UAE Masdar’ Sustainability Report reveals global portfolio, advanced pipeline capacity grew 58% in 2023 -
Abu Dhabi Future Energy Company PJSC (Masdar) announced the release of its annual Sustainability Report, including a significant expansion of its clean energy capacity and resulting impact on CO2 avoidance, as well as plans for growth through an ambitious sustainable bond programme. Masdar grew its clean energy portfolio and advanced pipeline of clean energy capacity to 31.5GW in 2023, generated more than 26,700GWh of clean energy and avoided 14 million tonnes of CO2e, up from 10 million tonnes the previous year. This is the equivalent of removing almost 870,000 cars from the road. The Sustainability Report, which covers Masdar’s global operations for 2023, highlights the launch of the company’s roadmap to a US$3 billion Green Bond offering at the London Stock Exchange to unlock investment in renewable energy across the globe. With significant projects initiated in 2023, Masdar’s growing portfolio substantially increased its global sustainability impact. Milestone projects in new and existing markets including Indonesia, Saudi Arabia, the UAE, Egypt and Azerbaijan came online or were signed into agreement. Al Dhafra Solar PV, the world’s largest single-site solar power plant, was inaugurated in the UAE, and the country’s first wind project was added to the national power grid, and Southeast Asia’s largest floating solar plant, the 145MW Cirata plant, came online. Mohamed Jameel Al Ramahi Chief Executive Officer, Masdar, said, “As Masdar’s latest sustainability report highlights, 2023 was a pivotal year as we continued on a path of unprecedented growth, increasing our global clean energy capacity by more than fifty percent. Leveraging the power of our shareholders, we entered new markets, pioneered clean energy solutions, and played a vital role in supporting the UAE’s climate action leadership. This landmark report also showcases our unwavering commitment to embedding strong Environmental, Social and Governance (ESG) practices across every part of our organisation, including through our industry-leading green bonds initiative that has achieved the highest ESG credentials.” Masdar’s Sustainability Report also details the company’s rating of 2 and entity score of 71 from one of the leading sustainability rating providers Sustainable Fitch, reflecting Masdar’s good ESG performance and the green nature of its assets. In 2023, Masdar became the first EMEA corporate to receive the Sustainability PurePlayer Label for companies whose business is focused on environmental advancements. Showcasing Masdar’s sustainability achievements in its first year under a new shareholding structure bringing together UAE energy giants TAQA, ADNOC and Mubadala, Masdar’s 2023 Sustainability Report presents clear evidence of the country’s commitment to climate action and Masdar’s role as a key enabler of the UAE’s energy transition. Milestones outlined in the report support the tripling of global renewable energy capacity as part of the UAE Consensus reached at COP28, and the report highlights Masdar’s crucial representation of the UAE on the global stage to advance the energy transition. To-date, Masdar has developed and partnered in projects in more than 40 countries across six continents, with a clear mandate to increase its renewable energy portfolio capacity to 100GW by 2030.
UAE, Saudi Arabia lead Arab investments in green hydrogen
Regional heavyweights UAE and Saudi Arabia are working to build a strong base for producing and exporting green hydrogen as a clean energy source, thus enhancing their position as leaders in this sector regionally and globally, according to the Abu Dhabi-based Interregional Center for Strategic Analysis.. This comes as part of their efforts to shift towards renewable energy and diversify their economies away from dependence on oil. The emirates is investing heavily in the production of green hydrogen and ammonia, as part of its strategy to shift towards clean energy and sustainability, stated the report. The country is considered one of the world’s leading countries in investing in this field, and seeks to develop a sustainable infrastructure that enables it to export these products to global markets, in line with the vision of achieving carbon neutrality 2050, it added. The UAE owns the region's first station for production of green hydrogen, which is considered the fuel of the future. According to experts, it is expected to capture 25% of the global hydrogen market in 2030. Masdar aims to produce one million tons annually by 2030, while Adnoc’s production reaches 300,000 tons annually, while the emirates intends to increase investments in the clean energy sector to up to AED600 billion ($163 billion) by 2050. The UAE’s National Hydrogen Strategy aims to support local low-emission industries, contribute to achieving climate neutrality, and enhance and achieve global leadership in hydrogen production by 2031. The strategy focuses on 10 enablers, and outlines the key steps the UAE will take to accelerate the growth of the hydrogen economy and reduce emissions in high-emission sectors. Interregional analysis indicated that the UAE and Saudi Arabia are working to build a strong base for producing and exporting green hydrogen as a clean energy source, which enhances their position as leaders in this sector regionally and globally as part of their efforts to shift towards renewable energy and diversify their economies away from dependence on oil.
Big green ammonia investments
Interregional said that the most prominent investments of the UAE in green ammonia, which is known as a chemical that can be used as a clean fuel or as a means of transporting and storing hydrogen, which is an important element in the transition to a carbon-free economy. The key projects include: *Abu Dhabi Hydrogen Alliance Project: This alliance, led by Abu Dhabi National Oil Company (Adnoc) and local and international partners, aims to develop technologies to produce green hydrogen and ammonia using renewable energy sources such as solar energy. Abu Dhabi aims to become a global hub for hydrogen production and export. *Masdar Clean Energy Project: Masdar is working to develop renewable energy solutions and green hydrogen, which is used to produce green ammonia. Masdar has signed international cooperation agreements to promote this technology. *Fertiglobe Project: In partnership with ADNOC and OCI NVThis project is developing a green ammonia production plant in Abu Dhabi, aiming to meet the growing global demand for clean fuel. Masdar, one of Abu Dhabi’s renewable energy companies, aims to become one of the world’s leading green hydrogen producers. In 2021, the UAE launched the Middle East’s first green hydrogen production plant, with a capacity of 1.25 megawatts, in cooperation with Siemens. As per the update of the UAE Energy Strategy 2050, it was decided to triple renewable energy sources by 2030, raise the contribution of clean energy to 19.8 gigawatts by the same year, and raise the contribution of clean energy installed capacity to the total energy mix to (30%). The National Hydrogen Strategy also aims to produce 1.4 million tons of low-emission hydrogen annually by 2031, and increase production to 15 million tons annually by 2050.
Saudi long-term clean energy plan
On the kingdom, Interregional said it was investing heavily in green hydrogen as part of Vision 2030, which aims to diversify the economy and transform the Kingdom into a global center for clean energy. The NEOM project is one of the largest projects in this field, as the Kingdom plans to establish a green hydrogen plant at a cost of nearly $5 billion. It is expected to start operating by 2025, and aims to produce 650 tons of green hydrogen per day. In 2022, NEOM Green Hydrogen announced the signing of agreements with local, regional and international banks to build an integrated green hydrogen facility in Saudi Arabia, with a total value of $8.4 billion to produce up to 600 tons of green hydrogen per day from 110 electrolyzers with a capacity of 20MW, operating with a capacity of 4 GW of wind and solar energy, in order to produce up to 1.2 million tonne ammonia annually for export, upon the start of commercial operation in 2026. In addition, Saudi Arabia has signed several agreements with international partners to enhance its capabilities in producing and exporting green hydrogen, and the Kingdom’s investments are expected to reach billions of dollars in the coming years. The International Energy Agency expects green ammonia to account for 45% of energy demand in the shipping sector, while green hydrogen will not exceed 15% according to the 2050 carbon neutrality scenario, meaning that the use of green ammonia will be 3 times the use of green hydrogen in the shipping sector. Arab interest in green ammonia This started in 2021, as the UAE was the first to launch the debut project that year, using 40,000 tonne green hydrogen, at a cost of up to $1 billion. Egypt also launched a project to produce green ammonia during "COP 27", a project to produce 42,000 tons in the first phase. Interregional pointed out that the world was witnessing the establishment of major projects in hydrogen and green ammonia, seeking to provide low-carbon supplies of about 13 million tonnes. This included the Beaumont project in America (1.1 million metric tonnes), which will start production in 2025; the Brazilian Unigel project with investments of about $1.5 billion, and the project of the Canadian company Everwind Fuels and the German company EON Hydrogen to supply green ammonia to Germany starting in 2025, in addition to the project of the Australian company Fortescue and Insight Pivot to produce about 400,000 tonnes of green ammonia annually from 2026.-
Kazakhstan votes on whether to build first nuclear plant
Kazakhstan votes in a referendum on Sunday on whether to build its first nuclear power plant, an idea promoted by President Kassym-Jomart Tokayev's government as the Central Asian nation seeks to phase out polluting coal plants. The plan, however, has faced public criticism because of its hazards, the Soviet nuclear testing legacy, and fears that Russia will be involved in the project. "I have come to the conclusion that the decision to build the nuclear power plant, and to build it with (Russian state nuclear firm) Rosatom, has already been made in (Tokayev's office) and the people of Kazakhstan are being invited to polling stations as 'notaries' to authenticate this decision with their votes," popular blogger Vadim Boreiko wrote. Despite having sizeable natural gas reserves, the Central Asian nation of 20 million relies mostly on coal-powered plants for its electric power needs, supplemented by some hydroelectric plants and the growing renewable energy sector. Kazakhstan is already importing electric power, mostly from Russia, as its facilities, many of which are aged, struggle to meet domestic demand. And coal is generally regarded as the most polluting energy source.
SOVIET LEGACY
The government says a reliable energy supply is needed to supplement renewable sources such as solar and wind power, and, since Kazakhstan is one of the world's biggest uranium producers, nuclear power is a logical choice. "In order not to remain on the sidelines of global progress, we must use our competitive advantages," Tokayev said days before the vote. The former Soviet republic, however, does not enrich uranium to the point where it can be used as fuel. The cabinet estimates that a nuclear power plant would cost $10 billion-$12 billion to build. Critics say the same goal can be achieved with gas-powered plants which, although they still use fossil fuel, are much less polluting than coal plants and come with less risk. Kazakhstan was part of the Soviet Union in 1986 when the Chornobyl nuclear disaster occurred, and tens of thousands of Kazakhs took part in the subsequent clean-up operation which left many with lifetime health issues. The country was also the site of hundreds of Soviet nuclear weapon tests which have made large swathes of land uninhabitable, caused numerous diseases among people in nearby areas, and have caused many people to become distrustful of anything nuclear. "One should not always look back, remember the bad things, and complain," Tokayev said of such sentiment. "(We must) only move forward and be optimistic, otherwise we will lose in this global race to progress."
European Industry to Cut Gas Use for Years With Costs Soaring
Europe’s heavy industry, scarred by recent energy-price shocks, is likely to curtail gas use for years to weather a prolonged period of high costs and weak profits. A tighter gas market in 2025 is expected to push up energy bills. That means price-sensitive sectors such as ammonia production and refining will have to cut consumption, said Erisa Pasko, an analyst at Energy Aspects Ltd. in London. The curbs would erase a modest uptick in demand seen earlier this year. A vital feedstock and power-generation fuel, natural gas is used by producers of everything from chemicals and plastics to glass and steel. Prices soared when Russia’s invasion of Ukraine squeezed supplies, forcing some factories to halt or run at a loss. A sluggish economy means demand may not pick up again until 2027, according to Anna Galtsova, a director at S&P Global Commodity Insights. While industrial gas use is up year-on-year, S&P reduced its estimate for 2024 growth to 5.8% and sees a 0.7% decline in 2025. Consumption remains far below what it was before the energy crisis. Indeed, the data firm expects 9.5 billion cubic meters of annual demand to be permanently lost due to shuttered output and energy-efficiency measures. Energy-intensive sectors such as fertilizers and steel are among the worst affected. “It’s very difficult to compete with the steel industry outside Europe,” said Miroslav Kiralvarga, vice president of Slovakia’s US Steel Kosice, the largest producer of the alloy in central Europe. Since the gas-supply crunch, “the energy price has stabilized, but it’s not comparable with our competitors.” In Europe, gas is about four times more expensive than in the US. Plants in the European Union must also pay to emit carbon dioxide as part of the bloc’s emissions-trading system, while companies across much of America aren’t tied to any such program. US Steel Kosice accounts for about 5% of industrial gas consumption in Slovakia, which remains a key buyer of Russian fuel. A deal to transit supplies across Ukraine to Europe expires at year’s end, potentially exposing central Europe to higher costs as firms source alternative options, including liquefied natural gas. Chemical and fertilizer maker Duslo a.s., also based in Slovakia, said high energy expenses make it hard to compete. Fertilizers flooding in from Russia or Belarus, for example, are pushing out local producers in a number of European markets, Duslo Chief Executive Officer Petr Blaha said in an interview. “As a result, producers are leaving Europe for places like China, but mainly for the United States,” he said. Europe’s industrial gas demand next year will be 21% below the 2017-2021 average, Energy Aspects’ Pasko said, citing a weak economic outlook, particularly in Germany. Consumption may not start to return until a couple of years later, when a slate of new LNG projects comes on stream, lowering prices. Some industries may languish for even longer. “Ammonia production won’t have recovered to pre-crisis levels even by 2030, so that’s kind of what we’re facing,” said Matthew Jones, head of power analytics at consultant ICIS. “If we look more broadly at gas-to-industry demand in Europe, that peaked pre-Covid and won’t be coming back to that level at any point.”
Japan Firms Unite to Cut Methane Emissions from LNG Supply
Twenty-two Japanese utilities and trading houses are joining an initiative that aims to leverage their buying power to curb methane emissions from liquefied natural gas supply chains, as pressure mounts globally to curb the harmful greenhouse gas. Companies joining the Coalition for LNG Emission Abatement Toward Net Zero initiative include all of Japan’s major power utilities as well as trading firms like Mitsubishi Corp. and Mitsui & Co., according to a copy of a report from the group seen by Bloomberg News. The CLEAN partnership was launched last year in Tokyo by Jera Co. and Korea Gas Corp. in collaboration with state-backed Japan Organization for Metals and Energy Security to collect data on methane emissions from individual LNG projects. The expansion of the group could add pressure on major LNG suppliers from the US to Australia to cut methane emissions from their supply chains. A Kansai Electric spokesperson said the utility is considering joining the CLEAN initiative, but declined to comment on whether it has decided to participate. Spokespeople for Jogmec and Mitsubishi declined to comment. Mitsui was not immediately available to comment. Japan and South Korea are the second- and third-largest buyers of LNG and together accounted for 27% of the world’s imports of the fuel last year. Although support is growing to cut releases of the potent gas scientists say atmospheric concentrations of methane have risen faster over the past five years than in any period since recording began. The greenhouse gas with more than 80 times the warming power of carbon dioxide during its first two decades in the atmosphere and can be intentionally or accidentally released from oil, coal and gas supply chains. Halting those emissions are some of the lowest hanging fruit in the fight against climate change. According to the document compiled by Jogmec and seen by Bloomberg, 20 LNG projects were surveyed but only seven responded about their methane emissions. The expansion of the CLEAN group was reported earlier by Nikkei and a formal announcement is expected at the LNG Producer-Consumer Conference this Sunday in Hiroshima
Russia’s Oil Revenue Grew in September at Companies' Expense
The Russian state’s oil revenue showed slight annual growth in September, as the government offset weaker energy prices by halving monthly subsidies to the nation’s crude producers The Russian budget received a total of 597.2 billion rubles ($6.28 billion) from its oil industry last month, up nearly 4% from a year earlier, the Finance Ministry said on Thursday. This is a key source of funds for the Kremlin as it seeks to withstand Western sanctions and cover the growing military cost of the invasion of Ukraine. Proceeds from key levies on the companies were lower amid a stronger ruble and weaker prices for Russian main crude export blend, Urals. The Kremlin’s combined revenue from oil-production taxes and the so-called oil profit-based tax in September declined to 902 billion rubles, almost 10% lower than a year earlier, according Bloomberg calculations based on the ministry data. Lower subsidies to Russian oil producers, paid to encourage gasoline and diesel supplies to the domestic market, offset this decline. In September, the payouts reached 145.7 billion rubles compared with nearly 300 billion rubles a year ago. The drop in payouts reflects a narrower gap between Russia’s domestic fuel price and the virtual price for fuels in northwestern Europe. The government sees the export price of Russian Urals crude dropping in the next three years, yet the invasion in Ukraine will still be amply financed, with military expenditures at historic highs, the Russian budget draft for 2025-2027 shows. While global crude prices have increased in recent days amid the military crisis in the Middle East, the fundamentals of supply and demand are a concern for main crude producers and exporters. Russia and its allies in the Organization of Petroleum Exporting Countries are trying to balance the market by withholding some output until December, when a phased production restart is set to begin. Russia’s September oil taxes were calculated based on the Urals price of $70.27 a barrel and an exchange rate of around 89 rubles per US dollar. In September 2023, a Urals barrel averaged $73.73 and the Russian currency traded at 95.28 per US dollar, according to data from the Federal Tax Service. Russia’s September proceeds from the gas industry alone grew almost 6% year on year, to almost 175 billion rubles, spurred by rebounding production, pipeline exports and robust domestic demand.
Russia Lifts Gas Output But 2024 Flow Seen Below Pre-War Level
Russian natural gas output rose almost 9% during the first nine months of this year, putting it on track to meet a government target but still far short of levels before the invasion of Ukraine. About 515 billion cubic meters of gas was produced between January and September, according to Bloomberg calculations based on industry data. That includes almost 464 billion cubic meters in the first eight months of the year, plus just over 45 billion cubic meters in the first 26 days of September, according to a person familiar with the preliminary results. If Russian gas companies continued to produce at the same pace, the September total would have been around 52 billion cubic meters. That leaves Russian gas output close to the government’s 10% annual growth target, as the Kremlin seeks to bolster revenues to fund its war in Ukraine. But that’s still below production in 2021, the last year before the invasion. All the data include flared gas volumes. Russia’s gas output slumped in late 2022 and kept falling through the first half of 2023, as the nation all but cut off pipeline flows to European buyers following the invasion in Ukraine. Now production is rebounding as the nation’s largest gas producer Gazprom PJSC sees higher demand at home and growing exports to China and Central Asia. Russia’s gas output in 2023, including flared volumes, reached just over 659 billion cubic meters, according to historic data seen by Bloomberg. The targeted 10% hike would bring volumes to around 725 billion cubic meters this year. Russian officials put 2023 production at 637 billion cubic meters, excluding flared gas. A 10% hike would take gas output to around 700 billion cubic meters this year.
Arctic LNG 2
Fields feeding the sanctioned Arctic LNG 2 produced just under 314 million cubic meters of gas over Sept. 1-26. That means the project’s output for the whole of last month was probably close to August’s near-record levels, Bloomberg calculations show. The robust output may have allowed the facility to process gas at the August pace, using the remaining few weeks left in the Arctic summer navigation season for loading cargoes. Novatek PJSC, which leads the Arctic LNG 2 project, didn’t immediately respond to a request for comment. Arctic LNG 2 has become a target for tougher western sanctions in the past year as the US and its allies consider the project a source of future revenues for the Kremlin’s increasing military spending. The September industry data seen by Bloomberg does not disclose Gazprom’s gas output. Yet the combined production of the category in which its volumes are included — and where Gazprom is by far the largest producer — reached 29.5 billion cubic meters over Sept. 1-26. That’s more than 65% of the nation’s total. If the companies included in this category pumped gas at the same average daily pace through the rest of the month, the combined September volumes would have reached just over 34 billion cubic meters. That’s only slightly below the August output for this category, according to the person familiar with the data.
Oil Turns Higher as Traders Await Israel Response to Iran Strike
Oil erased an earlier loss as the market and rise upward as tension in ME fries while waited to see if Israel would retaliate against Tehran for a missile attack last week, with President Joe Biden discouraging a strike on Iran’s crude fields. Brent rose above $79 a barrel, after jumping the most since January 2023 last week, while West Texas Intermediate surpassed $75. See attached charts Biden said on Friday that he didn’t know when an Israeli response would come, but “I’d be thinking about other alternatives than striking oil fields.” Iran’s attack on Israel has raised fears over an all-out war in the Middle East, and prompted a flurry of action in the options market. Still, questions about the demand outlook — especially from No. 1 importer China — and plentiful supply continue to hang over the market. “All attention is once again on the Middle East, especially whether there will be a military response from Israel following last week’s Iranian missile attack,” said Arne Lohmann Rasmussen, Chief Analyst at A/S Global Risk Management. The Middle East remains on edge, with Israel sending troops back into northern Gaza over the weekend and keeping up aerial attacks and limited ground maneuvers in Lebanon. Iran’s oil output has returned to almost full capacity and could be vulnerable as tensions escalate. Options markets for oil continue to retain their bias toward bullish call options — which profit buyers when futures gain. A gauge of implied volatility for Brent was near the highest level in almost a year, while money managers have added more net-long positions for the global benchmark. Goldman Sachs Group Inc. predicted Brent could surge to the $90s if Iran’s oil supply is disrupted, according to a note from analysts including Daan Struyven. However, JPMorgan Chase & Co. said attacking Tehran’s energy facilities wouldn’t be the preferred course of action. Saudi Arabia, meanwhile, raised its main oil price for buyers in Asia by a greater-than-expected amount, while simultaneously cutting prices of all grades exported to the US and European markets. China’s top economic planner will hold a press briefing on Tuesday to discuss a package of policies aimed at boosting economic growth, according to a notice from the government on Sunday. Expectations are rising among analysts for Beijing to expand public spending as part of its stimulus package.
Close last week Oil prices set for 10% weekly rise as Middle East tensions heat up
Oil prices rose sharply on Friday, and were on track for 10% weekly gains as investors weighed the prospect of a wider Middle East conflict disrupting crude flows after President Biden said the US was discussing an Israeli attack on Iranian oil facilities. Brent crude futures were up $1.09, or 1.4%, at $78.71 a barrel, as of 1120 GMT. U.S. West Texas Intermediate crude futures were up $1.08, also 1.5%, at $74.79 a barrel. "While Iran has 'saved face' by its rocket attack on Israel on Tuesday, fears are growing that Israel might target Iranian oil infrastructure under its response, which could provoke further retaliation dragging neighbouring states into the conflict," Panmure Gordon analyst Ashley Kelty said. The U.S. is discussing whether it would support Israel strikes on Iran's oil facilities as retaliation for Tehran's missile attack on Israel, President Joe Biden said on Thursday, while Israel's military hit Beirut with new airstrikes in its battle against Lebanese armed group Hezbollah. Biden said later in the day on Thursday he would not negotiate in public when asked if he had urged Israel not to attack Iran's oil facilities. Biden's comments contributed to a 5% rally in oil prices on Thursday, as Israel weighs its options after arch-foe Iran launched its largest-ever assault on Tuesday. "The market had already had a substantial amount of short positioning and low amounts of net length in the market – leaving the market prone to price spikes higher," StoneX analyst Alex Hodes said. Concerns over oil supply that drove up prices earlier in the week have also been tempered by OPEC's spare production capacity and the fact that global crude supplies have yet to be disrupted by the Middle East unrest. Meanwhile, Libya's eastern-based government and Tripoli-based National Oil Corp announced on Thursday the reopening of all oilfields and export terminals after a dispute over leadership of the central bank was resolved, ending a crisis that had heavily reduced oil production. This would allow the country to more than double its production levels, restoring them to about 1.2 million bpd.