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Sources say Shell-led LNG Canada is facing problems when it ramps up its production.
Shell-led LNG Canada has been experiencing technical difficulties as it ramps production up at its liquefied gas plant in Kitimat. One LNG tanker was diverted away from the plant without superchilled fuel, according to data provided by LSEG and four sources. The facility is the first major LNG-export facility on the West Coast of North America and Canada, providing access to Asia, which is the largest LNG market in the world. When fully operational, the facility will convert approximately 2 billion cubic foot of gas each day (bcfd), which is what market participants hoped would boost Canadian natural gas pricing. Western Canadian natural gas remains depressed due to a persistent glut of supply that hasn't yet been reduced by new demand from LNG Canada, which started on July 1. According to LSEG, the daily spot price for the Alberta Energy Company storage hub was $0.22 per mmBtu, compared with the U.S. Henry Hub reference price of $3.12. Two of the sources stated that LNG Canada's first plant (also called a train) is operating at less half its capacity. According to two industry sources, the facility's Train 1 experienced technical problems with a gas-turbine and a Refrigerant Production Unit. All sources spoke under condition of anonymity as the information was not publicly available. A spokesperson for LNG Canada responded that a facility of the size and scope of the joint venture may experience operational setbacks while it ramps production up and stabilizes. Shell diverted an empty LNG tanker to Peru while other tanks remained close to the facility. This was shown by LSEG ship tracker data. According to LSEG data, Ferrol Knutsen is a 170.520 cubic meters LNG vessel that was heading to Kitimat but changed direction and now is off the coasts of California, on its way towards Peru. LNG Canada is a joint-venture between Shell, Malaysian Petronas and PetroChina as well as Japan's Mitsubishi Corp. According to statements from the company, when fully operational LNG Canada will be able to export 14,000,000 metric tons per year (mtpa). The facility has so far exported four cargoes. Its first shipment was on July 1. A spokesperson for LNG Canada said that another shipment will be expected in the next few days. As the plant moves from its early stages of operation to a regular shipping schedule, the pace of exports will increase. The spokesperson said that "in regular operations, we expect to load one export cargo every two days from our facility." Tom Purdie is a senior LNG analyst with Energy Aspects. He said that any decrease in JKM-TTF prices above two cargoes a month would be bullish. This refers to the Asian and European benchmarks. Purdie stated that "further Canadian supply losss would tighten up the Pacific market and compound the impact of ongoing Australian shortages and robust Asian demand".
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US sanctions Brazilian High Court Judge
The U.S. imposed sanctions Wednesday on a Brazilian Supreme Court judge overseeing the trial for former President Jairbolsonaro. They accused the judge of authorizing arbitrarily pre-trial arrests and suppressing free expression. Justice Alexandre de Moraes presided over Bolsonaro's criminal case. Bolsonaro is accused of plotting to overturn Brazil’s presidential election in 2022. On Wednesday, U.S. president Donald Trump also signed an executive ordering imposing a tariff of 50% on Brazilian goods. He said that this was to stop the witch hunt against his right-wing allie Bolsonaro. Moraes received a sanction under the Global Magnitsky Act. This act allows the U.S. impose economic sanctions against foreigners they consider to have a history of corruption or abuses of human rights. Marco Rubio, the Secretary of State at the time, told legislators in June that Washington considered sanctions against this judge. Scott Bessent, U.S. Treasury secretary, said that "Alexandre de Moraes took it upon himself as judge and jury of an unlawful witch-hunt against U.S. citizens and Brazilian companies." Moraes is responsible, he claimed, for an oppressive censorship campaign, arbitrary arrests that violate the human rights and politically motivated prosecutions - including those against former president Jair Bolsonaro. The sanctions include the freezing of all assets owned by Moraes in the United States and the prohibition for U.S. residents to do business with him. Moraes and the Supreme Court of Brazil did not immediately comment. This month, Moraes Bolsonaro was ordered to wear a bracelet around his ankle, not contact foreign officials, and stop using social networking sites over the allegations that he courted Trump’s interference in Bolsonaro's Supreme Court trial. Bolsonaro referred to Moraes as a "dictator", and he called the recent court orders "cowardice." Bolsonaro denied taking part in a coup attempt but admitted to attending meetings that aimed to reverse the election results. Flavio Dino, the Brazilian Supreme Court justice, expressed his "personal solidarity' to Moraes through social media. He said that his colleague was "only doing his job in a honest and dedicated manner, following Brazilian Constitution." He said that the court's review had confirmed his decision. Washington increased pressure on Brazil's highest court following the latest restrictions against Bolsonaro. It imposed U.S. Visa restrictions on Moraes and his family, as well as other unnamed officials of the court. Luiz inacio Lula da Silveira, the Brazilian president, denounced these measures on July 18 as "arbitrary" et "baseless" and called foreign interference with the judiciary "inacceptable." In a statement, the leftist leader claimed that U.S. actions violated fundamental principles such as sovereignty and mutual respect. In a post on social media, Gleisi Hoffman, a member of Lula’s cabinet, described the additional sanctions against Moraes as "a violent and abrasive act." The government "totally repudiated the latest absurdity," the post read. Ivar Hartmann is a professor of law at the Insper business school in Sao Paulo. He said that the sanctions against Moraes may lead the Supreme Court "to stiffen their resolve" to show they will not be bowed down to them. He said that the sanctions could be used as a justification by Trump in Washington to re-examine tariffs against Brazil. Welber Baral, former Brazilian trade minister, said that it was difficult to determine if Magnitsky sanctions, which were designed to address violations of human rights, would have an impact on Trump's tariffs. Tariffs are usually a response to trade imbalances. Brazil is among the few major economies that the U.S. has a surplus with. Reporting by Matt Spetalnick, Ottawa; Luciana Magialhaes, Sao Paulo. Editing by Brad Haynes and Doina Chiacu.
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According to a lobby group, uncertainty over tariffs has halted oil shipments from Brazil into the US.
Roberto Ardenghy of the oil lobby group IBP told reporters on Wednesday that energy companies in Brazil have suspended oil exports to the United States following President Donald Trump's announcement of 50% tariffs against Brazil. The U.S. is Brazil's largest export market. Oil was exempted from the 10% tariff on Brazilian exports in April, but it remains unclear if the commodity will be exempted under the new tariff of 50% that is set to take effect on Friday. Ardenghy said, "This time there is no way to know." IBP represents Brazilian oil companies such as Petrobras, Shell, TotalEnergies ExxonMobil, Equinor, and TotalEnergies. Ardenghy stated that "business involving cargo which has to leave Brazil and go to the U.S.A. is suspended." Ardenghy stated that instead of shipping oil to the United States companies store it on production vessels floating or cargo ships. He said that because it takes about 21 days for an oil shipment from Brazil to reach the U.S., it was stopped when it became impossible to get to their destination by August 1. He said that if there was no exemption, Brazil would likely redirect shipments towards Europe and India. He added, "But for now, all is on hold as we wait for the 1st of August." According to data collected by StoneX, the consultancy group, government data shows that Brazil will export 1.78 million barrels of oil per day in 2024. Of this, 243,000 barrels of oil per day are going to the United States. Petrobras, Brazil’s state-owned oil company and the country’s top oil producer and supplier, said that it had exported 8% of the oil in its second quarter. Magda Chambriard, Petrobras' Chief Executive, said earlier this month that the company could redirect oil sold to the U.S. to Asia and Pacific if higher U.S. Tariffs on Brazil are implemented. (Reporting and writing by Marta Nogueira, editing by Leslie Adler).
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US reverses key climate findings, creating uncertainty for businesses
Lawyers and trade groups say that the Trump administration's plan to undo U.S. Climate Regulation is a way for them to save money, but this could backfire and force automakers, utilities and manufacturers to face a future filled with regulatory uncertainty and litigation risks. The Republican administration of President Donald Trump announced Tuesday that it would rescind a long-held finding that greenhouse gases endanger the health of humans, thus removing the legal basis for U.S. regulations on greenhouse gas emissions. Environmental Protection Agency Administrator Lee Zeldin stated that the move would save companies up to $52 billion on environmental compliance costs. The move would eliminate limits on greenhouse gases pollution from vehicle exhaust pipes, power plants and smokestacks. Lawyers said that companies who have already made significant investments to reduce emissions in order to meet government standards, as well as the demands of many shareholders, worry the proposal could lead them into a regulatory and judicial void. Meghan Greenfield, a partner at Jenner & Block, and former EPA Counsel, who represents clients in the auto sector, said: "Industries with GHG standards established by EPA are long-time compliers and do not want them stripped away." The stability of the regulatory framework is important to industry as a base. Zach Pilchen said that if the endangerment determination is repealed, companies will be required to adhere to a patchwork state law on climate change, rather than a single federal standard. Camille Pannu is an associate professor of law at Columbia University. She said, "I believe that the administration has overlooked the fact that most industries have already retrofitted themselves for regulation." "The industry did want deregulation but perhaps not through this mechanism." Sources from the former Trump administration said that during Trump's first tenure, the EPA declined to accept the endangerment findings because of the strong opposition from the industry and the risk involved in undermining federal authorities on this matter. Three sources within the auto industry privately stated that the EPA’s proposal to repeal vehicle efficiency standards was much broader than expected. The proposal also eliminates air conditioning standards and requirements for battery monitoring. Albert Gore is the executive director of Zero Emission Transportation Association. He said that the EPA's action to reverse a long-established law comes at a time when "clean" vehicle sales are steadily increasing and driving a boom in U.S. battery manufacturing and vehicle manufacturing. According to Environmental Defense Fund, over the past decade manufacturers have invested $197.6 Billion in U.S. EV manufacturing and battery production facilities. Gore stated that "taking backward steps, adding regulatory uncertainty, will harm consumers, unsettle markets, and complicate business decisions for automakers." LUKEWARM REACTION The industry groups' reactions to the EPA announcement have been reserved, with most saying that they will review the proposal in the coming weeks and provide comments. Edison Electric Institute (EII), the main lobbying group for the electric utility sector, has said that it supports the EPA in establishing clear, consistent regulations to encourage infrastructure and investment. EEI spokesman Jeremy Ortiz said: "It's essential that EPA uses its authority to create flexible regulations that take into account impacts on reliability and customer costs." Around a quarter (25%) of U.S. greenhouse gases are emitted by the power industry. Over the past decade, this sector has reduced its carbon emissions steadily by replacing coal-fired generation with natural gas and solar. EEI had sided in favor of the EPA (then part of the former president Joe Biden administration) in a Supreme Court case from 2022 in which West Virginia questioned the agency's power to regulate power stations. In its brief, it stated that "Violating this authority could upset that predictability and consistency and potentially expose individual GHG emitters the idiosyncratic wishes of individual district courts judges." The Alliance for Automotive Innovation is a group of auto industry professionals that welcomed the deregulation of tailpipes and said they were digesting a broader proposal for the repeal of the endangerment findings. Both the American Trucking Associations and the American Petroleum Institute praised the proposed repeal of vehicle exhaust rules. The U.S. Chamber of Commerce also opposed repealing the law because of its effect on members. Marty Durbin said Tuesday that the Chamber's Energy Institute, the Chamber's president, was reviewing the proposal and consulting with its members to provide constructive feedback.
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Eramet revises volume targets for 2025 after a H1 earnings decline
The French mining group Eramet announced a sharp drop in its first-half earnings on Wednesday. It warned that macroeconomic conditions would remain difficult throughout the rest of this year. This led to a revision downwards of Eramet's production targets for 2025. Eramet reported adjusted earnings prior to interest, taxes and depreciation (EBITDA), of 191 millions euros ($219.12million) for the first half of this year, a drop of 45% compared to a year ago. Earnings exclude Eramet’s New Caledonian Nickel subsidiary SLN which is supported by French government loans. Eramet's Chief Executive Paulo Castellari said to reporters that "our first-half results were not in line at all with our goals." Castellari stated that the decline was primarily due to a 92-million euro reduction in contributions from operations conducted in Indonesia. This amounted to nearly two thirds of the EBITDA drop, which was caused by lower nickel grades at new mining sites located in Weda Bay and higher operating expenses. In early February, the company had revised its production targets. It reduced manganese ore to 6.5-7.0 million tons from 6.7-7.2 millions, and lithium to 4-7 kilograms from 10-13 kilograms. This was due to operational delays in Argentina. The revisions are a response to the challenges presented by a weakening global steel market, a declining Chinese demand and operational bottlenecks. Eramet, on the other hand, has raised its target of marketable nickel ore for 2025 from 32 Mwmt to 36-39 Mwmt. The progress in Gabon, Senegal, and other countries provided some relief. Logistics improvements in Gabon increased manganese ore volume in the second quarter. Senegal achieved a 20% rise in mineral sands during the first half. Castellari confirmed that he had met Gabonese president Brice Oligui nguema in this month, after the West African nation announced last month an export ban for unrefined Manganese starting 2029. This would affect Eramet’s massive export-oriented production of steel ingredient.
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Trump's 'targeted' attack on climate data escalates across government
Trump administration limits climate data and references The effort is seen as being more "targeted" than the first term Volunteers restore and preserve historical information By David Sherfinski Data experts are scrambling in the campaign to restore and conserve what they can, while trying to keep up with an all-out effort they claim extends beyond what President Obama was attempting to achieve during his first term. Jonathan Gilmour of the Public Environmental Data Partners coalition, which works on data restoration, said: "It's far more focused, organized and rapid." The Environmental Protection Agency, as part of the administration's efforts to improve public health, is working to revert the long-held conclusion that greenhouse gasses are harmful. The administration also deletes, removes and minimizes reams and reams data and web pages related to environmental justice. "The dominant attitude of the first administration to climate change was a kind of denial." Now, we're seeing climate erasure," Gilmour said. It is much more dangerous than the standard denial. They are trying to remove data that we use in order to understand how humans have affected the world, and how these changes affect us, our societies and health. LIMITATION OF ONLINE AVAILABILITY The Trump administration is limiting and removing climate change data and studies through the EPA and National Oceanic and Atmospheric Administration. This includes limiting public access to the National Climate Assessment (NCA), a report mandated by Congress that is released every four years. It documents the human impact on global warming. After the administration fired hundreds of researchers and expert workers working on the new version, a White House official stated that the scope of the report was "reevaluated." Officials said that participants in the assessment were informed they would be "released from their role... whilst plans are being developed for the next assessment, noting there may be future chances for them to engage or contribute." NASA had indicated that it would attempt to host older reports online following the shutdown of the U.S. The Global Change Research Program, which oversees climate assessments, went dark at the end of June. This appears to be no longer the case. NASA spokesperson said that the USGCRP had "met its statutory obligations by presenting their reports to Congress." Bethany Stevens, spokesperson for NASA, said that the agency was not legally bound to host data from globalchange.gov. The Biden administration also removed the environmental justice screening tool it had set up online as part of their pledge to direct at least 40% certain federal benefits towards historically underserved areas. Izzy Pacenza is the project coordinator for the Environmental Data & Governance Initiative, which also works with Public Environmental Data Partners. "But personally, I did not expect it to be so extensive and that it would be one of first things that the Administration targeted." The EPA has not responded to any requests for comments. "SHOOTING YOURSELF in the FOOT" NOAA announced in May that it will no longer be adding disasters to its database if the damage exceeds one billion dollars, but it will keep all historical data up until 2024. NOAA did not also respond to requests for comments. Fulton Ring is a private firm that works in partnership with the Partnership. This month, Fulton Ring announced it had restored its version of the billion dollar disaster database. Rajan Desai is a co-founder of the company. He said, "I believe the attack on data may have been unprecedented. It's a case where you prove a point by shooting yourself in your foot." Why would you ruin your government's capability to send a signal, right? It makes no sense." Desai explained that part of the problem is now spreading the message, which is essentially a grassroots, volunteer effort. "It is a good thing to archive these data sets but, it's like a tree falling in the forest, and no one was around to hear it. Did it really happen?" Desai stated. If you don't do anything useful with these datasets, you won't have the support to start recollecting these data. Pacenza stated that the message was to not allow private individuals to fill government functions. Pacenza stated that "they have the resources and the money to do this and it is also funded by our taxpayer dollars."
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Southern Copper warns of a possible short-term impact on copper from the U.S.-China Trade War
Raul Jacob, CFO of Grupo Mexico’s Southern Copper, said that the U.S. - China trade war would affect the global economy and the copper sector. He made this statement on a conference call with analysts to discuss the company’s quarterly results on Wednesday. He said: "We think that an intense trade war between the U.S.A. and China could affect economic growth around the world." Jacob, the Chief Financial Officer, said that he expects the industry to remain resilient over the long term. He said, "We continue to maintain a positive outlook for the long-term future of copper." Jacob said that the huge price differential between the U.S. Comex and London Metal Exchange (LME), indicated "a strong possibility" for U.S. Tariffs on Copper Imports. The Trump administration announced that it would implement a tariff of 50% starting Friday. Southern Copper is Peru's third largest copper producer. Peru is also the world's third biggest producer of red metal. Peru is one of the largest suppliers of refined copper in the United States. However, the majority of its exports go to China. Jacob stated that there is still uncertainty about the tariffs or their impact on the company. He also noted the fluctuation of U.S. tariff levels on goods from other countries and goods. He declined to comment about the impact of the price differential between Comex and LME. In a recent statement, Grupo Mexico's Chairman German Larrea said that the company is monitoring the impact of tariffs on the business. However, Southern Copper has a strong position to deal with the uncertainty.
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Bloomberg News reports that Five Point is in negotiations to sell Northwind Midstream for $2.3 billion to MPLX.
Bloomberg News reported Wednesday that private equity firm Five Point Infrastructure was in discussions to sell Northwind Midstream Partners to U.S. Midstream Company MPLX for approximately $2.3 billion, citing sources familiar with the situation. Five Point had reported in May that it is looking into a possible sale of Permian Gas Infrastructure Operator. Any deal would be valued at upwards of $ 2 billion including debt. Bloomberg reported that a deal could be struck in the next few weeks, but the talks could still be stalled or delayed. The pipeline sector is booming with deals as companies seek to reduce costs, increase scale or gain access to attractive oil and natural gas producing regions. MPLX announced in February that it would purchase the remaining 55% of the BANGL pipeline from affiliates WhiteWater and Diamondback Energy, for $715m. The company is looking to expand its operations in the Permian basin. Five Point Infrastructure MPLX, and Northwind Midstream Partners have not responded to comments immediately. Northwind Midstream, a company formed by Five Point 2022, has built a pipeline system, compressor stations, and a treatment plant in New Mexico. (Reporting and editing by Sahal Muhammad in Bengaluru, with Pooja Menon from Bengaluru)
ADNOC-Led Consortium Makes $18.7B Bid to Buy Australia’s Santos
Australia's second-largest gas producer Santos said on Monday it intended to support an all-cash $18.7 billion takeover bid from an international consortium led by Abu Dhabi's National Oil Company (ADNOC), which wants to grow a global gas business.
Santos shares jumped 11% by the close on Monday, but that was well short of the 28% premium offered against their previous close, which analysts said reflected risks that the deal may not win regulatory approval in Australia.
ADNOC's investment arm XRG with Abu Dhabi Development Holding Company (ADQ) and private equity firm Carlyle proposed to offer $5.76 (A$8.89) per Santos share. The stock last traded at A$7.72.
Taking into account net debt, the deal gives Santos an enterprise value of A$36.4 billion, which would make it the largest all-cash corporate buyout in Australian history, according to FactSet data.
"For ADNOC, this is in line with their aggressive growth plans," said Kaushal Ramesh, vice president, gas and LNG research, at Rystad Energy.
The takeover bid emerged as oil prices reached multi-week highs as Israel and Iran traded air strikes, sparking concerns oil exports from the Middle East could be widely disrupted.
With Santos in its fold, the XRG-led consortium would gain control of two Australian liquefied natural gas operations - Gladstone LNG and Darwin LNG, as well as stakes in PNG LNG and the undeveloped Papua LNG. Santos' interests in Papua New Guinea are considered its most prized assets.
The company is also developing an oil project in Alaska, Pikka, due to start producing in mid-2026.
XRG said in June it aims to build a gas and LNG business with capacity of between 20 million and 25 million metric tons a year by 2035. Santos last year sold 5.08 million tons of LNG, with more than 60% of that from Papua New Guinea.
"What ADNOC really wants is the LNG assets, since they are inside the Asia Pacific basin. Since their plan is to expand in LNG, they will want assets close to where the future of demand lies," Rystad's Ramesh said.
Australian Treasurer Jim Chalmers, who makes the ultimate decision on major takeovers based on advice from the Foreign Investment Review Board, declined to comment on whether he had any concerns about an ADNOC-led takeover of Santos.
"It would be a big decision," he said in an interview with Australian Broadcasting Corp TV.
Santos said the latest offer came after it had rejected two previous proposals made by the consortium in March at $5.04 and $5.42 per share that were not made public.
Its board said if a binding offer is made it "intends to unanimously recommend that Santos shareholders vote in favour of the potential transaction, in the absence of a superior proposal."
The XRG consortium said it was negotiating to carry out due diligence with Santos on an exclusive basis before formalising the offer which would need at least 75% support from Santos investors.
"The proposed transaction is aligned with XRG's strategy and ambition to build a leading integrated global gas and LNG business," it said in a statement.
XRG, which was set up in November, last month acquired a stake in an offshore gas block in Turkmenistan. ADNOC has also struck several international deals for assets to sit under XRG, including gas and LNG interests in Mozambique.
Regulatory Hurdles Could Be Steep
Santos said the deal required approval from Australia's Foreign Investment Review Board (FIRB), Australian Securities and Investments Commission, National Offshore Petroleum Titles Administrator, PNG Securities Commission, PNG Independent Consumer and Competition Commission and Committee on Foreign Investment in the United States (CIFIUS).
XRG said it would maintain Santos' headquarters in South Australia, in a move to try and appease some regulators.
MST Marquee senior energy analyst Saul Kavonic said FIRB approval "may be a major risk to the deal" as Santos controls significant critical energy infrastructure in Australia.
Any spin-off of domestic infrastructure assets to potentially satisfy regulators would be difficult, as the facilities are saddled with decommissioning costs, he said.
Santos rejected a $10.8 billion offer from private equity-backed Harbour Energy in 2018 and walked away from talks with its bigger Australian rival Woodside Energy WDS.AX last year to create a possible A$80 billion oil and gas giant, saying it would look for other ways to bolster its value.
In February it reported a nearly 16% fall in underlying annual profit in 2024 and cut its dividend by 41%.
While Santos has long been a takeover target, Kavonic said a competing bid "is very unlikely as only ADNOC may be willing to pay such a premium to realise their global LNG ambitions."
($1 = 1.5425 Australian dollars)
(Reuters - Reporting by Scott Murdoch in Sydney and Emily Chow in Singapore, additional Shivangi Lahiri in Bengaluru; Editing by Kim Coghill and Sonali Paul)