New year, same Permian

PLUS: US top LNG exporter, Ara acquires USD Clean Fuels, Equinor/BP rip up offshore wind contract, Macquarie buys Greek renewables, HASI invests in 605MW

Good Morning. This is the Sunya Scoop. The newsletter that takes energy transition news and turns it into an easy-to-read email for you.

Here’s what we have for you today:

  • U.S. liquefied natural gas (LNG) exports reached record highs in December 2023, positioning the U.S. to become the largest LNG exporter in 2023.

  • In December, U.S. terminals shipped 8.6 million metric tons (MT) of LNG, with significant supply growth compared to 2022.

  • The U.S. surpassed Qatar and Australia in LNG exports, which were the top exporters in 2022.

  • Factors contributing to the U.S. record production include the return of Freeport LNG and the full-year output of Venture Global LNG's Calcasieu Pass facility.

  • Full-year exports from the U.S. in 2023 rose by 14.7% to 88.9 million MT, driven by various factors, including the recovery of Freeport LNG.

  • Europe remained the primary destination for U.S. LNG exports in December, receiving over 61% of shipments.

  • Asia became the second-largest export market, receiving 26.6% of U.S. LNG exports in December, up from 18.5% in November.

  • Natural gas flows to major U.S. LNG export plants reached record levels, with an average of 14.9 billion cubic feet per day in January.

  • U.S. gas prices varied across benchmarks, with prices at $2.55 / MMBTU at the Henry Hub in Louisiana, $9.81 at the Dutch Title Transfer Facility (TTF) in Europe, and $11.52 at the Japan Korea Marker (JKM) in Asia.

  • Ara Partners acquires majority interest in USD Clean Fuels, LLC (USDCF).

  • USDCF is a prominent developer of logistics infrastructure in North America for the renewable fuels value chain.

  • As part of the deal, USDCF also acquires the West Colton Rail Terminal in California.

  • Ara Partners commits additional capital for expanding USDCF's infrastructure.

  • USDCF, based in Houston, Texas, focuses on safe, reliable, and economic delivery of renewable fuel feedstocks and biofuels.

  • The USDCF team, led by Dan Borgen (CEO) and Bob Copher (President), has experience in midstream infrastructure development.

  • The investment aims to support the growth of the North American renewable fuel market and the transition to a low-carbon economy.

  • George Yong, Partner at Ara Partners, believes the green molecules economy offers significant returns and impact.

  • The partnership combines a strong management team with a portfolio of terminal logistics projects for scalable infrastructure development.

  • APA Corporation (NASDAQ: APA) is acquiring Callon Petroleum Company (NYSE: CPE) in an all-stock transaction valued at around $4.5 billion, including Callon's net debt.

  • The acquisition complements APA's assets in the Permian Basin and enhances its position as a diversified independent exploration and production company.

  • Callon's assets, primarily in the Delaware Basin, provide additional scale and increase APA's oil-prone acreage by over 50%.

  • APA's global portfolio includes legacy assets in the U.S. and Egypt, ongoing development projects, and exploration opportunities.

  • Following the transaction, APA's worldwide production mix will be approximately 64% U.S. and 36% international.

The Permian arms race continues. Who’s next?

  • Equinor and BP have canceled their contract to sell power from the Empire Wind 2 offshore wind farm to New York.

  • The cancellation is attributed to rising inflation, higher borrowing costs, and supply chain issues.

  • Equinor is considering new offshore wind opportunities in response to New York's latest offshore wind solicitation.

  • New York's expedited solicitation allows companies to exit old contracts and re-offer projects at higher prices, with winners to be announced in February.

  • The power sale agreement for the 816-MW Empire Wind 1 project remains unaffected.

  • The offshore wind industry is vital for meeting climate change goals and decarbonizing the power grid.

  • Several offshore developers canceled contracts in 2023 due to inflation, interest rate hikes, and supply chain problems.

  • New York accelerated its solicitation after developers threatened to cancel contracts awarded in 2019 and 2021.

  • The first offshore wind farm in New York, Orsted's South Fork, began providing power in December.

  • Avangrid and Copenhagen Infrastructure Partners' Vineyard Wind 1 project in Massachusetts also produced its first power for the New England grid.

  • Macquarie Asset Management acquires 50% of Enel Green Power Hellas for approximately €250 million.

  • Partnership formed with Enel Group to develop renewable energy projects in Greece.

  • Enel Green Power Hellas operates a 566 MW portfolio of renewable energy projects in Greece.

  • Portfolio includes 59 operational projects with 482 MW capacity and 6 solar projects under construction with 84 MW capacity.

  • Enel Green Power Hellas is expanding into innovative storage and hybrid solutions.

  • Greece aims to double its renewable energy capacity to over 28 GW by 2030.

  • This investment supports Greece's energy transition and decarbonization efforts.

  • HASI (NYSE: HASI) invests in a renewable energy portfolio owned and operated by AES Corporation (NYSE: AES).

  • The investment involves structured equity in a 605-megawatt (MW) portfolio of solar and solar-plus-storage assets across 11 U.S. states.

  • The states included in the portfolio are Arizona, California, Colorado, Connecticut, Georgia, Hawaii, Illinois, Massachusetts, New York, Rhode Island, and Vermont.

  • Over 200 operational renewable energy projects are part of this portfolio, with a significant portion featuring battery energy storage.

  • The portfolio's cash flows are secured with diverse investment-grade corporate, utility, and municipal off-takers, and it has an average remaining contract life of 16 years.

  • AES will continue to own and operate these assets.

  • This investment strengthens the ongoing partnership between HASI and AES, aligning with their commitment to advancing the energy transition and freeing up capital for new clean energy projects in the U.S.

WSJ: Looking further ahead, are the technologies affordable? 

Lesser: To get to 2050, we have to go to net-zero, not just to go down a lot from where we are now. Then we have about 30% of technologies that are not close to affordable yet. The rest are somewhere in-between, a little too expensive but they’re not way too expensive. 

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DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.

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