Oct 21, 2022
The Friday Express
Energy week highlights
Dozens of LNG ships await docking around Spain: Over “slightly more than 2.5 million tonnes tied up in floating storage.”
The need to make up for natural gas after Russia cut supplies led the EU to bid for LNG. However, the EU lacks sufficient LNG terminal capacity, with Spain concentrating the majority.
The sloats on the terminals are in high demand, and LNG ships must wait for their turn. In addition, most EU countries managed to fill their natural gas reservoirs. While speeding to get LNG to fill up for the winter, prices skyrocket.
With unexpected warmer weather and the terminals complete, some ships wait on purpose. They are betting on the arrival of cold weather to increase natural gas prices again. If the price increase is not enough, there is always the chance to return to Asia to sell.
The Energy Charter Treaty saga continues: yet another EU county quits.
The ECT renegotiation, led by the European Commission in the EU, faces resistance from several European Countries. Two weeks ago, several countries threatened to denounce the ECT. A week ago, Spain left the ETC. This week, the Netherlands quit as well. France also threatened to go next.
The ETC allows energy companies to sue governments over policy changes in arbitral courts. Since 2015, fossil fuel companies won over $52 Billion in lawsuits. Governments who want to speed up policies for energy transition find themselves at the mercy of expensive litigation via the ETC.
The EU marathon over a joint policy to deal with the energy crisis continues.
The countries agreed on joint EU natural gas purchases for next winter. But an agreement to disagree persists over a natural gas price cap. Germany is against a price cap. Some advocate adopting the Iberian model, but a dynamic price model seems to gather the most support.
