Horizontal wells are more expensive to drill than vertical wells, but they contact more reservoir rock and therefore produce greater volumes. Only 1 percent of vertical wells produced at least 100 barrels per day of crude oil in 2018, according to figures by the U.S. Energy Information Administration (EIA). Still, 32 percent of horizontal wells produced at least 100 barrels per day.

Horizontal drilling gains ground

As horizontal wells became more common, production growth continued as the well count fell. Wells classified as non-horizontal have decreased 10 percent to 842,000 in 2018, while the 140,000 horizontal wells drilled that year made up 14 percent of the total.

Even with fewer wells, U.S. oil production grew from 8.8 million barrels per day (b/d) in 2014 to 10.8 million b/d in 2018. During that same period, U.S. natural gas production (gross withdrawals) increased from about 78.5 billion cubic feet per day (Bcf/d) to 94.8 Bcf/d.

Crude oil and natural gas production has continued to grow since early last year. In November 2019, crude oil production had increased to about 12.9 million b/d and natural gas production had increased to 116.9 Bcf/d.

Most U.S. oil and natural gas production comes from wells producing between 50 barrel of oil equivalent per day (boe/d) and 1,600 boe/d. Wells within this range accounted for 9% of active wells that produced 66 percent of crude oil production and 62% of natural gas production.

Solid oxide fuel cells (SOFC) generate electricity using oxygen (O2) from the air, along with hydrogen (H2) and carbon monoxide (CO) extracted from reformed town gas or other sources. Cell stacks – the core component for power generation – are composed entirely of ceramic.

Cylindrical fuel stacks are structures of elements (laminate of fuel electrodes, electrolytes, and air electrodes) on the outer surface of a high-strength ceramic substrate tube, which produce a power-generating reaction.

The elements are serially connected by a conductive ceramic interconnector, notably a cylindrical horizontal-stripe cell stack. According to MHPS, this allows for efficient generation of low current, high voltage electricity.

Komaki pilot project

NTK has a track-record of ceramic forming, printing, and sintering and since 2016 is focused on developing both planar and cylindrical SOFCs. This know-how will be leveraged by CECYLLS to produce and sell MHPS' cylindrical cell stacks that feature long-life and efficient heat utilization capabilities.

Headquartered in Nagoya, Japan, NGK has installed various pressurized hybrid power generation systems, e.g. a demonstration plant in Komaki Factory that consists of a cylindrical solid-oxide fuel cell (SOFC) and a micro gas turbine.

Market weakness for short-cycle businesses, however, made EBITA from industrial business plunge 30 percent to 1.43 billion Euros ($1.58 billion). Net income declined 3 percent to 1.1 billion Euros though they include “substantially better results” from outside industrial businesses.

On a positive note, Siemens said the book-to-bill ratio was a strong 1.22 and the order backlog reached a new high at 149 billion Euros.

Carving out Siemens Energy

“The weak performance across our energy businesses reinforces our priorities. We confirm our full-year guidance and will list Siemens Energy on the stock exchange in September as planned,” the CEO underlined.

A decision on Siemens Energy’s future headquarters will be taken shortly, as the carveout – the legal separation of the energy segment from other Siemens activities – is meant to be completed by the end of March.

Preparing for the spin-off and listing of Siemens Energy in September 2020, Kaeser wants the new company to focus on the transition from conventional to renewable power sources as well as on the shift from fossil to synthetic fuels, notably ‘green hydrogen’.

“A robust, profitable and innovative business in the renewable energy field is a key prerequisite for success. For us, this business is Siemens Gamesa Renewable Energy or SGRE for short,” he said, announcing “we’ll contribute all our shares in SGRE to the new Siemens Energy company.”

The Munich-headquartered company late Tuesday announced it will purchase Iberdrola’s 8 percent stake in Siemens Gamesa for 1.1 billion Euros. Siemens said it will pay the total amount of €1.1 billion from its own resources and settle all legal disputes.

In the first quarter, profits from Siemens PG came in at 1.4 percent – a sharp drop from a 3.8 percent profit rate in Q1-2019. Hence, some 70 percent of the cost saving target is meant to be achieved already by 2021.

The stringent and rigorous savings program is part of Siemens’ Vision 2020+ that is meant to transform the company by mid-2021, or early 2022, before leading to an “ultimate value creation” in all businesses. In this context, 320 million in savings at Digital Industries being “accelerated” and a further 300 million Euros will be cut at the Smart Infrastructure division.

Responding to “disruptive” market transformation

Energy, as well as oil and gas markets, are undergoing a “disruptive transformation at high speed”, Roland Busch, Siemens Chief Technical Officer (CTO) noted.

“The 10 to 20-year market and technology cycles we were used to have been contracting radically,” he said, stressing “the driving forces behind this change are decarbonization, decentralization and digitalization.”

Rapid adaption to these changes is vital for any energy company or manufacturer. The planned spinoff of Siemens Energy will help give the overall company „a leaner and thus more agile setup” and reduce costs in all areas.

“In implementing lean and effective governance, we’re aiming to achieve savings of around €500 million. Here, we’re on track,” Busch noted. At Global Business Services, Siemens is “confident” to achieve savings of about €90 million.

As for Siemens Energy, more specific details about target achievement will be disclosed when the new company has been fully carved out. The legal separation is meant to be completed by the end of March.

Weaker electricity demand and industrial activity inevitably impact both domestic production and consumption of thermal coal. Imports also ease off, with reports of Indonesian coal producers already being asked to delay loadings.

“The effect on prices though is likely to be muted; prices fell so much through 2019 that globally many producers are already operating at negative margins,” commented Wood Mackenzie Asia Pacific Vice Chair, Gavin Thompson.

Gas demand faces headwinds

Growth in China’s gas demand started to tumble even prior to the outbreak due to the slowing economy. Given that 60 percent of Chinese gas demand comes from power and industry, the coronavirus infections impact the gas market at a time of underlying weakness.

Despite the much-anticipated U.S./China phase-1 trade agreement, Thompson said he finds it “difficult to get overly optimistic about any breakthrough, particularly as we enter an election year.” White House hawks, such as senior trade adviser Peter Navarro, are still pushing President Trump to go further with tariffs on China.

Containment crucial for GDP growth

Estimating how much economic damage the coronavirus outbreak will inflict is difficult and will ultimately depend on the duration and severity of the outbreak. Over 20,000 cases of infections are confirmed globally, the vast majority within China. And numbers keep rising.

Assuming a relatively quick containment of the virus, Wood Mackenzie expects slower Q1 economic growth in China at 5.8 percent year-on-year, before a notable rebound to 6 percent in Q2 and then a return to our previous slowing trajectory.

“In effect, our forecast for China's GDP growth in 2020 is unchanged at 5.8 percent. This is bullish, and there are of course far more pessimistic forecasts,” Thompson said. In contrast, the China Academy of Social Sciences warned that economic growth could fall below 5 percent in Q1. “This is a worst-case scenario,” he said, “and would be more damaging to the global economy.”

Hydrogen is one of the leading options for storing excess renewable energy, and hydrogen and ammonia can be used in gas turbines to increase power system flexibility. Ammonia could also be used in coal-fired power plants to reduce emissions.

“With declining costs for solar PV and wind generation, building electrolysers at locations with excellent renewable resource conditions could become a low-cost supply option for hydrogen, even after taking into account the transmission and distribution costs of transporting hydrogen from (often remote) renewables locations to the end-users,” analysts from the International Energy Agency (IEA) urged.

In his book Lepercq explains that “hydrogen is potentially much more than a cheap and plentiful energy source”. He defined it as a “decisive weapon in the fight against climate change”, which represents “a quantum leap towards a new order in energy and climate”.

France launched a €100 million national plan for hydrogen already in June 2018, earmarking public funding for f the deployment of hydrogen in industry, mobility and energy. Industry is urged to use 10 percent green hydrogen by 2023, while the transport sector is meant to increasingly rely on hydrogen-fuelled vehicles.  In short, the French government sees “decarbonised hydrogen as a key energy transition accelerator.” Germany, meanwhile, aspires that 20 percent of hydrogen consumed should be CO2-free bay 2030.

Oil majors eye hydrogen

The French oil major Total keeps an eagle eye on German projects that use electricity to produce synthetic fuels. “There are a number of projects in Germany that want to produce fuels via electrolysis,” said Total’s European head Benoit Luc. “These projects are interesting and we observe them very closely.”

Producing of “green hydrogen” with renewable power via electrolysis has lately become a hot topic in German industry. The steelmaker Salzgitter, for example, developed a “technically feasible but not economically viable” concept to replace the fossil fuels used in conventional steelmaking with a gradually rising share of renewable hydrogen made with electrolysis technology provided by start-up Sunfire. Applications projects are in the making with Climeworks and Rotterdam The Hague Airport.

Aiming to be climate-neutral by 2050, Germany will have to replace natural gas in its energy mix with hydrogen, which could eventually become carbon-free if made with renewable power using electrolysis. Germany's steel and chemical industries are also betting heavily on the use of green hydrogen in their long-term decarbonisation plans.

Ansaldo’s board of directors issued guidelines focusing on cash flow and capital restructuring to help accelerate the company’s reposition its service activities. A ‘diversification plan’ will be implemented in 2021 to create a “national champion” in the power generation industry.

Orders rebound

In 2020, a “strong growth in orders” is expected largely due to the greater contribution of “New Units” (new machines and new plants) and the resulting increase in workload for the production facility.

The 2020-2024 Business Plan also makes provision for investments totaling over €100 million investments in 2020 to introduce, among other things, new production technology in the factory. The aim is to boost production volumes, notably EPC and service work like after sales service, maintenance and assistance.

Adapting to changing energy markets, Ansaldo said it will “realign the group’s workforce and reduce external costs.” Improved competitiveness is meant to be achieved by shortening time-to-market through lean production and a sharper commercial focus.

During the past summer, the Yangon area of the country was subjected to power cuts of up to six hours a day. The government wants to avoid a repeat of this dire situation, hence Wärtsilä engines will be delivered on a fast-track basis before the end of February.

The two power plants will be owned by a consortium between China National Technical Import and Export Corporation (CNTIC) and VPower Group of Myanmar. Each plant will comprise eight Wärtsilä 50SG pure gas engines delivering a combined output of 146 MW, and running on regasified LNG.

Once commissioned, the flexible power plant can operate base load at high efficiency but can also provide balancing power. This will allow to introduce more intermittent renewable energy sources to Myanmar’s power grid in the future.

Wärtsilä said its experience and strong track record in LNG-fuelled engines was “an important consideration in the award of the contract.” Still, the main point was the manufacturer’s ability to meet the “very demanding delivery schedule.”

“Endeavouring to deliver the much-needed electricity to millions of households in Myanmar, we set stringent requirements on product efficiency, reliability and safety, and also the suppliers’ capability of timely delivery. Wärtsilä has proven in previous projects that it can be relied on to deliver on a fast-track schedule, and the high efficiency of its gas engine solutions is what is needed here,” said Earnest Cheung, Chief Commercial Officer of VPower Group.

Air pollution is a major health hazard in Indonesia, particularly in the capital Jakarta. However, there are “limited areas” where renewable energies could be introduced, as Indonesia’s territory consists of some 17,500 islands and sees “comparatively less sunshine and wind than other countries.”

Natural gas, a less emissions-intensive thermal fuel, could help Indonesia reduce air pollution. MHPS encourages state energy companies to make use of Indonesia’s rich gas reserves to generate electricity in combined-cycle power units.

Probing clean fuels on Java

Together with Indonesia's Bandung Institute of Technology (ITB), engineers at MHPS are analyzing big data from local power plant operations on the island of Java to advance clean energy technologies. The aim is to probe new fuels like ammonia and hydrogen.

Diagnosing operations of Indonesia's power plants through artificial intelligence (AI) and big data analysis is meant to enhance efficiency. To that end, MHPS and the ITB seek to establish a joint research and development base in Indonesia.

“Through this joint research, not only will we develop new technologies for clean energy, but also we will improve the performance of existing power plants in Indonesia through big data analysis and Artificial Intelligence (AI),” said MHPS President and CEO Ken Kawai.

In the Java – Bali region, the Japanese manufacturer supplied and installed over 30 percent of the power generation capacity. MHPS shipped its first steam turbine there in 1971 and continues today to contribute equipment for ensuring stable power supplies.

Some sixteen month ago, MHPS commissioned the 300 MW unit-2 of the Tanjung Priok combined-cycle power plant ahead of schedule. Unit 1 of the Jawa-2 project initially went into operation as a simple gas turbine system this June with output nearing 300 MW, and Unit 2 doubled that capacity to 600 MW. In Indonesia, MHPS claims to hold the top market share for large gas turbines, with a total power gen equipment supplied reaching 12 GW.

In a first application, the fluid monitor ensured the protection of engines during bench tests at the MAN Saint-Nazaire factory. The solution has been certified by Bureau Veritas marine applications after extensive tests, and MAN is currently filing for a patent.

“We know that lube oil is the life blood of an engine and that 70% of major damage reveals lube-oil contamination. We wanted to develop a global monitoring solution capable of conforming to the demands of all rotating machines – such as four stroke engines, and turbomachinery – and whatever the application, whether it be marine, power plants, or anything else,” said Arnauld Filancia, Vice-President within MAN Energy Solutions.

The new fluid monitor is the result of targeted research on operational security. Designed as an easy-to-implement solution, it helps enhance installation performance and security.

Used alongside laboratory analyses, the device alerts operators with alarms and stop recommendations as soon as it detects any degradation in lube-oil quality, thereby revealing minor wear of mechanical parts. By swiftly detecting anomalies - especially important during restarts where 50 percent of damage occurs - the device allows to identify part-wear before breakdown to help maximize machine availability.

“The power plant provides heat and power to more than half of Voronezh city’s residential buildings, as well as industrial and social facilities. Situated in southwestern Russia, Voronezh is inhabited by more than 1 million people.

“It is extremely important that the new combined-cycle power unit of the Voronezh CHP-1 will allow us to reach new heights in the reliability of the city’s heat supply, increasing electric power output by 50 percent and improving energy efficiency,” said Quadra’s chief engineer, Evgeny Zhadovets.

Use of new aeroderivative unit will support the “gradual decommissioning” of technically obsolete equipment present at the old plant.

Fast-start capability and fuel flexibility

Flexible LM6000 turbines have fast-start capability (down to five minutes from cold iron), enabling daily/multiple startups with no impact on equipment maintenance cost through its low turndown level. In Russia, GE’s areoderivative gas turbines have demonstrated up to 42 percent efficiency in simple cycle and up to 56 percent in combined cycle mode, said Michael Rechsteiner, CEO of GE Gas Power in Europe.

An advanced cooling system lowers the high-pressure compressor inlet temperature, which in turn effectively lowers the compressor discharge temperature. An inherent DLE combustion system provides fuel flexibility and helps meet emissions limits. As part of the project, GE also supplied a modular, multi-stage static air filter unit equipped with an anti-freeze protection system to guarantee reliable turbine operation in winter conditions.

Quadra already contracted GE for a service project in 2017, when the US manufacturer upgrades four SGT-800 gas turbine units, manufactured by Siemens, that are installed at Dyagilev and Alexin thermal power plants in the central part of Russia.

Determined to stop the completion of the controversial Russian-German gas interconnector, the U.S. Congress already threatened to levy sanctions against construction and pipe-laying companies involved in the project. Allseas, a Swiss pipelay firm, consequently suspended works.

Just 160 km of the 2,460 km long pipeline is left to be laid. AllSeas' deep sea pipe laying ship Solitaire has been laying most of Nord Stream-2 but the Swiss company had suspended works due to the U.S. sanctions.

The Nord Stream consortium, a purely commercial entity, stressed it remains focused on bringing the $11 billion pipeline project to a “successful end. “The twin pipeline -- designed to carry up to 55 Bcm of gas per year from Vyborg, Russia, along the bottom of the Baltic Sea to the city of Greifswald in eastern Germany -- was scheduled to start up in the first half of 2020, but will now be delayed.

Russia determined to go it alone

Russia vowed to complete construction works anyway and is now trying to mobilize its own capacities to do so. A pipe-laying vessel named Akademik Cherskiy, currently moored in the port of Nakhodka, is widely expected to carry out the work.

However, the Russian President Vlamimir Putin cautioned recently that the pipeline may not start flowing gas until the first quarter of 2021.

The Russian gas giant Gazprom is financing half of the project worth about 9.5 billion Euros ($10.5 billion). Other partners in the project are Austria’s OMV, the German firms Uniper and Wintershall, Royal Dutch Shell and France’s Engie. The European project partners have each invested between 950 million and 9.5 billion Euros into the project, adding up to 50 percent of total cost.

ROI likely to come “later” but at “higher level”

Austria’s OMV, one of the investors in Nord Stream 2, has already financed around Eur700 million of its share in the project. Chief executive Rainer Seele remains calm, saying “we are not expecting high cash calls from the Nord Stream 2 company in 2020.”

The delay, in his view, means that the Return on Investment (ROI) would come "a bit later" but at a higher level.

Nord Stream is a highly political project; so much of the goodwill – both from EU-member states and the United States – will depend on whether Gazprom and Naftogaz Ukrainy will reach a permanent gas transit agreement for the time after Nord Stream-2 will come onstream. Initially, Gazprom had threatened to halt all deliveries and transit through Ukraine after the second Baltic Sea interconnector will be fully operational.

The RFI calls for start of commercial operation, following financial close, of either three to six month or six to twelve month.

In its proposal, Karpowership informed South Africa’s energy department on “what is possible, where and how we would look to do it,” said Patrick O’Driscoll, global sales director at Karpowership.

Several locations have been identified as potential mooring points for the ships, suitable to inject the electricity generated offshore into the South African power grid. Each ship can provide a range of power supply options between 30 MW and 600 MW, and can be hired for different time spans.

Gas-fuelled powerships cheaper than diesel gensets

Eskom currently needs to spend billion of South African rand annually to buy diesel for emergency power units, mostly driven by open-cycle gas turbines. Karpowership underlined that the operational cost of one of its gas-fuelled ships will be “significantly less, maybe even half the cost of those [Eskom’s] peakers.”

Speed of delivery is crucial for emergency power solutions; hence O’Driscoll pointed out that a Karpowership was recently delivered and operated a 120MW contract in Senegal within just nine weeks. In addition, the 235 MW Powership Ayşegül Sultan is moored off Dakar since August 2019, contracted to supply 15 percent of Senegal’s electricity needs for 5.5 years.

Headquartered in Istanbul, Karpowership is the only owner, operator and builder of the first Powership fleet in the world. It has 25 powerships, all built in Turkey, in operation and an order book to build new vessels in excess of 4,400MW.

CNOOC took the drastic step encouraged by the Chinese government, which said it would hand out ‘force majeure’ certificates to domestic companies if they cannot fulfill their offtake obligations as the coronavirus crisis accelerates. Beijing apparently tries to mitigate potential losses of state-owned gas companies.

PetroChina and Sinopec are also understood to be considering invoking ‘force majeure’ on some contracts, given that they cannot get enough workers to run their regasification and import terminal at full capacity.

“Those of a more cynical disposition would say this may be an attempt to unwind long-term LNG sales and purchase contracts using force majeure as an excuse, on the basis the LNG spot market prices are significantly lower and there is excess supply in the market right now, with potentially new suppliers whispering in the ear of the buyers that they can achieve same volumes at much lower prices,” commented Myles Mantle, partner at law firm Haynes and Boone.

Force majeure is usually aimed at dealing with events such as unforeseen operational outages, rather than changes in broader economic circumstances in which case the risk lies with the buyer. Most long-term LNG purchase contracts include take-or-pay obligations, which require a buyer to pay for a certain quantity of LNG even if it doesn’t take, on the understanding that the buyer can receive some of the volume at a reduced price in the future.

Short-sighted cancellations damage relations

Cancelling contracts outright could be “short-sighted,” analysts noted, as spot market does are not significantly developed to be able to cover the volumes required by Chinese buyers, at normal times.

Should more Chinese importers invoke ‘force majeure’, this would “severely damage relationships and willingness of suppliers to enter into long-term contracts in the future,” Mantle noted. Particularly, where U.S. suppliers have used those long-term contracts as a basis of FID and financing for their liquefaction and export facilities.

Analysts agree it might take time for to justify this virus outbreak as force majeure. “While it might affect a buyer’s ability to fulfill its contractual obligations, most of the long-term contracts have an annual volume commitment that can be postponed to later in the year,” S&P Global Platts said, suggesting “it might be early for Chinese companies to justify and obtain reliefs from performance.”

However, China’s gas demand growth started to tumble even prior to the outbreak due to the slowing economy. Given that 60 percent of Chinese gas demand comes from power and industry, the coronavirus infections impact the gas market at a time of underlying weakness.

Assuming a relatively quick containment of the virus, Wood Mackenzie expects slower Q1 economic growth in China at 5.8 percent year-on-year, before a notable rebound to 6 percent in Q2. In contrast, the China Academy of Social Sciences warned that economic growth could fall below 5 percent in the short run, which would be much more damaging to the global economy.

Stretching 80 miles from Bruges on the Belgian coast to Richborough in Kent, Nemo Link is a joint venture between the UK’s National Grid and the Belgian electricity transmission system operator, Elia.

Operating smoothly, the subsea cable has been available to import or export power more than 96 percent of the time in the last 12 months, starting from January 31, 2019. Nemo Link has performed “exceptionally well” and its resilience is due to its “advanced technology,” said Elia’s director of infrastructure, Markus Berger.

In fact, the 1 GW power link is the first subsea HVDC project in the world to use cross-linked polyethylene (XLPE) technology. Manufactured by Power Systems, part of Sumitomo Electric Industries, the new cable system has been used for the first time at DC 400 kV for Nemo Link.

Near ‘real time’ power trading

Electricity traders can choose from a variety of products to move electricity back and forth between the two countries across the English Channel. Capacity can be bought closer to real time through hourly nomination gates. This “closer to real time service” enables traders to respond quickly to sudden changes in supply and demand, thereby reducing the potential for spikes in power prices.

“By enabling the market to react immediately to rapid changes in supply and demand, Nemo helps to better balance an energy system that is more reliant on intermittent wind and solar energy;” explained Jon Butterworth, President of National Grid Ventures. “In the coming years, interconnectors like Nemo will play an increasingly important role,” he forecast with reference to the TSO’s aim to “share renewable energy resources across borders” to reach net-zero carbon emissions by 2050.

For National Grid, Nemo Link is the third interconnector to Europe next to the IFA link to France and BritNed to the Netherlands. Three further projects are under construction to France, notably IFA2 due operational 2020, the North Sea Link to Norway due operational 2021, and the Viking Link to Denmark due onstream in 2023.

By 2030, some 90 percent of electricity imported via National Grid’s interconnectors is meant to originate be from zero carbon sources.

The shore connection system lets us draw electricity from renewable energy sources, both for cruise ships docked at the Ostseekai and for the ferry at the Schwedenkai. Striving for sustainable port development, Dr. Dirk Claus, managing director with the Port of Kiel said: “In the future, 60 percent of the energy demand required by the ships entering Kiel will be covered by climate-friendly shore power as diesel generators will be shut down while they are berthed.”

Kiel is the point of departure for cruises and has ferry connections to the Baltic States and Scandinavia. Over 32 different cruise ships last year stopped in 174 times at the port facilities.

The Siemens installation consists of one substation with four Geafol cast resin transformers, four air-insulated medium-voltage Nxair switchgears as well as one 16-MVA frequency converter.

To efficiently power up mooring ships, the Siemens converter system ‘Siplink’ is used. It features a frequency converter and software for central controlling of the two berths whereby two medium-voltage networks with different frequencies can be connected. In Kiel, that’s the local distribution grid with 50 Hz and the ship’s onboard electrical system with 60 Hz.

Siplink synchronizes both networks and takes over the power supply automatically within a few minutes. It also coordinates the energy supply of the ships’ two networks so that electricity can be supplied to both simultaneously.

Kiel, one of Germany’s key port cities, strives to become CO2-neutral by 2050. The new shore power system at the Port of Kiel aims can potentially reduce emissions by more than 8,000 tons of CO2 annually.

“Energy from natural gas can be dispatched quickly in a cost-effective manner. I firmly believe that the combination of natural gas and renewables offers a reliable, flexible and cost-effective pathway to a lower-emissions energy system,” Al-Kaabi said in a speech at the latest GECF meeting in the Qatari capital Doha.

Hence, renewables do not jeopardize gas generation. “As the cleanest of fossil fuels, natural gas comes in handy when the sun is not shining or the wind is not blowing,” Al-Kaab stressed.

Striving for 30% renewables by 2030

Heavily oil- and gas-dependent Oman aspires to supply 30 percent of its electricity demand with renewable energy sources by 2030. Up to 21 percent of the targeted 30 percent is meant to come from solar photovoltaic, backed up by flexible gas gensets.

The Gas OPEC’s ‘Global Gas Outlook 2050’ anticipates that gas production in GECF countries, including Qatar, would grow by almost 50 percent through 2050 to more than 2.5 trillion cubic metres (Tcm). These findings underline the continued importance of the group.

Qatar Petroleum pledged it will continue to fast-track boosting Qatar’s output from 77 million tonnes per annum to 126 mtpa with the construction of more mega-Trains for liquefaction. However, this move would add to the oversupply on global market and is bound to push down prices further from already low levels.

Members of the GECF are Algeria, Bolivia, Egypt, Equatorial Guinea, Iran, Libya, Nigeria, Qatar, Russia, Trinidad and Tobago, the United Arab Emirates and Venezuela. Another seven countries have observer-status, notably Angola, Azerbaijan, Iraq, Kazakhstan, Norway, Oman and Peru.

Appalachia, Permian and Haynesville are the most prominent shale oil and gas producing regions in the U.S. However, Appalachian production growth slowed significantly in 2019 due to dwindling capital investment in new rigs.

The number of operating rigs in Appalachia between April and December 2019 dropped from 81 to just 50, and from 63 to 52 in Haynesville. Meanwhile, the rig count in the Permian fell from 485 to 402 between February and December.

CAPEX cuts amid falling revenues

“The recent natural gas sell-off will put even further downward pressure on rig counts,” analysts commented. Bearish markets exert additional pressure on the exploration and production sector, which has been suffering from falling revenues and tight cash flows.

Pursuing different restructuring strategies, some producers have been imposed strict saving measures while others have been raising capital through debt.

“Unfortunately, the low-price environment has eroded equity valuations, amplifying the problem of holding uneconomic assets,” analyst noted. This has been “pushing some companies to write-offs, fire sales, financial distress and even bankruptcies.”

The decline in CAPEX, for the moment, has had little impact upon production amid soaring productivity per rig – but this can be short-lived. The average shale play lasts for only 18-24 months. Eventually per-rig productivity could begin to decline. “If that happens, the combination of low rig counts and falling productivity could cause U.S. oil and natural gas production to begin to fall,” analyst suggested. “Falling US production could, in turn, reduce storage levels and allow prices to drift higher.”

Exports rise despite narrowing price spreads

The U.S. shale revolution, unfolding since 2009, has been key to reduce risk premium in oil market and has been closing price gaps with Asia and Europe while putting the focus on Henry Hub as a pricing benchmark. Even if prices at Henry Hub were to “go somewhat higher,” the gap between U.S. and gas global prices will “remain significant, so US LNG exports will likely to continue to rise,” concluded CRM Group analysts.

Natural gas exports from the United States increased to over 4.5 billion cubic feet (Bcf) per day by mid-2019, up 37 percent from the pre-year period. Total US LNG export capacity rose from 5.4 billion Bcf per day in June 2019 to 6.1 Bcf by year’s end.

By the end of 2020, US LNG export capacity is expected to rise to 8.9 Bcf per day. Soaring gas production and falling prices have also accelerated the coal-to-gas switch in the U.S. power generation sector, and spurred demand from the petrochemical industry.

Power plant work with many OEMs and their respective platforms, so they areoften faced with a complicated and uncoordinated view of the various equipment that they operate and maintain.

“We want to reduce complexity for our customers and for other OEMs alike and to lower the hurdles for getting payback from data,” said MAN ES’ head of digital and strategy, Per Hansson.

Members of mýa can access their digital assets via a single interface, which bundles their OEM data streams into one complete system view. Hanson underlined that “all data exchanges are of course strictly subject to permissions given by the respective users and members.”

As an independent non-profit organization the mýa platform is open to all equipment providers, operators and asset owners. “We believe that data is worth more if it is shared, instead of held closely. To protect security, business and compliance interests, the sharing needs to be controlled,” mýa states on its website.

Swiss funding

mýa Connection GmbH, headquartered in Switzerland, invested to kick start the initiative with the aim of developing the platform into an independent non-profit organization.

“Once more companies get engaged, the organization will take direction from its members, OEMs and equipment users alike. The intent of mýa is to remove friction points and help the industry to operate more efficiently, ultimately saving resources,” explained Dr Alan Atkins, Chief Executive Officer of the newly founded mýa Connection.

Atkin stressed the group is looking for additional founding partners who can “take a seat at the table and define the direction and development of the mýa platform and shape the future of data usage.”

Backing up solar PV with gas gensets and energy storage, Fortescue taps various energy sources to lower its overall generating costs. The Pilbara Generation Project also allows Fortescue to leverage its existing energy infrastructure including the Fortescue River gas pipeline and generation capacity at the Solomon power plant and make use of renewable power sources.

Capital expenditure for the project will be funded by a combination of operating cashflow and low cost asset finance. Fortescue stressed its capital expenditure guidance of US$2.4 billion for fiscal year 1020 is maintained, incorporating the Pilbara Energy Connect program.

Connecting remote gensets at various mines

Striving for sustainability, Fortescue said the new-build units will add to the Chichester solar-gas-hybrid project. Developed with Alinta Energy, this project will see up to 100 per cent of daytime stationary energy requirements of the Chichester Hub iron ore operations powered by renewable energy.

"Importantly, Pilbara Energy Connect allows for large-scale renewable generation such as solar or wind to be connected at any point on the integrated network," said Fortescue's CEO Elizabeth Gaines.

Alinta will build, own and operate the 60 MW solar PV generation facility at the Chichester Hub and 60km transmission line linking the Christmas Creek and Cloud break mining operations with Alinta Energy’s Newman gas-fired power station. On completion this will integrate with the Pilbara Energy Connect program, via 275km of high-voltage transmission lines.

Going forward, Fortescue plans to invest $700 million in various energy projects, with $250 million dedicated for Chichester phase one while the Iron Bridge hybrid project will receive the remaining US$450 million. Rival mining companies have invested in similar solar PV and energy storage capacity, notably B2Gold, Gold Fields, Harmony Gold and Norgold.