Russia loses its chance to capture the EU gas market

[BenFranklin'sSpectacles + 762]

10 hours ago, ronwagn said:

We use a small unvented natural gas fireplace beneath a cracked window in our living room. We have a three bedroom house with a large multipurpose room and a living room. The little fireplace completely heats the whole house (which is well insulated and has dual paned windows). We have central heat and air, but only use the air, unless we are gone in the winter. It works great for us and we prefer the ambience of a fire. Our cost is very small for the natural gas, the "delivery" of the piped gas is often higher than the gas itself. Chefs work over large natural gas stoves all day long and I have never heard of one with any related health complaints. I have done extensive research about natural gas. I have CO2 monitors and pulse Ox testers which are always normal and have never had an alarm. 

Returning to the example of the power plant engineer who refuses gas appliances in his home: what you're doing is safe, yet it does not meet his standards. How much safer, then, must a distant coal power plant be?

[BenFranklin'sSpectacles + 762]

11 hours ago, KeyboardWarrior said:

I’m wondering if supercritical coal plants will put coal on a rebound. Coal is still cheaper than NG per mmbtu so if plant efficiencies are leveled with CCG I’d bet coal is here to stay for a while. 

On the other hand, coal is about as unpopular as nuclear so I’m not sure how this will balance. What do you think? 

Good question. I asked the power plant engineer exactly this; he said the increased efficiencies wouldn't bridge the gap.

CCGT is approaching 63% thermal efficiency. State-of-the-art coal plants are now in the 45-50% range. IIRC, SCCO2 gets you into the 50s - but it does not achieve combined-cycle level efficiencies. No matter what you do, NG and coal have fuel costs in the same ballpark.

The deciding factor is capital costs. CCGT has been standardized, with serial factory production. You drop in the plant, hook up the gas, and you're done. Coal can't do that. Each coal mine produces a slightly different product to which the plant must be tailored. Then you need the right coal handling equipment, extensive pollution controls, holding ponds for the ash, a plan for what you intend to do with that ash... it gets complicated, which is expensive. As yet, no one knows how to simplify that process, and there's no serious concern about doing so.

Coal will survive where NG is expensive: All of SE Asia, select parts of the US, Africa (to the extent they have an economy...), etc. In the US, with its rock-bottom NG prices, I wouldn't anticipate new coal power plants.

That raises a question though: what might raise US NG prices? Suppose there were a catastrophic event, such as a major war in the Middle East, that created maximum demand for US LNG. Would even that be enough to raise our NG prices for an extended period, or would expanded drilling squash prices before anyone considered significant capital investment in coal?

 

Update: now that I think about it, both I and the power plant engineer assumed rock-bottom NG prices. I.e. we assumed the US market. SCCO2 coal plants would make some difference where NG must be imported. Of course, coal is already cheaper in those countries even without SCCO2, so I'm not sure how much difference it would make.

One benefit of the SCCO2 cycle is actually capital costs: you have a dramatically simplified thermodynamic cycle, which cuts out mountains of expensive equipment. You also have much smaller turbines.  And of course, a 10% boost in efficiency is 10% less of everything else.  I wonder if all of this could get SCCO2 capital costs into the same ballpark as CCGT. 

But then, similar improvements are being made to natural gas cycles.  E.g. Netpower's Allam-Fedvedt cycle. There's also no reason why CSCO2 can't be used with non-coal heat sources, such as NG, driving down those heat sources' capital costs. The balance between coal and natural gas may ultimately hinge on two variables:
1) Local fuel prices.
2) All the emissions equipment coal requires.

While we're on the topic of SCCO2, we can't ignore nuclear. One massive limitation on nuclear power economics is that they're not allowed to superheat reactor water. This means steam entering the turbine immediately starts forming water droplets. That means three things:
1) You must install droplet filters (there's a name for this, but I've forgotten it) or reheaters before the 2nd and 3rd turbine stages.
2) Your 300 ton steam turbine must be stainless steel
3) Your thermal efficiency is somewhere around 30-33%.

These three things wreak havoc on your economics. As I mentioned before, the SCCO2 cycle simplifies the thermodynamic cycle, shrinks equipment, and raises efficiencies beyond current coal technology - and it should be able to do it at temperatures light water reactors can manage.

The answer to the question, "Which does future technology favor: coal or gas?" may be "Neither."

But I don't study thermodynamic cycles or design power plants for a living, so this is all speculative. I wish I knew someone who worked in these fields.

Edited October 9, 2020 by BenFranklin'sSpectacles
Added information.

[Ward Smith + 6,615]

23 hours ago, Coffeeguyzz said:

The 'for now' context stems from the dizzyingly rapid pace of change spanning topics such as new engines in LNG ships, expansion capacity of the Panama Canal, internal conflicts (political and actual physical) in current and potentially future suppliers, on and on.

 

@Coffeeguyzz your excellent post reminded me of something I thought of back when I took a cruise through the Panama canal. They were going on and on about the "new" canal to be able to handle bigger ships, but the size is still far too small to handle tankers.

One of the guys on the cruise worked at CSFB and I suggested to him that the intelligent thing to do was give up on the idea of making the canal big enough for tankers, but rather, build pipelines across the country to connect Atlantic with Pacific. The tanker pulls up to the offshore oil platform, offloads the oil to the pipeline, and goes back for more. A different tanker on the other ocean does the reverse. 

Saves a long wasted trip around the horn.

He wasn't amused, turns out his bank was financing the rebuild. That said, I'm still thinking it's a good idea, and of course needn't be done in Panama but any of the Central American countries could do it. For LNG you'd need more infrastructure, not sure if that would be worth it. Frankly I don't know enough about LNG, ideally you'd have a way of keeping it cold and compressed as you jetted it across the narrow isthmus. 

[BenFranklin'sSpectacles + 762]

2 hours ago, Ward Smith said:

@Coffeeguyzz your excellent post reminded me of something I thought of back when I took a cruise through the Panama canal. They were going on and on about the "new" canal to be able to handle bigger ships, but the size is still far too small to handle tankers.

One of the guys on the cruise worked at CSFB and I suggested to him that the intelligent thing to do was give up on the idea of making the canal big enough for tankers, but rather, build pipelines across the country to connect Atlantic with Pacific. The tanker pulls up to the offshore oil platform, offloads the oil to the pipeline, and goes back for more. A different tanker on the other ocean does the reverse. 

Saves a long wasted trip around the horn.

He wasn't amused, turns out his bank was financing the rebuild. That said, I'm still thinking it's a good idea, and of course needn't be done in Panama but any of the Central American countries could do it. For LNG you'd need more infrastructure, not sure if that would be worth it. Frankly I don't know enough about LNG, ideally you'd have a way of keeping it cold and compressed as you jetted it across the narrow isthmus. 

What percentage of the canal's traffic is oil and gas? Do we expect that percentage to hold in the future?

[Coffeeguyzz + 454]

Mr. Smith

Regarding Panama Canal status ...

Last year, a 210,000 cbm Q-Flex LNG carrier (second biggest in the world) transited the Canal.

LNG shipments increased from 6.5 million tonnes in 2016 to ~15 million tonnes in 2019.

(The expected doubling to ~28 million tonnes in 2021 will not be achieved post COVID).

Allowing night time transit, changes in scheduling protocol and transit procedures - along with the actual increase in lock size - have enabled more robust trade.

Cost round trip (fees)   approximately $1 million.

 

Somewhat surprisingly, perhaps, is that LNG is not even the most common liquid hydrocarbon product transiting the Canal.

Propane is.

US LPG exports (propane/propylene) are now 1.2 million barrels per day (hit 1.7 this past  spring), while ethane/ethylene exports regularly surpasses 300,000 bbld.

For context, seaborne ethane shipments did not even exist pre 2016 (excepting tiny, Baltic sea barge shipments). An entirely new ancillary  industry has emerged these past few years as virtual pipelines are carrying LPG and ethane to Europe, India, and China with big expansions (due to new Chinese and European crackers) already underway.

 

Turning to the other end of the spectrum - size wise - in these matters, are the many markets opening up using smaller hardware (shipping/storing/liquefying/burning-processing) which are then  expanding applications from fertilizer plants in Amazonian Brazil, bauxite mining and smelting in Jamaica, cheaper heating in Fairbanks, etc.

 

The resurgence of the fast ferry market - the US is a world leader - is due in no small part to LNG fueled engines.

Ramifications of high speed, high capacity, low cost marine transport have barely been contemplated.

 

Big, big changes continue to arise across wide swaths of industries when abundant, cheap energy becomes available.

[Coffeeguyzz + 454]

Mr. BenF

Data from 'Freightwaves' article, April 24, 2019 ...

Crude oil is only 1% of new (larger) Neopanamax) locks and 6% of smaller Panamax locks.

Reason is that the huge (2 million barrel) carriers that cross the Pacific are too big for the canal.

Container ships are 46% of Canal traffic.

LPG at 25% is second.

LNG is third at 12%.

Tankers using the Canal primarily carry refined products from US to western South American ports.

[Ward Smith + 6,615]

5 hours ago, BenFranklin'sSpectacles said:

What percentage of the canal's traffic is oil and gas? Do we expect that percentage to hold in the future?

Only tiny oil tankers fit in the locks  if any. The huge VLCC'S and ULCC's can only dream about going through the canal. That's why the ships take months to get from the Mideast to for instance, California. When Covid hit, that's why so many of them were loitering offshore, no where to unload. 

I said I didn't know much about LNG tankers, apparently they're considerably smaller than oil tankers. ULCC's make aircraft carriers look like cruise ships. 

@Coffeeguyzzedumacated me above on LNG ships, for which I'm thankful. Perhaps economies of scale don't apply to LNG? 

BTW only the sail boats below would fit in the new canal. 

Edited October 10, 2020 by Ward Smith

[Tomasz + 1,608]

Quote

 

Gazprom's share in the European gas market increased to 34% in the third quarter, according to Alexey Finikov, Deputy head of the company's Department.
Gazprom's Share of the European gas market increased to 34% in the third quarter," he said during a conference call.

At the same time, it is reported that the weighted average price of Gazprom's gas supplies to Europe for the year is expected to be at the level of 128-130 dollars per thousand cubic meters.

 

Quote

 

Gazprom's net loss under IFRS in January-September 2020 amounted to 202.207 billion rubles against a profit of 1.107 trillion rubles a year earlier, according to the company's report.

At the same time, the net loss attributable to shareholders amounted to 218.378 billion rubles against a profit of 1.048 trillion rubles a year earlier. Sales revenue decreased by 25% to 4.3 trillion rubles. The loss before tax amounted to 327.023 billion rubles against a profit of 1.399 trillion rubles in the same period last year.

Operating expenses in the first half of the year decreased by 15% compared to the same period last year and amounted to 3.944 trillion rubles. The share of operating expenses in sales revenue for the first nine months increased to 92% from 81% for the same period in 2019.

Foreign exchange gain on operating items for the first nine months was RUB 166.574 billion, compared to a loss of RUB 68.013 billion for the same period last year.

Gazprom is a global energy company. The main activities are exploration, production, transportation, storage, processing and sale of gas, gas condensate and oil, sale of gas as motor fuel, as well as production and sale of heat and electricity.Gazprom's net debt under IFRS for the first nine months of 2020 increased by 41%, to 4.46 trillion rubles, according to management's analysis and assessment of the company's financial position and financial results.

"The net amount of debt ... increased by 1,295,949 million rubles, or 41%, from 3,167,847 million rubles as of December 31, 2019 to 4,463,796 million rubles as of September 30, 2020," the document says.

 

As the company notes, this change is mainly due to an increase in the amount of long-term loans and borrowings in ruble equivalent due to the increase in the dollar and Euro exchange rates against the ruble.

1 $ is now about 75 roubles

Edited November 30, 2020 by Tomasz

[Tomasz + 1,608]

Quote

 

The gas market greeted 2021 with explosive price increases amid a cold winter in the Northern Hemisphere and disruptions in LNG supplies due to production and logistics problems. Spot prices for LNG in Asia in January broke a historic record, exceeding $ 800 per 1,000 cubic meters. As a result, all of the free LNG rushed to the region, leaving Europe alone with Gazprom. The Russian company is in no hurry to increase direct supplies and is actively consuming gas from underground storage facilities in Europe.

Gas prices on the Asian and European markets are hitting all records amid a cold winter. Thus, the day-ahead gas price on the Dutch TTF with delivery on January 11 rose to a peak level of $ 252 per 1,000 cubic meters - this is the maximum price since January 25, 2019. In Spain, which was hit by heavy snowfalls, gas prices at the local PVB hub in a few days soared to $ 645.84 per 1,000 cubic meters.

At the same time, Gazprom, although it has previously booked additional capacities for gas transit through the Ukrainian gas transportation corridor, is still reducing its load and is actively choosing reserves from underground gas storage facilities (UGS) in Europe.

Thus, Gazprom can pump up to 110 million cubic meters of gas through Ukraine per day under a long-term transit contract and another 41.2 million cubic meters for additional booking, but in fact, pumping is now at the level of 100 million cubic meters versus 182.8 million cubic meters per day. December. In the absence of Nord Stream 2 capacities, the company strives to fully utilize Turkish Stream and Nord Stream. At the same time, high reserves of gas from underground storage facilities in Europe are declining at a record pace: in the first 8 days of January, they fell by 7%, to 66 billion cubic meters. Restraining supplies through Ukraine, Gazprom is drying up the European market, creating conditions for maintaining high prices at the end of winter.

The reason for the rise in prices in Europe, in addition to the cold weather, was a decrease in LNG supplies - all free gas goes to Asia, where prices are breaking historical records.

As of January 7, the Platts JKM Index, which reflects the cost of spot LNG deliveries to Northeast Asia, peaked at $ 20.7 per MMBtu ($ 812 per 1,000 cubic meters). This dynamic, which even surpassed the surge after the Fukushima accident in 2011, is driven by production cuts at LNG plants in Australia, Qatar and Malaysia, as well as difficulties with LNG supplies from the United States. The capacity of the shortest route from the Gulf of Mexico to Asia through the Panama Canal is limited to two vessels per day, and the rest have to wait up to 13 days to get from the Atlantic to the Pacific. Because of this, many ships take the long route east around the Cape of Good Hope, which in turn leads to a shortage of tankers and higher freight rates. Despite this, in December, LNG exports from the United States broke the record, reaching 277 million cubic meters per day, of which,

However, the current surge in prices, according to market expectations, will be relatively short-term. Thus, the Platts JKM index for the second half of February is estimated at $ 17.811 per MBTU, for the first half of March - at $ 12.628, and for the second half of March - at $ 8.751.

Dmitry Marinchenko from Fitch notes that the amount of gas in European storage facilities is now at levels typical for this time of year, but the rate of withdrawal in the first week of January was about 30% higher than the average for the last five years. Nevertheless, in his opinion, one should hardly expect a gas shortage - the weather is within the climatic norm, and there is now much more LNG on the market than before. At the same time, the first quarter is likely to be favorable for Gazprom, the analyst believes: “There is every chance to sell more gas than in 2020 - the numbers are likely to be closer to the first quarter of 2019, then a little more 60 billion cubic meters of gas ”.

Gazprom's gas is now more competitive in Europe than LNG, which goes mainly to Asia, but the company is limited in terms of transportation capacity, said Sergei Kapitonov, gas analyst at the Skolkovo Energy Center of the Moscow School of Management.

The prospects for the first quarter will directly depend on the booking of additional capacity on the Ukrainian corridor, he says. “When working with the Ukrainian GTS exclusively within the framework of the current contract (40 billion cubic meters per year), Gazprom will not supply 10-15 billion cubic meters. m in the first quarter of this year compared to the first quarter of the record year 2018. If the concern will book additional capacities in Ukraine, then it has every chance to repeat the record figures of the pre-coronavirus years, ”the analyst said.

 

 

[NickW + 2,714]

On 10/8/2020 at 1:48 AM, dukeNukem said:

Thanks for this clarification. However nat gas is still emits approx 50% less CO2 than coal(depends which type of coal). So far nat gas is the cleanest fossil fuel and gas power generation more efficient compare to coal. I have read somewhere than start up time for gas power generation is much faster, than coal power generation. This is quite important matter when using it as a backup for intermittent Solar/Wind. 

I don't know if its higher for modern plants but the large UK Coal fired plants have a ramp rate of 17-18% of max output per hour. So basically cold to full output inside 6 hours. 

Within that time frame wind and solar output estimation (we are talking grid scale here) is quite accurate - to within 3-5% 

Typically CCGT ramp rates are under 2 hours. The OCGT part can reach full output in a matter of minutes.