In focus: Heatwaves everywhere, but winter is coming

The words energy transition were on everybody’s lips in the last couple of years. It sparked innovation and collaboration within the industry. Europe is a frontrunner in this transition, but policymakers from European countries now see that, in the short term, energy security is more relevant than energy transition.

This is because Russia turned the table in the conflict with Europe when it comes to the war in Ukraine. No longer the European Union is dictating sanctions against Russia, it is Russia using its gas supplies as a weapon in the war with the West. The notion that Russia is willing to shut down gas deliveries to Europe this winter, upsetting societies in Europe and the rest of the world, is making a lot of people very nervous. This is why the oil and gas sector is becoming the teacher’s pet again and it is reflected in this week’s news.

With the need for energy independence in relation to the high prices, undeveloped oil and gas assets in the West are now interesting again. Like the Rosebank in the UK with recoverable resources of more than 350 million barrels of oil equivalent. Norwegian energy giant Equinor has filed an environmental statement (ES) related to the development of its Rosebank oil field located West of Shetland to the UK authorities as one of the key documents ahead of making an investment decision. Equinor plans to make the Final Investment Decision (FID) for the project in 2023. The project will be developed with an already existing FPSO, currently known as Petrojarl Knarr, which has up to recently been working for Shell on the Knarr field in the North Sea off Norway.

Although the energy transition is losing momentum in the short term because of geopolitical developments, the need to decarbonise the oil and gas industry is still high on the agenda. In this light Scotland’s new offshore wind leasing round aiming to decarbonise the North Sea oil and gas sector was launched this week, with plans to deliver the results in March next year. Developers can apply for the rights to build small-scale innovative offshore wind projects of less than 100MW as well as larger projects connected to oil and gas infrastructure to provide electricity and reduce the carbon emissions associated with those sites. The power for oil and gas installations is usually generated using diesel and gas generators. However, offshore wind projects could provide electrification solutions for these assets to reduce emissions.

As part of the agenda to become less dependent on Russian gas and its pipelines, LNG is gaining importance. McDermott, one of the most experienced engineering and construction firms serving the LNG market, has secured a front-end engineering design (FEED) contract with state-owned oil and gas company QatarEnergy for the North Field South (NFS) expansion project. The North Field lies off the northeast shore of the Qatar peninsula and covers an area of more than 6,000 square kilometres. It is one of the largest single non-associated natural gas fields in the world. The aim of the expansion project is to increase Qatar’s liquefied natural gas (LNG) production capacity from the current 77 million tons per annum to 126.

QatarEnergy was also making other investments this week. Malaysian energy logistics group MISC Berhad and its consortium partners have been awarded long-term time charter contracts by Qatar’s state-owned oil and gas company for seven newbuild LNG carriers. Once delivered in 2025 and 2026, the seven newbuilds will serve the needs of QatarEnergy, which is one of the world’s largest LNG producers, in the transportation of LNG to various countries around the world.

The LNG carriers in question will be equipped with eco-efficient technologies such as X-DF 2.1 engines with intelligent control by exhaust recycling (iCER) system and air lubrication system, which will contribute to the reduction of greenhouse gas (GHG) emissions.

The focus on fossil energy at the moment doesn’t make the energy transition a vanity project to showcase new technologies. The climate is changing and heatwaves are making fresh water scarce. In order to become more self-sufficient, Norwegian wave-powered desalination developer Ocean Oasis has secured support from the authorities in Spain and Gran Canaria for its establishment and operations in Gran Canaria. The support is provided to the company’s newly established wholly-owned subsidiary in Spain, Ocean Oasis Canarias.

The company’s solution is said to enable the production of fresh water in ocean waters using a technology that captures the energy of waves to conduct a desalination process, and supply desalinated water to the coast through pipes located on the seabed.

So, turbulent times are ahead for the energy industry where short and long-term strategies are not aligning. One thing is sure, the time that cheap energy was a given is over. Let’s hope renewable energy will bring it back in the future.