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Italy's Snam cancels German gas contract amid Berlin's concerns about China
Snam, the Italian gas grid operator, announced on Friday that it had scrapped its plans to buy a minority stake of Germany's biggest independent gas transmission company. The German Economy Ministry has resisted. Berlin's concern over the 920 million-euro ($1.1billion) transaction is due to the fact that China's State Grid is an indirect shareholder in Snam. This was reported earlier today, citing sources who are familiar with the issue. The Italian group has signed an agreement in April to purchase a 24.99% share in Open Grid Europe Infinity Investments in Abu Dhabi has acquired the owner of's (OGE), Vier Gas Holding, with the aim to enter Germany's gas market, which is the largest in Europe. Snam, in a press release, said that the German authorities had terminated the agreement after an extensive review of foreign direct investments. They also stated that Snam's proposed solutions to obtain regulatory clearance were deemed inadequate. The company said that this development would not affect its financial forecast for 2025. Since the agreement, Germany's Economy Ministry has been reviewing the contract. The German government's resistance is a reflection of the European governments' tougher stance on Chinese investment in Europe because of security concerns. Agostino Scrnajenchi, CEO of Snam, had previously indicated that the company would not pursue an acquisition "come Hell or High Water" during the lengthy approval process. Germany has blocked China's State Grid from buying a stake in 50Hertz, a power grid operator in 2018.
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CANADA-CRUDE-Discount on Western Canada Select narrows slightly
On Thursday, the discount between West Texas Intermediate and Western Canada Select futures (the North American benchmark) decreased slightly. WCS for Hardisty, Alberta delivery in December settled at $11.65 per barrel, which is $1.65 below the U.S. benchmark WTI. This was down from $11.70 a barrel on Thursday. Michael Berger, Enverus analyst, stated that Canadian crude storage levels are below the average for the past five years. Trans Mountain, the pipeline that exports Canadian crude via the Pacific Coast to U.S. markets and Asian ones, has not been apportioned in November. This is another factor contributing to the narrow differential. The industry uses the term apportionment to describe when demand for space on pipelines exceeds its capacity. Berger says it is more difficult to predict the WCS discount over the long-term because of the possibility that policy and regulatory changes could occur in Canada, which would encourage oil producers to increase their production. * Oil prices in the global market rose by more than 2% on Friday, as Russia's Novorossiisk port halted exports of oil following an attack by a Ukrainian drone that targeted a depot at Russia's energy hub. This sparked supply concerns. (Reporting from Amanda Stephenson, Calgary; Editing and proofreading by Tasim Zaid)
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Cheniere expects US LNG plants to use 40 bcf per day of natural gas in the coming years
Anatol Feyegin, Chief Commercial Officer at Cheniere Energy, said that U.S. LNG plants may be able to take up as much as 40 billion cubic feet of natural gases per day over the next few years. According to LSEG data, U.S. LNG plants are using a record amount of natural gas (18 bcfd) to produce LNG. Feygin, speaking at a Federal Reserve Bank of Kansas City seminar, said that the increased demand for gas liquefaction may lead to higher natural gas prices. Prices have risen by 62% in the last year and could become even more costly towards the end of this decade. "You saw it in 22/23 when COVID came out. LNG returned to full utilization, and then increased. Nymex saw an increase in the single digits. Feygin stated that the supply would respond very quickly, indicating that drillers could increase production to meet increased demand. The executive stated that there is concern about a glut of LNG as more capacity is added. However, he said that Asian countries like Bangladesh and Pakistan may be drawn in by the lower prices to increase demand. Feygin stated that the world will need 30 million metric tonnes of LNG each year to meet the global demand growth. The majority of this new capacity will come from the U.S. He said that rising construction costs were behind some of the final investment decisions made in U.S. LNG. Feygin explained that "more than two-thirds" of the FID in this year were completed because fixed-priced EPC contract expires soon and the rush was on to keep the cost of construction of the LNG plant low. Feygin stated that the U.S. gas sector could produce up to 300 mtpa. However, he acknowledged that this rapid growth could be a challenge for some producers who are not prepared to deal with periods of low prices. He warned that only 17% of new capacity from plants which reached FID in this year had been sold on long-term contracts. Many portfolio players were unprepared. Curtis Williams, Houston (Reporting) and Leslie Adler Nathan Crooks Edmund Klmaann edited the article.
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Republican state AGs express concerns over Union Pacific's deal with Norfolk Southern
Nine Republican attorneys general raised concerns on Friday about Union Pacific's plans to purchase smaller rival Norfolk Southern for $85 billion, creating the first U.S. Coast-to-Coast freight rail operator. In a letter sent to the Surface Transportation Board by Tennessee Attorney-General Jonathan Skrmetti, and Kansas Attorney-General Kris Kobach that was seen by, the officials expressed concern about the deal, which they said would result in "undue market consolidation" and "stifle competition, resulting in higher prices, less reliability and less innovation, at the expense America's producers and consumers." If approved, the tie-up could help reshape U.S. freight railroad industry, streamline operations, and eliminate interchange delays at key hubs such as Chicago. Attorneys general from Ohio, Florida and other states, including North Dakota, South Dakota Mississippi, Montana, and Iowa, said that the merger could lead to high shipping costs, which could "kneecap American manufacturers' ability compete with foreign companies." The group also stated that "the downstream impact of the merger poses a significant risk, not only for our industrial base, but also for our agricultural producers." This merger, in the end, could compromise our national safety. Union Pacific responded on Friday by saying that it is looking forward to submitting their application to the STB to "detail how this combination will be good for America, meet the threshold to advance public interest and increase competition." The railroad said it has won the support of key unions as well as others in order to "ensure that rail is not forgotten." Norfolk Southern has not yet commented. The railroads announced earlier on Friday that over 99% of both companies' shareholders voted for the merger. The STB could take between 12 and 18 months to review the deal. Railroads have been struggling with the volatile nature of freight volumes, increasing labor and fuel prices, and increased pressure from shippers regarding service reliability. After meeting with Union Pacific CEO Jim Vena in September to discuss the largest U.S. railroad merger for decades, Donald Trump stated that the merger "sounds great to me". Union Pacific is the dominant freight rail carrier in Western United States. Norfolk Southern, on the other hand, is the leading carrier in Eastern United States. Together, the two railroads form one of four major U.S. class I railroads along with BNSF Railway, CSX Corp and BNSF Railway.
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White House claims that Alibaba is assisting Chinese military to target US, reports FT
Financial Times reported on Friday that Washington accused the online marketplace Alibaba of providing technology support to Chinese military operations targeting targets in the United States. The memo was cited by the White House. The FT reported that the national security memo contains declassified top-secret intelligence about how the Chinese group provides the People's Liberation Army (PLA) with capabilities the White House believes could threaten U.S. Security. The report didn't specify what capabilities or operations are involved or if the U.S. is trying to respond. Alibaba shares in the U.S. fell 4.2% following the news. Alibaba issued a statement saying that "the assertions and innuendos contained in the article were completely false." "We doubt the motivation behind this anonymous leak which The FT admits they can't verify. This malicious PR campaign clearly came from an rogue voice that was looking to undermine President Trump’s recent trade agreement with China. The Chinese Embassy in Washington has not responded to an immediate request for comment. (Reporting and editing by Susan Heavey, Matthew Lewis, and Jasper Ward from Washington)
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Airlines urge FAA to stop flight cuts because controllers are paid
After the government shutdown ended, major U.S. Airlines are asking the Federal Aviation Administration (FAA) to remove the mandatory 6% domestic flight reductions at 40 major airports. The cuts were imposed in order to address safety concerns regarding air traffic. The FAA's order, which requires far more drastic cuts, is not being followed by most airlines. Cirium, a firm that provides aviation analytics, reported airlines cancelled just 2% of flights on Friday, down from 3.5% Wednesday and Thursday. The FAA and union officials announced that air traffic controllers, and other FAA staff, began receiving their back pay on Friday. This is equal to approximately 70% of the amount they owe, excluding overtime. Officials told that airlines have privately argued to the FAA to stop the cuts, and some plan to cancel few or no flights this Saturday. After Congress voted for reopening the government following a 43-day shut down, FAA decided to reduce those cancellations on Wednesday. The FAA did not increase the cuts to 8% or 10% as announced previously. Instead, they remained at 6%. Transportation Secretary Sean Duffy stated Friday that only a handful of controllers had been absent on Thursday, as operations have improved dramatically. Duffy stated, "We are reviewing the data and working hard to restore the airspace to normal." Separately, on Friday, a group led by Rick Larsen (the ranking member of Transportation and Infrastructure Committee) asked the administration to provide specific safety data and compare it to the previous six months. The Democrats said that it appeared the administration took this decision without consulting key aviation stakeholders. United Airlines announced that it had cancelled 134 flights for the Friday after canceling 222 flights Thursday. There are about 3,500 fewer air traffic controllers than the FAA needs to meet its target staffing levels. Before the shutdown, many had already been working six-day weekends and mandatory overtime. Since October 1, when the 43 day shutdown began, there have been tens or thousands of cancellations and delays in air traffic. (Reporting and editing by David Shepardson, William Maclean.)
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Lukoil Moldova grants free fuel use to the government in spite of US sanctions
The Moldovan energy minister announced on Friday that Lukoil Moldova has agreed to give the government of Moldova free access to its fuel terminal located at the airport in Chisinau. Energy Minister Dorin Junietu stated in a press release that the move was made to ensure stable airport operations when U.S. Sanctions against the Russian owned company come into effect later this month. The U.S. sanctions against Lukoil and Rosneft were linked to the Russian war in Ukraine. The company is the only supplier of fuel to Eugen Doga Airport, Moldova's sole airport. Moldova's pro European authorities announced this week that they have proposed to buy the airport infrastructure of the firm, including storage facilities, in order to guarantee aviation fuel supplies in the country located between Ukraine and Romania. Junghietu said on Friday that the government had reached an agreement to supply fuel at the airport with a Romanian firm in the near future.
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CMA CGM warns of a tough year as the shipping industry faces overcapacity and falling demand
French group CMA CGM warned on Friday that the container shipping industry faces a difficult year, as new vessels increase capacity, while demand is slowing. Early orders for 2025 are being driven by trade tensions. CMA CGM reported core EBITDA of $2.96bn for the third quarter, which is the same as the previous quarter but down 40.5% from a year ago. This was down by 40.5% compared to a year ago, but an increase from the prior quarter as volumes recovered after a stoppage in April of China-U.S. Trade due to a tariff dispute. Ramon Fernandez said that the group, which is controlled by the Saade Family, expects its fourth-quarter results will be below those of the third quarter due to the falling freight rates. This could lead to a difficult shipping environment in 2026, Ramon Fernandez added. He said: "We anticipate that freight rates will continue to normalise as there is less demand, and capacity increases due to new vessels being delivered. There may also be a reopening the Suez route in 2026." Maersk and other rivals have warned about the pressure of falling freight rates. The disruption to shipping in the Red Sea and Suez Canal due to attacks by Houthi Rebels in Yemen has reduced capacity. Ships are now taking a longer journey around southern Africa. The Houthis' claim that they targeted vessels because of a ceasefire in Gaza, a war which the Houthis blamed on the Houthis, has raised hopes for resuming normal traffic. Fernandez stated that CMA CGM will continue to maintain limited transits through Suez as long as security permits. The tensions between Washington, DC and Beijing have also affected the industry. Both sides announced that they would charge port fees for vessels that had ties to the other nation. CMA CGM reorganised their fleet to avoid these fees. Fernandez stated that the company has no plans to change its fleet after the port charges were suspended for one year. Fernandez said that the company had contributed to the rising supply of ships and, based on the current orders, will surpass Maersk by the end 2027 as the second largest container line in the world based upon capacity. CMA CGM, along with the Saade Family, have pursued diversification in logistics, port terminals, and non-transport related activities. This includes the acquisition of Carrefour, Europe's biggest food retailer.
Global thermal coal exports and power utilize to hit new highs in 2024: Maguire
Global exports and usage of thermal coal will reach alltime highs in 2024, in spite of the record rollout of renewable resource generation capability across all major continents.
Exports of thermal coal through the very first 11 months of 2024 are up by 9 million metric heaps from the exact same months in 2023, per Kpler ship-tracking information, and will climb even more in December as power firms stock up for the Northern hemisphere winter.
Global coal-fired power generation is up by around 2% to brand-new highs so far in 2024, while coal-fired power emissions are also at a record, data from energy think tank Ash programs.
The continued expansion in coal imports and use underscores the trouble of dislodging fossil fuels from energy systems, and might dissatisfy those expecting a peak in coal burning.
Nevertheless, environment advocates can take heart from the slowing speed of export growth, which at just 1% marks the tiniest yearly expansion because 2020, when COVID-19 lockdowns triggered a. uncommon contraction in worldwide energy output.
Climate guard dogs may also be cheered by yearly declines in. coal imports by numerous of the largest coal-consuming nations,. which if repeated next year might trigger falls in coal exports. from 2025.
Below are the key nations that have helped raise coal. exports to tape highs in 2024, and will be the primary motorists of. coal purchases and use in the years ahead.
GROWTH MARKETS
For Indonesia, the world's leading coal exporter, 2024 will be a. banner year and mark the very first time the nation has shipped. over 500 million metric tons of thermal coal, according to. Kpler.
Australia will come in second with around 203 million loads,. followed by Russia (94 million lots), South Africa (55 million. loads), and Colombia (50 million heaps).
Simply 10 nations account for 87% of worldwide coal imports so. far in 2024: China, India, Japan, South Korea, Taiwan, Vietnam,. The Philippines, Malaysia, Turkey and Thailand.
And half of those purchasers will tape a yearly decline in. coal purchases in 2024.
Sadly for climate trackers, leading coal consumer China. - which represents 35% of all thermal coal imports - stays. in the import development classification.
China broadened imports by around 8% to a record 340 million. heaps from January 1st through the very first week of December,. according to Kpler.
China's electricity generation from coal-fired plants. climbed 2% over the first 10 months of 2024 to a brand-new record of. 4,838 terawatt hours, according to Ember, making 2024 the ninth. successive year of coal-fired growth in China. Nevertheless, quickly rising renewable energy production has. assisted cut coal's share of electrical energy generation to a record. low of 58.7% up until now in 2024, from practically 62% in 2023 and more. than 66% in 2019.
For now, China's total coal usage levels remain on a. increasing course even as coal's share of the generation mix decreases.
But in time China's total coal needs must likewise decrease. in line with coal share, and result in progressively diminishing coal. usage, production and imports by the country.
Beyond China, other essential development markets for coal imports and. usage this year are throughout Southeast Asia, where a number of. economies have gained from expanded production output and. exports, and increasing regional consumption.
Vietnam increased its coal imports by nearly 7 million loads. ( or 24%) to a record in the very first 11 months of this year from. the very same duration in 2023, and has raised coal-fired electrical power. production by 17%.
The Philippines and Malaysia have both likewise raised coal. imports to record highs this year, and have actually raised coal-fired. generation in line with general electricity output.
Thailand's coal imports were up almost 5% this year,. matching a comparable increase in coal-fired and overall electrical power. generation.
CONTRACTIONS
Over the first 11 months of 2024, the 2nd, third, fourth. and fifth biggest coal importers all reduced imports compared to. the exact same months in 2023.
India, the number two coal importer, cut imports by almost. 10 million tons from 2023 levels, due in large part to a climb. in domestic coal production.
South Korea cut imports by near to 6 million heaps, while. Japan cut coal imports by around 3.1 million lots and Taiwan cut. imports by 3.8 million loads.
Turkey, the ninth largest importer, has so far in 2024 cut. imports by around 1 million loads from the same duration in 2023.
Collectively, those nations imported around 23.5 million. lots less coal than during January-November in 2023.
What's more, 2024 will be the 2nd consecutive year when. Japan, South Korea and Taiwan will all tape-record lower coal imports. from the year before, as they pursue decarbonisation targets.
India's fast-growing economy is likely to trigger erratic. revivals in coal imports going forward, as it counts on coal for. around 70% of electrical energy production.
Vietnam and the Philippines are likewise most likely to further. boost coal imports in the coming years as their power need. needs go beyond domestic tidy energy supply growth.
However, over the longer run, all significant coal importers have. energy system decarbonisation objectives that must see coal's share. of the total energy mix fall steadily lower from around the. middle of this century.
The opinions expressed here are those of the author, a market. expert .
(source: Reuters)