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Welcome to Grid Brief! Here’s what we’re looking at today: new LNG developments in Asia, Warren Buffett’s take on the EV market, new methane regulations for US pipelines, and more.

New Asian LNG Inroads

Vietnam and Hong Kong are getting into the LNG import market.

“PetroVietnam Gas said on Monday it had received a certificate from local authorities to become the country's first company eligible to import and export liquefied natural gas (LNG),” reports Reuters. “PetroVietnam Gas said it had completed the construction of an LNG terminal in the southern province of Ba Ria Vung Tau with an initial capacity of one million tonnes of LNG a year. It aims to raise the capacity to three million tonnes.”

Meanwhile, a representative from CLP Holdings Ltd., Hong Kong’s electricity supplier, confirmed that the region received its first LNG shipment on Saturday. The commissioning process for an offshore import terminal in the city-state will begin this week.

“The rapid decline in LNG prices is rekindling plans from Hong Kong to Vietnam to begin importing the fuel,” reports Bloomberg.

Both countries are trying to wean themselves off of coal with LNG as the bridge to a cleaner future. A quarter of Hong Kong’s electricity generation comes from coal—authorities want to cease using it for daily electricity by 2035. In Vietnam, half of the electricity supply comes from coal. Last November, Vietnamese President Pham Minh Chinh pledged to achieve net-zero emissions by 2050.

Warren Buffett on the EV Market

Financial titan Warren Buffett sees great uncertainty in the market for electric vehicles.

"You will see a change in the vehicles, but you won't see anyone that owns the market because they changed the vehicles," Buffett said.

Part of the problem is the nature of the auto industry—highly competitive with stubborn players across the globe. "Charlie [Munger] and I long have felt that the auto industry is just too tough," Buffett continued. "It’s just a business where you’ve got a lot of worldwide competitors, they're not going to go away, and it looks like there are winners at any given time, but it doesn’t get you a permanent place."

Yet EVs are in a tight spot. Last week, Reuters reported that EV startups are burning through cash for yet another quarter. A lack of funding options and difficulty ramping up production are only adding more pressure on American EV startups.

Even the big guys are having a rough go of it. “GM is also burning cash on EVs although it hopes to stop this by 2025. Ford, meanwhile, reported a loss of $722 million for its EV division for the first quarter, which translates into a loss of more than $66,000 per vehicle,” reports Oilprice.com.

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New Pipeline Methane Regulation Proposal

The US federal pipeline regulators have proposed their first fixes for reducing natural gas leaks, aimed at curbing pollution and reducing the effects of climate change.

“The proposal would cover the 2.7 million miles of transmission, distribution and other pipelines under the jurisdiction of the Department of Transportation’s Pipeline and Hazardous Materials Safety Administration,” reports E&E News. The regulation will also pertain to underground natural gas storage and liquified natural gas facilities.

Just over two years ago, Congress gave PHMSA expanded powers to limit greenhouse gas emissions, which has historically focused on preventing physical safety hazards. The agency’s environmental efforts were confined to preventing spills of hazardous liquids. Methane leaks from pipelines and facilities sited in less populous areas were not considered a significant safety risk unless they exploded or ignited. But PHMSA's new aim is to support the Biden administration's climate agenda, as methane produces short-lived carbon emissions.

“Quick detection of methane leaks is an important way to keep communities safe and help curb climate change,” Transportation Secretary Pete Buttigieg said in a statement. “We are proposing a long-overdue modernization of the way we identify and fix methane leaks, thereby reducing emissions and strengthening protections for the American people.”

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• Big money is flowing into a Brazilian gas field project. “Equinor and its partners have decided to invest about $9 billion to develop the BM-C-33 gas and condensate discovery off Brazil Norwegian company said on Monday,” reports Reuters. “The field, which is estimated to hold more than one billion barrels of recoverable oil equivalent, is expected to start production in 2028. Gas from the offshore field will be directly injected into the national gas grid via a 200 kilometres pipeline landing at the city of Macae in the state of Rio de Janeiro. Oil liquids are planned to be offloaded by shuttle tankers. Equinor has a 35% stake in the project, while Repsol Sinopec holds 35% and Petrobras the remaining 30%.”

• Springtime pressure pushes Permian prices. “The start of pipeline maintenance season in West Texas is putting pressure on gas prices in the Permian Basin recently with cash markets at Waha and other nearby locations at risk through late May. In May 5 trading, spot gas prices at Waha sank to just 83 cents to hit their lowest since mid-April, data from Intercontinental Exchange and S&P Global Commodity Insights showed,” reports S&P Global. “Since the start of May, gas prices at Waha have fallen from over $1.60/MMBtu, or by nearly 50%, as recent pipeline maintenance and fading seasonal demand keep the gas market under pressure. From the start of May and into the week beginning May 8, at least a dozen maintenance events on El Paso Natural Gas alone will be constraining outbound gas shipments from the Permian Basin.”

• The conflict in Ukraine has driven investment into Kazakhstan. “Since Russian President Vladimir Putin began his ill-fated ‘special military operation’ (SVO) against Ukraine, subsequent international sanctions imposed in response produced the slowly mounting hemorrhaging of foreign firms based in the Russian Federation to other post-Soviet states, with many choosing to relocate to Kazakhstan,” reports Oilprice.com. “On April 19, Kazakhstan’s Prime Minister Alikhan Smailov told participants in a government meeting—held to discuss his nation’s socioeconomic development—that his government is in talks with 43 major international companies based in Russia regarding their relocation to the Central Asian country. According to Smailov, beyond these 43 firms considering the shift, 24 foreign companies have already moved to Kazakhstan.”

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