Energiser Investments Share Discussion Threads

[waldron] 27/9/2021 10:21

EAD and Engie launch phase II of mangrove rehab project
ABU DHABI, 1 hours, 9 minutes ago
The Environment Agency – Abu Dhabi (EAD), in partnership with the global energy company Engie, has announced the launch of the second phase of the Blue Carbon Environmental and Social Responsibility project.

After a successful pilot launch in 2020, the second phase of the project involves using highly innovative drone planting technology to sow mangrove seeds.

Dr Shaikha Salem Al Dhaheri, Secretary General of EAD, said: “Mangroves play a critical role in our fight against climate change. These carbon-rich forests that dot the coastline of Abu Dhabi are key to stabilising our environment and preserving the natural habitat of several species. The Blue Carbon project is one of its kind in the region and I am delighted that it has advanced to Phase II, following its very successful pilot launch in 2020. Rebuilding and restoring an ecosystem that resiliently protects our coast will support the sustenance of mankind while consequently combatting climate change.”

Hosted at the EAD Headquarters in Abu Dhabi, the event was attended by the Blue Carbon project team from EAD, Engie, and its partner, Distant Imagery, who are specialists in engineering drone solutions that are based on blue carbon restoration expertise. They have also designed and engineered drone rigging in the UAE.

All attendees collaborated and participated in making seedballs, which help protect the seeds when they are launched from the drone, as well as provide nutrients to ensure proper germination of the seeds when planted in the soil.

The project was initiated last year, in a very successful test pilot where approximately 2000 seeds were planted. Almost one year after the first planting, the success rate is estimated to be 25%, despite the volatile weather conditions of last year. Implementing the learnings from last year, supported by an advanced drop mechanism and methodology, this year, the project team expects a success rate of at least 35%. These are excellent results if compared to the typical mangrove survival rate in nature of 5%.

As part of the second phase of the project, plant seeding will take place earlier in the season, from early September, to ensure they are given an increased chance to stabilise and grow. There will also be a change in seeding time, to ensure seeds are captured with the highest chance of survival.

Ahmed Al Hashmi, Acting Executive Director for Terrestrial and Marine Biodiversity at Environment Agency Abu Dhabi, said: “Restoring biodiversity and preserving vulnerable ecosystems is not a choice anymore but a necessity for the survival of humankind, in the wake of climate change. With this in mind, we are glad to be working with Engie on this project. To us, this project is a direct extension to The UAE’s National Blue Carbon Project and The Abu Dhabi Blue Carbon Demonstration Project that was launched in 2012, that focused on mapping the UAE’s carbon sinks extensions and capacities."

Commenting on the project, Florence Fontani, Chief Communications and Sustainability Officer, Engie Africa, Middle East, and Asia (AMEA), said: “Our partnership with EAD and Distant Imagery for this project sets an example to better engage to achieve carbon neutrality and address challenges in preserving coastal and marine ecosystems for human life. At Engie, we are honoured to be part of this project and support the country’s goals towards conserving the rich environmental ecosystem for the generations to come.” -- TradeArabia News Service

[florenceorbis] 25/9/2021 05:15

An Unstoppable Natural Gas Rally

By Editorial Dept - Sep 24, 2021, 1:30 PM CDT


1. Oil Supply Disruptions Set To Ease

- With September seeing crude supply disruptions across continents, the upcoming months should bring most of that idled capacity back, also boosted by the end of field maintenance in Kazakhstan and Canada.

- Russia’s condensate supply was derailed by an August explosion at Gazprom’s condensate treatment plant, whilst Nigerian exports were hindered by oil spills and pipeline attacks.

- Shell, the main producer in the US Gulf of Mexico, indicated that repairing the West Delta-143 platform will take at least several months, shaving off some 250,000 b/d of production over Q4 2021.

- More than 16% of US Gulf of Mexico production is still shut-in, equivalent to almost 300,000 b/d as the pace of restoring output has weakened substantially this week.


2. Gas Prices Continue Their Insane Run

- Europe’s benchmark TTF pricing has netted another all-time high this week, with front-month ICE prices reaching €75 per MWh ($25 per mmBtu) this Monday, before dipping closer to the €70 per MWh threshold.

- In the meantime, spot LNG prices in Asia continued their upward movement, too, surging past $25 per mmBtu this week in unison with Europe.

- Russia’s pipeline gas monopoly Gazprom has still failed to book additional October capacity as it continues to replenish domestic inventories, while landed LNG prices in Europe are more than fourfold their seasonal average.

oilprice.co

[florenceorbis] 25/9/2021 05:00

EU Ministers Unveil Plan to Weaken Russian Grip on Gas Supply

5 hours ago

Europe’s energy ministers have joined forces to establish a plan that will reduce their dependence on foreign gas and purchase supplies as a bloc as part of a larger effort to combat Russia’s stake in the highly-coveted resource.

The plan is to purchase strategic gas reserves as a bloc with the goal of allegedly “countering221; Russian efforts to cut supply and hike prices.

The Times reported that prior to the European Union energy meeting on Wednesday, discussions were largely overshadowed by global gas shortages and forthcoming price spikes that many believe will prompt an energy crisis across Europe over the cold winter months.

“We’ve seen huge price increases,” said Dimitri Vergne, head of the energy team at the European Consumer Organization. “It’s worrying ahead of the winter, when gas consumption will necessarily increase.”

Gas accounts for over a fifth of the European Union’s energy mix, although it varies across the bloc — Russia provides 41% of the bloc’s gas.



Globally, the demand for gas has risen tremendously, and since the start of the year, wholesale gas prices in Europe have risen by 250%.

Some of the European nations at stake include Germany, France and Spain.

Alexey Miller, the head of Russia’s Gazprom, has warned that gas prices across Europe are more than likely to “reach new record highs” in the coming months.

The decrease in the volume of natural gas exports from Russia to northern Europe is a result of last year’s harsh and prolonged winter that caused a storage capacity — the maximum volume of natural gas that can be stored at a storage facility.

Individual EU countries are already intervening to ease the energy crisis, with Spain taking the lead after announcing emergency measures to cap energy prices and profits.

France has promised one-time payments of €100 (£86) for households struggling to pay their energy bills.

More recently, Annalena Baerbock, a German election candidate and leader of the Greens party, joined in on the chorus of individuals who have laid blame on Russia for gas issues.

Baerbock said that the German government should send a message to Moscow quoting, "Russia must stick to its promises and supply enough gas through the existing pipelines like it used to.”

Meanwhile, the energy ministry's spokeswoman, Suzanne Ungrad, said on Wednesday that Russia was fulfilling existing supply deals and did not disregard any long-term contracts.

sputnik international

[waldron] 23/9/2021 08:46

Engie’s environmental preservation efforts recognised

DUBAI, 0 hours, 33 minutes ago

Engie, a global reference group in low-carbon energy and energy efficient solutions, has been honoured with a Gold award in the ‘Environmental Sustainability Programme – Large enterprise” category.

The firm also won a Silver and Bronze award for ‘Innovation in Sustainable Technologies – Large enterprise’ category at the Gulf Sustainability Award 2021.

Held on September 20, 2021, at Jumeriah Creek Side Hotel in Dubai, Engie’s “Blue Carbon” project in partnership with the Environmental Agency of Abu Dhabi (EAD) and Distant Imagery, was commended for its pioneering feat to restore the mangrove habitat in Abu Dhabi.

In addition, Engie Solutions’ Integrated Centre for Engineering & Environment (iCEE) platform also took center stage for its capability to support clients in assessing operational and energy savings of their facilities and assets.

Carbon dioxide is sequestered three to four times faster by mangrove forests than other ecosystems on the planet. The coastline of Abu Dhabi is covered by mangroves, which play a vital role in storing blue carbon and offsetting carbon emissions.


The Blue Carbon project was launched in 2020 by Engie and EAD with an aim to ensure the rehabilitation of the region’s natural biodiversity through impactful climate actions. Engie’s efforts are supported by its partner, Distant Imagery, specialists in engineering drone solutions based on blue carbon restoration expertise, who use their custom-built drones and innovative technology to ensure the effectiveness and efficiency of planting mangrove seeds.

Similarly, with the aim to drive sustainable technology solutions across the business, and support clients in their transition towards becoming carbon neutral, Engie Solutions set up an Operational Control Centre called The Integrated Centre for Engineering & Environment (iCEE). From there Engie operates smart IoT platforms that include artificial intelligence and machine learning to automatically identify energy and operational savings and detect issues before they happen.

Florence Fontani, EVP Communications & Sustainability, Engie Africa Middle East & Asia, said: “Engie is committed to a carbon-neutral transition, and through natural based solutions we are actively contributing to the sustainable development goals. Blue carbon ecosystems also support local industries like fishing, tourism, and agriculture to flourish, that has the potential to contribute towards the UAE’s carbon-neutrality and sustainability agenda. Projects such as the Blue Carbon project are fully aligned with Engie’s decarbonisation pathway as it uses scientific expertise to provide innovative solutions to offset CO2 emissions.”

The Gulf Sustainability Award 2021 celebrates conscientious business practice within the region that are leading the way for Environmental, Social and Corporate Governance. It aims to inspire businesses to take the road towards sustainability and promote changes in that regard.-- TradeArabia News Service

[waldron] 20/9/2021 18:22

Nord Stream 2 Could Still End Up In "Investment Ruin"

By Irina Slav - Sep 20, 2021, 11:00 AM CDT


Nord Stream 2, the controversial pipeline, may yet flop, according to the co-leader of the European Greens, Reinhard Butikofer.

In an interview with German dpa, the co-chair of the Green Party in the European Parliament said there are still obstacles that Nord Stream 2 needs to clear before it is put into operation, and even after it clears them, the European Commission could still stop the project and turn it into an "investment ruin."

Nord Stream 2 is set to expand the capacity of an existing pipeline under the Baltic Sea to Germany twofold, to 110 billion cubic meters annually. It has exacerbated bilateral problems between Russia and the EU because its route bypasses Ukraine, which relies on Russian gas transit fees for much of its budget revenues.

At the same time, there is a concern that more Russian gas coming into Europe will make it more vulnerable to Russian political pressure.

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Be that as it may, much of Europe is currently finding itself in dire need of natural gas amid lower than normal inventories and strongly rising demand that has led to a surge in gas prices.

"The shout of triumph with which the Russian side is celebrating the completion of the Nord Stream 2 pipeline is premature," Butikofer told dpa. He then went on to list three challenges still remaining for Gazprom.

First, it needs to unbundle its gas production operations from its gas infrastructure operations. The unbundling rule aims to prevent gas monopolies. Second, Gazprom must give third parties the right to feed gas into the pipeline, which it has not yet done. Third and last, the Nord Stream 2 pipeline needs to receive the go-ahead from the German authorities, which is also pending.

Yet even if the German authorities grant Gazprom and its Nord Stream partners a permit for the pipeline, the European Commission can cancel it if it finds the project violates European energy law, the EP official explained.

By Irina Slav for Oilprice.com

[grupo] 16/9/2021 07:53

The stock is holding up well (almost stable) while the CAC40 is losing nearly 1%. Barclays reaffirms its 'overweight' recommendation while raising its target price for Veolia from €33 to €35. The stock is one of a list of European utilities stocks that 'look well positioned in the near term'.

Based on our analysis, EDF, Engie, Fortum, RWE and Veolia each benefit from an attractive combination of major strengths...' explains the broker, in a note where it 'seeks to identify the next major short-term catalysts' for the sector.

Translated with www.DeepL.com/Translator (free version)

[waldron] 15/9/2021 22:12

Nord Stream 2 Comes Just As European Gas Prices Reach 13-Year High

By Tsvetana Paraskova - Sep 15, 2021, 2:00 PM CDT


The sooner Nord Stream 2 is commissioned and launched, the better chance the Russia-led gas pipeline to Germany will have to balance surging gas prices in Europe, including on the spot market, Kremlin spokesman

Dmitry Peskov said on Wednesday.

“Obviously, the commissioning of Nord Stream 2 as soon as possible will substantially balance natural gas price parameters in Europe, including on the spot market,” Peskov told reporters in Moscow today, as carried by Russian news agency TASS.

Europe’s current natural gas demand is huge, and if the winter is colder than usual, even more gas will be needed, Peskov added.


Last Friday, Gazprom said it had completed the construction of the Nord Stream 2 pipeline, although gas flows on the controversial Russia-led pipeline cannot begin until Germany grants an operating license to the project.

Germany’s federal networks regulator BNA said earlier this week that it would decide no later than January 8, 2022, whether it will certify Nord Stream 2 and issue an operating license for the natural gas pipeline.

Europe is grappling with soaring natural gas and electricity prices ahead of the winter heating season due to tight gas supplies, very low gas inventories across the continent, and low wind power generation amid still weather.

During the summer, even with the strong rebound in European natural gas demand and surging prices, Gazprom did not book additional entry capacity to Europe via Ukraine.

Analysts say that this could have been an opportunistic move from the Russian giant to drive up Europe’s gas prices further and take advantage of what are now the highest prices in 13 years. Other analysts think that Gazprom’s effective reduction in supplies would force Europe to recognize that gas customers on the continent need the controversial Nord Stream 2 pipeline to Germany bypassing Ukraine.

By Tsvetana Paraskova for Oilprice.com

[grupo] 14/9/2021 11:38

Air Liquide SA said Tuesday that it is partnering with TotalEnergies SE to optimize performance at the French oil-and-gas major's hydrogen platform in Normandy, France and develop a low-carbon hydrogen network.

The French industrial-gas company said that it will take over and operate TotalEnergies' hydrogen production unit of 255 tons a day under a long-term contract agreement, ultimately connecting it to its network.

Financial details weren't disclosed.

The companies also plan to jointly develop a carbon capture and storage project that will decarbonize the hydrogen produced at the site.

Transferring the hydrogen production unit to Air Liquide is subject to the approval of competent authorities as well as the process of consulting employee representatives at the TotalEnergies Normandy platform.



Write to Giulia Petroni at [e-mail]



(END) Dow Jones Newswires

September 14, 2021 05:04 ET (09:04 GMT)

[waldron] 09/9/2021 13:16

Nord Stream 2

Gazprom plans to launch Nord Stream 2 on Oct. 1, Bloomberg says


Published Sept. 9 at 1:40 pm
.

Government moves closer to selling Bolshevik machine factory in Kyiv
High-profile cases that stalled under Venediktova

The first deliveries of gas through Nord Stream 2 may take place on Oct. 1, U.S. media Bloomberg reported, citing anonymous sources within Russian state-owned gas company Gazprom.

Gazprom didn’t answer the Kyiv Post’s request for comment.

Gazprom announced on Sept. 7 that it had welded the final piece of pipeline, which would shortly be laid onto the seabed. The pipe can start operating after the Danish and German sections are connected.

Nord Stream 2 will allow Russia to bypass Ukraine while transporting gas to Europe through Germany, depriving Ukraine of at least $1.5 billion in transit fees per year.

The controversial project is awaiting technical certification and insurance from the German gas regulator, which is still considering Nord Stream 2’s application as an independent transmission system operator.

The amount of gas that will flow through the pipeline is still being negotiated. Russia may only be allowed to use half of the capacity of its Nord Stream 2 undersea pipeline to Germany, a German regional court ruled on Aug. 25.

Under European regulations, half of the pipeline’s capacity must be auctioned to third parties to be allowed to operate in Europe, the court ruled, according to Bloomberg.

There are no third-party gas exporters in Russia, where Gazprom is a monopoly. This ruling would only allow Gazprom to send 27.5 billion cubic meters through the pipeline per year. The maximum annual capacity is 55 billion cubic meters.

Bloomberg’s source also revealed that by the start of December, Gazprom hopes to send gas through both lines of the pipeline, transporting a total of 5.6 billion cubic meters of natural gas by the end of the year.

Gazprom hopes to begin deliveries before the start of the winter due to a gas shortage in Europe.

In May 2021, head of Gazprom’s exporting division Elena Burminstrova suggested that Gazprom could “cover additional demand with the commissioning of Nord Stream 2.”

The comment that led Ukrainian energy think-tank Dixi Group to accuse Gazprom of manipulating the gas market to create an artificial deficit to make it look like Nord Stream 2 is necessary.

[misca2] 07/9/2021 11:55

Spanners in the gasworks


[...]


biznesalert.com/the-end-of-nord-stream-2-construction-is-just-the-beginning/

[la forge] 07/9/2021 10:38

Europe’s High Energy Prices Are Just The Beginning
By Julianne Geiger - Sep 06, 2021, 3:30 PM CDT

European energy prices might be at record levels, but there is still room for prices to run, according to a Bloomberg analysis.

Of course, natural gas prices are soaring everywhere—not just in Europe. The U.S. benchmark price for natural gas has nearly doubled over the last year, with front-month Henry Hub prices reaching $4.690/MMBtu as of September 6. And that’s despite record natural gas production in hot basins like Appalachia.

But U.S. gas exports are soaring more, hitting all-time records.

For Europe, which is coming off pandemic restrictions, the increased demand for natural gas and electricity as people return for work is triggering higher prices, and therefore inflation. Germany is battling the highest inflation since 2008, thanks to higher energy prices.

Typically, demand for natural gas this time of year is still low.

Today’s high prices, at a time when demand is typically low, are worrisome for Europe, which is now looking at a difficult winter, with natural gas inventories at painfully low levels.

The situation isn’t helped any by wind power, either, because low wind speeds and high temps are tamping down renewable power production, and in the process, paving the way for higher coal consumption.

And if Europe is still hoping that its own fossil fuels would prevent a winter price crunch for power, it would be wrong. According to Bloomberg, several production outages and declining gas fields have helped to send natural gas prices trading at a premium to crude oil.

Some estimates see retail consumers paying 20% more for utility bills.

Julien Hoarau, head of Engie SA’s analytics unit EnergyScan, said that Europe’s problems haven’t even started yet.

By Julianne Geiger for Oilprice.com

[the grumpy old men] 06/9/2021 19:51

6 september 2021, 18:00
61

Nord Stream 2 AG: the last pipe has been welded in Baltic Sea

The pipeline is expected to begin commercial flows this year, giving Gazprom a new direct supply link to Germany

Nord Stream 2 AG: the last pipe has been welded in Baltic Sea

Source: Nord Stream AG

Moscow, September 6 - Neftegaz.RU. Today, specialists on the laybarge Fortuna welded the last pipe of the 2 strings of the Nord Stream 2 pipeline.
The pipe № 200 858 will be lowered onto the seabed in German waters.

As the next step, the section of the pipe coming from the German shore will be connected to the section coming from the Danish waters in a so-called above water tie-in.
Afterwards, the required pre-commissioning activities are carried out with the goal to put the pipeline into operation before the end of this year.

In August, Gazprom said that Nord Stream 2 might supply 5.6 billion m3 of gas to Europe this year.
Gazprom's estimate for throughput this year is roughly a 10th of the annual nameplate amount, suggesting that if the pipeline is pressured up in the autumn, then flows could start some time in November.

Ukraine fears the pipeline will strengthen Russia’s influence and the country will lose about $3 billion a year in gas transit fees.
Part of the agreement is Germany’s commitment to help Ukraine in negotiating an extension to its current transit agreement with Russia.

Germany has also guaranteed it will reimburse Ukraine for gas transit fees it will lose from being bypassed by Nord Stream 2 until 2024, with a possible 10-year extension.

Nord Stream 2 could carry hydrogen in the future and would be ready to do so within 10 years.

To read the news in Russian

Source : Neftegaz.RU

[florenceorbis] 06/9/2021 11:50

Spie Submits Offer for Engie's Technical Services Provider Equans

09/06/2021 | 05:18am EDT


By Giulia Petroni

Spie SA said Monday that it is submitting a non-binding offer to acquire Engie SA's newly created technical-services provider Equans.

The French engineering company said the acquisition would be funded through a combination of debt and equity. Investment bank Bpifrance and U.S. private-equity company Clayton, Dubilier & Rice, LLC would help provide equity financing.

"This project and its financing structure would allow for a solid earnings per share accretion as early as the closing of the transaction, and growing strongly thereafter," Spie said.

The offer is subject to confirmatory due diligence.

Equans was launched earlier this year as an independent business, managing most of Engie's services-led activities in 17 countries. Equans combines activities that have a total 12 billion euros ($14.25 billion) in revenue, according to Engie.

French utility company Engie previously said it would consider all options regarding the evolution of the shareholding structure of Equans.

Other parties interested in a deal include French construction-and-media conglomerate Bouygues SA and construction-and-concessions group Eiffage SA.

Write to Giulia Petroni at [e-mail]

(END) Dow Jones Newswires

[the grumpy old men] 26/8/2021 09:28

Nord Stream 2 loses case to have EU pipeline rules waived

Nord Stream 2 AG, the controversial gas pipeline project owned by Gazprom, lost a German court fight to sidestep European Union rules separating production from transportation, a decision that may delay the start of the operations.

By Bloomberg
25/08/2021, 10:20 am
Energy Voice daily newsletter

Nord Stream 2 AG, the controversial gas pipeline project owned by Gazprom, lost a German court fight to sidestep European Union rules separating production from transportation, a decision that may delay the start of the operations.

The Dusseldorf Higher Regional Court on Wednesday dismissed a bid by Gazprom to overturn the German Network Agency’s decision to impose the EU measures, a spokesman for the tribunal said by phone.


While the ruling means that Nord Stream 2 could be fined if it fails to comply with the EU regulation once gas flows, it doesn’t have an impact on the construction of the project, which was licensed under a different set of rules and is expected to be concluded this month. Technically, the EU measures also don’t bar starting the flow of gas, but Gazprom would need to restructure Nord Stream 2, a step that could cost time.

Gas prices initially jumped on the decision, before paring gains to trade 2.5% higher at 45.985 euros a megawatt-hour by 10:36 a.m. in Amsterdam. While the ruling was widely expected, some traders say it could delay much needed flows via the pipeline.

Germany’s regulator in May last year refused to issue a waiver for the project. Under the EU gas directive, exemptions can only be granted to pipelines completed by May 23, 2019. The measures were revised after works on the pipeline had started — a move that Nord Stream 2 alleges was discriminatory.

In order to comply with the rules, Nord Stream 2 must be certified as an independent transmission or system operator under the EU regulation. While that doesn’t require Gazprom to sell ownership rights in the unit, it must give up control and command rights toward its leadership and include other measures like Chinese Walls to guarantee the independence.

As a precaution, Nord Stream 2 has already applied for this kind of certification at the German regulator, known as the Bundesnetzagentur. Documents are being reviewed and more paperwork might be requested, a spokesman for the regulator said by email. Once the application is complete, the agency has four months to prepare a draft decision.

Other Pipelines

There have been other pipelines that were already operating before the certification was completed and no fines were issued in the period when the regulator and the company were in talks over the process. It is likely that the same will apply to Nord Stream 2.

The Nord Stream 2 link can ship 5.6 billion cubic meters of fuel to Europe this year, Gazprom said earlier this month. Traders are watching every step of the project, as it will help ease a supply crunch in the European gas market. The news Nord Stream 2 will start operating soon sent benchmark futures in the Netherlands down as much as 7% last week.

The twin link — which will double the capacity of the existing undersea route from Russian gas fields to Europe — has been a major source of friction in trans-Atlantic relations for several years, with the U.S. claiming it could give Russia new leverage over Europe and introducing sanctions targeting the project. Joe Biden’s administration softened the U.S. stance, reaching a deal with Germany last month to end a longstanding rift over the pipeline.

There is also an arbitration case pending under the European Energy Charta over the issue and Gazprom is also seeking to nullify the rules in a suit filed with the EU’s courts.

Wednesday’s case is OLG Dusseldorf, VI-3 Kart 211/20 [V].

[la forge] 24/8/2021 11:05

European gas prices fall amid restored deliveries from Russia
24 Aug, 2021 08:50
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European gas prices fall amid restored deliveries from Russia
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Russian natural gas supplies over the Yamal-Europe pipeline soared almost twofold on Monday, returning to early August figures, data from the European gas transport operator Gascade showed.

According to Gascade, gas pumping via the Yamal-Europe gas pipeline surged by 77% (from 4pm to 5pm) to 2.71 million cubic meters per hour from about 1.5 million cubic meters per hour.

European gas prices dropped by almost 2% to $493 per 1,000 cubic meters or €41.125 per MWh on the back of growing supplies, ICE data shows.
Also on rt.com Russian Nord Stream 2 pipeline may start pumping gas to Europe this year, says Austrian energy major OMV

The resumption in gas deliveries from Russia through the Yamal-Europe gas pipeline follows a fire that broke out at Russian energy giant Gazprom’s Urengoy plant in Siberia on August 5. The fire was localized the following day, but the volume of gas transferred from the facility wasn’t fully restored until now, leading to a natural gas price spike in Europe.

For more stories on economy & finance visit RT's business section

[la forge] 24/8/2021 09:00

ENGIE: Medium Term Transformation In Progress

Aug. 24, 2021 1:56 AM ETENGIE SA (ENGIY), ENGQF

Summary

ENGIE has agreed to the sale of its 11.5% stake in GRTgaz at an attractive RAB premium of c. 48%.

With other planned disposals also in progress, the strategic shift appears to be on track.

Yet, shares trade well below EU peers despite the re-rating potential and the c. 4% yield on offer.



ENGIE (OTCPK:ENGIY), a French-based global utility company supplying electricity, gas, and energy services, may have outperformed yet again at its H1 '21 results, but the key highlight was the disposal of its stake in GRTgaz for a c. €1.1 billion price tag (implying a considerable premium to the RAB ("regulated asset base"). Beyond the highly favorable valuation benchmark the sale provides for Engie's gas infrastructure assets, it also illustrates that management is progressing well on its medium-term strategy to simplify the company. As such, I am bullish on Engie's plans to create a more straightforward infrastructure/renewable-focused group over the medium term and see a clear re-rating path ahead. In the meantime, shareholders get paid a c. 4% dividend yield to wait.



Making Progress on GRTgaz with Latest Stake Sale

Alongside its earnings results, Engie has signed a binding agreement with Caisse des Dépôts and CNP Assurances (both already minority shareholders) for the sale of its 11.5% stake in GRTgaz (gas transmission in France). The agreement values the GRTgaz group's total equity at €9.75 billion or an enterprise value of €14.6 billion, implying a c. 12x EV/ EBITDA valuation. In turn, the sale price also implies a RAB premium of c. 48%, which is certainly impressive for a minority stake in gas networks. In addition to the partial reduction in Engie's holding, the transaction will also feature a simplification of the GRTgaz group structure, which will lead to GRTgaz taking full ownership of Elengy (up from c. 82% currently).


I view the transaction as a significant positive – not only does it represent another value crystallizing disposal for the group (implying a 1-2% positive impact on Engie's market cap), but it also helps to reduce Engie's net financial debt by c. €1.1 billion. From a broader perspective, the accretive sale also validates the case that there is value in the rest of the gas networks assets in the Engie portfolio despite the market remaining unwilling to capitalize the remaining c. 64% stake in GRTGaz at the implied deal multiple (note shares were slightly down post-announcement). Nonetheless, the deal is on track to close by year-end, and with similar disposals in the pipeline, I remain optimistic on a re-rating of the gas assets down the line.


Medium Term Disposal Plan on Track

Since the strategic shift outlined by management at its previous investor day, Engie has made impressive progress, disposing of its 29.9% stake in Suez for €3.3 billion and signing the sale of EVBox for c. €200 million, leading to a total of €3.6bn in the last year. Engie has since guided for a €9-10 billion disposal plan from 2021-2023, including Customer Solutions business Equans and another c. €2 billion tranche of disposals. On the former, expect steady news flow over the upcoming month – per recent news reports, Engie is kicking off an auction process for some of its services assets, with initial bids (expected in September) already valuing Equans in the €5-6 billion range.


On the other hand, there will be some dilution at the EBIT level from the medium-term disposal plan – management has guided for a c. €700 million EBIT dilution scenario over the 2021-2023 period, mainly from the planned Equans sale. On balance, however, I view the disposals as a net positive, as it helps to de-risk the overall group, and depending on how the sale of Equans is structured, Engie still has options to manage the dilution side of the rotation (e.g., by executing in stages). With commodity prices also on the rise, expect higher profitability for Engie's supply activity and potentially its IPP business as well, both of which should help offset any earnings headwinds ahead.

Strategic Transition to Infrastructure Underpins Incremental Upside

In addition to the disposal plans, shareholders also stand to gain from a focus on infrastructure-like activities such as regulated networks, renewables developed on the balance sheet, along with contracted heating/cooling and cogeneration. A simpler group structure producing a visible and steady earnings stream on which the market can apply similar multiples to other bond proxy utilities in the sector (e.g., renewables peers) would likely be accretive. Assuming successful execution, the strategic shift should support a material re-rating of Engie's other activities, supporting the case for value unlocking ahead.

Source: Engie Strategic Update Presentation Slides (2021)

Alternatively, the planned transition would also make Engie a compelling M&A target for infrastructure or oil & gas funds/companies (with a lower cost of capital) looking to redeploy capital away from fossil fuels. Furthermore, Engie is currently trading at a considerable valuation discount to peers Enel (OTCPK:ESOCF) and Iberdrola (OTCPK:IBDRY) despite operating out of northern Europe. Considering Enel and Iberdrola are tied to higher Italian and Spanish underlying sovereign yields, I think Engie should instead trade at a premium multiple (note French 10-year bonds are negative yielding while similar durations in Italy and Spain offer modest positive yields).
Final Take

Overall, I like where Engie is going with its strategy, and considering its progress on the planned disposals, I see further positive catalysts ahead. Yet, Engie shares have been range-bound in recent months, even moving down slightly after an excellent quarterly earnings release. This seems unjustified, especially with earnings already growing ahead of expectations, disposals coming in at good valuations, and a near-term catalyst in the form of the Equans sale ahead (targeted before year-end). Trading well below peers at the current EV/EBITDA of c. 7x despite a dividend yield of c. 4%, Engie remains a great pick in the EU utilities space.

[waldron] 21/8/2021 07:55

Only 15 km left to finish Nord Stream 2 pipeline, Putin says

Aug. 20, 2021 3:33 PM ETPublic Joint Stock Company Gazprom (OGZPY)BASF SE (BASFY), ENGIE SA (ENGIY), OMV Aktiengesellschaft (OMVJF)...

By: Carl Surran, SA News Editor


Russia's President Vladimir Putin says only 15 km remain to be completed on the Nord Stream 2 gas pipeline from Russia to Germany, despite U.S. sanctions that have slowed the $11B project.

Russia is ready to transit gas via Ukraine after the current contract expires in 2024, but needs to have contracts to supply its consumers in Europe, Putin said today following a meeting with German Chancellor Angela Merkel in Moscow.

"We need to get an answer from our European partners on how much they are ready to buy," Putin said. "We cannot sign a transit contract if we don't have supply contracts with our consumers in Europe."

Meanwhile, the Biden administration says it is imposing sanctions on two Russian entities over their involvement in Nord Stream 2 but will leave in place a waiver that spared the company overseeing the construction and its top executive.

Russia's state-run Gazprom (OTCPK:OGZPY) leads the project, which includes Western partners Royal Dutch Shell (RDS.A, RDS.B), BASF's (OTCQX:BASFY) Wintershall, Uniper (OTC:UNPPY), OMV (OTCPK:OMVJF) and Engie (OTCPK:ENGIY).

Gazprom said earlier that the pipeline should deliver the first batches of natural gas to Germany this year.

[waldron] 19/8/2021 19:16

Nord Stream 2 pipeline can ship gas this year, Gazprom says

Aug. 19, 2021 11:59 AM ETPublic Joint Stock Company Gazprom (OGZPY)BASF SE (BASFY), ENGIE SA (ENGIY), OMV Aktiengesellschaft (OMVJF)...By: Carl Surran, SA News Editor11

Gazprom (OTCPK:OGZPY) says the Nord Stream 2 pipeline should deliver the first batches of natural gas to Germany this year, and could supply 5.6B cm of natural gas to Europe this year.

The new pipeline will help ease a supply crunch in the European market, and Gazprom's statement sent TTF European benchmark gas futures down as much as 12%.

The Nord Stream 2 consortium says the pipeline is 99% complete, with the Russian Fortuna pipe-laying vessel nwo working on the final part of the construction.

The Gazprom-led project includes partners Royal Dutch Shell (RDS.A, RDS.B), BASF's (OTCQX:BASFY) Wintershall, Uniper (OTC:UNPPY), OMV (OTCPK:OMVJF) and Engie (OTCPK:ENGIY).