Page 9 - NorthAmOil Week 23 2022
P. 9
NorthAmOil PROJECTS & COMPANIES NorthAmOil
Fire at Freeport LNG disrupts
supplies, causes gas price decline
TEXAS US natural gas prices dropped this week while Close to one-fifth of all shipments of LNG
prices in Europe rose following an explosion and from the US last month went via Freeport LNG,
fire on June 8 at the Freeport LNG terminal in which is one of seven LNG export terminals in the
Texas, which is expected to keep the plant closed country. With more shale gas now routed into US
for a minimum of three weeks. storage, the already strong competition between
As a result of the closure supplies for Europe Asia and Europe for gas is expected to intensify.
and Asia will be reduced while more shale gas The outage comes at the start of summer in
will be routed into US storage caverns. US gas the northern hemisphere, when demand from
futures sank 6.4% on June 8, while Dutch futures power stations traditionally rises owing to
climbed 10%. increased use of air conditioning.
Close to one-fifth of all Prior to the fire at the terminal, located in It is expected that LNG buyers will now likely
shipments of LNG from Quintana about 65 miles (105 km) south of begin searching for replacement shipments from
the US last month went Houston, prices in Europe had fallen to a three- the spot market, although traders in Asia told
via Freeport LNG. month low, partly on expectations for increased Bloomberg that supply was tightening.
supplies from the US. Freeport LNG receives roughly 2bn cubic feet
The fire was reported to have been brought (57mn cubic metres) per day of gas, equivalent to
under control the same day it broke out, and about 16% of total US LNG export capacity. The
an investigation into the incident has been facility has the capacity to produce around 15mn
launched. A force majeure has been issued to tonnes per year (tpy) of LNG and supplies gas to
buyers with shipments scheduled till at least June BP and TotalEnergies in Europe, in addition to
30, Bloomberg cited traders with knowledge of Japan’s JERA and Osaka Gas and South Korea’s
the matter as saying. SK E&S.
ENERGY TRANSITION
US launches $8bn programme
for clean hydrogen hubs
US THE US Department of Energy (DoE) released a bringing together stakeholders to drive down the
notice of intent (NoI) on June 6 to fund the Bipar- cost of advanced hydrogen production, trans-
tisan Infrastructure Law’s $8bn programme to port, storage and usage.
develop clean hydrogen hubs (H2Hubs) across The DoE also launched the Hydrogen Shot
the country. initiative last year, which aims to reduce the cost
The H2Hubs will be designed to establish a of clean hydrogen to $1 per kilogram within a
network of hydrogen producers, consumers and decade. Green hydrogen, which is produced
connective infrastructure to accelerate the use of using renewable energy, is currently estimated
clean hydrogen. The fuel is central to the DoE’s to cost between $3 and $6.55 per kg.
strategy for achieving the US’ goal of a 100% The DoE has stated that if it can achieve
clean electrical grid by 2035 and net-zero carbon Hydrogen Shot’s 80% cost reduction goal, it will
emissions by 2050. unlock a five-fold increase in demand by increas-
The DoE has indicated that cross-office col- ing clean hydrogen production from renewables,
laboration will take place to select locations for nuclear and thermal conversion.
the regional H2Hubs. These efforts will also take The US is currently producing around 10mn
into account factors such as environmental jus- tonnes per year of hydrogen, while global output
tice, consent-based siting, community engage- totals about 90mn tpy. Much of the current produc-
ment, equity and workforce development, the tion is more carbon-intensive, however, and a shift
department said. to cleaner forms of hydrogen is now underway.
Proposals that emphasise employment “Hydrogen energy has the power to slash
opportunities and address hydrogen feedstocks, emissions from multiple carbon-intensive sec-
end uses and geographic diversity will be prior- tors and open a world of economic opportunity
itised by the DoE. to clean energy businesses and workers across
The H2Hubs will also support the DoE’s the country,” US Secretary of Energy Jennifer
ongoing H2@Scale initiative which is focused on Granholm stated.
Week 23 09•June•2022 www. NEWSBASE .com P9