30th August 2024

Happy Friday ladies and gents. Let’s top and tail this week with the latest happenings in all things oil, gas, and energy:

• 🐔 Chicken sandwiches and oil

• 😓 Houthis plant bombs on stricken tanker

• 📉 Libyan losses

• 🇯🇵 Japan’s LNG empire

• ➕ plus Trump’s renewable tear-down; Shell cuts exploration jobs; Total testing floating wind; ONEOK splashes 6 bill; Marathon shareholders approve Conoco deal; 3 more years for Golden Pass; and plenty more.

Catch you Monday.

📈 THE NUMBERS

🗞️ WELL-HEADLINES

 🗽 North America

• ONEOK spending big - the pipeline operator is bulking up its midstream footprint in the Permian with two deals worth $5.9bn to buy Global Infrastructure Partner's interests in EnLink Midstream and Medallion Midstream. The assets include 1.7 bcf/d of gas processing capacity and 1.6 mmb/d of crude gathering capacity.

• Golden Pass needs 3 more years - the LNG project in Texas has applied for more time, until 2029, to finish construction. The plant was originally due onstream in 2021 but has been plagued by a series of delays, including recently because of a bankrupt contractor.

• Marathon shareholders OK Conoco deal - the $16bn takeover is expected to close in the coming months.

• CCGT to the rescue in Texas - the state has selected 17 projects seeking $5.4bn in government funding as part of a program to develop gas power stations. The Texas grid has become increasingly fragile in recent years and has suffered a series of blackouts.

• Alaska LNG’s Asian roadshow - A US Senator from Alaska is in Asia to drum up businesses for the stalled $39bn Alaska LNG project. If built, the facility would be the only US LNG export plant on the Pacific Coast, giving it direct access to Asia without relying on the Panama Canal.

• Inventories edge down - US crude stocks fell by 0.9 mmbbls to 425 mmbbls last week. Analysts had expected a 2.3 mmbbls draw. Gasoline stocks were down by 2.2 mmbbls.

🏰 Europe

• Shell cuts exploration jobs - the major is continuing its penny pinching by reducing headcount in its exploration department by 20%, with most of the impact in its Houston office. Shell has recently also scaled back in offshore wind, solar and hydrogen, while it focuses on LNG and large oil projects.

• Repsol abandons Norwegian sale - earlier this year the company put its Norwegian subsidiary up for sale, which includes seven producing fields and 53 mmboe of reserves. It has seemingly pulled the plug on that process, for undisclosed reasons.

• Total testing a wind + oil combo - the company is launching a pilot project to provide power to its Culzean O&G platform in the UK North Sea from a floating offshore wind turbine. The solitary turbine is expected to provide 1/5th of the platform’s electricity needs from late 2025.

🕌 The Middle East

• Iraq promises to repent - the serial quota-breaker has said it will reduce its oil output by ~300 kb/d later this year to comply with its OPEC+ target, and promises to play by the rules going forward. Sure…

⛩️ Asia & Oceania

• Japan’s LNG empire - Bloomberg has written a fascinating article on the global gas network that gas thirsty Japan have built as the resource poor country looks to secure its energy supply. Every six hours, somewhere in the world, an LNG shipment controlled by a Japanese company leaves a port.

• US PE eyeing Indian midstream - The Chatterjee Group, a US-based private equity firm, is in talks to partner with ONGC (the Indian NOC) to develop a $10bn 3.5 mtpa petchem plant in the south of the country. India’s petchem market is growing rapidly at ~10% a year.

🦁 Africa

• Libya’s losses - reports suggest that the country has now lost ~ 700kb/d of output as the eastern government shuts in production in a spat with its rival government in the west of the country. Loading has also been halted at five oil export terminals. How far and long will this go? No idea, but the Libyans don’t have a great track record when it comes to resolving disputes…

🗿 Central & South America

• BP and EOG FID Coconut - the companies are developing the natural gas field offshore Trinidad & Tobago that was discovered back in 2005 and is set to begin production in 2027.

• Ecuador shutting down Amazon oilfields - after a public referendum last year on the issue, the country has started closing its fourth largest oilfield in the Amazon rainforest. The country is expected to lose ~$680m a year in lost revenue from the shutdown.

• Full tilt at Mero FPSO - Petrobras has reported that the Sepetiba FPSO at the offshore Mero field in Brazil has reached production capacity of 180 kb/d.

🌍 GEOPOLITICS & MACRO

• Houthis plant bombs on stricken tanker - having previously said they’d allow the tanker to be towed away, the Houthis have released insane footage (watch here) of them planting and detonating bombs on the vessel containing. The tanker contains ~1 mmbbls of dense Iraqi crude and risks an environmental sh*t show. Miraculously, there hasn’t been a major oil spill yet.

• Trump’s renewable axe wielding - the Republican nominee “will immediately stop all Biden-Harris policies that distort energy markets, limit consumer choice and drive up the costs on consumers on day one”, said his campaign. He also plans to build “hundreds of new power plants”, “modernize” the country’s nuclear regulation, and withdraw from the Paris Climate Accord (again).

💨 CARBON, CLIMATE, & OTHER ENERGY STUFF

• Switzerland going nuclear - the home of chocolate, Roger Federer, and dodgy banks may soon(ish) have some nuclear power plants after the government announced plans to overturn a ban on them. The country’s energy minister said they owed it to future generations.

🛢️ BOTTOM OF THE BARREL

A little glimpse into how life would be without hydrocarbons.

Energy enables trade, modern agriculture, specialization.

And KFC…

👋 BEFORE YOU GO 

Any feedback, requests, terrible jokes? Please just ping a reply to this email and let rip. We read every word. 

Oh and if you could share us with your pals who might like a drop of us, then we’d be very happy.

Thanks for reading. Have a day out there. 🛢️🛢️

Was this forwarded to you? Both Barrels is a concise and irreverent oil, gas, and energy briefing, delivered to you daily. It’s free to subscribe.