LNG to Stay King of US Gas Exports

The US Energy Information Administration's Short-Term Energy Outlook has predicted that exports of liquefied natural gas (LNG) will drive growth in US natural gas exports over the next two years, with LNG exports expected to rise by 14% in 2023 and a further 5% in 2024.

The forecast is based on high global demand as LNG continues to displace pipeline natural gas exports from Russia to Europe.

The EIA expects U.S. natural gas exports by pipeline to grow by 0.5 Bcf/d this year and next, in large part due to increased exports to Mexico.

“Several new pipelines in Mexico—Tula-Villa de Reyes, Guaymas-El Oro, the Mayakan pipeline on the Yucatán Peninsula, as well as some other minor interconnects—are scheduled to come online in 2023–24,” reports the EIA. “We also expect an increase in exports via the Sur de Texas-Tuxpan underwater pipeline to supply the proposed floating liquefaction (FLNG) project off the east coast of Mexico.”

Vogtle Goes Critical

Georgia Power, a unit of Southern Co., has achieved self-sustaining nuclear fission in Unit 3 at its Vogtle nuclear power plant in Georgia.

The unit could begin commercial operation in May or June, with the fourth reactor expected to follow between November 2023 and March 2024.

“We remain focused on safely bringing this unit online, fully addressing any issues and getting it right at every level,” Chris Womack, chairman, president and CEO of Georgia Power, said. “Reaching initial criticality is one of the final steps in the startup process and has required tremendous diligence and attention to detail from our teams.”

The two new reactors, the first to be built from scratch in the US in decades, were originally planned to cost $14bn, but are now expected to exceed $30bn.

What went wrong? Why did the overruns happen?

“There was a breakdown between that company that supplies the nuclear reactor and the engineers and construction firms,” Mark Nelson, the founder and managing direct of Radiant Energy Group, told The Telegraph. “There was not a fully construction-ready design before construction started. The supply chain to deliver the critical parts, the modules of the reactor, was not in place. And the new construction techniques that were supposed to save time were too new for the construction firms. They didn’t know how to do these new things, and so it didn’t work well.”

Kazakhstan Struggles to Get Crude to Europe

Kazakhstan wants to cut its dependence on Russian oil supplies. But the country is struggling to meet requests from European countries for crude oil deliveries through Russia's Druzhba pipeline system.

“Germany is supposed to take delivery of a total of 40,000 tons of piped Kazakh oil this quarter, according to KazTransOil, the state oil pipeline operator,” reports Bloomberg. “That’s down by almost 90% from what was originally planned.”

Kazakhstan's oil producers are struggling to discover spare barrels, which would help European firms reduce their dependence on Russian supply. The country has also grown wary about continual use of the Druzhba link because they can get better returns via other routes. Worse still, Kazakhstan's production has dropped by about 100,000 barrels a day since late February.

The European Union has banned almost all seaborne oil imports from Russia, but allowed five countries, including Germany, to keep receiving supplies through the Druzhba pipeline system. However, Germany has elected to halt piped inflows from Russia, spawning a need for alternatives.

While Kazakhstan has the capacity to raise annual deliveries to 6 million tons, it has struggled to find even 20,000 tons to pump to Germany so far.

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Conversation Starters

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Crom’s Blessing