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Panama Canal considers pipeline for gas transport with an eye towards Asian clients
Canal administrator Ricuarte Vaquez announced on Monday that the Panama Canal is looking into the construction of an LPG pipeline across the trade passage. Japan was identified as the top client for U.S.-sourced gas. Why it's important After a court decision last year, the canal, which is one of the busiest passages for maritime trade in the world, wants to diversify its operation. A drought has limited crossings, and officials plan to build a nearby reservoir. Japan is the largest LPG consumer in the world, and uses the fuel both for domestic use and industrial purposes. KEY QUOTE Vasquez said after a press conference that "we're exploring the possibilities of rolling out an infrastructure with a capacity up to one million barrels per daily (bpd), however, the market is larger." Vasquez stated that "meeting the growing demand for gas through Panama" is a top priority but also a complex task. CONTEXT The move is a response to the escalating tensions that have been sparked between the U.S.A. and Panama by U.S.President Donald Trump's claims regarding reclaiming of the Panama Canal. Despite the pushback by Panamanian President Jose Raul Mulino, who rebuffed Trump's claim, the U.S. president and officials have praised a recent deal, led by U.S. company BlackRock, to purchase the majority of the ports business from Hong Kong conglomerate CK Hutchison. This includes its assets near Panama Canal. By the Numbers Vasquez said that initial studies indicate "possible capacity of traffic through the Panama Canal (of LPG in a decade) could reach 2,000,000 bpd." What's Next? Vasquez stated that the canal anticipates making a decision on the pipeline within the next year. The canal is already set to receive $8 billion worth of infrastructure and sustainability investments over the next ten years. (Reporting and writing by Elida Moreno, editing by Lincoln Feast.
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Australia shares hit a seven-month low, dragged down by banks. Qantas falls on the ex-dividend.
The Australian share market fell to a near seven-month-low on Tuesday. This was due to a decline in financial stocks. It followed a global drop in equity prices after uncertainty over tariffs imposed on the U.S. by President Donald Trump raised concerns of a possible recession in Australia. Qantas also fell as it began trading ex-dividend. The S&P/ASX 200 Index fell 1.5%, reaching 7,843.80 at 2356 GMT. This is its lowest level since 2024. U.S. stocks fell overnight. The S&P 500 registered its largest one-day decline since December 18, 2024 and the Nasdaq, which is heavily loaded with tech, dropped 4.0% as fears of recession in the largest economy in the world grew. Financial stocks, the most heavily weighted sub-index of the benchmark index, dropped as much as 1,9%, reaching their lowest level since the 8th October 2024. The "Big Four" lenders in the country are down between 0.1% to 1.9%. Qantas Airways' share price fell by as much as 10%, putting it on course to have its worst session in March 2020. The airline was trading ex-dividend. Iron ore prices fell amid worries about U.S. Tariffs, and China's promise to reduce crude steel production this year. This clouded the demand outlook. Rio Tinto, one of the sector's heavyweights, and Fortescue both fell 0.5% and 1.7% respectively. Oil prices fell by 0.1% as fears that U.S. Tariffs on Canada Mexico and China would slow economies in the world and reduce energy demand. The gold stocks fell as much as 4.5 percent, marking their weakest session in 2024. After removing its CEO, PolyNovo's stock fell by about 10%, reaching its lowest level since 30 October 2023. After discussions last week with the executive, the decision was made after media reports about the bullying of the CEO by the chairman of the company. The benchmark S&P/NZX50 index for New Zealand was down 0.7% to 12,423.12 point.
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After storm, the Bahia Blanca grain terminal in Argentina is nearing normal operation.
A port board member said that activity at Argentina's Bahia blanca commercial grain port has begun to normalize after a severe thunderstorm disrupted operations last Friday. Port officer: The terminals will be fully operational again on Tuesday. The port city of Bahia Blanca is located southwest of Buenos Aires and is Argentina's second largest grain terminal, but it still lags behind Rosario Port Conglomerate in Santa Fe Province. Bahia Blanca was hit by a torrential downpour of more than 300 millimeters (11.8 in) in just a few short hours, resulting in severe flooding and causing the deaths of at least 16 people. The city, located about 600 km (400 miles), suffered severe structural damage. In an interview, Dolores Valdemoros said that the port is expected to be fully operational tomorrow (Tuesday), because grain trucks have already entered. "Ships have begun to enter." "They are testing to make sure everything is working," she said. Many ships in Argentina, which is a major global grain exporter, complete their loading at Bahia Blanca, after passing through Rosario. According to port data, in January 980,460 tons of grain was loaded at Bahia Blanca.
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CERAWEEK - BlackRock CEO Fink claims nationalistic US policies will stoke inflation
BlackRock CEO Larry Fink stated on Monday that nationalistic policies will increase inflation in the United States, including deporting workers. Speaking at the CERAWeek Conference in Houston, the head of U.S. Investment Management Company added that the markets are discounting the inflation and that there will be additional cost increases within the next six-to-nine months. He said: "I believe that if we are all becoming more nationalistic, and I don't say that that is a bad thing. You know, that resonates with me, that will have an elevated inflation." Fink believes, for instance, that mass deportations can lead to problems in agriculture. Are we going to be able to harvest it now? He said. "I have even told the members of Trump's team that we will run out of electrical workers to build AI data centers. "We just don't enough." Trump's administration has been criticized for its stance on immigration. Threatening hefty tariffs Industry groups have warned that the import cost of goods from certain trade partners could be dramatically increased. What are you prepared to tolerate if I bring up these issues in Washington? Fink said. Fink said.
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Trump Administration aims to cancel sales of oil reserves and support small nuclear
U.S. Energy Sec. Chris Wright announced on Monday that he planned to work with Congress to cancel previously mandated sales of the Strategic Petroleum Reserve in order to deal with low stockpiles. Congress mandated the sale of 100 million barrels from the reserve. This is the largest stockpile in the world for emergency crude oil. A 7 million barrel sale was set up for fiscal years 2026-2027 and subsequent sales until 2031. Wright said in an interview during the CERAWeek Conference that "anything with Congress is harder, and it takes time." Wright stated that it would take between five and seven years, or $20 billion, to replenish the reserve. Joe Biden, the predecessor of Donald Trump and Joe Biden, sold almost 300 million barrels out of the SPR. This was its biggest sale since Russia invaded Ukraine 2022. Wright stated that due to ongoing maintenance problems, it takes longer to refill the reserve than sell from it. Wright said that he would not request $20 billion in oil purchases at once from Congress, as he was working with lawmakers on the purchase of oil. Wright wants to increase U.S. LNG exports. In his speech to Congress, Trump emphasized a $44 billion Alaska LNG proposal. Trump said Japan, South Korea, and other countries wanted to partner with the United States on a "giant" natural gas pipeline, claiming that they would each invest "trillions." The Alaska LNG project requires an 800-mile gas pipeline from Alaska's northern region to Asia. No final investment decisions have been made. Wright said that all options are available to support the project, including a possible loan guarantee by his department's Loan Programs Office (LPO). Wright added that the administration would look into every possible way to help get such a project built, including diplomacy, and possibly a loan guarantee that could be used to finance it at a cheaper rate than banks. U.S. U.S. If the Trump Administration uses the LPO to build Alaska LNG, this would be a significant policy shift from his first term in office when he didn't use the LPO much. Biden used the LPO frequently and signed legislation that increased its financial assistance to hundreds of millions of dollars. Wright downplayed the regional opposition against new natural gas pipelines, saying that he didn't expect it to stop the construction of new projects. Everyone wants lower energy costs. "Everyone in New York and everyone in New England," said he. Trump signed a declaration of emergency on his first day as president, aimed at expanding federal powers in order to push big projects such as generators, transmission, and pipelines to meet the rising demand for power. Wright, who was appointed energy secretary after stepping down as board member of the small modular reactor Oklo, also said that the administration would likely provide financial and regulatory assistance to the new nuclear technology, but did no elaborate on how. There are currently no commercial small modular reactors. (Reporting and editing by Nia William; Timothy Gardner)
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CEO of CERAWEEK NextEra Energy says that the company expects a 55% increase in global energy demand within 20 years.
NextEra Energy's Chief Executive Officer John Ketchum said that the company expects the demand for electricity to increase by 55% over the next two decades compared to the previous two decades. He spoke at the CERAWeek conference held in Houston, Texas on Monday. The boom in artificial Intelligence, which drives demand for data centers that consume a lot of power, is expected to account for 17%. Ketchum warns that the cost of gas-fired electricity generation has more than tripled due to the surge in demand, which makes renewable energy more affordable and available. He said that the cost of building gas-fired energy facilities has increased from $785 per kilowatt in 2022 for some installations to as much as $2,400 per kilogram today. We're going need all of it. Renewables will be needed. Gas will be needed. "We're going need nuclear," Ketchum said. NextEra has been looking into restarting the Duane Arnold Nuclear Facility in Iowa, one of many potential restarts across the United States. Ketchum warned that rising utility bills could lead to a crisis in the affordability of power. Ketchum stated that "if we have affordability problems, it will be very difficult to meet the demand we expect to see." (Reporting and editing by Liz Hampton, David Gregorio, and Georgina McCartney from Houston)
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Albert Ramdin, a Suriname native, is the first Caribbean Secretary General of OAS.
Albert Ramdin, the Surinamese Minister of Foreign Affairs, was elected as OAS's new Secretary General for 2030. He replaces Uruguayan diplomat Luis Almagro. Ramdin, who is 66 years old, was the OAS assistant secretary general from 2005 to 2015, before becoming Surinam's top diplomatic official in 2020. He has called for more efficiency within the organization, and highlighted that it is necessary to support Haiti better. Haiti is currently facing a conflict with armed gangs while receiving limited international assistance. Suriname’s government released a statement saying that this was the first time ever in the history OAS, a representative of the Caribbean had been elected Secretary-General. It is an honor for Suriname to have our candidate supported by the majority of member states. Suriname President Chan Santokhi praised Ramdin for his "calm assurance", as a trusted adviser and adept diplomat. Suriname, located in South America, has stronger diplomatic ties with the Caribbean Community (CARICOM). It opposed Washington's sanction against Venezuela and supported Guyana, a neighboring country in a territorial dispute over Esequibo with Venezuela. In 2017, Venezuela's government announced that it would leave the OAS. However, the organization has recognized the political opposition of the country since then. The OAS in Washington currently does not have a representative for Venezuela. Diplomats of other CARICOM countries expressed their hope that Ramdin’s appointment would increase diversity and represent smaller nations in Caribbean which are facing urgent problems with high debt, gun crimes and climate change. Ramdin will remain in his position as Foreign Minister until May 25, when Almagro will complete his term and Suriname will hold national elections.
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UK will fast-track grid connections for clean energy projects
The government announced on Monday that Britain would speed up the connection of clean energy projects including wind and solar to its grid, and accelerate the construction of new infrastructure. According to the current system, described by the government as "first come first served", projects are handled in the order that they enter the queue, regardless of their progress. The new "Planning and Infrastructure Bill" - which will be introduced into parliament this week -- will adopt an "first-ready, first-connected" approach. To meet the 2030 goal, the country will need to significantly increase its transmission network. In the past, expansion was a slow and difficult process as local support for plans has not been strong. The government announced that "decisions on offshore and onshore wind, solar energy, electricity grids and hydrogen power plants, as well as carbon capture, nuclear power and carbon capture, will be expedited to accelerate growth." The government announced new measures to speed up approval of nationally significant infrastructure projects. These include reducing the burden on consultations, improving guidance, and updating policies at least once every five years in order to reflect the priorities for infrastructure delivery. The government hopes that the changes will help it to meet its commitment to plan at least 150 major projects in infrastructure, including wind, hydrogen and solar power, during this Parliament. The government also confirmed that it would make further changes to the rules governing attempts to block major infrastructure by way of the courts, so that nuclear power plants and wind farms could be approved and constructed faster. On Monday, the Government announced that residents who live within 500 meters of new or upgraded electric pylons would receive a reduction in their bill of up to 2,500 pounds (3230 dollars) over ten years. The government stated that the discounted bills will help reduce opposition to and planning delays. Ed Miliband, energy minister, said: "This will be beneficial to the entire country as we ensure we build the clean electricity system we need." The companies that build new pylons or upgrade existing ones will be required to finance local projects, such as sports clubs and leisure facilities, in the affected communities. According to government figures, the average household energy bill for 2024 will be 2,252 pounds. Of this, 1,143 pounds will come from electricity and 1,109 pounds from gas.
US LNG exporters are looking to renegotiate contracts to cover rising costs
According to company statements and sources, several U.S. producers of LNG are trying to renegotiate with buyers higher prices due to rising construction, labor, and borrowing costs. The higher prices will reduce the competitiveness of U.S. LNG on the global markets, especially at a moment when President Donald Trump wants to expand this industry.
Alex Munton is the director of Global Gas and LNG Research at Rapidan Energy Group. He said that "the competitiveness of U.S. Liquefied Natural Gas (LNG) could be affected by a double-whammy." Munton said that rising liquefaction prices, a tighter gas market at home, and declining prices for competing supplies index to oil, could all have an impact on the competitiveness of U.S. Liquefied Natural Gas.
Energy Transfer's coCEO said on an earnings call, that negotiations are underway. According to four sources, Mexico Pacific and Venture Global have been seeking to renegotiate supply purchase agreements.
Mexico Pacific is trying to renegotiate a higher liquefaction fee with Chinese buyers Zhejiang Energy, and Guangzhou Gas. This according to two Chinese officials who are familiar with the situation. Mexico Pacific is trying to negotiate the price because the U.S. engineering company Bechtel that is building the plant wants a construction cost which has made the project expensive.
Mexico Pacific and Bechtel declined to comment.
Sources claim that Zhejiang, Guangzhou and other cities have rejected Mexico Pacific’s proposal. The sources did not give any details on Mexico Pacific's costs of liquefaction or how much it wanted to pay for them.
One of two sources who have direct knowledge of this matter said that Guangzhou has requested to reduce its share of the project's revenue from 1 MTPA per year to 700,000 tonnes per annum.
Zhejiang Energy did not respond to requests for comments sent via email. Guangzhou Development Group (parent company of Guangzhou Gas) did not comment immediately. Venture Global, second largest U.S. exporter of LNG, is also trying to renegotiate a higher price for its CP2 Louisiana project, despite the fact that the plant has yet to begin construction and have not received the financial go ahead, according to separate sources. Venture Global declined to comment on a request. In January, the company told investors that fees for liquefaction could increase to $4 per million British Thermal Unit (mmBtu), up from $2.25. Energy Transfer, which has a 16.5 MTPA facility for LNG export in Louisiana under construction, stated on a February earnings call that it was also renegotiating liquefaction charges with customers to try and align higher construction costs with the offtake agreements.
Everyone understands the cost increases. We are continuing to negotiate with the companies in order to reduce their fees, said Marshall McCrea.
McCrea stated that customers stuck with their projects despite being asked to pay higher fees.
Cheniere Energy, the largest U.S. exporter of LNG, announced in February that it would not be increasing fees. This is in part due to its prices already being linked to inflation, and because its projects are constructed on brownfields, which have cost advantages. Baker Hughes, one the biggest equipment suppliers to the U.S. gas sector, was able to control its inflation, but LNG developers have seen increases, according to Lorenzo Simonelli.
Simonelli, who was referring to engineering, procurement and construction companies, said that the EPCs are the ones that we tend to see more of. If we looked at the external climate, we'd say that there was some inflation. In general, the liquefaction fee for U.S. LNG is on track to increase above $2.50/mmBtu because of a tight labor pool, rising construction costs and persistently high interest rates.
Poten warned that higher liquefaction costs could reduce the cost-competitiveness for U.S. LNG project, particularly if they are coupled with an increase of U.S. gas prices or a fall in Brent crude oil,
Poten stated that inflation, on top of the labor shortages, is driving up equipment and material prices.
(source: Reuters)