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Energy News Beat

The North American Electric Reliability Corporation (NERC) is responsible for reducing risks to the reliability of the electric power grid in the U.S., Canada, and a tiny part of Mexico. NERC is overseen by the Federal Energy Regulatory Commission. Each year, NERC assesses developments and risks that could impact electricity supplies for the summer and winter peak demand periods. NERC also investigates and analyzes the causes of power system disturbances, such as problems during extreme weather.

A few days ago, NERC released its Winter Reliability Assessment (WRA) for the upcoming winter period which is defined as December 2023–February 2024. The WRA designated almost half the U.S. as being at an “elevated risk” of having insufficient operating reserves during extreme weather. Operating reserves are electricity supplies that are not being used but can quickly come online in the case of an unplanned event such as an equipment malfunction or fuel supply disruption. The first finding in last year’s WRA (2022-2023) and this year’s (2023-2024) are exactly the same: “A large portion of the North American BPS is at risk of insufficient electricity supplies during peak winter conditions.” However, the area at risk for electricity shortages is larger this year than last year.

The new WRA includes a number of findings. Two of the findings are summarized briefly below with excerpts from the reliability assessment. (We encourage readers of this blog to read the WRA to better understand the assessment and its nuances.) Because the assessment highlights significant risks associated with natural gas, we include the dependence of certain regions on natural gas.

MISO

“… an extreme cold-weather event that extends into MISO’s southern areas can cause high generator outages from inadequate weatherization or insufficient natural gas fuel supplies. Load shedding is unlikely but may be needed under wide-area weather events.” (Load shedding means cutting off power to parts of the grid until electricity demand and supply are balanced. It also protects the grid from damage that could cause long-term interruption of power supplies.)

According to NERC, natural gas contributes 46% of MISO’s winter resource mix.

New England

“Potential constraints on the fuel delivery systems and the limited inventory of liquid fuels may exacerbate the risks for fuel-based generator outages … that result in energy emergencies during extreme weather … A standing concern is whether there will be sufficient energy available to satisfy electricity demand during an extended cold period given the existing resource mix, fuel delivery infrastructure, and expected fuel arrangements without considerable effort to replenish stored fuels (i.e., fuel oil and liquified natural gas).”

Natural gas contributes 54% (17 GW) of New England’s winter electricity resource mix.

PJM and parts of the Southeast

“A severe cold weather event … can lead to energy emergencies … Forecasted peak demand has risen while resources have changed little in these areas since Winter Storm Elliott … [The generators in these regions] are vulnerable to derates and outages in extreme conditions … A severe cold weather event that extends to the South can lead to energy emergencies as operators face sharp increases in generator forced outages and electricity demand.”

Natural gas contributes 47% (85 GW) of PJM’s winter resource mix and 44-51% (23-32 GW) for parts of the Southeast.

ERCOT

“ … the risk of a significant number of generator forced outages in extreme and prolonged cold temperatures continues to threaten reliability where generators and fuel supply infrastructure are not designed or retrofitted for such conditions. The risk of reserve shortage is greater than last winter due primarily to robust load growth that is not being met by corresponding growth in dispatchable resources … Electricity demand in Texas rises sharply as extreme cold temperatures add to winter operating challenges and energy shortfall risks …For the upcoming winter season, Texas RE-ERCOT will face reserve shortage risks during high net load hours … Load shedding is unlikely but may be needed under wide-area cold weather events.”

Natural gas contributes 62% (54 GW) of ERCOT’s winter resource mix.

Southwest Power Pool

“While the reserve margin is adequate for normal forecasted peak demand and expected generator outages, higher demand levels and outages that have occurred during extreme cold weather result in shortfalls that can trigger energy emergencies. The vast wind resources in the area can alleviate firm capacity shortages under the right conditions; however, energy risks emerge during periods of low wind or forecast uncertainty and high electricity demand … SPP does not anticipate any emerging reliability issues impacting the area for the 2023–2024 winter season but realizes that interruptions to fuel supply could create unique operation challenges.”

Natural gas contributes 41% (27 GW) to SPP’s winter resource mix.

Natural gas

“Recent extreme cold weather events have shown that energy delivery disruptions can have devastating consequences for electric and natural gas consumers … Winter Storm Elliott demonstrated the wide-area consequences for BPS reliability that can result from reduced natural gas production during periods of extreme cold weather …” NERC and FERC jointly recommended “establishing reliability rules for natural gas infrastructure …[and] control room to control room operational communications protocols that can be invoked when extreme weather approaches ….”

Coal

“Coal is an important fuel for electricity generation in winter. Generator owners report fewer coal supply issues compared to last winter. Normal rail transportation services are available and coal stocks are at a high level compared to historical averages. Some coal-fired generation that relies on barge shipments in inland waterways could be impacted by drought restrictions that limit barge loading.”

Final observation by America’s Power

Despite NERC’s continued warnings about the potential for electricity shortages, coal-fired generation continues to retire at an alarming pace. Based on announcements by their owners, more than 11,000 megawatts (MW) of coal will have closed during the time between these two winter assessments. In addition, almost 5,300 MW of coal are expected to shut down next year. Therefore, it is essential to take steps to ensure that coal retirements do not outpace the addition of resources that can provide the same attributes as coal. These include a high accredited capacity value (a measure of how dependable a resource is when electricity demand peaks), fuel assurance, and many other attributes.

Source: Americaspower.org

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Energy poverty is a real thing. We have to look at solutions that take care of the environment while providing low-cost energy for humanity. I just had the opportunity to visit with leaders from Africa and the last mile.

Please sit back, and enjoy our discussion with Tucker. You can connect with Tucker on his LinkedIn HERE: https://www.linkedin.com/in/tucker-perkins/

The Propane Council is HERE: https://propane.com/

00:00 – Intro

01:07 – How did you get your podcast started?

01:50 – Overview of Propane Council involvement, current activities, and priorities

04:46 – Importance of propane in the energy transformation, focusing on environmental benefits and global observations

09:58 – Urgency and challenges of global energy transition, emphasizing human impact and opportunities in Africa

16:26 – Critical role of propane in providing affordable and reliable energy, stressing the importance of education and changing perceptions

21:03 – Evolving landscape of renewable fuels, confidence in renewable propane and natural gas, and their contributions to sustainability

25:52 – Challenges of transitioning to electric trucks, advocating for propane in medium and heavy-duty vehicles, addressing issues of mineral resources and holistic energy security

31:43 – Discussion on challenges and misconceptions surrounding hydrogen, advocating for practical, immediate actions with propane

36:03 – Contact information for the speaker and podcast

38:35 – Outro

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Energy researcher Irina Mironova writes that a Turkish gas hub where Russian natural gas can be traded is becoming a tangible reality, with the project’s launch planned for 2024. However, the primary purpose will not be to maintaining Russia’s gas exports to the West, but rather advancing Turkey’s longstanding aspirations for EU membership.

In October 2022, two weeks after the Nord Stream explosions, which deprived Russia of one of its key export routes to Europe, President Putin suggested that Russia would establish the “largest gas hub” for deliveries to Europe in Turkey. The news was immediately picked up by both Russian and international media.
In fact, Turkey had been trying to promote the hub for the past 20 years, but until October 2022 Russia was not seen as a key player in this initiative. On the contrary, the feasibility of the project was justified by Turkey’s geographical proximity to the EU and interest in integrating with it.
The EU, in turn, has viewed “hubs” as an efficient way to reform EU gas markets for several decades now. In 2014, the EFET (European Federation of Energy Traders) even identified the Turkish market as promising, noting that though Turkey, unlike the British NBP and the Dutch TTF, did not have a developed liquid hub, its market was more advanced than those of Hungary, Poland and Bulgaria.
Then, why is Russia showing such keen interest in the development of the Turkish gas market currently? And will it be able to play a pivotal role in that process?
What is Russia’s interest?
Ever since the “gas for pipes” deal that brought Soviet gas to West Germany in the early 1970s, practically all Russian natural gas export initiatives were tied to Europe. Only a few years ago, the eastern route started to evolve with the Power of Siberia launch in 2019.
Huge upstream investment has been made on the Yamal Peninsula over the past couple of decades, the idea being that Yamal gas will gradually replace Nadym-Pur-Taz production, which is in a declining phase. Currently, there is no physical capacity to move that gas anywhere but westward.
Turkey is a stop on the way for Russian supplies headed to Europe that bypass the territory of Ukraine. The whole strategy of bypassing transit states was introduced in the mid-2000s and included Nord Stream in the Baltic Sea and South Stream in the Black Sea. Though neither project evolved as planned, Turkey remains a critical point for the southern vector of Russia’s European gas policy.
For Russia, a natural gas trading hub in Turkey would mean an opportunity to still have some volumes of gas headed westward.
Hub-based trading typically involves the purchase of a specified volume of gas without identifying its exact origin via electronic trading platforms. This “anonymized” gas, sourced from various suppliers, is delivered from the hub’s exit zone, which can be advantageous for maintaining supply volumes to a certain degree.
Is Turkey ready for this?
In 2022, following the major geopolitical crisis and explosions on Nord Stream, which led to a drastic 50% decline in Russia’s pipeline exports to Europe, Turkey became the leading pipeline gas importer from Russia, despite a decline in 2022 volumes versus 2021.

“Turkey has replaced Germany as the entry point for Russian gas to and key partner in the European gas market.”

Turk Stream, a natural gas pipeline running from Russia to Turkey.

The total capacity of Russian pipelines to Turkey amounts to nearly 50 bcm – and it remains the only real capacity to Europe still in service apart from that through Ukraine.
Over the past 30 years, the role of Turkey has evolved from a relatively small consumer at the far end of the European pipeline network into a critical element of Russia’s remaining presence in the European market. In 1990, Turkey’s natural gas consumption was just over 3 billion cubic meters (bcm); in 2021, it set a record at 57 bcm.
The USSR started to supply natural gas to Turkey in 1987 alongside gas exports to a large number of European countries. The gas traveled through the Trans-Balkan pipeline via Ukraine, Moldova, Romania and Bulgaria, and further from the Turkey-Bulgaria border by a trunk pipeline to Ankara. Today, there are two submarine pipelines that connect Russia and Turkey: Blue Stream (launched in 2003, it was a big step in Gazprom’s strategy to ensure presence in the Turkish market) and Turk Stream (launched in 2020).
Whereas for Russia the gas hub in Turkey represents an opportunity to gain indirect access to the European market, for Turkey, as a candidate for EU membership, having a gas hub is an advantage. After the implementation of the Third Energy Package, hubs were introduced across the EU to reduce the risks of pricing not tied to the supply/demand balance in the natural gas market.
However, to establish a gas hub in a broad sense, two factors are essential: market maturity in terms of physical characteristics (infrastructure, consumption volumes, etc.) and regulatory approaches for trading.
Although the gas transportation infrastructure in Turkey is quite well developed and the country is active in purchasing gas in the spot market (in 2022, almost 35% of gas was imported under spot deals), Turkey still needs to maximize the ratio of volumes traded on the exchange to actual physical deliveries.
Who is the boss?
Seeing an additional venue for trading Russian gas, Russia has shown interest in this emerging “hub” and could expedite its growth by enhancing liquidity – by upping the physical volumes of gas traded.

“However, Russia’s direct ability to foster trading on the exchange seems limited. Moreover, disagreements on the choice of trading platforms for these transactions complicate Russia’s position.”

Furthermore, Turkey’s energy blueprint is centered around reducing its reliance on imported energy and diversifying its energy portfolio. The country is investing in domestic energy production, particularly in renewables and nuclear power. Notably, in 2022, gas imports saw a decline versus the previous year.
In conclusion, portraying Russia as the main driver behind this venture would be a misrepresentation. For decades, Turkey has been steadily honing its gas trading mechanisms
For Turkey, the establishment of a gas market mirroring EU practices is not just about commerce – it’s a step closer to aligning with the major EU market and amplifying its trading power in both the Black Sea and Mediterranean Sea regions. Though Russia can bolster Turkey’s goals, primarily as a “liquidity provider” to Istanbul’s EXIST exchange, its involvement will ultimately be circumscribed by the priorities of the trading platform and, more broadly, Turkey’s market interests.

Source: Russiapost.info

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BARNSTABLE — The scene at Barnstable High School on a recent Monday night felt like a homecoming rally — all anxious energy, cheers, and hugs. A crush of bodies flooded the hallway as revelers greeted friends and handed out fliers to people pouring into the auditorium.

Except these weren’t high schoolers filling the corridor. This was a public meeting for Barnstable residents to discuss a developer’s plans to lay transmission cables from offshore wind projects under their beaches. For the most part, these residents were opposed, and they were demanding to be heard.

Chuck Tuttle, one of four locals who prompted the event by getting more than 500 residents to petition the Town Council, surveyed the turnout and pumped his fist, thrilled at what he saw. A gray-haired woman wearing a bright-blue jacket that matched her eyes gently laid her hand on Tuttle’s arm. “Do you think we have a shot at stopping this?” she asked him as the crowd churned past.

“I do,” he said, smiling and watching the continued flow of arrivals.

Far from the regulatory offices where decisions are made and the executive boardrooms where plans are laid, advocates and clean-energy experts say the growing wave of opposition in Barnstable and other communities on the front lines of the offshore wind revolution represent a potential threat to the clean-energy and climate goals that rely on the rapid growth of an industry that’s new to the United States.

The offshore wind industry has long been considered the cornerstone of the region’s plans to address climate change by transitioning off fossil fuels. But growing public opposition, combined with economic challenges facing the industry, are dampening the prospects for what was not long ago considered a promising clean-energy solution.

In Barnstable, the main issue isn’t the turbines themselves. It’s that two major offshore wind projects being developed by the company, Avangrid, called Commonwealth Wind and Park City Wind, are planning to bring power ashore via local beaches. These high-powered cables would be buried roughly 50 feet below Barnstable’s shoreline — under Dowses Beach and Craigville Beach — before winding through cement encasements under residential neighborhoods to connect to the regional grid.

Some fear the cables could cause health risks from electromagnetic fields, cause fires or ecological disasters, and result in major disturbances to the area as roads are ripped up during construction of the new projects.

“What about health? What about our future and our families?” Centerville resident Shelly Sterling asked at the Barnstable open meeting. Those questions were echoed by others in the crowd of several hundred, along with worries that the plans to run high-voltage cables through residential areas in Barnstable are turning residents there into guinea pigs. Offshore wind projects elsewhere in the world, they say, bring the power to shore at industrial or commercial locations, not residential ones.

But Avangrid has said bringing power to an industrial port in Somerset wasn’t an option; other offshore wind developers have the rights to the capacity there. Moreover, that location would require longer transmission lines, meaning greater cost to ratepayers, and the cables would have to traverse ecologically sensitive areas to get to Somerset.

Clean-energy opponents have openly sought to capitalize on worries like these to block the advancement of offshore wind. David Stevenson, a former Trump adviser and a director at a libertarian think tank called the Caesar Rodney Institute, has said onshore landings are “the achilles heel of these projects.” The institute is part of the State Policy Network, a group of far-right think tanks and nonprofits that fight climate-related legislation. Stevenson has worked to delay or derail offshore wind projects up and down the East Coast, including through his support of an unsuccessful lawsuit, now under appeal, to stop Avangrid’s Vineyard Wind project, the nation’s first industrial-scale wind farm, which is being installed off Massachusetts’ coast.

Meanwhile, economic factors like supply-chain disruptions and higher interest rates, are also helping boost opponents of offshore wind.

For the wind farm industry in Mass., it’s back to square two

In New Jersey late last month the world’s largest offshore wind company, Ørsted, abandoned plans to build two offshore wind projects, citing economic factors. Those cancellations came amid a torrent of opposition, largely focused on perceived risks that offshore wind poses to whales. Although leading experts on whales have said that offshore wind plans do not appear to threaten the whales, the message has stuck: Public support for offshore wind in New Jersey fell from 80 percent in 2019 to 50 percent in 2023, according a recent poll by Stockton University.

“It’s been kind of shocking for me how asleep at the switch the developers and the advocates have been in anticipating, understanding, and responding to the opposition movement that’s sprung up against offshore wind,” said J. Timmons Roberts, an environmental studies professor and director of the Climate and Development Lab at Brown University.

The situation in Barnstable also raises thorny questions that are likely to crop up more and more as the nation transitions to clean energy: What rights does a community have to say no to a clean-energy project? And how should that right be balanced against the greater needs of the state, region, and country to transition off fossil fuels?

Since earlier this year, both Commonwealth Wind and Park City Wind, which would land their cables in Barnstable, have been on hold due to economic factors. But the high-voltage cables of the Vineyard Wind project have already been connected underneath Covell’s Beach in Barnstable, though they are not yet delivering power.

At the beach, there’s no real trace of the Vineyard Wind cables, save for an additional manhole in the beach’s parking lot. On a recent evening, as the sun dipped low and clouds on the horizon turned peachy orange, tourists walking the beach said they had no idea that high-powered cables were running below them.

In Barnstable, representatives from the developer Avangrid have been trying to combat residents’ fears about its wind project. The company has been making monthly visits and bringing in health experts to answer residents’ questions.

After the Barnstable High School event, Ken Kimmell, Avangrid’s vice president for offshore wind development, said Barnstable would not be a guinea pig for running high voltage lines through a residential neighborhood. “There are underground power lines all over the country, including throughout metropolitan Boston, that carry the same voltages that we’re talking about from these offshore wind facilities,” he said.

Nor would this be the first beach landing for underground cables, despite what many locals on Cape Cod argued. In France, two offshore wind projects — the Saint-Nazaire Offshore Wind Project and the Saint-Brieuc Offshore Wind Farm — land cables at beaches in residential areas similar to Barnstable.

On the website for Commonwealth Wind, Avangrid writes that the magnetic field at ground level from the buried cables is “a small fraction of what occurs from overhead power lines, and far smaller than the earth’s natural magnetic field.”

Ultimately, those health concerns — as well as other worries raised by the community — will be reviewed by the state’s Energy Facilities Siting Board. And that’s another thing that angers many in Barnstable. The decision about where the cables will land was made by the developers with approval from the state, not the town.

In 2022, Barnstable did, however, sign an agreement for Avangrid to pay a $16 million host community fee related to the Park City Wind project. The company also agreed to limit construction at and near the beach to non-summer months and pledged to take extra steps to protect the ground water.

But with the project now on hold, that agreement is too. Now Barnstable has to decide whether it will move forward with those agreements or try to petition the state to have Avangrid find a new place to land its cables.

In October, the Barnstable Town Council voted to postpone signing off on easements related to the Park City Wind project until there is more clarity on the project’s status. The council also decided to stop negotiating for another agreement related to the Commonwealth Wind project.

Some residents say these agreements are worth entering into; after all, the town has no clear legal path to stopping the project. Its best bet, they say, is to take advantage of what Avangrid is offering. And while just a handful of supporters of the wind project landings spoke out at the open meeting, offshore wind and climate advocates on the Cape say there’s a larger, silent majority that supports the projects.

But then there’s this.

This year, due to a quirk of Barnstable’s code of governance, every single town councilor was up for re-election. Paul Cusack, a councilor who has been a vocal supporter for the wind projects due to the benefits the community could reap through host agreements, was unseated.

His opponent, John Crow, whose election signs dotted lawns alongside signs opposing the cable landings, beat him nearly two to one.

Source: Msn.com

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Everything that needs electricity is made from petrochemicals manufactured from crude oil.

Most of the products that did not exist before the 1800’s are made from petrochemicals manufactured from crude oil. To date, we have yet to have a backup to crude oil to support the materialistic needs of today’s society.

Wind turbines and solar panels can generate occasional electricity. Nuclear, coal, hydro, and natural gas can generate continuous uninterruptable electricity.

The world continues to be focused on “electricity” to save the world from crude oil.

Electricity from wind and solar, and stored electricity in batteries, but electricity cannot MAKE anything.

Electricity can charge the iPhone but cannot make the iPhone. Electricity can make the defibrillator work but cannot make the defibrillator.

The basic reality is that everything that needs electricity is made from petrochemicals manufactured from crude oil. Without crude oil, there would be nothing that needs electricity!

All the parts and components of wind turbines, solar panels, EV vehicles, iPads, etc., are all made with petrochemicals manufactured from crude oil.

Getting rid of crude oil will rid the world of wind turbines, solar panels, and EV’s etc., and get us back to the zero-emission society of the 1800’s.

Occasional electricity may work for the coffee pot, toaster, refrigerator, washer and dryer, and other toy objects, including short range EV’s, but hospitals, communications, transportation, internet, etc. need continuous uninterruptable electricity. Occasional electricity generation from wind and solar will not be able to charge batteries.

Source: Heartland.org

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HOUSTON, Nov 13 (Reuters) – Exxon Mobil (XOM.N) said on Monday it plans to start producing lithium from subsurface wells by 2027 to provide supplies of the key metal used in electric-car batteries and advanced electronics.

Oil majors are investing in the electrification sector as governments in the United States and Europe set programs to promote wider use of electric vehicles and reduce fossil-fuel consumption.

Exxon said it will start production from briny waters pumped out of the ground in an area in the state of Arkansas known to hold significant lithium deposits to help develop a domestic source of the metal.

“In the long term, lithium really is a global opportunity,” said Dan Ammann, president of Exxon’s Low Carbon business unit. “We are starting here because there is an urgent need to ramp up domestic production of these critical materials.”

Exxon plans to supply lithium for well over 1 million EVs per year and become a leading supplier of the metal by 2030. Analysts at financial firm TD Cowen estimate its goal would require some $2 billion in capital expenditures to provide 50,000 tonnes, a volume that could generate $800 million in potential cash.

Ammann did not disclose how much Exxon intends to invest in the lithium business, or when it might become profitable.

The largest U.S. oil company said it would use conventional oil and gas drilling methods to access lithium-rich saltwater from reservoirs about 10,000 feet underground and then use direct lithium extraction (DLE) technology to separate lithium from the saltwater.

The company’s majority-owned Canadian affiliate, Imperial Oil (IMO.TO), also has invested in a lithium-extraction pilot project in Alberta, Canada.

Exxon plans to begin production with partner Tetra Technologies (TTI.N), Reuters exclusively reported on Saturday. It will produce the metal onsite and sell it under the brand name Mobil Lithium, the company said on Monday.

Exxon had acquired the rights to 120,000 gross acres of the Smackover Formation in Arkansas, a potential hub of activity for lithium brine aspirants, earlier this year.

European oil rivals BP (BP.L) and Shell (SHEL.L) have invested in EV charging stations as part of their energy transition strategy. A Deloitte study released earlier this year showed investors would like to see more spending on such technologies.

Exxon, which invented the rechargeable lithium-ion battery in the 1970s, but stepped away from the technology, has no plans to invest in EV charging stations, Exxon’s Ammann said.

It wants to supply lithium for EV batteries, consumer electronics and energy storage systems that can hold electricity generated from intermittent solar and wind power.

There are about 280 million vehicles in the United States today, and fewer than 3 million are EVs, or about 1% of the total, Ammann said.

“There is still 99% to go, which suggests it is a very, very big opportunity,” he said.

Source: Reuters.com

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As of September 2023, the yuan accounted for 5.8% of international payments, up from 4.82% in August, which is the highest share the Chinese currency has held in the last five years, according to SWIFT system data.

The Chinese yuan has surpassed the euro to become the world’s second-most used currency in SWIFT trade settlements, according to data from the international SWIFT system. This marks a significant milestone in China’s efforts to internationalise its currency.

As of September 2023, the yuan accounted for 5.8% of international payments, up from 4.82% in August. This is the highest share the yuan has held in the last five years. Despite this increase, the US dollar remains the dominant currency in global trade, with an 84.15% share in September, a slight increase from 83.95% in August.

The euro now ranks third in international payments, with its share decreasing to 5.43% in September from 6.43% in August. The Japanese yen and the Saudi rial follow, ranking fourth and fifth, respectively.

This development comes as China continues to expand its economic influence globally. Despite the yuan’s share of global payments remaining small compared to the size of China’s economy, it has seen a steady increase from 1.81% about five years ago.

The Society for Worldwide Interbank Financial Telecommunication (SWIFT) is a Belgian cooperative society that provides services related to the execution of financial transactions and payments between banks worldwide. The US dollar and the euro have traditionally dominated SWIFT payments, making up more than seven out of 10 payments in 2023.

The rise of the yuan in international trade settlements is seen as a reflection of China’s growing economic power and its efforts to make the yuan a global reserve currency. However, the yuan’s share is still negligible compared to the dollar’s 46.6%.

China introduced the yuan as its currency system in the late 1800s, and it has had a currency peg since 1994. This peg, along with China’s robust export economy, has helped the yuan gain traction in global trade.

The recent data from SWIFT indicates a shift in the global financial landscape, with the yuan’s growing prominence signalling China’s increasing role in international trade and finance.

Source: Indiatoday.in

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Greek owner Capital Product Partners has entered into an umbrella agreement with Capital Maritime and Capital GP for the acquisition of 11 newbuild LNG carriers from the Evangelos Marinakis-led company for a total acquisition price of $3.13bn.

The 11 vessels in question are all two-stroke Mark III Flex 174,000 cu m LNG carriers either built or under construction at Hyundai Heavy Industries and Hyundai Samho Heavy Industries in South Korea.

The move will see the company move away from containerships and focus purely on LNG carriers. Back in July, it already exited the dry bulk sector with the sale of its only capesize, Cape Agamemnon. The company will also rebrand to Capital New Energy Carriers which is expected to become effective by December 31, 2023.

Only one of the vessels, the Amore Mio I, has been delivered and will start a 2.8-year time charter with Qatar Energy Trading in December. Three vessels set for delivery in 2024 already have contracts. Axios II has a seven-year bareboat charter deal plus three years in options with Bonny Gas, Assos won a ten-year time charter deal with Tokyo LNG Tanker Co, and Apostolos has lined up a charter by Jera for 10.5 years with three years in options. The last one is Aktoras which won a seven-year bareboat charter with BGT.

The Archimidis, Agamemnon, Alcaios I, and Antaios I will be delivered during 2026 while the final two – the Athlos and Archon – will be delivered by March 2027.

According to the company, the vessels will be purchased through the acquisition of 100% of the equity interests in the applicable vessel-owning company. As Amore Mio I has already been delivered, the acquisition of this vessel was financed through a $196.3m sale and leaseback transaction between the vessel-owning company and CMB Financial Leasing.

For the vessel-owning companies of the Axios II, Assos, Apostolos, Aktoras, Archimidis, and Agamemnon a 10% deposit will be paid at the closing date. Each vessel will be bought after its construction completion and delivery from the shipbuilder. On delivery of these vessels, the company will pay a total of around $1.6bn

The vessel-owning companies of Alcaios I, Antaios I, Athlos, and Archon will be acquired on the closing date, and Capital Product Partners will take over their obligations under the respective shipbuilding contracts with Hyundai. The company expects that the total amount due on or about the closing date to Capital Maritime will be $454.2 million. Hyundai will also be paid an additional amount of $910m in pre-delivery and delivery instalments. The closing date is expected to occur by year-end 2023 upon the closing of the rights offering.

To finance a portion of the purchase price for the vessels, Capital Maritime has agreed to issue an unsecured seller’s credit to us in an amount of up to $220m at a fixed rate of 7.5%, repayable on June 30, 2027. Also, Capital Product Partners will conduct a rights offering to finance $500m of the purchase price.

As part of the company’s focus switch on the LNG carrier market, Capital Maritime has agreed to grant Capital Product Partners rights of first refusal over transfers of LNGC vessels owned by Capital Maritime to third parties, opportunities to order newbuild LNG vessels of which Capital Maritime becomes aware, and employment opportunities for LNG vessels of which Capital Maritime becomes aware, in each case, for a period ending on the tenth anniversary of the closing date.

Also, the company has first refusal for transfers to third parties of two LCO2 carriers and two ammonia carriers recently ordered by Capital Maritime for a period ending when Capital Maritime and its affiliates no longer beneficially own at least 25% of the issued and outstanding common units.

Source: Splash247.com

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Nov 13 (Reuters) – Mach Natural Resources (MNR.N) said on Monday said it will buy certain oil and gas assets in the Anadarko Basin in Oklahoma from privately-held Paloma Partners for $815 million in cash.

Mach Natural said the assets have reserves of 75 million barrels of oil equivalent (mmboe) and will boost its existing output of about 65,000 barrels of oil equivalent per day (boepd) by roughly 32,000 boepd.

The assets cover about 62,000 net acres in the Anadarko Basin, one of the most productive U.S. basins and which spans parts of Oklahoma, Kansas, Texas, and Colorado

The deal is expected to close on Dec. 29 this year, with a retrospective effective date of Sept. 1.

Houston-based Paloma Partners is backed by energy sector-focused EnCap Investments and is focused on the acquisition and development of U.S. oil and gas assets.

(This story has been officially corrected to reflect that Mach Natural said the assets have reserves of 75 million barrels of oil equivalent (mmboe), not 31.5 mmboe, in paragraph 2)

Source: Reuters.com

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New York-listed Capital Product Partners has entered into an umbrella agreement to buy 11 LNG carriers from its sponsor Capital Maritime & Trading Corp for a total acquisition price of $3.13 billion.

CPLP entered into the deal with Evangelos Marinakis-led Capital Maritime and its general partner Capital GP.

Earlier this year, CPLP took delivery of its seventh LNG carrier in South Korea, Asterix I, which it also purchased from Capital Maritime.

Such as the first six LNG carriers which joined CPLP in 2021, Capital Gas, also owned by Evangelos Marinakis, manages the new LNG carrier as well.

Capital Gas recently took delivery of the 174,000-cbm ME-GA LNG carrier, Amore Mio I, chartered by QatarEnergy.

This is the first vessel out of 11 of these LNG carriers CPLP will buy under the new deal.

The other LNG carriers are Axios II (chartered by Bonny Gas transport), Assos (chartered by Tokyo LNG Tanker), Apostolos (chartered by Jera), Aktoras (chartered by BGT), Archimidis, Agamemnon, Alcaios I, Antaios I, Athlos, and Archon, according to CPLP.

These LNG carriers are scheduled for delivery from January 2024 to March 2027.

Following the closing of the umbrella agreement, CPLP intends to explore the disposal of its container vessels and abstain from acquiring additional container vessels.

Besides the deal, CPLP will change its name to Capital New Energy Carriers L.P. to reflect focus on LNG carriers and energy transition shipping, it said.

This name change is expected to become effective by December 31, 2023.

Further, the company, Capital Maritime, and the general partner have agreed to negotiate and jointly work with tax and other advisors to “agree terms for the conversion from a Marshall Islands limited partnership to a corporation with customary corporate governance provisions within six months of the closing of the umbrella agreement.”

In connection with the change of CPLP’s business focus to concentrate on the LNG carrier market, Capital Maritime agreed to grant to the company opportunities to order newbuild LNG vessels of which Capital Maritime becomes aware, and employment opportunities for LNG vessels of which Capital Maritime becomes aware, it said.

“We are very pleased to announce this transformative transaction for the partnership, which we expect to usher Capital Product Partners L.P. to a new chapter in its life as a public listed entity,” CEO Jerry Kalogiratos said.

“Upon completion of the 11 LNG/C fleet acquisition, we expect CPLP to transform, into one of the largest US-listed shipping companies in terms of enterprise value and the largest owner of two-stroke, latest generation LNG carriers compared to the current fleet of its US listed peers,” he said.

He said the company is “well positioned” to take advantage of the “strong” fundamentals of the LNG industry with six open LNG carriers delivering between 2026-2027 and rights of first refusal on a unique fleet of LCO2 and ammonia carriers.

“We believe that this transaction, together with our stated intention to convert the partnership into a corporation and to review over time our capital allocation policy, should attract additional investor interest and allow our equity valuation to move closer to our peers,” Kalogiratos said.

Moreover, the acquisition of the 11 LNG carriers is expected to be “transformative” across all financial and qualitative metrics for the partnership.

“We expect our contracted revenues to increase by 87 percent to $3.1 billion, our revenue weighted charter duration to 7.2 years as of the closing date and the average age of our LNG fleet to decrease to 3.2 years by the time all LNGCs have been delivered in 2027,” he said.

“Finally, I am pleased to see our largest unitholder and sponsor, Capital Maritime, fully backstop at no additional cost and at a 9.6 percent premium to the last closing price a $500 million rights offering and offer an attractively priced $220 million seller’s credit to partly finance this transaction, while giving a right of first refusal on all LNG business and its new energy newbuilding vessels to CPLP,” Kalogiratos said.

“We believe that the rights offering with the Capital Maritime backstop will allow for all our unitholders to participate without execution risk in the transition of CPLP to an LNG and energy transition focused corporation, which we hope to become a bell weather for the industry,” Kalogiratos concluded.

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Capital Product Partners shifts focus to LNG in $3.1bn deal for 11 newbuilds

Mach Natural Resources to buy Anadarko Basin assets for $815 mln

Capital Product Partners to buy 11 LNG carriers for $3.1 billion

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