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By David Gaffen, Editor, Energy Markets

Hello Power Up readers! The markets continue to meander about, with a lot of signals that paint an unclear path on the direction of the world economy. China’s refining activity is picking up, and there is a lot of LNG-related investment, which we’ll start with first. 

Today’s top headlines:

• Poland urges Germany to quicken Rosneft exit from Schwedt refinery
• U.S. proposes to formalize deep fee reductions for wind, solar on federal land
• Small funds eyeing big gains pile on Venezuela debt

“Yes, bring us all of the LNG. All of it.” (That’s Patrick Pouyanne, CEO of TotalEnergies, and no, that’s not likely what he was saying.)  REUTERS/Pascal Rossignol

TotalEnergies of France is buying a 17.5% stake in U.S. liquefied natural gas developer NextDecade for $219 million, America Hernandez reports here, which will help facilitate the LNG company’s long-awaited decision to build its Rio Grande LNG project to export the super-cooled fuel. Last year, LNG cargoes from the United States helped ease the pain for Europe after it lost its biggest supplier, Russia, following that country’s invasion of Ukraine.  

More projects are in the works, with substantial new supply expected beginning in 2024 – which will bring more LNG to Europe and Asia from the United States. In addition, Total’s involvement makes this the largest supply contract that NextDecade has signed. TotalEnergies is the world’s third-largest LNG player, with a roughly 12% market share and global portfolio of about 50 million tons of LNG per year.   

China’s economic figures remain mixed, as this graphic shows. However, its refining output has been at near-record levels, which says something about the countervailing signals across many economies right now. 

Refiners in China are processing oil at rates hardly ever seen, in a sign of ongoing recovery from that nation’s extensive COVID lockdowns. China is the second-biggest consumer of oil worldwide, and in May, the nation processed about 14.6 million barrels per day, falling just short of April’s level of 14.9 million bpd, as Reuters reports here.  

The only nation that processes that much oil through refiners daily is the United States, which swings between 19 million and 20 million bpd regularly. Refiners in China reopened after being closed in April while the state-owned Changqing refinery also opened. In addition, big independent refineries in the Shandong province – the country’s oil hub – also boosted output due to more imports from Russia, Iran and Venezuela. 

Those are delegates at the voluntary auction of carbon credits in Nairobi, Kenya, earlier this week. REUTERS/Thomas Mukoya

Saudi Arabian companies bought about 2.2 million tonnes of carbon credits in a big sale this week in Nairobi, Kenya’s capital – said to be one of the largest-ever sales of such credits, as Duncan Miriri reports here. There have been many criticisms of carbon credits from those who say that the offset market isn’t as transparent as it should be, and some of the schemes to lower emissions are overstated in their quality. 

That said, 16 Saudi firms paid about $6.27 per metric tonne of carbon credits, which were certified and come from projects that avoid emissions or try to remove carbon from the atmosphere. The project was held in Kenya to highlight the need for more climate investment, organizers from the Regional Voluntary Carbon Market Company said. Kenya has banked heavily on the idea of carbon credits, protecting the environment as it has been hit hard by climate change – including droughts that have killed crops and livestock.

It’s Eni’s logo in front of its headquarters in San Donato Milanese, near Milan. REUTERS/Stefano Rellandini/File Photo

Italy’s Eni, one of the world’s largest oil-and-gas companies, is talking with investors about possibly selling off a minority stake in its renewables and retail business Plenitude, as Francesca Landini and Ron Bousso report here. The group could be valued at about $6.5 billion in the transaction.  

According to the sources with knowledge of the matter, the idea would be to sell 5% to 15% of the company – and that would be a way of preparing it for an eventual public listing. Eni wanted to sell this business before, as it had an IPO all lined up in the middle of 2022, but had to shelve it due to weak market conditions. The company generates power from renewable energy and sells electricity and gas to homes and businesses.  

“I am not sure I want to comment on how often we find holes in our system. But what I can say is that we have found holes in our system.”  

Henriette Borgund, who works at Norway’s Hydro as an ‘ethical hacker’ to discover vulnerabilities that can be exploited by people trying to hack into renewable energy companies and grids. 

The European Union countries are in another back-and-forth, with a notable split over whether the EU’s renewable energy targets should allow for nuclear power to be included in the production of ammonia or not. France has led a group of nations that wants to see more favorable treatment for nuclear, which isn’t surprising given how much that nation relies on that energy source. But other countries basically seem to suggest that it’s going to be hard to re-do language on a law that had already been worked out – and took months to do so. 

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