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U.S, EU Strikes New Energy Deal in an Effort to Replace Russian Gas

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Russina Oil to Europe

Barely 24-hours after Russian ruler Vladimir Putin demanded payment for Russian gas be made in the local Ruble, the U.S. and EU have struck a deal that seeks to replace the Russian gas supply.

According to a report, the United States is working to supply 15 billion cubic metres (bcm) of liquefied natural gas (LNG) to the European Union oil markets this year. This is coming up as Europe intensifies efforts to wean itself off Russian gas supplies.

Investors King also gathered that the U.S. President, Joe Biden and European Commission President Ursula von der Leyen will announce the formation of a task force dedicated to reducing Europe’s dependence on Russian fossil fuels.

According to data by the EU, 10% of gas used in the EU is produced by the EU with Russia typically supplying some 41% of the rest of the region’s needs.

The U.S president also revealed that the commission will work with EU countries to enable them receive about 50 bcm of additional LNG until at least 2030. Although the figures by the U.S is not exactly clear whether it was referring to add this to the already existing amounts from last year’s 22 bcm of U.S. exports to the European Union, this remains a welcomed update for the EU who have depended on Russian gas for the longest.

Investors King also gathered that the European Union has stepped up its efforts to secure more LNG after talks with a number of supplier countries continued following Russia’s invasion of Ukraine.

A number of countries are individually doubling efforts in reducing their dependency on Russian oil. Germany is one country that has made significant progress in reducing its importation of Russian gas, oil and coal.

According to a report by Germany’s Economy Minister, Robert Habeck, importation of Russian oil now accounts for 25% of German imports which is a record down from 35%, with gas imports cut to 40% from 55% and  Russian coal imports cut to 25% from 50% before the invasion.

Since the start of the war between Russia and Ukraine, Russia has leveraged its fossil fuels as a weapon to frustrate the global oil market after receiving a number of sanctions from world leaders.

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Energy

Fintech CEO: As Lithuania Breaks Energy Ties with Russia, Risk of Cybercrime Further Heightens

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cybercrime - Investors King

This week, Lithuania’s Energy Ministry released a statement which noted that the country is now completely independent from Russian natural gas. It read, in part, “Seeking full energy independence from Russian gas, in response to Russia’s energy blackmail in Europe and the war in Ukraine, Lithuania has completely abandoned Russian gas.” Lithuanian leaders called on other EU countries to make the same move to withdraw from Russian economic influence.

“Lithuania is in a unique position as it abuts Russia’s Kaliningrad Oblast. The country has historic ties to Russia, and that history should carry influence larger than typical for a small country with less than three million people — especially as proposals emerge for a LNG terminal located in Paldiski, which would be an Estonian joint venture with Latvia and Finland. Due to their geography, these countries see a more urgent Russian threat, but as the world continues to divest from Russian energy, there will be a need to find new streams of revenue to finance the war effort,” said Richard Gardner, CEO of Modulus, a US-based developer of ultra-high-performance trading and surveillance technology that powers global equities, derivatives, and digital asset exchanges.

“From this month on – no more Russian gas in Lithuania.Years ago my country made decisions that today allow us with no pain to break energy ties with the agressor. If we can do it, the rest of Europe can do it too,” tweeted Lithuanian President Gitanas Nausėda.

“If you’re Russia and the world won’t buy your energy resources, where do you turn? It doesn’t require you to stretch your imagination very far to realize that, in a conflict which is actively employing cyberwarfare, the government could find hacking to be an appropriate avenue of revenue generation. Whether that is focusing hackers on digital asset exchanges or engaging more heavily in cyber-based extortion campaigns remains to be seen. However, these exchanges are giant honeypots, and, right now, Russia is the equivalent of a hungry bear,” said Gardner.

“Practically, it will be difficult to extract large amounts of stolen assets to use for homeland activities like paying troops, which may make the endeavor less attractive. However, it would be completely naïve to think that the idea isn’t on the table,” said Gardner.

Modulus is known throughout the financial technology segment as a leader in the development of ultra-high frequency trading systems and blockchain technologies. Modulus has provided its exchange solution to some of the industry’s most profitable digital asset exchanges, including a well-known multi-billion-dollar cryptocurrency exchange. Over the past twenty years, the company has built technology for the world’s most notable institutions, with a client list which includes NASA, NASDAQ, Goldman Sachs, Merrill Lynch, JP Morgan Chase, Bank of America, Barclays, Siemens, Shell, Yahoo!, Microsoft, Cornell University, and the University of Chicago.

“It is more important than ever for financial exchanges, including those dealing in cryptocurrencies, to be on high alert. For the many exchanges that have historically focused more heavily on marketing than security, now is the time to flip the script and lockdown your security apparatus. Good enough isn’t good enough. Your innovation is only as good as the security that protects it,” said Gardner.

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NBET Approves, Processes Payment Of N9 Billion From PRSP To Gencos

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Power - Investors King

In March alone, Nigeria’s electricity grid has collapsed twice, resulting in a nationwide blackout. Among other factors, the regular collapse of the power grid is unconnected to poor utility performance, theft of grid equipment, weather, as well as insufficient funding.

According to a report by TheConversation, Nigeria’s national electricity grid has collapsed more than 200 times in the last nine years and in sub-Saharan Africa, every 1% increase in power outages (in terms of hours) has been associated with a 2.86% decrease in gross domestic product (GDP). This translates to a loss of about US$28 billion in GDP.

However, as part of efforts to resuscitate power generation and ensure even distribution of electricity across the country, the Nigerian Bulk Electricity Trading Plc (NBET) has approved and processed the sum of N9 billion from the Power Sector Reform Programme (PRSP) to all to power generation companies (GenCos).

The NBET also disclosed that it paid all GenCos the sum of N39 billion for power generated in January. This brings the total payments to GenCos in the last two months to over N80 billion.

“NBET paid N39 billion to GENCOs in first tranche of payments towards the settlement of January 2022 Payment Cycle. DisCos performance for same period is 51 per cent.

“Another N9 billion from the PRSP has been approved and processed by NBET as further payments to the GenCos”, it added.

According to the NBET, all GenCos are expected to also make similar payments to the gas suppliers. The NBET, incorporated on the 29th day of July 2010 and 100% owned by the Federal Government of Nigeria,  is the manager and administrator of the electricity pool (‘The Pool’) in the Nigerian Electricity Supply Industry (NESI).

In an earlier report by Investors King, Financial Derivatives Company (FDC) Limited revealed that Nigeria will require about $100 billion in funding to solve its electricity supply challenges over the next 20 years, as investors are willing to actively participate in the power sector through partnerships, joint ventures, training of personnel and building of transmission and distribution infrastructure if only necessary reforms are put in place.

According to the report by FDC, of the estimated $100 billion in investment required to bridge the gap, renewable energy sources are likely to form the bulk of Nigeria’s energy solutions as global warming and climate change restrict investment in traditional energy sources.

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UK to Finance Nigeria’s Energy Projects With £10m

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Solar energy - Investors King

Nigeria’s energy access projects are set to receive a boost as the United Kingdom declared its £10m donation to the energy sector.

The United Kingdom, in its statement on Monday, said that the funds will finance energy access projects and aid Nigeria’s COP26 commitments.

The financial aid will make Nigerian investors focus more on low-carbon energy, supporting off-grid and low-carbon energy projects.

Investors King gathered that the funds will further encourage investments in local pension funds, insurance firms and other investment plans.

The UK financial aid will also enhance local funding for eligible off-grid clean energy infrastructures, like the solar mini-grid and home systems, clean cooking infrastructure and SME cold storage infrastructure in Nigeria.

“The UK is providing up to £10m of concessional aid to reduce the risk for pension and insurance funds to invest in energy access projects, and support Nigeria’s COP26 commitments.

“The financing will help Nigerian investors focus on low-carbon energy, supporting off-grid, low-carbon energy projects. The £10m will be blended to de-risk transactions and therefore mobilise domestic institutional investment from local pension funds, insurance firms and other local institutional investors,” the statement read.

Assuring Nigerians of it’s commitment to providing assistance for energy projects, the UK Minister for Africa, Vicky Ford said the UK government will aid a sustainable and resilient growth in the energy sector.

Ford maintained that the transaction between the two countries is essential for the growth of the sector.

He noted that the initiative would ensure energy is circulated to unserved and underserved communities while assisting local investors of the low carbon energy sector with affordable long-term financing to support scaling up of off-grid low carbon energy projects.

The minister added that “the initiative will support the implementation of Nigeria’s Nationally Determined Contributions plan, which Nigeria submitted to the UNFCCC before COP26, its Energy Transition Plan, which was presented by the Nigerian government at COP26, and Nigeria’s plans to increase energy access including the Solar Naija programme.

“The UK is committed to increasing both renewable energy and energy access in Nigeria, driving clean, sustainable and resilient growth. As the world looks to transition to clean growth, we are witnessing an era-defining opportunity for the private sector. This transaction is particularly exciting as it brings together UK government support with the institutional capital which is essential to grow the sector at scale,” he said.

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