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New Fortress Energy reports a quarterly loss due to weak performance across all segments
New Fortress Energy reported a loss for the first quarter of the year on Wednesday. The U.S. LNG company struggled to perform well across all its segments. This sent the shares plummeting nearly 19% during extended trading. Excelerate Energy purchased the company's assets and operations in Jamaica for $1.06billion. The New York company delayed its announcement of first-quarter results from Monday to allow it to complete the deal. Wes Edens, CEO of Excelerate, said: "The sale of our Jamaican assets is a milestone for our company. We are able to streamline our operations while paying down corporate debt by selling assets." New Fortress had a long-term debt of $8.9 billion, according to LSEG, at the end the first quarter. It began to explore options last year such as bringing in strategic investors or selling assets after deferring a dividend to shareholders to conserve cash and working out a deal to delay maturities with bondholders. The company's financial problems stem from the fact that it was unable to secure LNG on long-term contracts for its power generation assets in Latin America because its credit rating wasn't investment grade and they had to purchase gas at higher rates. New Fortress total revenue dropped to $470.5 in the first quarter from $690.3 during the same period last year. Operating margins at its Terminals and Infrastructure unit fell 78.7%, to $74.6million during the quarter. The operating margin for the Ships segment dropped to $31.4m from $34.2m a year ago. The company reported a loss of $197.4 millions, or 73c per share, in the quarter that ended on March 31. This compares to a profit of $56.7million, or 26c per share, one year ago. (Reporting from Pooja in Bengaluru, Editing by Leroy Leo.)
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A regulator warns that a large part of North America could face power shortages this summer.
A changing mix of energy supplies is increasing reliability risks in the middle of the U.S. The North American Electricity Reliability Corporation reported that the demand for electricity in the United States has increased by 10 gigawatts, more than double the increase of last year. This is due to the retirement of fossil-fired energy sources and the rapid growth of solar power. As electricity demand increases from data centers, manufacturing, and electrification in industries such as transportation, power generation sources on the North American grid shift from 24/7 power plants, like coal and nukes, to intermittent supplies from renewables like solar and winds. According to NERC this change poses new challenges to grid reliability in the summer when energy-hungry air conditioners threaten to drain resources from the grid, causing power shortages. ERCOT will test the grid in the evenings, when the demand for electricity increases, but the solar output decreases. John Moura, NERC, said during the annual Summer Reliability Assessment call that "when the sun goes down and that time period of late evening or early morning, there is a potential for failure." Low wind power production could upset the balance between supply and demand in the Southwest Power Pool. This pool covers Montana, New Mexico, and Nebraska. MISO, the major Midwestern grid operator, will have less supply this year than last, as 1,575 megawatts in natural gas and coal generation has been retired since last summer. New England, a region that is outlier, is also at risk. Since last summer, North America is expected to retire more than 7 gigawatts in fossil-fired energy generation. This includes coal and natural gas. NERC's report states that, at the same time, as these 24/7 power supplies retire, 30 gigawatts solar capacity and 13 gigawatts battery storage capacity have been added to the continent in the past year. Moura, the NERC reliability assessment and system analyst, explained that to avoid shortages during summer, both the U.S. Moura: "As the demand increases, we need to build infrastructure."
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Algeria has bought 660,000 tonnes of milling wheat at a tender, traders claim
European traders reported that Algeria's state grain agency OAIC bought approximately 660,000 metric tonnes of milling wheat at an international auction that ended on Wednesday. They said that the total cost of the ton, including freight and other costs (c&f), was $244.50. Most traders estimated the volume to be 660,000 tonnes, while some estimates put it at 700,000. Initial assessments indicated that the bulk of the purchases would come from the Black Sea Region, primarily Russia and Romania, but also possibly Ukraine. The reports reflect the opinions of traders, and it is possible to estimate prices and volume later. Algeria usually buys much more than the nominal volume. Wheat can be supplied from any approved origin. Wheat is needed for two shipping periods, including Europe. The dates are July 1-15 and then July 16-31. The wheat is shipped a month sooner if it comes from South America or Australia. Algeria is an important customer of wheat imported from the European Union and France in particular, but Russian exporters as well as those from other Black Sea regions have seen a strong expansion on the Algerian market. According to traders, a diplomatic split between France and Algeria has led the grains agency tacitly to exclude French wheat and trading firms from its tenders. Relations between the two countries remain tense. OAIC purchased an estimated 570,000 tonnes of milling wheat in its previous reported tender on 16 April. This was largely expected to come from the Black Sea area. Reporting by Michael Hogan, Hamburg; Gus Trompiz, Paris; Editing by David Goodman
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Ivory Coast Port Operator to invest in inland logistic
Africa Global Logistics, the company that operates Ivory Coast’s main port plans to invest more than 60 million euros ($67million) in inland logistic over the next five year to enhance its position as a gateway and transport hub for landlocked West African countries. Regional Director Asta Rosa Cisse said that the company intends to develop dry warehouses with cooling facilities and establish operational hubs throughout Ivory Coast. Africa Global Logistics, which operates Abidjan, the main port of Ivory Coast - the world's largest cocoa and cashew producers - also handles shipments from and to landlocked neighbours Burkina Faso, and Mali. Mediterranean Shipping Company also deals in cotton, rubber and other commodities such as bananas, mangos, palm oil, and even cotton. Cisse stated that "Abidjan is a victim of centralisation with everything convergent on the port". She said that the company will decentralise its operations by creating hubs at Ferkessedougou, in the northern Ivory Coast; Bouake, in the middle and San Pedro, in the southwest. This is to increase speed and efficiency. Cisse said that the import and export traffic in Abidjan’s main port will increase by 50% to 1.8 million 20-foot units (TEUs) this year from 1.2 millions TEUs. Our traffic has increased in accordance with the economic growth of the region. She said that the region's dynamism boosts both export and imported traffic. The second container terminal, to be completed by the end of 2022 at Abidjan’s main port has increased traffic, as it accommodates large vessels from Asia and Europe. Previously, these vessels had to unload their cargo in South Africa, before they could transfer goods to smaller ships bound for West Africa. Cisse said that the expansion of middle class and its increased consumption of European products, along with the increase in infrastructure construction, which attracts many products, have contributed to the surge of traffic in Abidjan.
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Sources: TenneT is in talks to sell a stake of up to 13 billion dollars in its German unit to funds.
Four people with knowledge of the matter have confirmed that the Dutch state-owned power grid operator TenneT began talks with investors to sell a minority stake of its German division. This could be one of the largest deals of Europe in 2025. Tennet Germany's regulated asset base, a key gauge of valuation for energy grids that is 27.8 billion euro ($31 billion), will grow at a rate of 25% per year until 2029 according to a presentation to investors on the company's website. Three people have said that the Dutch government could earn up to 12 billion euro from the sale of a minority stake in the division. However, the amount may be lower, depending on the size and debt level of the company. The Dutch government has guaranteed a BBB capital structure for TenneT Germany in line with the other German high-voltage grid operators (TSOs). Sources, who spoke on condition of anonymity as the matter was private, said that non-binding offers for the business were due in mid-June. TenneT The Dutch government has declined to comment. Sources said that the U.S. Trade War has hindered dealmaking over recent weeks, but grid assets - which are regulated, and offer fixed returns - are expected to become more attractive for investors in light of declining interest rates and increased economic uncertainty. Two people have said that funds such as Macquarie, Canada's Caisse de depot et placement du Quebec and Apollo Global Management are interested in this sale. One person and a third said that Global Infrastructure Partners, a BlackRock company, and CPP Investment Board, which manages Canadians’ pension savings, will also show interest. Two people stated that more suitors may emerge, and parties will likely team up due to the size of the transaction. However, there is no certainty about a deal. Apollo, CDPQ Macquarie GIP, CPPIB and Macquarie all declined to comment. After a failed partial sale of TenneT Germany to the German state lender KfW last year, the Dutch government is now pursuing a dual-track process. The Hague is still open to Germany acquiring a stake in TenneT Germany. The government can opt to sell the company or offer a partial initial stock offering. In a letter to the Dutch parliament sent this week, Dutch Finance Minister Eelco henen said that he wanted a decision on either of two options by early July. In a letter dated May 13, he wrote: "Based on discussions and non-binding offers, I will evaluate with TenneT the expected best option." TenneT Germany, with a network that spans more than 14 000 km, is the largest high-voltage grid operator in Germany. In 2024, it will have earned 2.2 billion euro before depreciation, interest, and tax. $1 = 0.8919 Euros (Reporting and editing by Anousha Saoui, Elaine Hardcastle and Anousha Sakoui; Additional reporting and editing by Bart Meijer and Andres González)
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Hapag-Lloyd CEO: Trade truce between the US and China boosts Hapag-Lloyd
Hapag-Lloyd saw an increase in freight traffic between the United States of America and China this week, after a cooling down in trade tensions between the two countries. The U.S. & China agreed on Monday to reduce steep tariffs at least for 90 days. This ends a trade conflict between the two largest economies in the world that had sparked fears of global recession. Rolf Habben Jansen, the CEO of Rolf Habben Jansen said on Wednesday that he expected an increase in trade between China and the U.S. This is what has already been seen over the past few days. He added that it remains to be determined how long the process will take, and whether or not demand will increase. In the first few days, bookings for U.S. to China traffic were up by 50% week-on-week at the German container shipping company. Hapag-Lloyd's share price was up 7.3% at 1341 GMT. The company reported earlier on Wednesday a 27% increase in earnings before interest and taxes, or EBIT. This was partly due to many Chinese manufacturers bringing forward consignments for the United States, anticipating trade barriers. Habben Jensen, the company's CEO, said that it was using ships of various sizes to adapt to a volatile market. He said, "Our problem, of course is that ships are unfortunately not elastic." The two sides announced that under the temporary truce the U.S. would reduce the extra tariffs on Chinese imports that it imposed last month, from 145% to 30 % for the next three-month period, and Chinese duties on U.S. imported goods will drop to 10 % from 125%. Hapag has confirmed that it expects its EBIT for the full year to range between breakeven and 1,5 billion euros.
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Spot premiums on Russian June ESPO blend decline amid OPEC-driven increase in supply
Four traders reported that spot premiums for Russian ESPO blend crude oil dropped in June compared to May, amid abundant supply following OPEC+'s agreement to increase output for a 2nd month. They said that the premiums for June-loading shipments fell to between $1.50 and $1.70 per barrel compared to ICE Brent, on a basis of delivered cargoes in Chinese ports. Two traders reported that May-loading crude oil cargoes were trading at premiums of up to $2.50 against ICE Brent despite a large export plan. Early in May, the producer group OPEC+ decided to increase oil production for a second month in a row. The output will be increased by 411,000 barrels / day in June. ESPO Blend, a lighter Russian oil grade that is loaded from the port of Kozmino in the Pacific to Asian markets is favored by Chinese refineries. Two traders stated that the demand for June-loading ESPO blend was somewhat reserved. Cargoes were estimated to be plus $1.50-1.70 a barrel over ICE Brent. A trader pointed out that the regional Murban oil grades prices were also weakening amid increased OPEC+ production plans and expected increases in supplies. Third trader: plus $1.50 per barrel to ICE Brent at Chinese ports is a "reasonable price" for volumes of ESPO blend in June. ESPO Blend Oil is traded 1.5 months before loading. This means that June cargoes will soon be sold out. One of the traders stated that private Chinese refineries were the biggest buyers of Russian ESPO Blend loading from Kozmino at the moment, as state oil companies continued to show a cautious approach towards Russian oil purchases on the spot market. Another trader on the ESPO Market said that the reason for the lower than expected demand in June for ESPO blend oil loading was the high amount of oil purchased for storage during the spring months. He said that demand for ESPO blend could increase after the summer holidays start due to increased fuel consumption in Asia. (Reporting in MOSCOW by Siyi Liu, and additional reporting in SINGAPORE by Aizhu Chan; editing by Jan Harvey).
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Kazakhstan's oil production fell 3% but remained above OPEC+ quota
According to an industry source who is familiar with the calculations and statistics, Kazakhstan's oil output fell 3% in March, to 1,82 million barrels of oil per day (bpd) by April. However, it was still above the OPEC+ quota. Saudi Arabia, the group's leader, has demanded that all members adhere to their quotas. Kazakhstan, a country in the top 10 oil producers, had a quota of 1.473 millions bpd for OPEC+. The energy ministry of the country said in May that they were committed to OPEC+ but did not plan to reduce output as it "frequently informed" their OPEC+ partner. OPEC+ agreed to increase oil production for a second month in a row, increasing output by 411,000 barrels despite lower prices and expectations that demand would be weaker. The expansion of the Tengiz oilfield, Kazakhstan's largest, led by Chevron has resulted in an increase in oil production this year. In April, the field produced 885, 000 bpd. This is down from 950,000 in March. The Kazakhstani energy ministry didn't immediately respond to a comment request on Wednesday. Kazakhstan had previously pledged to compensate its overproduction by decreasing its cumulative production by 1.3 millions bpd before April 2026. Western oil majors such as Shell, ExxonMobil, TotalEnergies, Eni and Chevron are involved in Kazakhstan oil projects.
Algeria purchases milling wheat at tender, traders claim
European traders reported that Algeria's state grain agency OAIC bought milling wheat at an international auction which ended on Wednesday.
They said that the initial cost of a metric tonne, including freight and costs (c&f), was around $244.50.
It was initially unclear what the exact size of the order in terms of tonnage would be. The initial estimates of traders indicated a large order of between 600,000.00 and 700,000.00 metric tons.
The reports reflect the opinions of traders, and it is still possible to estimate prices and volume later.
Algeria usually buys much more than a nominal volume of 50,000 metric tonnes. Wheat can be supplied from any approved origin.
Wheat is shipped in two phases from the main regions of supply, including Europe: July 16-31 and July 1-15. The shipment date is one month earlier if the wheat comes from South America or Australia.
Algeria is an important customer of wheat imported from the European Union and France in particular, but Russian exporters as well as those from other Black Sea regions have seen a strong expansion on the Algerian market.
According to traders, a diplomatic split between France and Algeria has led the grains agency tacitly to exclude French wheat and trading firms from its tenders. Relations between the two countries remain tense. Reporting by Michael Hogan from Hamburg and Gus Trompiz from Paris
(source: Reuters)