14th February 2024

• 💥 Iran pipeline goes BOOM

• 📉 US nat gas prices near multi-decades low

• ❌ Shell bails on Iraqi petchem project

• 💧 Re-filling depleted oil inventories

• ➕ plus BP & ADNOC join forces; Woodside going shopping; more attacks in Mozambique; the IEA’s critical mineral program; our friendly new subscriber.

Here goes.

📈 THE NUMBERS

🗞️ WELL-HEADLINES

 🗽 North America

• Nat gas prices keep on falling - Henry Hub prices hit a ~3 ½ year low yesterday of $1.7/mmBtu, and are not far off 21st century lows, on near-record output, ample storage, and mild winter temperatures. US gas inventories are 15% above normal levels for this time of year. Why is gas production not falling back? Many gas producers are well hedged and lots of gas production is actually associated gas coming from oil production in the Permian and elsewhere.

🏰 Europe

• No luck for Var with Norwegian wildcats - two wells drilled at the Hubert and Magellan prospects in the Norwegian North Sea both came in dry. Multiple discoveries have previously been made in this area in recent years.

🕌 The Middle East

• Huge explosion at Iran’s main gas pipeline - Iran has blamed terrorists for an explosion at its main gas pipeline that carries gas from the Persian Gulf gasfields towards the major cities including Tehran, Esfahan and Qom. Details at the moment are scarce. Attacks on gas pipelines are all the rage these days. Maybe Iran blew up its own pipeline like Russia apparently did?

• Shell quits Iraqi petchem project - back in 2015, Shell signed an outline deal worth $11 bn to build a petrochemicals plant in the southern oil hub of Basra, but today announced it was bailing on the project. Shell said the decision was in line with its “focus on performance, discipline and simplification”. That’s over ten years of work they’re walking away from.

⛩️ Asia & Oceania

• Woodside going shopping after Santos failure - the company has got cash to burn after its merger with Santos fell through and is now looking in Australia, North America, and the Middle East for other deals to build its LNG portfolio, according to the CEO.

🦁 Africa

• More attacks in Mozambique shed doubt on Total return - militant raids in the northeast of the country have killed two dozen troops, heightening concerns ahead of Total’s planned return to the country to build the $20bn Mozambique LNG plant. In 2021, a deadly terrorist attack near the project pushed Total to declare force majeure and suspend its work in the country.

• ADNOC and BP pair up in Egypt - the companies have formed a new JV to develop gas assets in the country and potentially elsewhere around the world. BP is contributing existing development and exploration assets to the partnership, while ADNOC is providing cash.

🗿 Central & South America

• Vitol / Mexico bribes handed over in Houston car park - the court case into Vitol bribes to Mexican officials has heard that wads of cash were handed over in a car park. How old school. I wonder if the notes were in brown paper bags too, or maybe dropped in a bin.

🌍 GEOPOLITICS & MACRO

• Not so fast, inflation - US inflation fell by less than expected last month. Equity and commodity markets fell on the news as stubborn inflation may delay interest rate cuts.

• LNG demand to surge - in Shell’s annual LNG outlook the major predicts global LNG demand will increase by more than 50% by 2040, driven by China’s transition away from coal and rising demand in other Asian nations. Shell says that global natural gas demand will peak "after 2040". Read the full report here.

• China and US refilling oil stocks to support demand - an effort to restore depleted oil stocks in is expected to support oil demand in the coming months. The IEA calculates that global oil inventories are at their lowest levels since July 2022 after an unusually large decline in recent months.

💨 CARBON, CLIMATE, & OTHER ENERGY STUFF

• IEA launches critical minerals security program - without giving many details, the agency said it was kick-starting a program to secure the supply of critical minerals for the energy transition like lithium, cobalt, and copper. “Currently, we are A, not able to keep up with the demand, and B, the ability of manufacturing these critical minerals is concentrated in one single country or two”, said IEA head Birol.

• Eversource in $1.1bn offshore wind sale - the power company is seeking to exit the troubled sector and has offloaded its stakes in two US offshore wind projects to Global Infrastructure Partners.

🛢️ BOTTOM OF THE BARREL

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