A couple of updates from the latest CapProCon e-newsletter can be seen here.
ExxonMobil has outlined an aggressive growth strategy to more than double earnings and cash flow from operations by 2025 at today’s oil prices. In the upstream sector, ExxonMobil expects to significantly increase earnings through a number of growth initiatives and investments in US tight oil, deepwater and LNG projects.
Meanwhile, Engie, in its latest annual report, highlighted the renewable energy projects it has invested in. They include the acquisition of a wind energy portfolio of more than 400 MW with the takeover of La Compagnie du Vent in France. The company also launched a joint venture with Abraaj Group to develop a 1 GW-plus portfolio of wind energy projects in India.
In the mining arena, Clean TeQ completed an underwritten institutional placement which has raised AUD150 mn (USD118.1 mn). Proceeds raised will be used to fund early works and long lead items to accelerate the development of its Sunrise nickel/cobalt/scandium project, located 350 km west of Sydney.
In Europe, Skanska will invest EUR41 mn in the first phase of a new office development in Gdansk, Poland. The first-phase of the project will be 14 stories high with two levels of underground parking.
The Capital Projects and Contracts (CapProCon) e-newsletter, distributed every Monday, includes dozens more updates and developments. To learn more, click here.
Majors, national oil companies (NOC) and independents are all scrabbling to get a slice of Mexico’s burgeoning oil and gas industry, according to analyst Wood Mackenzie.
Simon Flowers, chairman and chief analyst, said Mexico is ”as hot as a habanero, the spiciest of Mexican chillies”. The country is vying alongside the top drawer of proven oil provinces for scarce investment capital, such as Brazil and Iran.
Mexico’s proven reserves of 64 bn barrels of oil equivalent (boe) in fields discovered so far, is similar in scale to global giants like Norway, Brazil and the UK.
In the northern part of the Gulf of Mexico, in the deepwater Sabina Rio Grande play, Pemex has already made a series of discoveries in the Perdido area. Each may hold up to 400 mn barrels of oil. Further south in the Salinas Sureste basin, US independent Talos last year found 500 mn barrels at Zama.
Also in the south of the country in the Tampico Basin, explorers are attracted by structures offshore, similar physically to recent onshore discoveries, which could make for giant light oil or gas finds.
“Investment in recent decades has been comparatively modest, barely scratching the surface of many plays. There may be much more oil and gas yet to be found,” said Flowers.
Mexico attracts FDI
Mexico has recognised that it needs external investment capital for its oil and gas industry to flourish. Flowers said oil exports’ contribution to Mexico’s GDP has halved from 6 percent in 2004 when production peaked at 3.8 mn bpd to just three percent today. Oil production this year will be 2.1 mn bpd and will still be in decline into the early 2020s. NOC Pemex was not in shape to turn things around on its own.
The Mexican government has taken bold steps to create a favourable regulatory and fiscal environment, in bid to draw investments. The 2013 Energy Reform was a critical step, opening up Pemex’s monopoly to private investment. One measure of success is the number, quality and range of companies now active in the country’s upstream space.
“Over 80 E&Ps, including all the majors, numerous NOCs, independents, and a growing cadre of domestic small-caps have entered the sector in successive licence rounds. The integrated players see opportunities beyond upstream, in the gas value chain and downstream.”
Wood Mackenzie suggests that domestic political stability under President Pena Nieto has also been a key factor in the progress achieved.
This article was first published in CapProCon. To subscribe, click here.
Wind turbines manufacturer Vestas announced a flurry of turbine orders multiple markets.
Vestas received a 28 MW order from Total-EREN for the Flampouro project located in Greece. It includes the supply and installation of two V117-3.45 MW turbines and six V126-3.45 MW turbines.
It also secured a 279 MW order in Sweden from Eolus Vind. 61 V136-3.45 MW turbines will be supplied to the Kråktorpet and Nylandsbergen wind projects. 13 V136-3.45 MW turbines will be delivered to the Sötterfällan and Anneberg projects.
Vestas also signed a partner agreement with W.E.B to supply its 4 MW platform for future projects in Germany, Austria, Italy, France, Canada, and the US. Meanwhile Ebert Erneuerbare Energien Projekt placed a 28 MW order with Vestas for eight V136-3.45 MW turbines for the Grohnde-Kirchohsen wind park in Lower Saxony, Germany.
Vasa Vind ordered 23 V110-2.0 MW turbines for the 49 MW Munkflohögen wind farm located outside Östersund in central Sweden.
Vestas has received a 96 MW order from Innogy Renewables UK for the Clocaenog Forest wind farmin the UK.
Aquila Capital is set to acquire the 357 MW Valhalla windpower project in Sweden. The project will consist of 85 V136 4.2 MW Vestas turbines. The project will be delivered on an EPC basis.
North American orders
Vestas has received a firm and unconditional order from an unnamed client for a 190 MW project in the USA. Vestas will supply its 4 MW platform. It also received a firm and unconditional order for 87 V136-3.45MW turbines for the 300 MW Henvey Inlet wind project in Ontario, Canada. The order was placed by Pattern Energy Group.
Avangrid Renewables placed a firm and unconditional order for 184 MW of wind turbines. The deal includes 41 V136-3.45 MW turbines for the first phase of the Montague wind project in Oregon.
South America and Asia
Vestas will supply nine V136-3.45 MW turbines to Vientos de Renaico for the 32 MW La Flor wind farm in the Renaico region of central Chile.
Argentina’s Petroquímica Comodoro Rivadavia placed an order with Vestas for the supply and installation of six V117-3.45 MW turbines. Delivery is planned for the second quarter of 2018 and installation is scheduled for the fourth quarter of 2018.
Vestas has signed a deal with Aluar Aluminio Argentino to extend the Aluar wind park. The contract to build the second phase of the project comprises supply and installation of 14 V126-3.45 MW turbines.
Compañía Eólica Vicente Guerrero has placed a 118 MW order with Vestas for the Vicente Guerrero wind park in the state of Tamaulipas.
Watsun Infra Private, a subsidiary of Continuum Wind Energy, has placed a 96 MW order with Vestas for the second phase of the 150 MW Periyapatti wind farm in the state of Tamil Nadu, India. Vestas will supply 34 V100-2.0 MW turbines as well as 14 V110-2.0 MW turbines.
Senvion will supply wpd with nine MM92 wind turbines designed for cold climates, which will be installed at the White Pines wind farm in Prince Edward County, Ontario, Canada. The wind farm will have an output of 18.45 MW.
The project will provide clean, renewable electricity to about 3,000 homes. Senvion and wpd also concluded a service and maintenance agreement (ISP) for 15 years.
Aurora LNG and its partners, Nexen Energy and Inpex Gas British Columbia (IGBC), have ended the Aurora LNG feasibility study and will cease all investigation activity, effective immediately.
Through this feasibility study, Aurora LNG has determined that the current macroeconomic environment does not currently support the development of a large LNG business at the proposed Digby Island site.
Despite the fact that it was a central point in the Trump administration’s election campaign, a USD1 tn investment into US infrastructure has yet to materialise. It remains unclear whether any robust plan will ever come to fruition.
President Donald Trump may have recently signed an executive order aimed at removing regulations governing new infrastructure projects, calling for a less-stringent permit process and fewer environmental regulations, but the order gave no guidance on the administration’s plan for new investment.
Indeed critics have suggested that 80 percent of the proposed investment would have to come from funding outside the federal government. This is likely to be in the form of public-private partnerships and tax breaks, used to encourage new projects.
All things considered, it looks like it could be a long time before any sort of widespread initiative to improve crumbling highways, ports and airports actually takes place in the USA. This is to the disappointment of companies involved in delivering the modules and equipment for such improvements, as well as the transport and logistics companies, which are clamouring for those projects.
Some might suggest that the president’s much-vaunted infrastructure plans, like those covering health care and tax reform, have hit the buffers.
TechnipFMC has been awarded an engineering, procurement, construction and installation (EPCI) contract by Husky Energy for the West White Rose Project in eastern Canada. This news was originally carried in CapProCon.
The contract covers the supply and installation of subsea equipment including tie-in manifolds, flexible flowlines, and control umbilicals, which will connect the recently announced West White Rose Platform to the existing SeaRose floating production, storage and offloading (FPSO) vessel.
The Husky West White Rose Project will use a fixed platform tied back to the SeaRose FPSO vessel. The main White Rose field is located approximately 350 km (217 miles) east of St. John’s, Newfoundland and Labrador, on the eastern edge of the Jeanne d’Arc Basin in water depths of about 120 m (393 ft).
Sempra Energy has reached an agreement to purchase Energy Future Holding (EFH) and its 80 percent stake in Texas’ largest electricity transmission and distribution company Oncor. The value of the deal is approximately USD18.8 bn.
The US Energy Department has released three wind power market reports highlighting continued growth nationwide. The USA’s wind industry added more than 8.2 GW of capacity in 2016, representing 27 percent of all energy capacity additions in 2016.
In 2016, wind supplied about 6 percent of the USA’s electricity needs; 14 states now get more than 10 percent of their electricity from wind. The reports cover the following market sectors: land-based utility scale, offshore, and distributed wind.
Recent and projected near-term growth is supported by the industry’s primary federal incentive – the production tax credit (PTC) – as well as myriad state-level policies.
Wind power additions have also been driven by improvements in the cost and performance of wind power technologies, yielding low power sales prices for utility, corporate, and other purchasers.
“The wind industry continues to install significant amounts of new capacity,” said acting assistant secretary for energy efficiency and renewable energy, Daniel Simmons. “A combination of federal subsidies, state mandates, and technological advancements continue to help drive new wind capacity additions.”
The 2016 Wind Technologies Market Report, written by the Energy Department’s Lawrence Berkeley National Laboratory, highlighted that more than 82 GW of utility-scale projects have been installed in the USA. In total, 40 states and Puerto Rico operated utility-scale wind projects, with Texas leading the nation in capacity with over 20 GW of installed capacity.
The report also finds that wind energy continues to be sold at attractive prices through power purchase agreements (PPA), making this renewable energy source cost-competitive with traditional power sources such as natural gas in many parts of the USA, especially when wind energy is sold at a fixed price over 20 years.
The 2016 Offshore Wind Technologies Market Report says that the offshore wind project development pipeline in the USA includes over 20 projects, totaling 24.1 GW of potential installed capacity. Most of the near-term activity is concentrated in the Atlantic off the northeast coast, but projects have been proposed in the southeast Atlantic, the Pacific, the Gulf of Mexico, and the Great Lakes.
News of the declining costs for offshore wind projects in Europe spurred confidence in the domestic US offshore wind market over the past year. Several states including Massachusetts, New York, and Maryland have enacted new policies or bolstered their existing policies to support the development of over 4 GW of offshore wind.
Key findings from the 2016 Distributed Wind Market Report says that approximately 992 MW of distributed wind power capacity is installed in the USA. Compared with traditional, centralised power plants, which send power over transmission lines to distant end-users, distributed wind energy installations supply power directly to homes, farms, businesses, and communities. This capacity comes from roughly 77,000 turbines installed across all 50 states, the District of Columbia, Guam, Puerto Rico, and the US Virgin Islands. Turbines used in these applications can range from a few hundred watts to several megawatts.