Good morning team - this is Both Barrels. Your daily dose of all things oil, gas, and energy, without the hot air.

Here’s what hit the wires today:

• 🔥 LNG strike negotiations hotting up

• ❌ O&G windfall taxes taking their toll

• 🦜 Pirate Scholz

plus a lot more. Let’s get to it…

📈 The numbers

No major price swings across commodity markets in the past 24 hrs. Labor Day in the US and other public holidays around the world will likely have damped trading volumes.

🗞️ Well-headlines

 🇺🇸 North America

• Venture Global has announced plans to increase its LNG export capacity from 70 to 100 mtpa from current and future projects both in and outside of Louisiana in the US. It will partner with Baker Hughes to support this growth ambition. Gas industry movers and shakers are currently rubbing shoulders at the Gastech conference in Singapore.

🇪🇺 Europe

• After announcing a loss in H1 2023, UK North Sea producer EnQuest said: “The UK's oil and gas sector faces significant challenges and loss of competitiveness due to uncertainty following the adverse changes to the fiscal regime”. Unsurprisingly, the UK’s genius windfall tax on O&G companies is deterring investment and damaging the sector. Who knew?

• Europe is storing gas in western Ukraine ahead of winter as its own storage levels are almost full. European storage levels are at ~92%, above the 90% target. Storage levels are important but there’s also a constraint on the rate at which storage can be drawn down, which limits storage’s potential to mitigate short-term shortages.

🇸🇦 The Middle East

• Saudi Arabia is lining up EPC contractors for the expansion of its mega Fadhili gas plant. The expansion is a key part of SA’s plans to increase its supply of natural gas, freeing up crude for refining and exporting (instead of power generation). ~30% of Saudi’s power is currently met by burning oil. This is a relatively low value use of black gold.

🇨🇳 Asia

• CNOOC has evacuated over 10,000 offshore workers from the South China Sea ahead of the super Typhoon Saola. It’s unclear what impact this will have on production but the company said that certain assets are “smart fields” that can be operated remotely from onshore facilities during typhoons.

• Japan’s Jera, the world’s largest LNG importer, has confirmed it is working with Uniper to meet Japan’s LNG demand. The companies are also partnering to developing green and blue ammonia export projects in the US, in collaboration with ConocoPhillips.

📍Everywhere else

• The standoff between LNG workers and Chevron in Australia is escalating. Continued talks have failed to reach an agreement and unions have announced that workers will down tools for 2 weeks from Sept. 14th at the Gorgon and Wheatstone LNG plants. These two facilities are responsible for a whopping ~5% of global LNG supply. Strong bluff? We’ll see…

• Eni is selling its onshore Nigeria business to Oando in a deal estimated to be worth ~$500m. Many large oil companies have left Nigeria in recent years due to all sorts of problems including theft, spillages, and clashes with militia groups - the most famous of which is named straight out of a Marvel film: Niger Delta Avengers.

• Petrobras has cancelled plans to sell key assets including the onshore Urucu and Bahia-Terra clusters, as well as the Manati oilfield and Petrobras Operaciones, its subsidiary in Argentina.

🌍 Geopolitics & macro

• Trafigura’s head of oil trading believes that the oil market is “more fragile than it looks”. It’s vulnerable to price spikes due to lack of investment in new supply and high interest rates which make it more expensive to store oil, he said.

• Chevron’s President of Midstream has said that the global gas market is better supplied heading into this winter than it was last year. Let’s hope he’s right, and let’s hope for a mild one…

💨 Carbon, Climate & other energy stuff

• The UAE, host of this year’s UN COP climate summit, has promised $4.5 billion to help African countries accelerate clean energy adoption. In a speech at the Africa Climate Summit, COP President Dr.Sultan al-Jaber reminded everyone of the importance of energy security and affordability.

• Global coal emissions per capita have climbed by ~10% since 2015. The biggest coal addicts? In top spot is South Korea, followed by Australia, and China in third. The global average is 1.1 tCO2 per capita per year from coal. In Australia it’s 4.4.

• Italy’s government has declared its ambition to begin producing nuclear power within the next ten years. It shut down its last plants in 1990 but, like (most, cough Germany cough) other countries around the world, it’s waking up to the importance of nuclear power in the energy mix.

• Australia is considering extending the life of its largest coal power plant amid climbing power prices and concerns that wind and solar cannot meet demand.

🛢️Bottom of the barrel

Poor German Chancellor Scholz had a running accident and is now wearing an eye patch. Unsurprisingly, the internet had some fun:

And here’s a ranking of coal emissions per capita mentioned earlier. It’s hard to kick a coal habit. It’s an abundant, affordable, and easy-to-handle fuel that dragged the world out of the darkness in the early 1900s. Yes, it’s dirty, but the world would be a much worse place today without it.

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Thanks for reading. Have a day out there. 🛢️🛢️