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By David Gaffen, Editor, Energy Markets

Hello Power Up readers! Much is happening worldwide, especially for countries like Qatar and Guyana that are continuing to build out their respective energy industries, while on the other end, the big energy merchants out there are holding onto a big pile of cash as they look for other investments. Here’s what’s going on… 

Today’s top headlines:

• COLUMN: Japan’s bloated gas stocks add to worldwide surplus
• Saudi Aramco’s Jafurah field has another bevy of proven gas reserves
• Siemens Energy CEO: bought troubled wind unit based on ‘sound’ intel

QatarEnergy CEO and Qatar’s Minister of Energy Saad al-Kaabi, looking contemplative during an interview with Reuters in Doha in 2022. REUTERS/Imad Creidi

Qatar plans on boosting natural gas production despite a recent steep drop in global prices as part of a longer-term bet, as Reuters reports here. QatarEnergy chief Saad al-Kaabi said on Sunday a new expansion of liquefied natural gas (LNG) production will increase overall capacity to 142 million tons per year. 

The tiny nation is one of the world’s biggest exporters of super-cooled LNG, which various countries in Europe and Asia have been using more frequently as they try to wean themselves off coal and in Europe’s case, make up for lost supply following Russia’s invasion of Ukraine. Asian LNG prices have recently collapsed to a nearly three-year low due to higher-than-usual temperatures during the winter.  

The country competes with the United States and Australia among other big exporters. 

This is a miniature of Exxon Mobil’s Liza Unity oil platform at an energy conference in Georgetown, Guyana. Not for nothing, but shouldn’t this be made of Lego? REUTERS/Sabrina Valle

Guyana, which has only recently become a major oil producer, is open to changing oil contract terms to secure investment in the country, though it will not change royalties or other fiscal terms, Vice President Bharrat Jagdeo said, as Reuters reports here.  

The South American nation now produces 650,000 barrels per day (bpd) up from zero five years ago – and it is moving ahead with a new oil production sharing agreement model to keep boosting overall revenues. These terms are a bit more favorable than a previous deal with Exxon Mobil; the U.S. oil giant has to pay the government a 2% royalty but the new agreements bumps that for producers jumping in to 10%. The country also wants to try to develop natural gas resources; it is already working with S&P Global/IHS.  

“Everybody needs money. That’s why they call it ‘money.'” REUTERS/Dado Ruvic/Illustration

The world’s top global energy trading merchants are sitting on massive piles of cash, as Reuters reports here, as they’ve been raking in profits on big trading worldwide, and they’re finding other investments for that pile of money wanting.  

The biggest traders – Vitol, Trafigura, Mercuria and Gunvor – are sitting on billions of dollars, even after paying out record dividends, according to sources familiar. The trading houses are having a hard time growing or investing as they have found returns unattractive; Vitol has an estimated $30 billion in equity. 

That’s the gas leak from Nord Stream 2 over Bornholm island, Denmark. Danish Defence Command/Forsvaret Ritzau Scanpix/via REUTERS

Denmark has dropped its investigation into the 2022 explosions on the Nord Stream pipelines that carried Russian gas to Germany, as Reuters reports here, making it the second nation to do so after Sweden closed its own inquiry. The two pipelines were the key arteries carrying gas under the Baltic Sea, but were ruptured in the Swedish and Danish economic zones in September 2022, releasing vast amounts of methane into the air.  

The blasts came seven months after Russia invaded its neighbor Ukraine, setting off a range of Western economic and financial sanctions against Moscow. Sweden last month dropped its own probe, but the German government is still looking into the incidents, according to a spokesman in Berlin. Danish police had previously said the pipelines were hit by powerful explosions and Swedish investigators confirmed that traces of explosives found on site showed evidence of sabotage. 

“We see that Europe is going to need gas for a very, very long time. But the growth in Asia is definitely going to be bigger than the growth in Europe, basically driven by population growth.” 

QatarEnergy chief Saad al-Kaabi on the nation’s expansion plans 

The United States has been making hay on diesel exports to Europe, but slumping U.S. refining activity and shipping delays due to attacks on Red Sea routes are reducing those exports, as Reuters reports here. Europe has a number of big fuel needs, with diesel one of them, as it moves away from its reliance on Russian energy.  

Europe’s other suppliers for diesel from the Middle East and Asia have been forced to traverse the Cape of Good Hope due to Houthi attacks on vessels in the Red Sea, adding lengthy delays and making that trade less profitable too. Diesel prices in Northwest Europe have been rising steadily throughout February, averaging over $118 a barrel, compared with $109 last February. 

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