Greece, Europe fear impact of heatwaves, Russian gas cuts

The country and Europe, as a whole, are bracing for even greater energy-system pressure ahead of anticipated summer heatwaves around the continent and the threat of intensified natural gas shortages.

The upcoming temporary closure of the Nord Stream gas pipeline, linking Russia with Germany, for annual maintenance work between July 11 and 21, according to Nord Stream AG, the gas pipeline operator, has European officials concerned the move could be a precursor for a full disruption. This would have a knock-on effect on natural gas prices all the way down to the Balkans.

Under the currently mild market conditions of pre-heatwave low demand, electricity prices in Greece are at 323.78 euros per MWh today. Officials dread the impact on prices of higher heatwave-induced electricity demand, combined with further Russian gas supply cuts to Europe.

At this stage, there is no way of knowing if Greece will be able to continue importing electricity from its northern neighbors if further Russian gas supply cuts prompt a wider shortage. In such a case, neighboring countries, like Greece, could look to fully cover domestic demand before thinking about exporting electricity.

Greek electricity producers are currently exporting considerable quantities to Bulgaria, Albania and Italy, driven by high prices fetched. Prices for electricity exports to Italy today are at 418 euros per MWh. However, electricity exporters may be forced to disrupt these sales in the event of an acute energy crisis in the Greek market.

 

Greece envisioned as gas supply solution in Europe, Balkans

Greece is seen as a natural gas supply solution by Balkan and European countries, a Regional Task Force meeting in Sofia, staged within the framework of the EU Energy Platform –  formed to help establish common natural gas and hydrogen markets – has made apparent.

The Sofia meetings agenda focused on the search of natural gas supply solutions given an anticipated demand increase in Europe, including the continent’s southeast, Mihalis Thomadakis, Director of Strategy and Management at gas grid operator DESFA, who participated in the Sofia meeting, has told an ensuing industry event, Athens Energy Dialogues.

He was a member of the Greek delegation in Sofia led by Nektaria Karakatsani, an energy ministry expert on energy policy matters.

Delegations representing Ukraine, Bulgaria, Romania, Croatia and Moldova also took part at the Regional Task Force meeting in Sofia.

Thomadakis, the DESFA official, underlined that gas network upgrades need to be developed as quickly as possible in order to meet new needs emerging.

Besides the EU Energy Platform, established in April as part of Europe’s plan for a swift end to its reliance on Russian natural gas, the European Commission, in collaboration with the International Energy Agency, has also formed the Technical Support Instrument, a project already involving seventeen EU member states, for the same purpose.

The TSI project is promoting energy source diversification and transmission, biomethane production, international hydrogen trade, roof-mounted solar energy installations, energy efficiency measures, swifter RES licensing procedures, innovative hydrogen solutions, as well as RES projects for the industrial sector.

 

Europe on edge, tested by Putin’s ruble payment demand

Tension in Europe has risen with signs of disorientation emerging over Russian president Vladimir Putin’s demand for ruble-currency payments to cover Russian natural gas supply.

German chancellor Olaf Scholz, according to Moscow, initially agreed on this payment term for Russian gas supply, but this was swiftly denied by the chancellery.

Italian prime minister Mario Draghi abruptly rejected Putin’s ruble-based payment plan for Russian gas supply, while Polish prime minister Mateusz Morawiecki has called on Europe to impose an embargo on Moscow and follow his country’s example by stopping all Russian energy imports until the end of the year.

Europe is on high alert. Reliance on Russian energy reaches as high as 80 percent in Austria. Germany’s dependence on Russian energy is also high, at 55 percent.

Both countries have taken steps for gas rationing over the payment stand-off with Russia, fearing, like all of Europe, a halt in energy deliveries from Russia because of the dispute over payments.

Robert Habeck, Germany’s federal minister for economic affairs and climate action, has called on citizens to use electricity as moderately as possible.

Should Putin take the dreaded step and cut energy supply to Europe, distribution of existing natural gas reserves, as well as supply from non-Russian sources, will need to be prioritized, with preference for hospitals, power stations and crucial industries, needed to avoid economic collapse.

If European governments are forced to announce a state of emergency, an electricity rationing plan will need to be implemented for all households. The UK was forced to adopt such an extreme measure, for fuel, during the oil crisis in 1973.

In Greece, a halt in Russian natural gas supply would stop economic activity in just a few days. The country’s daily gas consumption reaches approximately 200,000 MWh, of which 115,000 MWh is supplied by Russia.

Additional LNG shipments in April; the mooring of an FSRU at the Revythoussa islet LNG terminal, just off Athens, for a capacity increase; full-capacity generation at the country’s lignite-fired power stations; as well as an agreement with Italy to ensure storage capacity at the neighboring country’s gas storage facilities, for strategic reserves, are all necessary steps ahead of next winter.

It remains to be seen if Russia’s war on Ukraine will carry on into summer and require extreme measures, or end soon, to the relief of all.

The TTF gas exchange ended trade yesterday at 118 euros per MWh. Wholesale electricity prices in Greece today are at 222.38 euros per MWh.

In comments offered during yesterday’s opening day of the two-day Power & Gas Forum staged by energypress, Pantelis Kapros, Professor of Energy Economics at the National Technical University of Athens, estimated that natural gas prices, even if the war were to end now, will average between 50 and 70 euros per MWh this year.

 

 

 

Smaller, bigger solar energy investors face differing prospects

Smaller and major-scale solar energy investors face differing prospects amid RES investment opportunities offered by extremely higher wholesale electricity prices as these opportunities are being largely offset by higher equipment costs.

Sharply higher wholesale electricity prices have generated stronger investment opportunities for bigger RES investors, while, for smaller players, these prospects are being dampened by higher RES equipment costs, severely diminishing their more modest profit margins.

Demand for solar panels has surged around Europe in recent times, pushing up prices. The cost of solar panel mounting systems has also risen as a result of recent sanctions imposed on Russian steel exports, which have driven steel prices higher.

Solar panel prices had begun falling early in 2022 following a period of pandemic-related increases, but are now rising again with no price de-escalation seen in the short term, RES sector officials have projected.

 

Athens to discuss plan should Russian gas supply be cut

The Greek government is on high alert fearing the entry of Russian troops into two rebel-held regions in Ukraine’s east could disrupt Russian natural gas supplies to Europe and prompt energy insufficiencies, including in Greece.

In response to the development, energy minister Kostas Skrekas has been asked to attend an emergency meeting of the Government Council for Foreign Affairs and Defense (KYSEA), to be headed by Prime Minister Kyriakos Mitsotakis, and present a detailed update on the strategy he could implement to avert a natural gas shortage in Greece should Russia disrupt its gas supply to Europe or the EU imposes economic sanctions on Russia, including its gas exports.

Russian president Vladimir Putin has recognized Donetsk and Luhansk as independent states.

The fundamentals of the Greek energy minister’s plan had been presented at a recent government meeting on February 14.

According to sources, the worst-case scenario would entail a disruption of Russian natural gas supply via the TurkStream pipeline, which supplies Bulgaria and then Greece.

In this event, Greece would need to utilize gas grid operator DESFA’s LNG terminal, on the islet Revythoussa just off Athens, to its fullest, as well as the TAP pipeline supplying natural gas from Azerbaijan.

The Revythoussa LNG terminal is currently filled to capacity and would remain so with two shipments each month for as long as the Ukraine crisis continues, sources have informed.

However, the big question for Greece, and Europe as a whole, is whether LNG shipments will be available, and at what price.

Milder weather conditions, resulting in less gas consumption, would help ease the pressure on grids throughout Europe.

Natural gas prices rebound 14% over Ukraine concerns

The timing of the Russia-Ukraine crisis, coinciding with the ongoing energy crisis affecting Europe, including Greece, is proving detrimental to the recent de-escalation of record-level energy prices, especially in central European markets, where wholesale electricity prices have fallen below 100 euros per MWh for the first time in months.

Concerns over a possible Russian invasion of Ukraine have prevented markets from easing. Natural gas prices yesterday rose by an average of 14 percent to register a two-week high of 88 euros per MWh. As a direct consequence, electricity prices increased today following a downward trajectory in recent weeks.

In Germany, wholesale electricity skyrocketed 51.63 percent, in a day, to 155 euros per MWh. France registered a 3.3 percent increase to 193.44 euros per MWh. In the Netherlands, wholesale electricity rose by 14.98 percent to 202.1 euros per MWh, and, in Spain, the price of wholesale electricity increased by 9.07 percent to 199.94 euros per MWh.

A Russian invasion of Ukraine, which would disrupt Russian gas supply to Europe, would push up natural gas prices to new record levels exceeding records set in December.

Russia is Europe’s biggest natural gas supplier, covering 40 percent of the continent’s natural gas imports, of which 30 percent is transported through pipelines running through Ukraine.

The Russia-Ukraine crisis is also impacting oil prices, now close to 100 dollars per barrel.

 

Europe tackling crisis with lower tax rates, subsidies, reimbursements

EU member states are resorting to a variety of solutions, namely lower energy tax rates, subsidies and reimbursements, to offer some relief to households and enterprises pressured by the energy crisis, a latest report published by HEPI (Household Energy Price Index) has highlighted.

The Greek government has opted to ease the impact of the energy crisis on consumers by subsidizing electricity.

In Austria, the government has decided to zero out a carbon tax on electricity bills. Cyprus has reduced its VAT rate on electricity bills to 9 percent from 19 percent for a three-month period, beginning last November.

Elsewhere, the Low Countries have significantly reduced energy taxes. Poland has slashed its VAT rate for electricity bills to 5 percent from 23 percent and removed a special consumption tax for electricity. Spain, too, has reduced its taxes on electricity bills.

In Norway, consumers are being partially compensated if electricity prices exceed certain levels.

 

Markets challenged by nuclear withdrawals, gas crisis, demand

A series of unfavorable developments, including nuclear reactor withdrawals in Germany and Belgium, persistently high natural gas prices and strong energy demand threaten will further test the European grid, threatening to prolong the energy crisis.

The withdrawal of nuclear reactors in Germany and Belgium, combined with skyrocketing natural gas prices, will negatively impact Europe’s electricity market, even in countries where natural gas holds a small share of the energy mix, as markets are interconnected, enabling a knock-on effect.

Germany has announced a withdrawal, today, of nuclear reactors with a combined capacity of 4.25 GW and remaining capacities, totaling about 4.3 GW, by end-2022. Overall, this phase-out represents 12 percent of the country’s electricity supply.

In addition, Germany’s new coalition intends to reassess the country’s existing decarbonization plan, its phase-out of fossil-fuel plants running until 2038, with the aim of shortening this procedure t0 2030, if possible.

Belgium is headed in the same direction. The country’s nuclear reactor phase-out runs until 2025. The country’s Doel 3 facility is planned to shut down in October, 2022, followed by Tihange 2 in early 2023.

Electricity demand in ten European countries is forecast to increase by 2 percent, or 5 GW, on average, in 2022, according to a Platts Analytics projection.

LNG tankers reroute for Europe as prices soar on continent

Natural gas prices in Europe, well over price levels in Asia, are prompting LNG tankers to reroute mid-voyage and head for Europe as the gas supply crunch on the continent worsens.

Buyers in Asian countries have outbid Europeans for LNG shipments for much of the year, but with storage now full across Asia, uncommitted cargoes from the Atlantic basin that were heading for Asia are being turned round by their owners and sent to Europe to cash in on soaring prices and demand.

The ships carrying liquefied natural gas to Europe include the first Australian LNG tanker headed for the continent in a decade.

American LNG exports are expected to rise significantly in 2022, surpassing quantities exported by Qatar and Australia.

According to US agency EIA, the Energy Information Administration, American LNG exports will rise to 11.5 billion cubic feet annually in 2022, 22 percent of projected global demand.

The US is expected to maintain the leadership in LNG exports until at least 2025, when Qatar is scheduled to launch an extension of its North Field gas deposit.

According to Reuters, 13 percent of American LNG exports in 2021 went to South Korea, 13 percent to China and 10 percent to Japan.

Three new gas liquefaction plants are planned to be launched in the US in 2022, by Cheniere Energy, Venture Global, and Tellurian.

 

Greece registers Europe’s lowest wholesale electricity price today

Greece has registered Europe’s lowest day-ahead market price today, helped by greater RES contributions that have lowered the wholesale electricity price by 57.44 euros per MWh in a day, to 197.24 euros per MWh.

Elsewhere in Europe, wholesale price levels for today are upwards of 250 euros per MWh, while in some countries, the level greatly exceeds 300 euros per MWh, headed by France, where the wholesale price is 329.27 euros per MWh.

Renewable energy units represent 31.13 percent of the energy mix in Greece today, offering a total capacity of 61.5 GWh, just below the level of natural gas, the top contributor, with a 35.62 percent share of the energy mix, or 70.4 GWh.

The country’s hydropower generation is also significantly up today, capturing a 16.5 percent share of the energy mix, or 32.6 GWh, well over usual recent levels of less than 10 percent, as a result of heavy rainfall over the past few days that filled hydropower reservoirs.

The price gap between Greece and other European markets has prompted an increase in electricity exports today to a level of 31.2 GWh. Imports were restricted to 3.2 percent of the energy mix, or 6.3 GWh.

French price containment proposal at EU council meeting

A French proposal to be tabled at a council meeting of European energy ministers this Thursday is expected to call for RES and nuclear energy windfall profits to be directly returned to the market, without passing through any operator, as is the case in Greece with RES market operator DAPEEP, to help subdue elevated wholesale electricity prices.

Energy authorities of Europe’s south, including Greek energy minister Kostas Skrekas, will be up against the firm belief of ACER, Europe’s Agency for the Cooperation of Energy Regulators, and Europe’s north that the single electricity market is functioning properly and does not require reforms, despite the exorbitant wholesale market price levels.

The prolonged crisis and, until now, apparent ineffectiveness of EU tools to remedy the situation do not appear to have convinced Europe’s north and the European Commission of the need for any revisions.

Europe’s north sees no need for change as it is backed by the security of multiple grid interconnections, a rich energy mix, storage facilities, and better functioning energy exchange markets, and, as a result, has aligned with the views of ACER.

A latest report by this agency on wholesale electricity prices, to be discussed at Thursday’s meeting, sees no abuse of dominant positions or room for improved market functioning.

Colder weather a first test for European energy system

Falling temperatures in Europe, particularly at central and western regions, have increased electricity and natural gas demand for household heating needs, representing a crash test for the European energy system, interlinked and influencing market conditions from one country to another.

Wholesale electricity price levels have risen to record levels in France and Germany, currently experiencing sub-zero Celsius temperatures.

Besides the sudden drop in temperatures, windless conditions are depriving the Netherlands, Denmark and Germany of wind-based generation, down by at least 15 to 20 GW today, according to market data.

Subsequently, the energy mix of these countries and the EU as a whole has increased in cost as the mix is now dominated by natural gas, on a record-breaking price surge in recent months.

This has prompted wholesale electricity price increases throughout Europe. In Greece, day-ahead market prices for today are at 281.03 euros per MWh, a new record for the country following a rise for a fourth consecutive day.

German wholesale electricity prices have also struck a new record level today, reaching 273.89 euros per MWh, up 13.9 percent in a day. Dutch wholesale electricity prices rose 15.5 percent in a day to reach 254.01 euros per MWh. In France, the average wholesale electricity price for today is 295.82 euros per MWh. The highest price level in Europe was recorded in Serbia, reaching 310.63 euros per MWh.

Meteorologists have forecast a heavy winter. Greek officials are awaiting energy price levels for the rest of November before they decide on whether to increase current electricity subsidy levels.

 

 

 

Market players fear European energy inaccuracies could lead to further woes

Major energy market players agree European energy consumers could face many more rounds of pressure over the next few years as a result of errors and inaccuracies plaguing the EU’s energy transition plan towards renewables.

Energy market players are not doubting the EU’s decarbonization goal, seeing it as irreversible, but do believe the European Commission must rectify, as soon as possible, current mechanism faults and market distortions whose resulting deficiencies are being exploited by traders and monopolies, such as Russian gas giant Gazprom, earning excessive revenues at present.

Europe appears to have trapped itself in mechanisms that do not seem to be working, fueling rising concerns among enterprises and industrial players.

Measures must be taken right now at national and European levels. For instance, windfall profits, sparked by sharp wholesale price increases, need to be stopped through the introduction of related taxes, as has been the case in Spain, market players suggest.

Also, electricity prices need to cease reflecting the spot market’s surging prices and instead be shaped by the actual cost of the energy mix, comprised of low-cost renewables (30-35%), high-cost natural gas (30%), lignite (10%), hydropower (10%), plus imports.

In addition, green PPAs reflecting actual cost need to player a bigger role. In Germany, for example, 90 percent of electricity supply is currently made available through PPAs.

Fearing this crisis could last, industrial players in Greece are moving to secure futures contracts covering supply for the next three to four years.

 

Greece tops August wholesale electricity price list in Europe

Greece’s wholesale electricity market was rated Europe’s most expensive in August, the country’s day-ahead market averaging a level of 121.72 euros per MWh for the month, according to Energylive data.

Romania followed with an average of 112. 7 euros per MWh, while Italy was ranked third with a day-ahead market average of 112.4 euros per MWh in August. They were followed by: Bulgaria (111.55 euros per MWh); Serbia (109.65 euros per MWh); Hungary (109.02 euros per MWh); and Portugal (105.99 euros per MWh). France recorded Europe’s lowest day-ahead market average in August, 77.3 euros per MWh.

The elevated wholesale electricity market levels closing off August, following various factors that prompted a surge throughout the summer, confirm that de-escalation remains beyond reach at present.

Analysts and market officials, at European and national levels, have warned wholesale electricity price levels will be extremely high in autumn and winter.

Yesterday’s energy exchange day-ahead market prices for today average 123.43 euros per MWh, a 5.52 percent drop compared to the previous day.

August day-ahead market prices in Greece peaked at 142.00 euros per MWh, while the lowest level recorded for the month was 100.56 euros per MWh.

 

 

PPC production share dips since 2010, still among EU’s top 10 leaders

Eurostat data identifying the biggest energy producers of EU member states and their respective shares has highlighted a delay in Greece’s electricity market liberalization, specifically in the domain of electricity generation.

Greek power utility PPC maintained a 51.3 percent share of the country’s electricity production in 2019 – the year for which most recent data is available – placing the country in ninth place among 25 member states, in terms of the size of the leading producer’s market share.

Despite being ranked relatively high on this list, PPC’s share of production, from a long-range perspective, has contracted substantially over the past decade or so.

PPC has shed 33.8 percent since 2010, when its share of total electricity production stood at 85.1 percent. Independent producers began emerging in Greece’s electricity production market about a decade ago.

Similar electricity production share drops, by the leading producers, have also been recorded in other member states.

In Belgium, the share of the country’s top producer fell by 39.5 percent to 39.1 percent during the equivalent period. In France, the top producer’s share fell from 86.5 percent to 65.6 percent, while in Slovakia the dominant producer shed 28 percent of its share.

The biggest decline was registered in Luxembourg, where the leading electricity producer’s share of 85.4 percent in 2010 plummeted to 18.1 percent in 2019.

A full monopoly was maintained on Cyprus with the state-controlled utility representing 100 percent of generation in 2019.

The Cypriot utility, topping the list, was followed by the biggest producers in: Latvia (86.4%), Croatia (80%), Estonia (76.4%), France (65.6%), Czech Republic (60.5%), Slovenia (53%), and Slovakia (52.8%).

PPC bond issue, ESG-linked, attracts top international funds

Some of the world’s biggest investors are among the foreign institutional investors who participated in power utility PPC’s recent bond issue as well as a supplementary issue staged yesterday, through which the corporation raised a grand total of 775 million euros.

Participants included US fund Blackrock, managing capital worth nearly 8 trillion dollars, fellow American fund Fidelity, whose portfolio is worth 440 billion dollars, the UK’s Apollo, managing 455 billion dollars, and France’s Pictet, with an investment portfolio worth 689 billion dollars.

The turnout for PPC’s bond issues was dominated by real-money investors, or institutional investors handling enormous amounts of cash reserves for long-term investments in companies with solid prospects. Their clients are chiefly retirement funds as well as corporations looking to the future.

Information made available until now on PPC’s bond issues indicates that 70 percent of subscribers were from abroad and 30 percent domestic. Among the foreign investors, half are institutional and real-economy investors, many of these cross-Atlantic.

US and European investors participated in the issues with shares of close to 50 percent each, while investors from Australia and Asia represented about 5 percent of subscriptions.

PPC’s initial bond issue raised 650 million euros at a borrowing rate of 3.875 percent, while yesterday’s follow-up issue raised an additional 125 million euros at 3.67 percent.

Bond issues linked with ESG (Environmental, Social and Governance) terms, as was the case with PPC’s two issues, are in high demand, internationally.

Through its issues, five-year bonds maturing in 2026, PPC has committed to a 40 percent reduction of CO2 emissions, from 23.1 million tons in 2019 to 13.9 million tons by 2022. If this target is not achieved, 50 basis points will be added to the yield.

RES auctions postponed throughout Europe

Governments throughout Europe are postponing RES auctions as a result of the coronavirus pandemic’s impact on markets.

Germany, France and Ireland have already taken steps back to protect new RES projects, currently at various development stages, according to a Green Tech Media report.

Germany had planned seven RES auctions for this year. The country has so far offered 400 MW for solar energy projects and 675 MW for wind farms, while a further 2.9 GW for onshore wind farms and 1.4 GW for solar energy facilities remain pending. Strong investment interest had been expressed prior to the postponements.

In France, a RES auction for solar energy projects has been postponed by two months. In Ireland, a session that had been planned for April 2 has now been rescheduled for April 30. Portugal has also postponed a RES auction offering 700 MW for solar energy projects.

On the contrary, Dutch authorities intend to press ahead with a RES auction at the end of this month, offering 700 MW for wind farms. Swedish multinational power company Vattenfall’s Dutch subsidiary has announced it will not participate.

 

 

 

Local retail electricity prices register EU’s 4th biggest dip

Retail electricity prices in Greece registered the EU’s fourth largest reduction in the first half of 2019, compared to the equivalent period a year earlier, falling by 1.3 percent, latest Eurostat data has shown, primarily as a result of more aggressive discount policies by independent suppliers for households and enterprises.

Denmark was ranked first with a 4.3 percent price fall, followed by Portugal with a 4.1 percent drop, and Poland, where retail electricity prices slid 3.1 percent.

The average EU price rose by one cent. The Netherlands posted the biggest price increase, averaging 20.3 percent. Cyprus followed with a 16.4 percent increase, Lithuania was next on the list with an average price hike of 14.4 percent and the Czech Republic was fourth with a 12 percent price increase.

Retail electricity prices in the Greek market are among the EU-28’s lowest, the Eurostat data showed. Greece was ranked 18th in this category with an average tariff price per KWh of 0.16 euro. Germany is the most expensive with an average tariff price per KWh of 0.30 euro. The EU average is 0.21 euro and the Eurozone average 0.22 euro, according to the Eurostat data.

Despite the more aggressive pricing policies of independent suppliers in Greece, power utility PPC maintained its dominant position with a retail market share ranging between 77 and 80 percent during the first half. PPC not only avoided dropping its prices but reduced a punctuality discount offered to customers paying their electricity bills on time.

Electricity prices in Greece and other EU member states could have been lower if it were not for the considerably sized surcharges and taxes added to electricity bills, Eurostat noted. Over one-third of total electricity costs go to state coffers and electricity transmission and distribution network operators, Eurostat added.

Engie, Terna, Energean join for underground gas storage facility

Three major firms, each specializing in its own respective field, have formed a consortium to seek a contract to develop and operate a depleted natural gas field in northern’s Greece’s offshore South Kavala region as an underground gas storage facility, energypress sources have informed.

Storengy, belonging to France’s Engie group, Energean Oil & Gas, holder of a license for the South Kavala field, and technical firm Gek Terna are the three players joining forces for this contract, to be offered through a tender being prepared by the privatization fund TAIPED.

Greece remains the only country European country without an underground gas storage facility. All others maintain storage facilities covering over 20 percent of their annual natural gas consumption needs. At present, many countries in Europe are planning to develop additional such projects over the next five years.

Underground gas storage facilities play a key role in subduing carbon emissions as a result of the flexibility they offer to renewable energy sources.

Consortium member Storengy is Europe’s biggest developer and operator of underground gas storage facilities. It currently operates 21 such facilities of all types on the continent.

Offering a capacity of between 360 and 720 million cubic meters, or 10 percent of annual natural gas consumption in Greece, the South Kavala underground gas storage facility will require an investment of between 300 and 400 million euros to develop. The project has been granted PCI status by the European Commission, enabling EU funding support.

 

US reacts to Russian LNG in Boston, European shale battle rising

The delivery of Russian LNG to freezing Boston, a psychological blow for US authorities, has prompted American officials to highlight the country’s major shale gas and oil production prospects for 2018.

Pundits noted that Washington is finding it increasingly difficult to remind European countries such as the UK, Portugal and France, which have already purchased Russian LNG from the Yamal station in northern Siberia, that they cannot only use ecomomic criteria in their dealings with Russsia and, as a result, breach sanctions imposed on the country.

Walter Peeraer, president of TAP, the Trans Adriatic Pipeline project, whose development is now approaching completion, intervened by stressing the pipeline’s plans do not entail transmitting Gazprom gas, despite an interest expressed by the Russian giant to do so.

In preceding remarks, French and Dutch officials noted that incoming Russian LNG is not being used in their countries but, instead, was reloaded on tankers to be sold to other markets offering greater profit. These destinations were not specified.

According to Bloomberg, it is not certain whether the aforementioned Russian LNG shipment to Boston represents the order’s final destination. The order was shipped from the UK by French firm Engie.

Responding to this delivery, the US International Information Adminstration, which has spearheaded the wider American reaction, declared that US oil production is expected to reach an average of 10.3 million barrels per day in 2018, a 970,000 bpd increase compared to 2017. Such a performance would easily surpass the previous US record of 9.6 million bpd, set in 1970 under the Nixon administration. American shale oil production is expected to reach 11 million bpd in 2019.

The major US oil production level forecast for 2018 promises to undermine efforts by OPEC and Russia to reduce oil production by 1.8 million bpd in an effort to boost prices levels.

Last night, the price of Brent crude reached 69.24 dollars a barrel in New York, its highest level since 2014.

The International Information Adminstration believes Brent prices, which averaged 54 dollars a barrel in 2017, will reach an average of 60 dollars a barrel in 2018 and 61 dollars a barrel in 2019.

Though American shale oil and gas prospects appear rosy, the cross-Atlantic prospects in the UK are far less promising. Efforts made by petroleum firms to convince the UK government and public of the need to exploit shale gas deposits, which could offer energy supply to Great Britain for the next 25 years, continue to face major obstacles.

The Scottish government has already banned fracking as a means of extracting shale gas while the UK public’s environmental concerns are particularly acute.

Ineos, the petrochemicals group headed by Jim Ratcliffe, is preparing to file a legal case against the Scottish government for abuse of ministerial power. Further south, in central England, companies such as Cuadriilla, Third Energy and IGas Energy, are preparing to launch campaigns in 2018 with the aim of convincing the UK public that shale gas extraction is not environmentally hazardous.

All eyes on French energy system as Europe braces for colder weather

Europe’s energy sector enters a crucial period today and for the next few days as a result of the cold winter weather that has been forecast combined with maintenance and operational issues troubling France’s nuclear power facilities, which could lead to energy supply shortages.

Temperatures in Greece and other parts of Europe are forecast to drop by as much as 10 degrees Celsius this week, which will sharply increase energy demand for heating.

Weather conditions are not expected to be as extreme as they were last winter. Authorities have assured necessary measures have already been taken to a large degree.

Even so, the ongoing situation in France is worrisome. Throughout 2017, the country’s output at nuclear power stations has registered the lowest levels since the millennium. Nuclear power station capacity in France yesterday managed to climb to a level of 52 gigawatts.

As reported by Platts, the French power utility EDF has declared five units will resume production this week but, even so, was forced, once again, to reduce its output forecasts as a result of delayed returns to the grid of units undergoing maintenance work.

EDF’s nuclear power stations have generated electricity at an average level of 50 gigawatts this month, while, for the fourth quarter, output has fallen 14 gigawatts short of forecasts, a quantity equivalent to 28 LNG shipments.

Given the magnitude of France’s electricity production, as well as last year’s domino effect of energy shortages experienced by a series of European countries, stemming from problems at French nuclear power stations, all eyes are now on France.