Page 8 - AsianOil Week 26
P. 8
AsianOil
SOUTHEAST ASIA AsianOil
part of this energy transition, renewable energies were identi ed as of critical importance.
Iberdrola said it was ready “to continue seiz- ing” the opportunity of this transition, while also creating value for its shareholders. During the 2018-22 period, it said it would invest €34bn ($38.05bn), with €30bn ($33.6bn) already exe- cuted or under construction.
e shi will manifest in a move to reg- ulated or long-term activities, it said, while maintaining currency diversi cation – with a slight shi from British pounds into euros. In particular, investments are going into net- works, renewable energies and contracted generation capacity.
In addition to reducing its LNG exposure, Iberdrola is also cutting coal capacity, aiming to have reduced this to zero by 2030.
e company sold o €1.2bn ($1.34bn) of assets in 2018, with the largest share coming from the sale of its conventional UK generation.
Iberdrola has a number of supply and demand contracts in the LNG space. Iberdola has, for instance, signed a supply agreement with Dong Energy – now known as Orsted – in 2010 on the supply of 1bn cubic metres (cm) per year of LNG for 10 years, starting in late 2011. Deliveries are to Orsted’s Gate terminal, in the port of Rotterdam. It also has an agreement to supply volumes to BP, with both of these due to end in 2021.
e Spanish utility has a supply contract for 1bn cm per year of LNG with the US’ Cheniere Energy, running for 20 years. is involves sup- plies from the Corpus Christi liquefaction plant. e price of the contract was linked to Henry Hub and was provided to Iberdrola on a free on board (FOB) basis. It also has a deal with Nige- ria LNG (NLNG) and with Norway’s Equinor – expiring in the mid-2020s – while a contract with Eni was due to end in 2018.
Strategic drivers
Pavilion, and Singapore, have been making steps to scale up their involvement in the LNG space. Pavilion is ultimately owned by Temasek Hold- ings, Singapore’s sovereign wealth fund, and as such their strategic plans are in close alignment.
Pavilion supplies around one third of Singa- pore’s downstream gas demand. e company said the deal with Iberdrola would allow it “to play a greater role in energy transition as well as to o er competitive solutions to our customers and suppliers”.
e Singaporean company had struck a deal in September 2017 with German power com- pany, Uniper. Under this agreement, the two sides agreed to provide access to infrastructure. Uniper was to allow Pavilion into its terminals in the UK and Netherlands, while the German company gained access to Singaporean storage and reloading facilities.
Pavilion, which was set up in 2013, received a licence from Singapore’s Energy Market Authority (EMA) to import LNG in October 2017. is gave it the right to bring in LNG for three years, or up to 1mn tpy, whichever came rst. Its rst cargo was imported in April 2018, from Qatargas.
Progress has been accelerating. In May this year, Pavilion carried out its first commer- cial ship-to-ship bunkering operation in the Port of Singapore. Earlier this year it ordered an LNG bunkering vessel, which is due to be delivered in 2021.
Increasing its scope in Europe demonstrates Pavilion’s plans for expansion, which should provide it with knowledge about the sector in addition to revenues. e company has major ambitions, in November 2018 it signed an agree- ment with Russia’s gas independent Novatek, sig- nalling a potential interest in taking a stake in the proposed Arctic LNG 2 project.
P8
w w w . N E W S B A S E . c o m Week 26 03•July•2019
