Page 6 - Euroil Week 48 2019
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EurOil COMMENTARY EurOil
Target zero
Responding to the heightened scrutiny regard- ing oil companies’ carbon footprint, Spain’s Repsol become the rst major energy rm, on December 2, to promise to bring its net carbon emissions to zero by 2050, in line with Paris Agreement objectives. The company said it could achieve 70% of this reduction by using technologies already in existence or on the path to development, such as CCS. Mediterrane- an-focused Energean Oil & Gas made a similar promise on the same day.
Repsol’s move was celebrated by some inves- tors, who called on other oil and gas companies to follow suit.
“It is clear that this is a very signi cant com- mitment from Repsol that raises the bar across the oil and gas sector,” said Adam Matthews, a director for ethics at the Church of England Pen- sions Board. e church is an investor in Shell.
“We have been pressing fossil fuel companies to commit to align with a net zero emissions
pathway by 2050 for some time. It is good to see Repsol showing this leadership, including clear milestones along the way,” said Natasha Landell-Mills, head of stewardship at UK-based asset manager Sarasin & Partners. “In the end, shareholders need to know their companies are looking forward, not back, when it comes to the energy transition.”
Sarasin & Partners manages around $19bn in assets and made headlines in July when it divested a 20% stake in Shell, saying that com- pany was not doing enough to lower its emis- sions. e fund manager has said its remaining investments in the oil company are “under review.”
The industry will need to work hard to advance CCS and other techniques to show that fossil fuels can be produced cleanly, in order to convince policymakers that they have a role in play in the energy mix for decades to come. Oth- erwise they risk losing ground to renewables at a faster pace.
PIPELINES & TRANSPORT
TurkStream gas pipeline togoliveonJan8
TURKEY
The launch comes as Russia struggles to maintain sales in Turkey.
RUSSIA’S TurkStream gas pipeline to Turkey will come online on January 8, the Kremlin has con- rmed, enabling it to divert some supplies that currently ow through Ukraine.
Russian President Vladimir Putin will open the pipeline with Turkish counterpart Recep Tayyip Erdogan in a ceremony in Turkey, Krem- lin press secretary Dmitry Peskov told report- ers. e pair will also hold talks on other issues including bilateral relations and the situation in Syria, he said.
TurkStream runs from Russia for 930km along the bed of the Black Sea, terminating in Turkey’s western race region. Its rst string will supply up to 15.75bn cubic metres of gas per year to Turkish consumers, while its second will run through Bulgaria, Serbia and Hungary, delivering an equal volume of gas to customers in Europe.
Russia’s state-owned gas supplier Gazprom broke ground on the project in May 2017, a er hiring Swiss-based Allseas to lay the pipe, and work on both strings’ o shore sections was com- pleted in November last year. It began lling the pipeline with gas in late October.
TurkStream was initially expected to start
operations before the end of this year. Its launch will enable Russia to slash gas supplies it sends to Turkey and other European countries via Ukraine. This will strengthen Russia’s hand in ongoing talks on establishing terms for gas transit through Ukraine starting next year, a er their current contract expires. e two sides have held several rounds of talks, so far without any progress.
Like elsewhere in Europe, Gazprom is strug- gling with rising competition and at demand in the Turkish market. Its supplies to the coun- try slumped 34.5% in January to September to 11.6bcm, on the back of a 8% drop in Turkish demand to 33.3 bcm and increased imports from Azerbaijan and LNG suppliers.
“The economic turmoil in Turkey [has] made consumers there particularly sensitive to the price of gas being supplied, with gas consumption pressured by alternative cheap sources such as coal,” Moscow-based VTB Capital wrote in a recent research note. “Gaz- prom’s gas is probably the most expensive on the Turkish market, so to keep its market share the company is inevitably going to have to sac- ri ce the margin.”
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w w w . N E W S B A S E . c o m Week 48 05•December•2019
