As pitches go, it was not promising: “Oil and gas firms struggling due to price slump”. The press release bearing the headline might itself struggle to gain traction this far into the oil-price cycle. Tell me something I don’t know, says hard-bitten hack.
Biomass market participants from all over the world gathered in London for the annual Argus Media biomass conference, but there was one noticeable absentee — German Pellets, until recently one of the world’s largest wood pellet producers.
Since the start of this year, barely a week has gone by without new headlines concerning the wood pellet producer and its recent downfall. The producer filed for insolvency in February, followed by seven European subsidiaries and its US arm Louisiana Pellets.
In December 2014, with Brent at around $50/bl, Opec secretary-general Abdullah al-Badri said: “We do not want a very high price because there will be less demand and consumption. We do not want a low price because there will be less investment and supply.”
When the price was $110/bl, or $100/bl, or $90/bl everyone was happy, he added. Well, US shale oil and Canadian oil sands producers certainly were.
Saudi oil minister Ali Naimi’s message to the horde of energy executives and journalists gathered in Houston this week is being portrayed by some as a dose of cold, hard reality from the world’s largest crude producer.
The US is about to start its first new LNG export facility for over four decades. And it’s pointing its tankers to Europe, Gazprom’s largest and most important gas market.
In Paris last week, Cheniere Energy chief executive Charif Souki said the 25mn t/yr Sabine Pass project could deliver LNG to Europe at $4.50/mn Btu. This is close to the breakeven cost for Gazprom delivering to Europe, according to Societe General European gas and LNG analyst Thierry Bros. He estimates Gazprom would need prices of $4.50-5/mn Btu, including transport and taxes. This means the US slightly edges out Russia on price to supply Europe. Continue reading