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Europe's shrinking river systems reduce power production, transport and company profits
The record low water levels of Europe's rivers have hampered the transportation of goods and reduced electricity production. This has led to fears of the impact of the searing heat and unpredictable rainfall on the economy. Europe is experiencing the fastest warming of any continent, and heatwaves that have broken records. The drought has highlighted a need to reconsider how business practices are conducted. Waterways are becoming less reliable for transporting goods like grains and oil or producing electricity, which is needed by millions of people to cool their homes. Alessandro Armenia is a power analyst with commodities data and analysis firm Kpler. The current dynamic means that either we will see blackouts, or we must invest more. HYDROPOWER OUTPUT AND NUCLEAR POWER CUT Production of hydropower and nuclear power has fallen in Serbia and Hungary due to record low water levels along the Danube. The Danube passes through major cities such as Vienna, Budapest, and Belgrade, on its route from Germany towards the Black Sea. Paks, the nuclear power plant that generates almost half of Hungary's electricty, is expected to be shut down Monday and possibly for several weeks, because the water level in the river which provides cooling water for the facility will remain too low to allow it to function safely. Davor Maljokovic, production director at Djerdap 1, Serbia’s largest hydropower plant, said that output had fallen to just 20% of its capacity. The once wide shipping channel next to it has now shrunk, exposing sandbanks, gravel bars, and other debris. Serbia's EPS state power utility reported that the lack of water also affected cooling systems at Serbia's coal-fired Kostolac power plants. This forced them to reduce output. Both Serbia and Hungary claim they will compensate for their losses by importing electricity. This is a costly solution when the demand on the local?markets is high. The state-owned nuclear power company Nuclearelectrica in Romania also shut down one of its reactors this week due to the same reasons. A second reactor is expected to follow soon, depriving Romania of up to a fifth its electricity requirements. France also reduced nuclear power production due to low water levels and rising river temperatures. TRANSPORTATION IS ALSO DRUNK BY HIGH WATER LEVELS The energy industry is not the sole loser. Cezar Gheorghe, consultant AGRIColumn in Romanian grain markets, told farmers on the Danube that they were having difficulty shipping their crops due to low water levels. Only the ports that are closest to the Black Sea remain operational. Gheorghe stated that barges cannot pass through other ports. "Crops purchasers could offer lower prices to farmers and load them into trucks. However, there may also be a lack of trucks." A port spokesperson said that the amount of cargo being transported from and to Rotterdam, Europe's biggest sea port, to the Rhine is about 10% less than usual. This has been happening every?week, since the start of July. The draught of chemical and oil product tankers, and dry bulk carriers is usually greater than that of container barges. This means they are positioned deeper in the water. The drought has reduced company earnings. Apart from the devastation caused by wildfires, and the temperatures that have led to thousands of deaths in excess, the balance sheets of companies have suffered due to the changing climate. Austrian utility Verbund said that drought conditions reduced earnings in the first half of this year by EUR370 million compared to a year with normal hydrological conditions. French utility EDF announced on Friday that earnings for the full year before interest, taxes, depreciation, and amortisation in 2026 would be down 10% due to low market prices, and heatwaves reducing power output. The Po River basin in Italy has reached a high level of water scarcity. This is threatening the rice crops and water supply for drinking throughout the north. Renato Mazzoncini is the Chief Executive Officer of A2A regional utility. He expects hydropower production to be 3.9 TWh this year, compared with a historical average. He said that "some of our reservoirs were under pressure." "We need to do a rain dance," he said. (Additional reporting by Inti landauro, Brussels; Giancarlo Navach, Milan; Danny Callaghan, Gdansk; Marleen Kasselbier, Zurich; Rene Wagner, Berlin; Writing and editing by Edward McAllister)
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Sources: Brookfield Infrastructure is interested in a $5 billion purchase of Canadian pipeline operator NorthRiver.
People familiar with the matter say that Brookfield Infrastructure Corp. is looking at a possible sale of NorthRiver Midstream, a Canadian natural gas pipeline operator. The deal could be worth around C$7 Billion ($5 Billion) to Brookfield Infrastructure Corp. Sources who requested anonymity in order to discuss private discussions said that the investment firm had been working with banks in recent weeks to solicit interest from potential buyers in NorthRiver. The rising?demand from strategic and financial buyers for energy infrastructure assets has driven up valuations, and encouraged some business owners to explore selling businesses they've held for years. Sources cautioned that there is no guarantee that Brookfield Infrastructure will be able to retain NorthRiver. Brookfield Infrastructure and NorthRiver have declined to comment. According to its website, NorthRiver Midstream is the owner of?pipelines? and processing infrastructure? that transport natural gas from fields in the Montney shale formation in British Columbia and Alberta to larger pipes?that transport it to clients in Canada and United States. Brookfield Infrastructure has agreed to purchase gathering and processing assets of Enbridge for C$4.3billion in 2018. These assets were consolidated later under the NorthRiver Midstream name. Sam Pollock, Brookfield Infrastructure's Chief Executive Officer, said on an earnings call held April 29, that the company was considering whether to pursue growth opportunities with NorthRiver and/or take advantage of a market he called "pretty positive" for midstream companies. NorthRiver was not discussed or asked for by Brookfield Infrastructure when it announced its earnings on Thursday. Companies don't normally share?information during earnings calls about active sales efforts, except in rare cases such as updating previously announced moves. Private equity firms, infrastructure investors and pension funds seeking stable cash flow have shown a strong interest in energy infrastructure assets, while publicly traded midstream companies also sought to expand their network. Canada's cautious approach in approving large-scale long-distance oil and gas pipelines has, in recent years,?limited supply of new infrastructure?and supported valuations on existing midstream assets. The environment may have changed under Mark Carney's administration, but large-scale pipelines remain hard to duplicate.
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Satellite images reveal oil spillage from a shadow fleet tanker off Oman
According to satellite images and shipping experts, a sanctions-hit oil tanker has been leaking oil near the coast of Oman. The spill has increased in recent days and is increasing concern about possible environmental damage. Ship tracking data indicates that the Caroline Bezengi stowed Russian oil at its Black Sea port, Novorossiysk, before departing for its latest voyage. Two maritime security sources confirmed that the ship first reported problems on June 8, off the southern Yemeni Port of Mukalla. They added that preliminary assessments suggested that an explosion had occurred onboard. Satellite image taken on July 28 shows that there is a "dark slick" in the water around the vessel, and lighter patches to the north of al-Qibliyyah Island. This island lies near Oman's coastline?and forms part of a marine protected area. After reviewing the images, Wim Zwijnenburg a remote sensing?specialist at the Dutch peace advocacy organization?Pax said that the darker oil slicks indicated that the hull of the crude storage ship?seems to have been breached and the ship was leaking crude. Zwijnenburg said that the area's monsoon, which usually peaks between July and August can bring harsh weather conditions, which could spread crude oil quickly. Satellite Images Show Vessels Could Be Listed The deck structure and paint of the Caroline Bezengi, as shown on recent satellite images, match archive imagery. This vessel is under sanctions from the European Union and the UK for its alleged involvement with Russian fuels. Rentoor Shipmanagement of Shanghai, the owner listed in shipping databases, was not available to comment. The Ministry of Transport, Communications and IT in Oman did not reply to a comment request. A 'oil tanker expert' who reviewed satellite images stated that the vessel is likely to be sagging. Other maritime sources warned it could break apart at some point. At this time, the vessel has not been broken up. The International Maritime Organization's (IMO) spokesperson said that authorities were currently discussing how to address safety and environmental concerns. Russia uses aging and often poorly maintained oil tankers in its shadow fleet to avoid Western sanctions on its oil exports. It is unclear whether the explosion damage to the vessel was caused either by an attack by Ukraine on Russian tankers or by the conflict in the Middle East. (Reporting and editing by Helen Popper, Catherine Cartier, Jonathan Saul)
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Two sources confirm that Tengizchevroil, a Kazakhstani company, resumes exports to Georgian Batumi.
Two sources said on Friday that Tengizchevroil has resumed oil exports through the Georgian port of Batumi for the first time since March. Caspian Pipeline Consortium is responsible for more than 80% (of Kazakhstan's oil exports), with the majority of the oil coming from the Caspian field of?Tengiz and Karachaganak. Drone attacks and adverse weather conditions have forced the suspension of CPC. This has forced TCO to use alternative routes, which are more expensive. The consortium reported that the CPC halted crude oil deliveries on Thursday at its Black Sea terminal near Novorossiysk after a drone attacked tankers. Approximately 20,000 metric tonnes of oil from Tengiz has been shipped to the port of Batumi, according to one source. The sources refused to be identified 'because they weren't authorised to speak in public. In recent weeks, the restrictions on oil exports through CPC has led to a dramatic drop in crude oil production in Kazakhstan. Chevron is the primary shareholder in TCO, with a 50% stake. Other investors include ExxonMobil (25%) KazMunayGas (20%) and Lukoil (5%) KazTransOil is the owner of the Batumi Oil?Terminal, Kazakhstan's oil pipeline company. Felix Light, Emelia Sithole Matarise and Barbara Lewis edited the article.
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Amadeus CEO: Iran war has improved bookings and the worst is over.
The CEO of 'Amadeus' said that bookings for air travel were improving on Friday, after the Iran war had impacted the company's second quarter results. He added that the worst effects are likely to be over. Amadeus reported earlier that the turmoil in the Middle East led to an increase in cancellations and air traffic disruptions. This resulted in a 7.6% drop in its quarterly bookings. "Our 'feeling' is that the worst already happened with all these cancellations, adjustments of routes and adjustment of capacity of the airlines," said CEO Luis Maroto in a conference call with analysts. He cited a gradual improvement of bookings from June. Maroto said that the U.S. and Israeli war against Iran affected bookings on some domestic markets including the United States as airlines rearranged their capacity and raised prices. He warned that it is yet to be seen if the recent improvement is a result of people who delayed bookings in a "wait and see" attitude, or if it's a new trend. According to LSEG, Amadeus' adjusted?second quarter core earnings were EUR672.8 mln ($774.2 mln), which?beat analysts expectations. Reporting by Javi Larranaga in Gdansk and Gemma Guasch, with editing by Milla Nissi-Prussak
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Saudi Aramco, Sonatrach and Sonatrach increase LPG prices in August
Saudi Arabian state oil producer Saudi Aramco raised its official prices for liquefied petroleum gas by between 6% and 7% in August, traders reported on Friday. This was due to a higher demand for the product on global markets. Algeria's Sonatrach raised LPG prices between 19% and 23 % for August, according to traders. Saudi Aramco’s August OSPs have increased by $40 per metric tonne to $620. For propane, the price has increased by $40 per ton up to $640. Butane is a good alternative. LPG comes in two types: Propane (also known as butane) and propane. Both have different boiling points. LPG is used primarily as fuel for vehicles, for heating and?as feedstock for other chemicals. Sonatrach has increased the price of its August?OSP propane by $100 per ton, to $540 And?for?butane, by $90 per ton to $570 . Saudi Aramco’s OSPs serve as a reference for contracts to supply LPG originating in the Middle East?to the Asia-Pacific area. Sonatrach’s?OSPs? are used as benchmarks in the Mediterranean and Black Sea regions, including Turkey. (Editing by Emelia Matarise Sithole)
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UAE Stocks Rise as Earnings Boost Sentiment
The stock markets of the United Arab Emirates closed higher on Friday. Abu Dhabi led the gains, as a strong corporate earnings boosted investor confidence. Abu Dhabi's benchmark index? jumped 0.4% in the second session of gains. Alpha Dhabi Holding rose 1.5% before its earnings announcement later that day. Adnoc Drilling gained 1.2% after it reported a 2% increase in net profit for Q2 to $359 Million, surpassing analyst estimates. Joseph Dahrieh said that despite external pressures the UAE stock market could continue to be resilient. Dubai's main index rose?0.1%, thanks to a rise of 1% in the Salik Company, a toll-gate operator. Commercial Bank of Dubai also saw a jump of 5.9%. Gains were limited due to a 0.7% drop in the top lender Emirates NBD Bank and a 0.5% decline in blue-chip developer Emaar Properties. Dubai Financial Market fell 1.4% following a?report by the exchange operator that its second-quarter profits had declined more than 60% to 229.8 millions dirhams (62.57million dollars). The price of oil, which is a major driver in the Gulf's financial markets, increased on Friday, as regional tensions and shipping restrictions fueled supply concerns. Brent crude rose 1.4% to $90.31 per barrel by 1146 GMT. Abu Dhabi's index rose by 0.9% for the week, while Dubai gained 0.2%. This ended a losing streak of three weeks.
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Enbridge's Mainline volume increases helped it beat second-quarter profit expectations
Enbridge beat expectations for the second-quarter adjusted profits?on Friday as the Canadian pipeline operator benefitted from higher volumes of liquids transported through its Mainline system. Enbridge has been able to maintain steady growth despite geopolitical tensions, commodity price volatility and increased demand for utility infrastructure, natural gas and power for data centers. Its Mainline System, which moves almost half of the crude oil in the United States?reported a second-quarter core adjusted profit of C$1,57 billion ($1.12billion), an increase from C$1.5billion a year ago. The largest pipeline system in North America transports light and heavy crude oil, natural gases liquids, and refined products to markets in Canada and U.S. Midwest. Enbridge's gas transmission unit reported a core adjusted profit of C$1.42 Billion, up from C$1.38 Billion a year ago. This was due to the increased revenue from East Tennessee settlement rates and an approved rate increase for Texas Eastern. The Line 5 Relocation?project in Wisconsin sanctioned this quarter added over C$1billion to the secured growth backlog. This brings the total to approximately C$41billion. Enbridge anticipates that the project will cost $1 billion, and it is expected to enter service by early 2027. CEO Greg Ebel stated that the company is well-positioned to take advantage of a "favorable" growth environment. He also said he would continue to give more visibility to its 5% growth forecast and extend it into the future. Peer TC Energy, which also topped the quarterly profit estimates Thursday, approved natural gas pipeline extension projects in North America worth approximately C$700 millions. According to LSEG, the company reported an adjusted profit per share of 63 'Canadian cents' for the quarter ended June 30. This was higher than analysts' expectations of 59 Canadian dollars. Reporting by Pooja menon in Bengaluru, Editing by Shreya biswas and Tasimzahid
Enbridge Canada has postponed plans for the second phase of Mainline's oil pipeline expansion
Canadian pipeline ?operator Enbridge said on Friday it was ?postponing the 250,000-barrel-per-day second phase of its Mainline crude pipeline ?network, partly due ?to Canadian oil ?producers ?not committing to significant output increases.
The project would have led to an increase in the export of Canadian crude oil to U.S. refining plants.
Enbridge CEO Greg Ebel stated that the company would focus on the 100,000 bpd Flanagan South Expansion and its 50,000bpd Southern Access Extension. These will increase capacity to two secondary pipelines which connect to the Mainline and transport crude to several U.S. refineries centers and the Gulf Coast.
Ebel stated that Canada has a "generational opportunity" to increase its oil production, due to recent federal government policy changes and the rollbacks of certain environmental regulations.
He said that while the recent agreement between Alberta and the federal government aimed at speeding up oil sands development could have a significant impact, the majority of the proposed amendments remain "non-binding" and have not yet been enshrined in law.
Enbridge's liquids pipelines president, Colin Gruending, stated that the company does not expect Canadian companies producing oil sands to?increase production meaningfully until there is greater policy and regulatory certainty.
"We do not expect producers to make?binding FID -able commitments for new pipelines before then," said?Gruending, referring final investment decisions.
The spokesperson for Enbridge confirmed that the decision to "prioritize secondary pipeline projects" means a delay in the "Mainline Phase Two Project", which Enbridge previously stated could be completed by the end 2028.
(source: Reuters)