MDN’s Energy Stories of Interest: Mon, Apr 7, 2025 [FREE ACCESS]
OTHER U.S. REGIONS: Stonepeak to acquire interest in Woodside’s Louisiana LNG; NATIONAL: WTI sinks 14% in two days amid global unrest; DOE offers 16 locations for possible data center, energy infrastructure development; Renewable subsidies are poisoning the nation’s electricity grid; American energy dominance providing the backbone for fair trade; Weather and inventory build set bearish tone for natgas prices; INTERNATIONAL: LNG cargoes land at wider discounts in Europe; EU calls for new funding proposals for cross-border energy projects; Saudis slash oil prices to Asia after surprise output hike; Shell lowers first-quarter LNG production outlook; Europe could need extra $11 billion of gas to refill winter stores.
OTHER U.S. REGIONS
Stonepeak to acquire interest in Woodside’s Louisiana LNG
Stonepeak
On April 6, 2025, Stonepeak, a prominent alternative investment firm specializing in infrastructure and real assets, announced a definitive agreement to acquire a 40% stake in Woodside Energy’s Louisiana LNG project for $5.7 billion. This transaction involves Stonepeak funding 75% of the project’s capital expenditure in 2025 and 2026, supporting the development of a three-train, 16.5 million tonnes per annum LNG facility in Lake Charles, Louisiana. Woodside, retaining a 60% controlling interest, aims to reduce its capital burden while advancing toward a final investment decision, with first exports targeted for 2029. The deal follows Woodside’s $1.2 billion acquisition of Tellurian Inc. in 2024 and a lump-sum EPC contract with Bechtel, enhancing project momentum. Stonepeak’s involvement validates the project’s quality, aligning with its $72 billion asset management portfolio, while Woodside continues seeking additional equity partners to reach a 50% sell-down target. [MDN: This is the former Driftwood LNG project by Tellurian. M-U molecules flow to the Lake Charles area (to the existing Cheniere Energy Sabine Pass LNG facility), and will likely help feed the Woodside facility, too. Even though an FID has not yet been made, construction on the Driftwood (now Woodside) facility has been ongoing for at least two years.]
NATIONAL
WTI sinks 14% in two days amid global unrest
Bloomberg/Rigzone
On April 4, 2025, Bloomberg reported that West Texas Intermediate (WTI) crude oil prices plummeted 14% over two days, dropping from $71.77 to $61.99 per barrel, amid escalating global unrest and economic pressures. The sharp decline was triggered by a combination of factors: OPEC+ unexpectedly increased production by 411,000 barrels per day starting in May, surpassing earlier plans, while President Donald Trump’s new tariffs intensified a global trade war, raising recession fears. China’s retaliatory 34% tariff on U.S. goods further dampened oil demand expectations, particularly as Goldman Sachs cut its 2025 Brent forecast by 5.5% to $69 and WTI by 4.3% to $66, citing higher OPEC+ supply and trade tensions. Commodity trading advisers exacerbated the sell-off, shifting to a 73% short position on WTI. This convergence of oversupply, geopolitical strife, and economic uncertainty sent oil markets into a tailspin, hitting a three-year low. [MDN: Brent for June settlement slid 6.5% to $65.58 a barrel. So we’ve sunk to new recent lows of the low $60s. Not biggie. It may go lower, and frankly, it wouldn’t bother us a bit if it did. Things will turn around. It’s coming. Be patient.]
DOE offers 16 locations for possible data center, energy infrastructure development
Utility Dive
The U.S. Department of Energy (DOE) has identified 16 federal sites for potential data center and AI infrastructure development, as outlined in a Request for Information (RFI) released on April 4, 2025. The initiative aims to co-locate data centers with energy infrastructure on DOE-managed lands to meet the rising power demands of AI-driven data centers, projected to increase from 176 TWh in 2023 to 325-580 TWh by 2028. The RFI seeks industry input on power needs, timelines, and co-location strategies, aligning with recent policy efforts under Presidents Trump and Biden to accelerate AI infrastructure powered by diverse energy sources. Sites like the National Renewable Energy Laboratory’s Flatiron Campus, capable of hosting a 100 MW data center, are among the candidates. This move also offers collaboration opportunities with DOE’s research facilities to advance power systems and next-generation hardware, supporting economic and technological growth. [MDN: Two of the offered sites are located at the National Energy Technology Laboratory Pittsburgh Campus. Cool!]
Renewable subsidies are poisoning the nation’s electricity grid
Washington (DC) The Hill
The article from The Hill, dated April 6, 2025, critiques the Inflation Reduction Act (IRA) for exacerbating the energy crisis rather than alleviating it, arguing that its focus on clean energy investments has neglected broader energy reliability concerns. It highlights how the IRA’s $370 billion allocation toward renewables like wind and solar has coincided with increased fossil fuel prices and strained electric grids, as evidenced by events like Winter Storm Elliott in 2022, which exposed vulnerabilities in gas infrastructure. The author contends that the act’s push for electrification—such as electric vehicles and heat pumps—has outpaced the development of necessary grid capacity, risking blackouts and higher costs for consumers. While acknowledging the IRA’s intent to address climate change, the piece asserts it fails to balance this with immediate energy needs, urging a more pragmatic approach that includes maintaining diverse, reliable energy sources to prevent economic and social disruption. [MDN: This excellent column, written by Mario Loyola, a professor at Florida International University and a senior fellow at the Heritage Foundation, correctly pegs why our grid is having trouble: unreliable renewable energy.]
American energy dominance providing the backbone for fair trade
RealClearEnergy
Author Larry Behrens argues that restoring U.S. energy dominance is crucial for ensuring fair trade and countering the economic influence of nations like China. He highlights how the U.S. achieved energy independence under President Trump’s first term through policies that boosted domestic oil and gas production, only for these gains to be reversed by the Biden administration’s restrictive energy measures. Behrens emphasizes that abundant, affordable American energy strengthens national security and trade leverage, particularly as global demand rises with advancements like AI. He critiques reliance on foreign energy and minerals, noting China’s control over critical supply chains, and advocates for deregulation and innovation to revitalize U.S. energy production. This, he asserts, would support American industries, create jobs, and promote equitable trade without dependency on adversarial nations. [MDN: Behrens makes excellent points in this column, namely that energy is the key to ensuring fair trade with economic predators like China. Now is the time to cure the very sick patient called the USA.]
Weather and inventory build set bearish tone for natgas prices
FX Empire
Natural gas futures declined to around $3.84/MMBtu, marking the largest weekly loss since early March, driven by mild weather, weak demand, and a bearish inventory report. Warmer mid-April forecasts have diminished expectations for late-season heating demand, while a surprising 29 Bcf storage injection—contrary to the typical seasonal draw—highlighted excess supply and reduced consumption. Despite inventories remaining 21.5% below last year’s levels and 4.3% under the five-year average, the early stockpile build has intensified bearish sentiment. Strong production and trade policy concerns further pressured the market, with traders anticipating larger inventory increases ahead. The short-term outlook remains pessimistic, as technical indicators suggest potential drops below key support levels like $3.858 or even $3.36, unless colder weather emerges to boost demand. While low storage levels could offer long-term support, current fundamentals point to continued downside risk for natural gas prices. [MDN: Prices go up and they go down. We like the price of natgas above $4, but honestly, anything above $3 is OK and a level that drillers can make at least a slim profit.]
INTERNATIONAL
LNG cargoes land at wider discounts in Europe
Bloomberg/Rigzone
Liquefied natural gas (LNG) shipments to Europe are becoming cheaper due to increased competition among terminals to handle additional cargoes, as reported on April 4, 2025. The delivered price of LNG in northwest Europe has widened its discount to the Title Transfer Facility (TTF) benchmark, driven by a supply glut from milder weather reducing demand and low Asian spot prices redirecting cargoes to Europe. Data from Spark Commodities shows this discount has grown in recent weeks, with Greece’s Public Power Corp. securing a May delivery cargo at a 70-cent discount to TTF. This trend is expected to persist through the summer as Europe aims to rebuild gas inventories depleted by a cold winter, requiring an estimated 250 extra LNG cargoes. Lower Asian demand and competitive terminal pricing are key factors enabling Europe to attract more LNG at reduced costs, supporting energy security ahead of the next heating season. [MDN: Cheaper prices typically indicates a preference. Will Europe now stop buying so much natgas from Russia, with prices for LNG coming in cheaper? We don’t put anything past the flaky Euro weenies. They’ll keep buying Russian gas just to spite us (financing the war against Ukraine by doing so).]
EU calls for new funding proposals for cross-border energy projects
Rigzone
On April 7, 2025, the European Commission announced a new call for funding proposals under the Connecting Europe Facility (CEF) Energy program, offering up to €600 million to support cross-border energy infrastructure projects across the European Union. This initiative targets projects from the first list of Projects of Common Interest (PCI) and Projects of Mutual Interest (PMI), adopted in November 2024, focusing on electricity networks, smart grids, hydrogen infrastructure, carbon dioxide transport, and offshore electricity initiatives. The funding aims to enhance energy security, reduce costs, and bolster competitiveness by fostering a unified energy network. Applications are open until September 16, 2025, with projects evaluated based on their contribution to market integration, sustainability, and supply security. This move aligns with the EU’s revised TEN-E Regulation, emphasizing innovative and sustainable energy solutions to meet regional energy goals. [MDN: Simply amazing. Europe’s energy needs are increasing, yet the EU is fiddling while the region burns. Messing around with funding “36 studies and five work proposals” for screwball renewable and “low-carbon” energy nonsense. Meanwhile, the region heads for blackouts and brownouts. You can’t fix stupid.]
Saudis slash oil prices to Asia after surprise output hike
Bloomberg/Rigzone
Saudi Arabia, through its state oil company Aramco, has sharply reduced oil prices for Asia, cutting the price of its flagship Arab Light crude by $2.30 per barrel for May shipments, setting it at a $1.20 premium over the Dubai/Oman benchmark, following a surprise OPEC+ decision to boost output. Announced on April 3, 2025, OPEC+, led by Saudi Arabia and Russia, plans to increase production by over 400,000 barrels per day starting next month—triple the previously expected amount—prompting a nearly 11% drop in global oil prices, the lowest in over three years. This move aligns with falling benchmarks and aims to pressure overproducing OPEC+ members like Kazakhstan. Price cuts for other regions were smaller, with Europe seeing a $0.50 reduction and the U.S. a $0.20 drop per barrel, reflecting a strategic focus on Asia, Saudi Arabia’s largest market, amid global trade tensions and recession fears. [MDN: Our “friends” the Saudis are using the same tactics against Trump they did in his first administration—increase production, drop prices, and try to force shale energy out of business. This time around they will deal with a Trump who will tariff them into oblivion if they get out of hand.]
Shell lowers first-quarter LNG production outlook
Reuters
Shell, a major British energy company, has revised its first-quarter liquefied natural gas (LNG) production outlook downward in a trading update released on April 7, 2025, ahead of its May 2 earnings report. The company now expects LNG output to range between 6.4 million and 6.8 million metric tons, compared to the previous forecast of 6.6 million to 7.2 million tons, attributing the reduction to cyclones and unplanned maintenance in Australia. Despite the lower production forecast, Shell anticipates that its gas division trading results will remain consistent with the previous quarter. Additionally, the company expects to record a $100 million exploration write-off for the quarter. This update reflects challenges in Shell’s LNG operations, a key component of its portfolio, as it navigates environmental disruptions and maintains focus on its gas trading performance amidst a shifting energy landscape. [MDN: Shell is perhaps THE major player in the LNG space worldwide. Watch it closely for indicators of what’s happening in the LNG world.]
Europe could need extra $11 billion of gas to refill winter stores
Reuters
Europe may require an additional $11 billion worth of liquefied natural gas (LNG), equivalent to 250 extra cargoes, to refill its depleted gas reserves before the upcoming winter, with Ukraine needing at least 30 more cargoes, according to analysts cited by Reuters. The higher demand stems from a colder, less windy 2024-25 winter, which drained EU gas stores to just under 34% capacity—the lowest since 2022. To meet the European Commission’s target of 90% storage capacity by November 1, set after Russia’s 2022 invasion of Ukraine to prevent shortages, Europe must aggressively purchase LNG amid reduced pipeline supplies and competition with Asia. However, experts doubt this goal is achievable, suggesting a potential delay in the deadline or government subsidies to incentivize refilling. This urgency has driven summer gas prices up, despite typically lower demand, complicating market dynamics as traders face unprofitable storage injections without structural changes. [MDN: Hey Euro weenies, America is open for business with our LNG exports. Step right up and get yours now. Forget about unreliable renewables.]