where feasible."

The industry calls for G7 governments to accelerate the deployment of new nuclear facilities based on proven designs, and accelerate the development, demonstration, and deployment of new nuclear technologies, including new large reactors as well as small modular reactors and advanced modular reactors, to achieve net-zero in electricity generation, and help decarbonise non-grid, hard-to-abate sectors, such as heat supply for heavy industry, hydrogen production and the manufacturing of synthetic fuels.

The associations said G7 Climate, Energy and Environment Ministers must take decisive action by: establishing optimum conditions through consistent and coherent long-term policies that enable the extension of the operating life of existing reactors and facilitate fleet deployment of nuclear technologies; providing clarity to investors on the funding and investment recovery mechanisms available for nuclear projects; ensuring ready access to national and international climate finance mechanisms for nuclear development; ensuring that multilateral financial institutions include nuclear energy in their investment portfolios; clearly and unambiguously labelling nuclear energy and the associated fuel cycle as a sustainable investment; and promoting development of the supply chain commensurate with expansion targets and continue investment in nuclear research.

"Nuclear energy holds immense promise for the world, and the G7 should embrace nuclear deployment as a strategic priority in the years to come," the statement ends.

The G7 is an informal forum that brings together Italy, Canada, France, Germany, Japan, the UK, and the USA. The European Union also participates in the group and is represented at the summits by the President of the European Council and the President of the European Commission.

The G7 Ministerial Meeting on Climate, Energy and Environment is being held in Turin on 28-30 April and "aims to identify coherent, complementary and interconnected actions to address the ongoing climate, energy and environmental crisis, with a special focus on the most vulnerable areas and populations".

Speaking from the event, World Nuclear Association Director General Dr Sama Bilbao y León, praised the Italian government's "recognition of nuclear’s role to support climate change mitigation and deep decarbonisation of the entire economy. As an industry we also recognise the role of Italian companies, and indeed of companies from all G7 countries, supporting an acceleration in nuclear development and deployment globally".

Researched and written by World Nuclear News

G7 Pledge to Exit Coal by 2035 Could Include Exceptions for Germany and Japan

By Charles Kennedy - Apr 30, 2024

The G7 group of the world’s most industrialized nations is set to announce later on Tuesday a pledge to phase out coal-fired power generation by 2035 but could include some leeway to Germany and Japan, Reuters reports, citing diplomatic sources.

The energy, climate, and environment ministers of the G7 nations – Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States – are meeting between Sunday and Tuesday at a palace near Turin to discuss ways to address climate change. Phasing out coal-fired electricity is top of the agenda, and a tentative agreement has been reportedly reached. The ministers agreed on Monday on phasing out coal-fired electricity between 2030 and 2035, and are expected to announce it officially later on Tuesday, Reuters’s sources said.

However, Germany and Japan could be given more time to shut down coal-fired power generation by including in the final communique wording that G7 countries could pick a date to exit coal that is consistent with keeping a limit of 1.5 C global temperature rise within reach, according to Reuters’s sources.

Germany aims for coal phase-out by 2030, but its official end date is 2038. Japan, for its part, hasn’t set any end date for exiting coal-fired electricity.

A potential common target to phase out coal-fired power plants by 2035 in G7 nations would mark the first major achievement in the reduction of fossil fuels since the COP28 summit in Dubai at the end of last year.

During the annual climate summit, and after much debate, the countries issued a final declaration with a compromise text referencing for the first time a call to all parties to transition away from fossil fuels.

One of the “global efforts” is “Transitioning away from fossil fuels in energy systems, in a just, orderly and equitable manner, accelerating action in this critical decade, so as to achieve net zero by 2050 in keeping with the science,” the text reads.

By Charles Kennedy for Oilprice.com

The Four Key Reasons Why The U.S. Will Never Stop Targeting Russia’s LNG Sector

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• By Simon Watkins - Apr 29, 2024
• 
  
• LNG has become the most important swing energy source in an increasingly insecure world.
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• Energy exports remain the foundation stone of Russia’s essentially petro-economy.
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• Russia's LNG industry is closely associated in Russia with President Vladimir Putin personally.

Perhaps even more than its targeting of Russian oil exports, the U.S. has been laser-focused on its liquefied natural gas (LNG) sector as they key area it wants to effectively destroy over the long term. Last week’s suspension of Russia’s flagship Arctic LNG-2 project by lead operator Novatek is the latest of Washington’s trophies in this regard, but it is very unlikely to be the last. As U.S. Assistant Secretary of State for Energy Resources Geoffrey Pyatt said on 24 April: “[Novatek] has recently had to suspend production at its Arctic LNG-2 liquefaction facility, in part because of sanctions that the Biden administration has led.” He added: “We’re going to keep tightening the screws […]  We’re going to continue to designate a broad range of entities involved in development of other key energy projects, future energy projects as well, and associated infrastructure including the Vostok Oil Project, the Ust Luga LNG Terminal, and the Yakutia Gas Project.” So, why is the U.S. so concerned about Russia’s LNG sector?

The first of four key reasons is that LNG has become the most important swing energy source in an increasingly insecure world. Unlike oil or gas that is transported through pipelines, LNG does not require years and vast expenses to build out a complex infrastructure before it is ready to transport anywhere. Once gas has been converted to LNG, it can be shipped and moved anywhere within a matter of days and bought reliably either through short- or long-term contracts or immediately in the spot market. Around a year before the Kremlin ordered the first Russian troops into Ukraine on February 24, 2022, China foresaw the critical significance of global energy dependency, as extensively discussed in my new book on the evolving dynamics of the global oil market. So, beginning in March 2021, a 10-year purchase and sales agreement was signed by the China Petroleum & Chemical Corp (Sinopec) and Qatar Petroleum (QP) for 2 million tonnes per annum (mtpa) of LNG. This was followed by several other major LNG deals prior to Russia invading Ukraine.

In the zero-sum game of emergency global energy supplies, China’s hoarding of LNG prior to the 2022 invasion meant that Europe – critically dependent on Russian gas and oil – would be even more exposed if these supplies suddenly stopped. Russia had been banking on this to produce the same response from Europe to its 2022 invasion of Ukraine as had occurred after its 2008 invasion of Georgia and its 2014 invasion of Ukraine and subsequent annexation of Crimea. That is, Russia expected Europe to do absolutely nothing meaningful to sanction its aggression. The Kremlin was nearly right in its calculations, with the effective leader of the European Union (E.U.) – Germany – only concerned about ensuring its own continuity of gas and oil supplies from Russia in 2022 at all costs, as also analysed in detail in my new book on the new global oil market order. Its acquiescence to Russian hostility yet again was only stopped when the U.S. with U.K. support in Europe and the Middle East worked to establish new emergency supplies of LNG from elsewhere. This determination to never again allow the European Union states to just roll over in the face of Russian aggression due to their over-reliance on Russian energy is the second key reason why the U.S. continues to mercilessly target its LNG sector.

The third reason is that energy exports remain the foundation stone of Russia’s essentially petro-economy and that it was intending to counterbalance the reduction of income from pipelined oil and gas with rises in LNG supplies. Indeed, according to comments from its Deputy Prime Minister Alexander Novak on 22 November last year, Russia intended its LNG market share to rise to 20 percent (at least 100 million tons per year) by 2030, from the current 8 percent (around 33 tons in 2023). As also analysed in my new book on the new global oil market order, Russia earned nearly US$100 billion from oil and gas exports during the first 100 days of the war in Ukraine. Overall, revenues from the higher post-invasion oil and gas prices were much greater than the cost for Russia of continuing to fight the war. However, as prices started to weaken again and sanctions increasingly hit Russia, its finances and ability to secure an outright military victory have been significantly reduced. So desperate has the situation become for President Vladimir Putin that he risked arrest in December to visit Saudi Arabia’s Mohammed bin Salman, and the UAE’s Mohamed bin Zayed al Nahyan, to plead for greater cuts in OPEC oil production in order to push prices up. Again, in the zero-sum game of the global energy market, Russia’s LNG losses from sanctions will be a gain for the U.S. and those LNG suppliers it regards as allies, which now includes Qatar. As it stands now, the Emirate will account for about 40 percent of all new LNG supplies across the globe by 2029, according to comments from its government. The U.S. has seen its LNG exports go from zero before 2016 to around 124 billion cubic metres (bcm) this year, and it is expecting another 124 bcm to come online by 2030. Meanwhile, according to the International Energy Agency, Russia’s share of internationally traded natural gas is forecast to fall from just around 30 percent in the year before it invaded Ukraine to about 15 percent by 2030. Its revenue from natural gas sales is projected to drop from around US$100 billion in 2021 to less than US$40 billion by 2030.

The fourth and final reason why Washington is so determined to effectively destroy Russia’s LNG sector over the long term is that it is an industry so closely associated in Russia with President Vladimir Putin personally. He has long seen LNG – particularly from the country’s huge gas resources in the Arctic – as the key to Russia’s next major phase of energy growth, rather as shale oil and gas was for the U.S., as also detailed in my new book on the new global oil market order. The Russian Arctic sector comprises over 35,700 billion cubic metres of natural gas and over 2,300 million metric tons of oil and condensate, the majority of which are in the Yamal and Gydan peninsulas, lying on the south side of the Kara Sea. According to comments by Putin, the next few years will witness a dramatic expansion in the extraction of these Arctic resources, and a corollary build-out of the Northern Sea Route (NSR) – the coastal route of which crosses the Kara Sea - as the primary transport route to monetise these resources in the global oil and gas markets, especially to its key geopolitical and financial ally, China. Such was Putin’s determination to move ahead with Russia’s Arctic LNG projects that various heavyweight Russian entities were inveigled around the time the U.S. imposed its 2014 sanctions to finance key parts of them. The Russian Direct Investment Fund, for example, established a joint investment fund with the state-run Japan Bank for International Cooperation with each contributing half of a total of about JPY100 billion (then US$890 million) to it. The Russian government itself bankrolled Arctic LNG 1 from the beginning with money from the state budget. It then supported it again when sanctions were introduced by selling bonds in Yamal LNG (the first part of the Arctic LNG programs), and then by providing another RUB150 billion of backstop funding from the National Welfare Fund.

By Simon Watkins for Oilprice.com

Production at Drone-Hit Kurdistan Gas Field Set to Resume

By Charles Kennedy - May 01, 2024

Production at the Khor Mor field in Kurdistan is set to resume less than a week after a drone attack suspended operations at the site, killing four.

An official from the company that distributes the gas produced at Khor Mor told local news publication Rudaw that production will resume at midnight today, adding that the companies involved in the field’s operation had taken steps to ensure safety.

Four Yemeni workers lost their lives, and two others sustained injuries in the drone attack on the Khor Mor field in Kurdistan last week.

The ramifications of the assault extend beyond casualties, impacting electricity generation in the region. Kurdistan's electricity ministry stated that the drone attack disrupted gas supplies to power plants, leading to an approximate 2,500 MW reduction in electricity output.

Pearl Petroleum—a consortium comprised of Dana Gas and Crescent Petroleum (operators of the Kurdistan Gas Project), along with OMV, MOL, and RWE holds the rights to develop Khor Mor and Chemchemal, two of Iraq's largest gas fields.

Emirati Dana Gas and Crescent Petroleum each hold a 35% stake in the field, while the European companies each have a 10% stake in the project. Production from the Khor Mor field averages some 106,000 barrels of oil equivalent daily, about 1,000 metric tons of liquefied petroleum gas, and 15,000 barrels daily of gas condensates. The reserves of the field are estimated at some 7 trillion cu ft of natural gas.

No one has yet claimed responsibility for the attack but the Kurdish government accused an Iraqi group of staging it. The group is called Iraq’s Popular Mobilization Forces, which is said to have ties with Iran.

"Good efforts have been made in the past to improve the energy sector and economic infrastructure in Iraq, especially in the Kurdistan Region, and while steps are being taken to resolve the disputed, evil and destructive hands once again targeted the Khor Mor gas field in a terrorist act. These repeated strikes must be stopped, and we urge the Iraqi government to find the perpetrators of this terrorist act and bring them to justice," the spokesman of the Kurdistan Regional Government said in the wake of the drone attack.

 

U.S. Sees New Egyptian Gas Fields As Key To Its New Middle Eastern Strategy

• By Simon Watkins - Apr 30, 2024
• 
  
• Egypt was chosen as the launching pad for the U.S.’s reassertion of power into the region because historically it holds a unique position in the Middle East and in the Arabic world.
• 
  
• Aside from its unique geopolitical significance, Egypt is uniquely positioned too in the global oil market.
• 
  
• Besides its important geo-strategic location, Egypt is the new potential gas hotspot in the potentially huge Eastern Mediterranean gas hub.

Arguably the two greatest military errors of the 100 years have been Japan’s attack on the U.S. naval base of Pearl Harbour on 7 December 1941 and Russia’s invasion of Ukraine on 24 February 2022. In both cases, they snapped the U.S. out of prolonged moments of introspection, and into the broader focused force for good that it and its key allies represent to many people around the world. In the Middle East, then-President Donald Trump’s comments encapsulated in his ‘Endless Wars’ commencement address to the United States Military Academy at West Point on 13 June 2020, had found resonance in the U.S.’s withdrawal from Syria (in 2019), Afghanistan (2021), and Iraq (2021), as analysed in depth in my new book on the new global oil market order. This allowed its key geopolitical rivals China and Russia to dramatically boost their presence across the region, as they had been itching to do for years without too much on-the-ground interference from Washington. Once President Vladimir Putin ordered his troops into Ukraine, though, it was obvious to the U.S. and other NATO members that this was just the first step in a bigger move westwards aimed at bringing all of Europe under Russian control. To stop this, not only did Ukraine need to be supplied with weapons from the U.S. and its European allies, but several of these countries needed to be provided with long-term sources of energy supplies to make up for those lost from Russia. As China and Russia at that point had significantly strengthened their alliances with the key Middle Eastern states - including Saudi Arabia, Iraq, Iran, Syria, and the UAE - the U.S. needed a new point of entry back into the heart of the Middle East. Egypt was the choice, and new developments in the past few weeks underline that the U.S.’s new Middle East strategy is proceeding apace.

Egypt was chosen as the launching pad for the U.S.’s reassertion of power into the region because historically it holds a unique position in the Middle East and in the Arabic world. For decades, Egypt has been seen by the Arab world as the leading proponent of the ‘Pan-Arab’ ideology that believes enduring strength can only be found in the political, cultural, and socioeconomic unity of Arabs across the different countries that emerged after the two World Wars. The philosophy’s most powerful recent proponent was Egypt’s president from 1954 to 1970, Gamal Nasser. Among the most palpable signs of this movement at the time was the formation of the United Arab Republic union formed between Egypt and Syria from 1958 to 1961, the formation of OPEC in 1960, the series of conflicts with neighbouring Israel over the period, and then the 1973/74 oil embargo, as also detailed in my new book on the new global oil market order. By bringing this leader of the Arab world on side, the U.S. hoped to offset the negative geopolitical impact of long-term ally Saudi Arabia having been lost to the China-Russia bloc. Politically and historically, Egypt is at least as much of a leader in the Arab world as Saudi Arabia has ever been.

Aside from its unique geopolitical significance, Egypt is uniquely positioned too in the global oil market. Over and above its official conservative estimate of around 1.8 trillion cubic metres of gas reserves, Egypt controls the major global shipping chokepoint of the Suez Canal, through which around 10 percent of the world’s oil and LNG is moved. It also controls the vital Suez-Mediterranean Pipeline, which runs from the Ain Sokhna terminal in the Gulf of Suez, near the Red Sea, to Sidi Kerir port, west of Alexandria in the Mediterranean Sea. This is a crucial alternative to the Suez Canal for transporting oil from the Persian Gulf to the Mediterranean. The Suez Canal is one of the very few major transit points that is not controlled by China. Specifically, China already has effective control over the Strait of Hormuz through the all-encompassing ‘Iran-China 25-Year Comprehensive Cooperation Agreement’, as first revealed anywhere in the world in my 3 September 2019 article on the subject and also analysed in full in my new book. The same deal also gives China a hold over the Bab al-Mandab Strait, through which commodities are shipped upwards through the Red Sea towards the Suez Canal before moving into the Mediterranean and then westwards. This has been achieved as it lies between Yemen (the Houthis having long been supported by Iran) and Djibouti (over which China has also established a stranglehold through debts connected to its multi-generational power-grab project - the ‘Belt and Road Initiative’).

Crucially as well, Egypt had earlier been identified as a new potential gas hotspot in the potentially huge Eastern Mediterranean gas hub. The key for the U.S. was to get its own big oil and gas firms in there quickly, with similar firms from its key allies to follow shortly afterwards. Chevron was the key U.S. operator from the start, with an announcement in December 2022 that it had hit at least 99 billion cubic metres of gas with its Nargis-1 exploration well in the eastern Nile Delta, about 60 kilometres north of the Sinai Peninsula. Following that, an announcement came of the discovery with Italy’s Eni of a potentially huge offshore gas field in its concession area in the Red Sea focused on the Nargis-1 well. This augmented its already significant presence in the broader Eastern Mediterranean through its operation of the massive Leviathan and Tamar fields in Israel and the Aphrodite project in offshore Cyprus.

The U.S.’s beachhead has since been used by several other of its allies’ major international oil companies, most notably Great Britain’s Shell and BP.  The latter said recently that it will invest US$3.5 billion in the exploration and development of Egypt’s gas fields in the coming three years. This amount could be doubled if the exploration activity yields new discoveries. Meanwhile, Shell began that development of the tenth phase of Egypt’s Nile Delta offshore West Delta Deep Marine (WDDM) concession in the Mediterranean Sea. This came after the British firm and its partner had developed the previous nine development phases of the WDDM concession that comprises 17 gas fields, located at water depths ranging from 300 metres to 1,200 metres and spanning approximately 90-120 kilometres from the shore. News emerged last week, that the same Shell-led consortium have agreed to begin the 11^th phase of the WDDM.

The next phase of the U.S.’s new Middle Eastern strategy appears to be to tie-in big operators from those countries that it considered to have been lost in large part to China and Russia. A key case is the UAE, which had been identified by Donald Trump’s administration as a potential key ally for the roll-out of several ‘relationship normalisation’ deals with Israel across the Middle East during his tenure as President. Indeed, the UAE’s own deal with Israel was ratified by its parliament on 19 October 2020. Several developments after Trump left office – not least the extraordinary refusal of UAE leader Sheikh Mohammed bin Zayed al Nahyan to even take a telephone call from U.S. President Joe Biden as oil prices spiked after February 2022 – indicated to Washington that the Emirate was no friend. However, last week saw BP announce a new joint venture (JV) with the UAE’s flagship oil and gas firm – the Abu Dhabi National Oil Company (ADNOC) – to be centred in Egypt. The concessions included in the new Concessions included in the JV are Shorouk (which contains the producing Zohr field), North Damietta (containing the producing Atoll field), North El Burg (containing the undeveloped Satis field), and further exploration agreements for North El Tabya, Bellatrix-Seti East and North El Fayrouz.

By Simon Watkins for Oilprice.com

ECOCIDE; METHANE RELEASE

Texas Producers Boost Flaring as Natural Gas Prices Tumble

By Tsvetana Paraskova - Apr 30, 2024

Oil and gas producers in Texas have significantly increased in recent weeks the number of requests to the Railroad Commission of Texas (RRC) to allow flaring on some operations as low natural gas prices and a glut of supply present challenges to the drillers how to get rid of the unwanted gas.

RRC, the oil and gas industry regulator of Texas, approved last week as many as 21 requests from producers to be exempt from rules banning or limiting flaring, Reuters reported on Tuesday.

The U.S. natural gas benchmark, Henry Hub, has been depressed below $2.00 per million British thermal units (MMBtu) since early February, due to weak winter demand amid milder weather, record output at the end of 2023, and higher-than-average natural gas stocks. 

U.S. oil producers are not in a rush to significantly boost production despite oil prices hitting $85 earlier this month, as low natural gas prices are holding back drilling in parts of the Permian and costs have increased, analysts and industry executives told Reuters earlier this month.

As WTI crude prices moved above $80 per barrel, producers are keen to continue pumping oil. But weak natural gas prices, especially in Texas, have created a dilemma for the companies, and many would choose more flaring – if permitted – to shutting down oil-producing wells that have associated gas output, analysts say.  

So far, producers in America, where part of the natural gas is associated gas from oil drilling, are not jumping the gun. They are mindful of the investor demands for higher returns, not necessarily higher production.

Still, natural gas prices at the Waha hub in the Permian basin in Texas slumped to a negative value of -$2.00 per MMBtu earlier this month as the recent rise in oil prices prompted producers to bring drilled but uncompleted wells online.

“Natural gas is currently pricing at or below costs of production,” an executive at an exploration and production company said in comments in the latest quarterly Dallas Fed Energy Survey released at the end of March.