Energy Talking Points 14-06-2016


East coast gas in the pipeline for Jemena

Chinese-controlled infrastructure company Jemena says an $800 million pipeline is built to connect the Northern Territory gas market with the east coast and as part of a much bigger plan, with Gladstone’s three LNG plants set to drive more demand than many were expecting to struggle to source reasonably priced gas. Melbourne-based Jemena is a 60/40 joint venture between China’s State Grid Corporation and Singapore Power with $10bn of mainly gas pipeline and gas and electricity distribution assets. The potential extra demand from Gladstone’s Curtis Island, where $70 billion of LNG construction is tripling east coast demand, was illustrated by Origin Energy, which last week told investors there was the opportunity for east coast LNG plants to run at 10 per cent above nameplate capacity. Click here for the full article.


Iran signs deals to sell crude oil to European Firms

Long-term deals are signed with Saras SpA and Eni of Italy, Spain’s Repsol, Hellenic Petroleum SA of Greece, France’s Total, Switzerland’s Vitol Group as well as Lukoil of Russia, according to executive director for international affairs at National Iranian Oil Company (NIOC) Mohsen Qamsari. The newly developed Iran Petroleum Contract (IPC) is one of the strategies Tehran has adopted to attract investment and upgrade the country’s oil industry, Iranian Deputy Oil Minister for International Affairs Amir Hossein Zamaninia said earlier this month. The country is planning to draw 185 billion dollars of investment in all sectors of the oil industry within a five-year period, adding that 85 billion dollars of the investment will go to the upstream sector of the industry. Iran and the world powers reached a nuclear deal last July, which was implemented in January and would enable the country to re-engage with energy firms of the world to develop its oil and gas fields. Click here for the full article.


Fosun to invest in oil & gas sector

China’s Fosun Group will continue to seek out investment opportunities in the oil and gas sector after keeping a low profile following its $474 million acquisition of Australia’s Roc Oil nearly two years ago. Roc Oil is the first acquisition Fosun has made in the sector so far, bringing the Chinese conglomerate into the upstream oil and gas industry with its established petroleum and natural gas businesses in China, Southeast Asia and Australia. Fosun had been eyeing two small natural gas fields in the eastern Mediterranean from Israel’s Delek Group earlier this year. But there hasn’t been any update since Fosun scrapped a 1.8 billion shekel ($632m) deal to buy Phoenix Holding from Delek, as the Israeli group is being forced by the government to sell off some of its oil and gas assets in an effort to open the sector to new competition. Click here for the full article.


China to import 1 billion tonnes of iron ore this year

On Wednesday the Northern China benchmark iron ore price held onto recent gains to trade at $52.10 per dry metric tonne according to data supplied by The Steel Index after Chinese imports of the steelmaking raw material continued to gather pace. The price of iron ore is down sharply since trading within shouting distance of the $70 mark in mid-April but is back in bull territory for 2016 with a 22% rise since the beginning of the year and a 40% rebound since hitting near-decade lows in December. Customs data released today showed China imported 86.75 million tonnes of iron ore in May, the fourth highest monthly figure on record and the biggest volume this year. May cargoes constituted a 22.4% rise from a year earlier. Iron ore dependence on China won’t diminish even as imports begin to fall from record levels next year according to the report. China last year consumed two-thirds of the seaborne iron ore supply with imports reaching a record 968 million tonnes according to the calculations. Click here for the full article.