Bloomberg Istanbul Turkish gas distributor Palmet Enerji AS agreed to buy all of EWE AG’s assets in the country for between €130mn ($148mn) and €150mn. Palmet beat its only competitor, State Oil Company of Azerbaijan Republic (SOCAR), to secure the assets of EWE Holding Turkey AS, Palmet chairman Doganay Samuray said in a phone interview yesterday. “We will have a stronger position in Turkey’s retail gas distribution market with this acquisition,” Samuray said. Palmet already operates gas grids in the Erzurum province in eastern Turkey, and Gebze, an industrial town to the east of Istanbul. “We held talks, and in the end decided not to buy EWE assets” in Turkey, Ibrahim Ahmadov, a spokesman for Socar in Baku, Azerbaijan, told Bloomberg. He didn’t elaborate. Palmet is in discussions with banks to finance the acquisition, which is subject to approval by Turkish energy and antitrust regulators, Samuray said. It may take “two or three months” to complete those talks. The borrowing for the acquisition will be in Turkish lira, which is the currency of EWE’s gas grid revenues in Turkey, Palmet chief financial officer Bora Kirac said. “We are in talks with five or six local banks but we will probably borrow from two or three of them.” EWE Turkey doesn’t have any outstanding debt, he said. Germany’s EWE hired Barclays Plc to manage the sale process, people with knowledge of the matter said in March. The agreed price is less than half the amount people familiar with the process had estimated the assets were worth in October. EWE’s Turkey unit owns 80% stakes in two gas grids in the provinces of Bursa and Kayseri, as well as a phone company, Millenicom. Its other assets include electricity trader EWE Enerji and Enervis, a technology service provider for the energy industry

OPEC and its allies plan to hold a meeting in March to assess their oil-production accord in Azerbaijan, and then ministers will gather to set policy in April, according to the organization’s top official.

The body that reviews the implementation of OPEC’s supply cuts, the Joint Ministerial Monitoring Committee, will convene in the Azeri capital of Baku on March 17 to 18, Secretary-General Mohammad Barkindo said in a statement. Ministers will then meet in Vienna on April 17 to 18 to decide whether the cutbacks should be extended beyond their scheduled expiry in the summer.

The 24-nation coalition of oil producers known as OPEC+, which includes OPEC nations as well as non-members, is cutting output to stabilize global markets. They have agreed to collectively reduce supplies by 1.2 million barrels a day for the first half of this year.

By restraining supply in 2017 and early last year, the alliance engineered a recovery in prices that ended the oil industry’s worst slump in a generation, but the market has started to weaken again. At about $60 a barrel in London, prices remain about 30 percent down from a four-year high reached in October.

It took more than a month for the Organization of Petroleum Exporting Countries to settle on the dates, an unusually long time for the group, which typically concludes each conference with a prompt resolution on when to meet again.

The delay may reflect the more complicated logistics that come with expanding into a broader coalition with more countries. Whereas in the past decisions were confined to the dozen-or-so members of OPEC, these days its consultations can involve all 24 nations in the broader network, with Russia having particular influence.

Pronounced volatility in oil prices in the month since OPEC+ announced its supply curbs suggests market participants have been looking for additional clarity on the organization’s plans.

Besides the two meetings for ministers, delegates will also convene in coming weeks to work on a framework that will cement co-operation between OPEC and non-OPEC over the long-term.

OPEC officials will meet to discuss the framework on Feb. 7 to 8, and representatives from their non-OPEC partners will follow-up the consultations on Feb. 18 to 19. The charter will be finalized in order to be considered by ministers at their meeting in April, Barkindo said.

China may boost its liquefied natural gas import capacity by nearly four-fold within two decades as it pushes toward using more of the fuel.
The Ministry of Transport has proposed the nation operate 34 coastal terminals with total annual import capacity of 247mn tonnes by 2035, according to people with knowledge of the draft plan. That compares with the nation’s total nameplate capacity of 67.5mn tonnes at the end of last year, according to BloombergNEF. The plan is preliminary and could change, said the people, who asked not to be identified as the information isn’t public.
The transport ministry didn’t respond to a faxed request for comment. The Shanghai Petroleum & Gas Exchange posted information about the plan on its website on Monday, citing a report by Southern Energy Observer.
President Xi Jinping’s government has prioritised using more natural gas in place of coal for residential and industrial use, sparking a race to increase supply and expand infrastructure such as pipelines, storage tanks and import terminals. Total gas imports surged 32% last year as the nation overtook Japan to become the world’s biggest buyer, both by seaborne LNG and pipeline. The boom was so big that China accounted for 65% of global LNG demand growth last year, according to Sanford C Bernstein & Co.
The draft plan consists of two types of terminals, said the people. The first is 13 facilities referred to as “key” or “important,” and will have a combined capacity of 165mn tonnes in 2035. A second category, known as “general” or “ordinary,” will total 82mn tonnes over 21 terminals. Additionally, there are six terminals planned inland along the Yangtze River that aren’t accounted for in the total capacity figure, they said. – With assistance from Dan Murtaugh.

[FRANKFURT AM MAIN] A transatlantic tiff over Europe’s natural gas supply came to the boil Sunday, as Donald Trump’s ambassador to Germany threatened firms involved in a pipeline from Russia with sanctions.

At stake is a mixture of economic and security interests for Moscow, Washington, Berlin and Paris — with equally direct consequences for Ukraine and other eastern European nations.

A letter envoy Richard Grenell sent to several businesses “reminds that any company operating in the Russian energy export pipeline sector is in danger… of US sanctions,” an embassy spokesman told AFP.

The letter by Grenell, a close ally of President Donald Trump, “is not meant to be a threat, but a clear message of US policy,” the spokesman said.

Pressure has been mounting on Berlin for months to turn away from the under-construction pipeline, which is set to double the capacity of an existing connection beneath the Baltic Sea.

Trump accused Germany last year of being “totally dependent” on and a “captive” of Moscow because of the natural gas supply.

But the louder the volume of complaints from Washington, the more Berlin has dug in its heels.

Chancellor Angela Merkel, backed by France and Austria, has in the past insisted the pipeline is a “purely economic project” that will ensure cheaper, more reliable gas supplies.

German Foreign Minister Heiko Maas also weighed in on the transatlantic row last week, saying “European energy policy should be decided in Europe, not in the United States.”

The confrontation echoes European leaders’ sticking to a 2015 deal with Iran to limit that country’s nuclear programme.

Trump has renounced the pact and threatened sanctions against EU firms doing business with Tehran.

– ‘Blackmail’ –

In an angry reaction from Russia Sunday, senator Alexei Pushkov tweeted that Trump was using “direct threats” to sell “more expensive American gas to Europe.”

The US embassy spokesman said that “the only thing that could be considered blackmail in this situation would be the Kremlin having leverage over future gas supplies.”

American officials argue that routing more gas through the Baltic and the planned TurkStream pipeline under the Black Sea will deprive Ukraine of vital transit income and isolate it from its allies.

That could be bad news for Kiev, which saw the Crimean peninsula annexed by Russia in 2014 and is battling Moscow-backed separatists in a conflict that has so far claimed over 10,000 lives.

“Firms supporting the construction of the two pipelines are actively undermining the security of Ukraine and Europe,” ambassador Grenell wrote.

US objections are shared by “nearly 20 European countries” such as vital EU member Poland, as well as the European Parliament and the US House of Representatives, the embassy spokesman said.

Merkel — a key player in Moscow-Kiev peace talks — says Ukrainian interests will be protected as some Russian gas will still be transported via the country once Nord Stream 2 is online.

– Gas ahoy –

But Germany has also appeared to make concessions to Trump by looking into construction of liquid natural gas (LNG) terminals on its north coast to accept sea shipments from the US.

Berlin was “studying options” to help fund gas facilities, Merkel spokesman Steffen Seibert said in October — although he denied the government was caving to US pressure.

Beyond Ukraine, Trump has explicitly linked his complaints over Russian gas to his push to get European members of the NATO alliance to spend more on defence.

“Germany just started paying Russia, the country they want protection from, Billions of Dollars for their Energy needs coming out of a new pipeline,” he tweeted in July. “Not acceptable!”

Merkel has long since committed to reach the NATO defence spending target of 2.0 per cent of GDP — albeit by 2024.

Last year, just 1.24 per cent of Germany’s output went on its military, compared with 3.5 per cent for the US.

AFP

Crude oil’s rally is starting to sweep away the pessimists. After starting 2019 on a cautious tone, hedge funds last week slashed bets on falling Brent crude prices to the low- est level since mid-November, as they looked to get out the way of a recovery that pushed oil back into a bull market. Wagers on increasing prices climbed the most in a month, reversing course from last week. The global benchmark surged last week, as the US and China made progress in trade talks and Opec members reaffirmed its commitment to head off a supply glut. Money managers have turned alternately bullish and bearish on the rally in recent weeks, but the evidence for a sustained move higher is getting- ting harder to ignore, said Mark Waggoner, president of Oregon brokerage Excel Futures Inc. “Just having another positive week is going to be huge for a lot of people’s psyches, after we got so beat up last year,” Waggoner said by telephone. “I think you’re going to see more of them coming on board this week.” Brent has gained more than 20% since hitting an 18-month low in late December. Nonetheless, it’s still down by almost a third since October and faces continuing pressure from the boom in US shale drilling and an uncertain economy. Prices fell for the first time in two weeks on Friday, retreating 2% to $60.48 a barrel. US crude prices finished the week up 7.6%, their best showing in six months. Data on hedge fund wagers for West Texas Intermediate crude weren’t available due to the US government shutdown. Brent net-long positions – the difference between bullish and bearish wagers – climbed 3.8% to 158,146 options and futures contracts in the week ending January 8, the ICE Futures Europe exchange said on Friday. Most of the shift came from a 3.6% decline on contracts predicting a Brent drop. Bets on rising prices edged up 0.8%. They’ve traded gains and losses for the past six weeks. Late December’s more bearish stance “was more about hedge funds squaring their books after they’d had a very bad year,” said Frances Hudson, a global thematic strategist at Aberdeen Standard Investments in Edinburgh. Sentiment has improved markedly, she said in a telephone interview. “Things seemed to have settled down a little bit in terms of production,” Hudson said.

Qatar’s recent decision to withdraw its membership from the Organisation of the Petroleum Exporting Countries (Opec) is a business decision that supports the country’s development strategy for its liquefied natural gas (LNG) sector, industry experts agreed during the Euromoney Conference held in Doha on Sunday.

With China refusing foreign waste under its new policy, countries are forced to handle their own plastic pollution. As holiday shopping ramps up, so do the dizzying varieties of plastic packaging tossed in recycling bins. And while we wish a miracle would transform this old garbage into something new, the reality is the waste left over from the holiday shopping frenzy is more likely than ever to end up in a landfill or incinerator. Until January of this year, the United States and other Western countries were foisting their low-value plastic waste on to China, with little concern for the environmental degradation this caused. To protect its citizens from the burden of foreign pollution, in the beginning of this year, China refused to be the world’s dumping ground and effectively closed its doors to plastic waste imports. China’s new National Sword policy of refusing foreign waste has brought a long-overdue moment of reckoning for the recycling industry, and by proxy, for manufacturers. Its clear recycling alone cannot come close to addressing the ballooning amounts of plastic waste piling up all over the country. Even before China’s waste ban took effect, only 9% of plastic in the US was actually recycled. No matter how diligently Americans sort their plastic waste, there is just too much of it for the US, or any other country, to handle. On the bright side, the ban sparked a much-needed conversation about improving domestic recycling infrastructure and recycling markets and has forced both companies and the public to re-evaluate the products and packaging that were previously assumed to be recyclable. But the ban has also been used as a wrongful justification for burning trash in incinerators. Waste incinerators became popular in the US in the late 80s, until harmful emissions of mercury and dioxins, toxic ash, technical failures, and prohibitive costs soured the public on the industry. However, there are still more than 70 relics left over from that failed experiment which continue to pollute surrounding communities and drain city coffers. One of the most notorious cases is in Detroit. The city’s incinerator, perversely named Detroit Renewable Power, exceeded emissions limits more than 750 times over the last five years, contributing to one of the highest rates of asthma in the country. Not only is the incinerator criminally polluting, it cost the city nearly $1.2bn in debt. According to US Energy Information Administration data, incinerators are the most expensive way to produce energy – costing twice that of nuclear and solar and three times the cost of wind. In some cases, recent incineration schemes are even disguised as recycling programs. For example, the city of Boise, Idaho, which was rocked by China’s waste ban, is directing residents to “recycle” their plastic by putting it in a special orange bag called the Hefty Energy Bag. The plastic is then melted to make fossil fuels to burn. This method, called pyrolysis, or “plastic-to-fuel”, is being pushed by the American Chemistry Council, Dow Chemical, Unilever, and others who are invested in continuing the status quo of churning out massive amounts of single-use plastic. Not only is this form of incineration the opposite of recycling, it gives people a false sense of security that single-use plastic is acceptable to continue making and using. Instead of coming up with increasingly complicated and expensive ways to deal with plastic waste, why not focus on preventing it from being made in such large quantities in the first place? We simply need less plastic in the world. Notably, many North American cities are cracking down on nonsense single-use plastic and resisting short-sighted, false solutions like plastic-to-fuel. Plastic bag bans or fees are underway in cities such as Seattle, Boston, San Francisco (leading to a statewide ban), and Washington, DC. Some cities are going even further: Vancouver is introducing a city-wide ban on single-use straws, foam cups, and containers starting June 2019. In addition to bans and fees on problematic products and packaging, several cities are also pursuing legislation that would force companies to pay for managing the waste created by their products instead of foisting disposal costs onto the consumer, thereby motivating them to change their manufacturing and delivery systems to eliminate or drastically minimize waste. This holiday season, the greatest gift manufacturers can give consumers is the option to buy their products without ending up with a recycling bin full of single-use plastic packaging destined for the burner or the dump. As the saying goes, “necessity is the mother of invention”. China’s National Sword policy gives us the opportunity to kick our society’s plastic habit once and for all and to put pressure on those most responsible for it: not consumers, not cities, but producers. – Guardian News & Media

Reuters Washington

Fiat Chrysler Automobiles NV will pay more than $700mn to resolve lawsuits from the US Justice De- partment and diesel owners over claims it used illegal software to allow 104,000 diesel vehicles to emit excess emissions, three people briefed on the matter said on Wednesday. Fiat Chrysler will pay $311mn in civil penalties to US and California regula- tors, about $75mn to states investigating the excess emissions and additional funds to off set excess emissions from the older cars. It will also pay $280mn to settle a law- suit by owners, the sources said. Fiat Chrysler has denied any wrongdo- ing and previously said there was never an attempt to create software to cheat emis- sions rules. In October, the company set aside €713mn ($815mn) to cover potential costs related to the case. Separately, Robert Bosch GmbH, a German auto supplier that made some components for the Fiat Chrysler diesel engines, is expected to announce it will settle suits from US owners for $30mn, one person said. The settlements are set to be an- nounced on Thursday at the Justice De- partment. Fiat Chrysler, Bosch and the Justice De- partment declined to comment. The Environmental Protection Agency issued a media advisory on Wednesday that said it would make an “announce- ment of a signifi cant civil action to ad- dress cheating on federal auto-emissions tests.” The Justice Department sued Fiat Chrysler in May 2017, accusing it of il- legally using software that led to excess emissions in 104,000 US diesel vehicles from the 2014-2016 model years. Fiat Chrysler won approval from US regulators in July 2017 to sell diesel vehi- cles with updated software. The company has repeatedly said it hoped to use that software to address agencies’ concerns over the 2014-2016 vehicles. The company is not expected to make any hardware changes to the vehicles and the fi x will not impact the vehicle’s fuel economy, two people said. Owners of those vehicles are expected to get an average of $2,800 each for com- pleting the software updates, the sources said. Fiat Chrysler will formally issue an emissions recall for the vehicles, but will not off er to buy back the vehicles, the sources said. The Justice Department in 2017 said Fiat Chrysler used auxiliary emissions controls in diesel vehicles that led to “substantially” higher than allowable levels of nitrogen oxide, or NOx pollution, which is linked to smog formation and respiratory problems. US and California regulators stepped up scrutiny of diesel vehicles after Volkswa- gen AG admitted in 2015 to illegally in- stalling software in US vehicles for years to evade emissions standards. VW has agreed to pay more than $25bn in the United States for claims from own- ers, environmental regulators, states and dealers. Regulators have also been probing die- sel emissions in Daimler AG’s US Mer- cedes Benz vehicles.