Cureton Midstream announces sale to Williams

Energy News Beat

Oil and Gas 360

November 2, 2023 —Tailwater Capital LLC (“Tailwater”), an energy and growth infrastructure private equity firm, and a fund managed by the Private Equity Group of Ares Management (“Ares”), a leading global alternative investment manager, today announced that they have signed definitive agreements to sell Cureton Front Range LLC (“Cureton” or the “Company”) to Williams Field Services Group, LLC (“Williams”), a subsidiary of The Williams Companies, Inc. (NYSE: WMB), with an expected close in December 2023, subject to regulatory approvals.

“This transaction represents yet another step forward for our team and positions Cureton for its next chapter of growth while holding true to our commitment to deliver the highest quality of service to our customers and communities in which we operate,” said Charlie Beecherl, President and Chief Executive Officer of Cureton. “I want to express profound gratitude to our exceptional team, whose remarkable work ethic, shared values, and commitment to our company’s culture were pivotal in driving the successful sale of our business. We are also thankful for Tailwater’s and Ares’ steadfast support as we navigated a constantly evolving market landscape. As we look to the future, we are confident our assets remain in capable hands with Williams and are poised for an exciting trajectory of growth in combination with Williams’ existing asset base. Finally, I want to thank our customers who have been incredible partners these past six years, we appreciate your support.”

Tailwater and Ares initially invested in Cureton in 2017 to pursue an anchored greenfield midstream strategy in the DJ Basin in Colorado. Cureton’s initial project started with an acreage dedication from a single private producer and culminated in the successful development of a premier multi-customer midstream gathering and processing platform. Cureton’s asset base now consists of over 260 miles of low and high pressure pipelines, 109 MMcf/d of natural gas processing capacity, 64,000 horsepower of compression, and is underpinned by long-term contracts from blue-chip operators covering more than 200,000 dedicated acres and over two million acres of AMIs.

“We commend the Cureton team for the success they have demonstrated over the course of our partnership,” said Edward Herring, Co-Founder and Managing Partner of Tailwater Capital. “Cureton has effectively expanded its presence in the oil-abundant rural landscape of the DJ Basin, emerging as a market leader thanks to its team’s substantial experience and strategic partnerships with oil and gas producers.”

“Cureton has continued to strategically enhance its operations, create a capital-efficient business, and demonstrate unwavering dedication to its customers, communities, and people,” said David Cecere, Partner of Tailwater Capital. “Given the continued need for scale in the midstream sector, we believe it is an optimal time to monetize the business and are excited to provide another strong return for our investors.”

“We are very proud of the many accomplishments that the Cureton team has achieved throughout our partnership,” said Robert Kimmel, Partner in the Ares Private Equity Group. “We believe that the company remains well positioned and we wish Williams every success in shepherding this next phase of Cureton’s growth.”

Evercore served as the exclusive financial advisor to Cureton in connection with the transaction. Kirkland & Ellis served as legal counsel. RBC Capital Markets served as financial advisor and Davis Polk & Wardwell LLP served as legal advisor to Williams in connection with the transaction.

 

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Is Zelensky done for? A new Time Magazine cover story indicates changing American attitudes to Ukrainian leader

Energy News Beat

The actor-turned-politician feels let down by the same Western powers that have been inflating his ego for close to two years

A recent, long article in Time Magazine presents itself as a deep dive into the world of and the state of mind of Ukraine’s President Vladimir Zelensky. In reality, it is a backhanded, withering attack.

Readers learn that Zelensky feels he is being, and –worse– is being let down internationally, that close aides not only doubt him but tell foreign journalists about it, that his actor’s panache has given way to a brooding anger, and that his refusal to face facts blocks any attempts to even think about a negotiated way out of the catastrophic war. Vital US support is quickly diminishing. The reception during Zelensky’s recent visit to Washington was frosty, while especially the problem of Ukraine’s eternal and crippling corruption is being broached with renewed insistence. Meanwhile, military officers back home are receiving presidential orders so detached from reality that they cannot even try to execute them.

In short, we see a lonely leader who will not accept that he is losing and is ready to sacrifice ever more of his country and people to his obstinacy. Psychologically, Zelensky’s denial of reality is understandable (though not forgivable). He bears much of the responsibility for Ukraine’s course of extreme, one-sided dependency on the West. It is true that others have contributed to this fiasco of a proxy war, in Ukraine and in the US, NATO, and the EU. But in Kiev, Zelensky is the man most to blame, because he did have the agency to prevent or end this national debacle.

He could have kept the one clear electoral promise he made (before netting a historic landslide victory in 2019): to make peace by compromise with the Donetsk and Lugansk People’s Republics, which were breakaway regions of Ukraine at the time. He could have taken the 2015 Minsk 2 peace agreement seriously instead of systematically sabotaging it (with Western encouragement). He could have let go of the notion of entering NATO, especially as the Washington-led alliance feeds his country just enough false hope to die for but hasn’t offered even a concrete prospect of membership. At this year’s Vilnius summit, with its humiliatingly empty promises, this was demonstrated again. Zelensky could have stopped listening to the West when the latter stonewalled Russia’s late-2021 initiative to avoid the war by a grand bargain. He could have refused to obey when the US instructed Ukraine to forgo a quick peace in spring 2022. None of the above would have been easy or without risk. But if you want to have it easy, don’t run for president. Or resign.

Even now, Zelensky could pick up the phone any day and call if not Russian President Vladimir Putin, then, for instance Brazil’s Lula da Silva to ask for genuine mediation to begin substantial talks. Indeed, it would be his duty to finally overcome his inflated ego and serve his country, instead of the West. 

With so many good reasons for a bad conscience, Zelensky may never change. The personal failure he would have to acknowledge is too terrible. Instead, he keeps repeating the narcissistic mantra that the fate of the whole world depends on Ukraine (read: him), and that the war could go global if Ukraine does not win. Even once the war is officially lost, he may well spend his remaining days in exile blaming others and spinning stab-in-the-back legends. Indeed, the Time article shows that he has already started, singling out himself – and only himself – as the truest believer in Ukrainian victory and blaming the West for letting him down. In a sadly revealing metaphor, he describes his audiences outside Ukraine as losing interest in what they, he feels, perceive as a show that has run for too many seasons.

We cannot know what exactly is behind Time’s demolition of a figure it used to help exalt in a personality cult. Yet two things are obvious: The tone as well as the message have changed radically, and Time is not alone. Zelensky’s days as the darling of the West, toast of Hollywood, the embodiment of a fantasized hero hybrid concocted, Jurassic-Park-style, from the genes of Che Guevara and Winston Churchill, are over.

The reason for this shift is clear as well: The proxy war is failing and, in addition, Washington is now giving priority to helping Israel carry out its genocidal attack on the Palestinians and perhaps starting a larger war in the Middle East. Zelensky even confesses to what is, in effect, a form of “Israel envy.” For a man who believed he could learn from America’s favorite client state how to build a militarized, highly nationalist, and de facto authoritarian society, this as well must be bitter, if deserved.

In short, the Time take-down may be a sign of the US preparing the ground for moving against Zelensky. Like other proxy leaders before him, such as America’s former “miracle man” in (South) Vietnam, Ngo Dinh Diem, the Ukrainian president may find himself dispensable and dispensed with, whether by a more-or-less open military coup, a manipulated election (or its aftermath), or other means. 

What has largely escaped Western attention, however, are Ukrainian reactions to the Time article. It has resonated in the media and among the political elite. The secretary of the powerful National Security and Defense Council, Aleksey Danilov, has unpersuasively dismissed the piece as factually misleading, while calling on the security services to identify the leakers contributing to it. That kind of damage control is no surprise.

Social media in Ukraine feature some voices blaming Russia. Political commentator Kostiantin Matvienko, for instance, speculates that the Time article is evidence of the West’s opponents’ (whom he calls, American neocon-style, the “axis of evil”) intention to take Zelensky down a peg because they, Matvienko wants to believe, fear his moral authority. How they got Time to do their bidding, Matvienko does not reveal. Bizarre as this reaction is, it illustrates the persistence, at least with some Ukrainian intellectuals, of an inflated image of Zelensky’s – and, with it, Ukraine’s international influence. National self-importance is by no means a uniquely Ukrainian issue. But, in the case of Ukraine, such illusions make ending the war harder.

At the same time, Ukrainian observers note the change in tone signaled by Time. For one journalist, Zelensky’s old image was that of a Tarot magician, a card associated with both powerful trickery and the ability to channel cosmic forces, while he now appears as a hermit figure, solitary and withdrawn. His “messianism” has given way to “fear of society.” Fanciful as it is, the imagery is striking: For some Ukrainians, at least, Time’s iconoclasm makes sense.  

Examples could be multiplied. Inevitably they will also remain anecdotal. But here is the key point: If Time’s attack on Zelensky had occurred a year ago, Ukraine would at least have appeared united in rejecting it with indignation. That, however, is not the case now. Doubts and frustration are growing not only abroad but at home, too.

It would be wrong to jump to conclusions. If the US is really seeking to weaken Zelensky now, what is the purpose of that maneuver? To threaten and make him pliable? To replace him with a leader who will accept a compromise peace, so that Washington can focus on the Middle East and Asia (while leaving Ukraine and the EU in a mess)? Or so that the war can be pursued further under different management?

If Zelensky feels beleaguered and angry, does that reflect mostly the increasing depression and perhaps paranoia of a politician who fears the consequences of his failures? Or is he exhibiting a well-founded sense of real danger, from within as well as from his “allies” abroad?

The one thing that is certain is that the former poster boy of the great struggle for “Western values” has lost his aura. For Zelensky, in whose rise and rule the management of image has played an outsized role even by contemporary standards, that in and of itself is bad news.  

The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of RT.

 

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US House speaker promises Biden impeachment decision ‘soon’

Energy News Beat

US House Republicans are fast approaching a point where they will have to decide whether to impeach President Joe Biden, but following the evidence and observing due process takes time, Speaker Mike Johnson said on Thursday.

“I do believe that very soon we are coming to a point of decision on it,” Johnson, a Louisiana Republican, told reporters on Capitol Hill. “We’re gonna follow the evidence where it leads and we’ll see, and I’m not gonna predetermine it this morning.”

Johnson pointed out that Democrats had twice used impeachment for “raw partisan political purposes” against President Donald Trump.

“We have to follow due process and we have to follow the law,” he added.

Impeachment is the most serious power Congress has, next to a declaration of war, and it has to be done properly, Johnson said, and “not the way the Democrats did it – snap impeachments, sham impeachments, and all the rest.”

Trump was impeached by the House twice, once for allegedly conditioning US aid to Ukraine on investigating Biden, and the second time over the January 6, 2021 Capitol riot. Both times, the Senate voted not to convict.

Biden has long been accused of profiting from influence-peddling schemes by his brother James and son Hunter, dating back to his vice-presidency under Barack Obama. He has denied any wrongdoing and repeatedly denied any knowledge of his son’s business dealings. Evidence that has recently emerged, however, suggests otherwise.

On Wednesday, the House Oversight Committee Republicans released a report showing that a $40,000 “loan repayment” check Joe Biden received from his brother in September 2017 originated from a larger payment the Chinese company CEFC wired to his son Hunter, who “extorted” it from them in a text message later discovered on his laptop.

Biden not only lied to the American people about Hunter’s business dealings and his role in them, he also placed “America’s interests behind his own desire for money,” said committee chair James Comer, a Kentucky Republican.

On Thursday morning, USA Today published an op-ed by Hunter Biden, in which he accused the Republicans of weaponizing his drug addiction for “a vile and sustained disinformation campaign” against his father, the president. 

 

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Germany announces complete ban of Hamas activities

Energy News Beat

Germany has announced a complete ban on the activities of the Palestinian group Hamas and ordered the disbanding of a pro-Palestine group accused of spreading anti-Israel and anti-Semitic ideas.

In a statement on Thursday, German Interior Minister Nancy Faeser said she implemented a formal ban on activity by or in support of Hamas, which is already designated as a “terrorist” organisation in the country.

“With Hamas, I have today completely banned the activities of a terrorist organisation whose aim is to destroy the state of Israel,” Faeser said.

A Hamas official in Lebanon said the move showed that the country was in partnership with Israel on crimes against Palestinian people.

“This prompts us to question whether the German political mentality is a Holocaust mentality that affects all peoples and is not limited to one party or another,” Osama Hamdan, the Hamas representative in Lebanon, said in a news conference on Thursday.

Faeser said she also is banning and dissolving the German branch of the Samidoun network, which she said “supports and glorifies” groups including Hamas.

German Chancellor Olaf Scholz had announced that the government would take action against both groups on October 12.

Samidoun was behind an October 7 action in which a group of people handed out pastries in a Berlin street in celebration of Hamas’s attack on Israel. At least 1,400 people were killed in the attack, most of whom were civilians, according to Israeli officials.

“Holding spontaneous ‘jubilant celebrations’ here in Germany in response to Hamas’s terrible terrorist attacks against Israel demonstrates Samidoun’s antisemitic, inhuman worldview in a particularly sickening way,” Faeser said, as cited by Deutsche Welle.

Since the attack, Israel has bombarded Gaza relentlessly and tightened its blockade on the territory, cutting off supplies of  fuel and severely restricting water, food and electricity access.

More than 9,000 Palestinians have been killed in the bombardment, including 3,760 children, according to authorities in Gaza.

Pro-Palestinian protests in many parts of Germany have been banned in recent weeks, and schools in Berlin have been given permission to ban the traditional Palestinian headdress, the keffiyeh.

Pro-Palestinian activists in Germany say it amounts to a crackdown on Palestinians and a curtailment of free speech.

“All instruments of assembly law must be used to prevent solidarity demonstrations with the terror of Hamas as early as possible,” a spokesperson with the German Interior Ministry previously told Al Jazeera.

Amir Ali, a Palestinian who has been involved in organising protests in Munich, told Al Jazeera that a demonstration was cancelled after years of “holding them peacefully with police cooperation”.

“I was even forbidden to walk inside the city for 24 hours because I was wearing a keffiyeh,” he said.

 Hamas criticises announcement, says it shows Berlin in partnership with Israel on crimes against Palestinian people. 

     

​  

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Germany hands Ukraine another 25 Leopard tanks

Energy News Beat

Berlin is expected to spend $5.73 billion on military aid to Kiev this year, officials report

The German federal government revealed on Wednesday that Berlin has sent Ukraine an additional 25 Leopard tanks. This latest shipment brings the total number of these vehicles handed over to the Eastern European country from Berlin to 115, according to a government press release.

Germany and Denmark have embarked on a collaborative project, as mentioned in the statement, to provide Kiev with older iterations of Berlin’s primary battle tank, the Leopard 1A5. The most recent shipment also added nearly two dozen reconnaissance drones and five new drone boats to Ukraine’s supplies. Berlin also shipped Kiev a total of 12 new armored personnel carriers and six airspace surveillance radars, along with around 30 military trucks and 30,000 sets of winter clothing.

According to government data, Berlin is set to allocate €5.4 billion ($5.73 billion) for military aid to Kiev this year. Most of these funds will be dedicated to supplying military equipment and training to Ukraine. However, a portion of the budget will be earmarked for replacing Germany’s military assets and supporting the European Peace Facility (EPF). The EPF covers the costs incurred by EU members in providing essential military support services to Ukraine, according to the government.

Next year, Germany plans to nearly double the sum it spends on supporting Ukraine’s war effort. The nation’s military assistance commitments for 2024 already amount to around €10.5 billion ($11.15 billion), according to government data.

These new figures come months after Ukraine’s counteroffensive, which is widely thought to have failed to bring about tangible results, began in early June. The operation was preceded by a massive Western military assistance campaign for Kiev, with the US and its allies providing hundreds of heavy weapons to Ukraine.

According to the latest estimates provided by Russian Defense Minister Sergey Shoigu, the Ukrainian military has lost more than 90,000 soldiers to deaths and injuries, as well as some 600 tanks and over 1,900 armored vehicles of various types, since June 4.

The Russian military has also regularly published videos of Western military equipment supplied to Kiev being destroyed by drones, artillery, helicopters, and other weapons. Last week, the Russian Unmanned Rapid Response Squad – a unit specializing in using first-person view (FPV) kamikaze drones – published videos showing their unmanned aerial vehicles (UAVs) destroying three Leopard tanks in just two days.

Ukraine’s military intelligence chief, Kirill Budanov, said last week that Kiev’s troops were conducting their operations on foot while the use of heavy armor was “minimal.” According to earlier reports in the Western media, the Ukrainian military had to change its tactics following heavy equipment losses over the first weeks of the counteroffensive.

This week, Ukraine’s top general, Valery Zaluzhny, told The Economist that the warring sides had “reached the level of technology that puts us into a stalemate.” He also said that such a situation puts Russia in a better position due to its larger population and resources.

 

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Competition for gas supplies could heat up between the EU and China

Energy News Beat

The end of COVID-19 lockdowns in China has boosted the nation’s overall gas demand by 6% this year, according to a new report by UK consultancy firm Cornwall Insight.

This demand isn’t currently mirrored by an increased Chinese appetite for liquified gas (LNG), but experts note this could change during the colder months ahead.

“As China’s economic recovery drives up gas demand and worldwide events send prices skyrocketing, Europe can no longer cling to the illusion of on-demand LNG,” said Dr Matthew Chadwick, lead research analyst at Cornwall Insight.

Since Russia’s invasion of Ukraine in February 2022, the EU has relied more heavily on LNG, a move that has allowed the bloc to reduce its dependence on Russian pipeline gas.

In 2022 and 2023, an average of 11.2 billion cubic metres (bcm) of LNG were imported into the EU per month, compared with 6.6bcm per month in 2021.

Imports to member states are predominantly sourced from the US (44%), although the EU is also dependent on Russia (17%) and Qatar (13%) for LNG.

Last year, Europe managed to weather the cold months better than expected, and general gas storage inventories were 55.7% full at the end of the winter period.

The record figure was achieved thanks to mild temperatures and higher energy prices, which in turn led to reduced demand, but consultants from Cornwall Insight have advised Europeans against complacency.

“A multitude of factors, from weather patterns to surging demand in Asia, leave Europe open to potential gas shortages if it places its faith in another high-temperature, low-competition winter,” said Dr Chadwick.

Balancing LNG with going green

The European winter is once again set to be warmer than usual this year, but experts have raised concerns about the effects of global events on LNG supply.

The Israel Hamas war, gas worker strikes in Australia, or damage to the Balticconnector pipeline, are all examples of how wider instability can push up wholesale energy prices.

As China and other Asian nations are able to pay higher prices for gas than the EU, this leaves the bloc in a vulnerable position.

One solution here is to secure more long-term LNG supply deals instead of relying on so-called ‘spot market purchases’, which are essentially immediate but volatile transactions.

In pursuit of future energy stability, the EU has also been improving its infrastructure to combat trade bottlenecks.

The bloc’s import capacity can meet around 40% of its total gas demand, but access to LNG infrastructure is still uneven throughout member states.

Yet when considering long-term energy plans, Cornwall Insight has nonetheless advised the EU to stay focused on its climate targets.

Analysts say that whilst LNG emits 40% less CO2 than coal and 30% less than oil, it remains a significant source of carbon emissions, meaning it should only be viewed as a transitional solution.

Source: Msn.com

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#146 Renewable Energy can only survive with Sustainable Storage”. How do you define “Sustainable Storage?”

Energy News Beat

Today I had the opportunity to visit with Tim Kaelin, CEO of Renewable Energy Management about his energy storage company that does not need tax incentives, or subsidies to bring to market. This is a huge win for the grid stabilization that needs to happen for our increased energy demands.

Sustainable to many people does not include fiscal or ecologically responsible in their definition. Our conversation went over their energy storage solution and it hit all of my top requirements. Ecologically sound, not require the massive critical minerals from foreign countries, and fiscally sound. The other key point of our discussion was the battery technology. It could spill out on the ground, and could even be considered fertilizer.

There is a massive need for ending energy poverty, and I am thrilled to have had the opportunity fo visit with Tim, and am looking forward to visiting with his executive team of world experts. George McMilan is one of his team members with whom I have been communicating and planning some fantastic geopolitical discussions around energy.

00:00 – Introduction

02:00 – Tim Kaelin founded a company to create affordable utility-scale batteries for renewable energy, aiming for profitability without subsidies.

04:27 – Explaining their technology’s operation.

06:45 – The significance of kilowatts per megawatt-hour in the discussion.

08:15 – Their batteries for large solar farms in shipping containers, addressing reclamation and recyclability concerns.

11:14 – Upcoming November 9th event with George McMillan, covering energy, geopolitics, market dynamics, and renewable energy challenges.

16:46 – Importance of battery storage in renewable energy, regulatory hurdles, fiscal sustainability, and global energy dynamics, including skepticism around net-zero goals in developing countries and coal demand.

21:31 – Highlighting energy storage as a currency for economic growth and societal advancement.

23:23 – Preview of the November 9th event in New York and the possibility of a live podcast before the event.

24:57 – Outro.

Full Transcript and Show notes will be added shortly.

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Europe’s Wind Energy Giants Brace For Massive Losses And Writedowns

Energy News Beat
The malaise spreading through the renewable energy industry hasn’t come to an end just yet.
wind energy giants Ørsted A/S and Siemens Energy are facing billions of euros in losses and writedowns as their wind energy businesses continue to deteriorate.
Siemens Energy is currently in talks with the German government looking to secure as much as €16B worth of guarantees for long-term projects after the company warned that losses at its troubled wind turbine business are likely to be higher than earlier forecast.

The malaise spreading through the renewable energy industry that started in late October when we reported that shares of Israel-based SolarEdge Technologies Inc. (NASDAQ:SEDG) suffered their biggest crash in the company’s public history has now spread to the European wind energy sector, too.

It’s all about soaring costs and supply chain woes–all of which prompted SolarEdge to warn that Q3 revenues, gross margin and operating income would all come in below the low end of the company’s prior guidance.

Now, wind energy giants Ørsted A/S (OTCPK:DNNGY) and Siemens Energy (OTCPK:SMEGF) are facing billions of euros in losses and writedowns as their wind energy businesses continue to deteriorate.

Ørsted, the world’s biggest builder of offshore wind parks, has raised the alarm on possible impairments of as much as 28.4B Danish kroner (US$4B) to its U.S. portfolio thanks to supply chain snarls as well as an unsuccessful bid to seek more profitable contracts with New York regulators.

The company has also scrapped two New Jersey wind projects; 2,248 MW Ocean Wind 1 and 2 projects, but says it will move forward with its Revolution Wind project offshore Connecticut and Rhode Island, a 50-50 joint venture partner with Eversource.  Ørsted has forecast a third-quarter loss of 12 billion kroner, the worst quarterly loss since 2015 when the company was more focused on fossil fuels and conventional electricity.

Two weeks ago, Ørsted announced that it has agreed to sell 50% of the Gode Wind 3 offshore wind farm in Germany for €473M (nearly $500M).

‘‘Ocean Wind 1 and 2 have experienced significant impacts from macroeconomic factors, including high inflation, rising interest rates and supply chain constraints, particularly a vessel delay on Ocean Wind 1 that considerably impacted project timing,” Ørsted has said.

Orsted is a big player in the renewables world and was one of the frontrunners, so there is a conception in the market that what the company is facing today are actually issues that could be seen across other developers,” ABN Amro Bank NV strategist Larissa Fritz has told Bloomberg.

Ørsted is hardly the only wind energy developer in serious peril.  Norwegian energy giant Equinor ASA (NYSE:EQNR) took a $300 million impairment on U.S. offshore wind projects while  China’s top turbine maker Xinjiang Goldwind Science & Technology Co. reported on Friday that third-quarter profit tumbled 98%.

Ørsted shares have crashed 61.3% in the year-to-date to a five-year low.

There are too many known unknowns around Orsted, which could lead to near-term headwinds for its shares. Visibility around the US, including balance sheet funding, and the fate of Hornsea 3 is required before any meaningful re-rating,’’ Citigroup Inc. analysts have said.

Meanwhile, shares of Ørsted’s German peer Siemens Energy have jumped nearly 13% in Wednesday’s intraday trading after supervisory board chairman Joe Kaeser said the company does not need a taxpayer-funded bailout from the German government, and that it seeks guarantees rather than a cash injection.

The company obviously doesn’t need money from the state,” Kaeser reportedly told the Welt am Sonntag newspaper, adding that “all segments apart from the wind business are doing well, partly better than at the competition. If you read ‘state aid’ as an investor, then panic is pre-programmed”

Siemens Energy is currently in talks with the German government looking to secure as much as €16B worth of guarantees for long-term projects after the company warned that losses at its troubled wind turbine business are likely to be higher than earlier forecast. Siemens says it needs the backstops for projects because the financial outlook for its wind turbine business has continued to deteriorate. Back in June, the company announced that it was overhauling the division at a cost of up to €1bn.

Cost Increases

According to Kerstin Ahlfont, chief financial officer at Vattenfall AB, these companies have been contending with cost increases of up to 40% over the past 18 months, rendering many projects unprofitable. The Swedish utility itself has been forced to shelve a giant project in the UK after deeming it not profitable enough even with the guarantees available in an auction it won last year.

Last month, no energy companies submitted bids in the UK’s 5GW offshore wind auction, with the government coming under fire for ignoring warnings that the offer on the table was too low to reflect soaring costs. This comes as a significant blow to Rishi Sunak’s plans to meet climate targets and lower energy bills and also makes it harder for the government to achieve its goal of reaching 50 GW of offshore wind by 2030. The price of the UK’s offshore wind power has fallen steeply in recent decades. The government set a maximum price of £44 a MW hour for the latest auction, which developers deemed too low due to soaring construction costs, owing to rising inflation and higher borrowing costs.

Things could not be more different in Germany where European oil and gas supermajors BP Plc (NYSE:BP) and TotalEnergies (NYSE:TTE) won all of the capacity on offer in the country’s 7GW offshore wind auction, its biggest in history. BP secured leases at two North Sea sites off the coast of Helgoland with total generating potential of about four gigawatts, paying a total of $7.5 billion. The new sites–BP’s first offshore wind projects in Germany–will nearly double the company’s global offshore wind pipeline. Meanwhile, TotalEnergies–through local subsidiaries–secured the other two sites for a total of  $6.5 billion. Germany currently has 8.4GW of operational offshore wind capacity.

Source: Oilprice.com

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Biden-backed wind power company cancels New Jersey projects despite $1B in subsidies

Energy News Beat

A green energy company on Tuesday pulled the plug on two wind projects off the coast of New Jersey which were approved for an estimated $1 billion in taxpayer-funded subsidies by Democratic Gov. Phil Murphy and state lawmakers.

The Danish outfit Orsted cited high inflation, rising interest rates and supply chain issues as their reasons for scrapping its Ocean Wind 1 and 2 projects – both of which were buoyed by tax incentives included in President Biden’s so-called Inflation Reduction Act.

“Macroeconomic factors have changed dramatically over a short period of time, with high inflation, rising interest rates, and supply chain bottlenecks impacting our long-term capital investments,” Orsted Americas CEO David Hardy said in a statement.

“As a result, we have no choice but to cease development of Ocean Wind 1 and Ocean Wind 2. We are extremely disappointed to have to take this decision, particularly because New Jersey is poised to be a US and global hub for offshore wind energy.”

Murphy, a strong proponent of the project, fumed over Orsted’s announcement, calling the pullout “outrageous” amid the unprecedented accommodations granted by the Garden State to the foreign company.

“Today’s decision by Orsted to abandon its commitments to New Jersey is outrageous and calls into question the company’s credibility and competence,” Murphy said in a statement. “As recently as several weeks ago, the company made public statements regarding the viability and progress of the Ocean Wind 1 project.”

Murphy he would explore legal options regarding the abandoned Orsted project after the state worked hard to secure the funding.

“In recognition of the challenges inherent in large and complex projects, my Administration in partnership with legislative leadership insisted upon important protections that ensure New Jersey will receive $300 million to support the offshore wind sector should Orsted’s New Jersey projects fail to proceed,” he added.

“I have directed my Administration to review all legal rights and remedies and to take all necessary steps to ensure that Orsted fully and immediately honors its obligations.”

The failed development, which would have provided the state with its first offshore wind farm just 13 miles off the South Jersey coast, was expected to generate enough energy to power half a million homes.

In July, New Jersey legislators approved tax breaks for Orsted valued as high as $1 billion to keep the project moving forward  — a move Republicans, commercial fishermen and activists slammed as a generous subsidy for a potentially harmful environmental project.

In exchange for the handout, which allowed Orsted to pocket federal tax breaks it was initially required to give back to New Jersey ratepayers,  the company was required to place a $200 million guarantee into state coffers, which will ostensibly be returned to ratepayers now that the company has scrapped the project.

State Sen. Ed Durr (R-Gloucester) criticized the subsidy at the time, arguing that when Orsted first received approval to build the wind farms it “agreed to apply for and return to ratepayers any federal tax incentives that might become available to offset the higher costs that ratepayers are paying today for the development of wind energy.”

“Despite the deal they signed, Orsted is realizing that wind farm projects don’t make economic sense without major government subsidies, so now they’re looking for a huge handout at the expense of New Jersey utility customers,” he added.

Under the Inflation Reduction Act, renewable developers stand to receive tax credits of up to 30% for qualifying investments that use union labor, and more credits if the project meets additional criteria.

Orsted officials were reportedly seeking a 40 percent tax credit to move forward with the project.

The New England Fishermen’s Stewardship Association, which argued sustainable fisheries and other maritime activities off the New Jersey coast were being threatened by the project, welcomed Orsted’s decision and said it was a sign that the future offshore wind projects would be doomed to fail.

“Billion-dollar cost overruns incurred in spite of generous giveaways from the Biden administration and the state of New Jersey will dominate accounts of the demise of these projects,” the group said in a statement.

“These fiscal and logistical pitfalls are instructive for all states considering a transition to offshore wind energy. But these challenges should not eclipse consideration of the urgent threat offshore wind farms pose to the fisheries, maritime communities, and the marine environment.”

Rep. Chris Smith (R-NJ), another critic of the project, called Orsted’s announcement “a victory for local residents.”

“Governor Murphy abandoned the people of New Jersey by throwing taxpayer dollars at unsound and improperly vetted offshore wind projects even when his own Division of Rate Counsel noted that ratepayers would have to pay higher costs and Orsted would earn more money as a result of the billion-dollar bailout he signed into law in July,” Smith told The Post.

“While Orsted’s withdrawal is a victory for local residents, environmentalists, and New Jersey commercial and recreational fishermen who have been subjected to the coercive power of the Biden and Murphy Administrations, we are not out of the woods yet. We must continue this critical fight to protect the Jersey Shore from their ocean industrialization plans that would eviscerate our marine ecosystem, put recreational and commercial fisherman out of business, seriously impair radar navigation, and jeopardize our national security,” the congressman added.

The company said it would be moving forward with its Revolution Wind project in Connecticut and Rhode Island and its South Fork Wind project in New York despite the cancellation of Ocean Wind 1 and 2.

White House spokesperson Michael Kikukawa said in a statement that “momentum remains on the side of an expanding US offshore wind industry,” despite the collapse of the Ocean Wind project.

“While macroeconomic headwinds are creating challenges for some projects, momentum remains on the side of an expanding U.S. offshore wind industry — creating good-paying union jobs in manufacturing, shipbuilding, and construction; strengthening the power grid; and providing new clean energy resources for American families and businesses,” Kikukawa said.

Source: Nypost.com

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Fifth filling of controversial dam coming up in Ethiopia – expert

Energy News Beat

Satellite images show the eastern gate of the GERD is fully open, despite objections from Egypt and Sudan over the infrastructure

The eastern drainage gate has been opened to its full capacity in anticipation of the fifth filling of the controversial Grand Ethiopian Renaissance Dam (GERD), according to satellite images shared by Cairo University professor Abbas Sharaki on Wednesday.

The images, which were published on Facebook, were taken on Tuesday evening and showed the continued crossing of water over the dam’s middle corridor.

“The water will stop over the next week,” wrote Sharaki, who is a professor of geology and water resources. He added that as the middle section dries, concrete work will begin “to increase the height of the dam side and the middle corridor.” 

The GERD is located on the Blue Nile River, which is the source of 97% of Egypt’s water. The infrastructure has been at the center of a dispute over its impact on downstream flows into Egypt and Sudan, both of which have expressed concern.

Sharaki noted that Ethiopia had made a similar move in January 2023 in anticipation of the fourth filling of the dam, but has now started the latest process around three months earlier than planned.

Ethiopia has unilaterally completed four filing phases of the infrastructure and has operated two turbines over the past three years, despite not reaching agreement with downstream countries.

Sharaki argued that the fifth storage, like the previous ones, infringes on the GERD Declaration of Principles signed between the three countries in March 2015, the Presidential Statement of the Security Council of September 2021, and international standards regarding projects on shared rivers.

According to the Egyptian Ministry of Water and Irrigation, the GERD tripartite ministerial meeting held in Ethiopia on September 23 and 24 failed to make significant progress. The ministry further accused Ethiopia of backing away from the previous consensus reached between the three countries.

The first round of negotiations between the nations failed in April 2021, although the three parties said they still hoped to reach an agreement by the end of that year.

Ethiopian Prime Minister Abiy Ahmed has insisted that his country is seeking to address its electricity needs while reducing any concerns in Sudan and Egypt.

Ethiopia has also accused Egypt of taking unilateral decisions in disputes over the Nile. According to a letter from February 2022, Addis Ababa alleged that Cairo was pursuing water projects without consulting upstream countries.

The Asyut Barrage Project, the ‘New Delta’ National Project, the Ahmed Hamdi Tunnel 2, and other plans could “potentially reduce the flow of the Nile through its [Ethiopian]territory, jeopardizing future plans such as the GERD,” Ethiopian News reported on X (formerly Twitter).

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