Good interview above with Nick Potter, President of Equinor Natural Gas. A bit of a companion piece to the survey of energy executives I posted about nearby on this page.
This is a bit of a Rosetta Stone for understanding what gas markets will be doing. Potter uses soothing euphemisms, citing “what’s going on” in the MidEast and Russia. He obviously hopes that gas will be a big part of fueling Data Centers, which may be only partially true. As has been pointed out on these pages, it’s a big assumption that gas pipeline capacity will be available for AI in every case.
I’ve posted Jigar Shah’s warning to the AI bros about counting on Natural gas supplies.
There are now some indications that Jigar’s cautionary note has merit.
Oracle Corp. is moving to shield itself from racking up expenses on a massive data center being built in New Mexico, adding a fresh wrinkle to a project beset by opposition and regulatory setbacks.
The technology giant sent the project’s developer, a unit of Blue Owl Capital Inc., a notice citing force majeure, according to people familiar with the situation. Rather than trying to walk away as the site’s main tenant, Oracle is attempting to put off payments should the data center dubbed Project Jupiter get derailed and fail to come online in 2028 as planned, the people said, asking not to be identified discussing private matters.
Companies typically invoke force majeure to free themselves from contractual obligations when problems arise beyond their control. In this case, Oracle is seeking to assert its contractual position if the build-out is delayed. Still, it’s not certain that such a maneuver would free Oracle from its previously agreed financial obligations.
A key natural gas pipeline project developed by Energy Transfer LP that was supposed to begin service this month and supply fuel to Project Jupiter was instead delayed by nearly six months to Feb. 1, 2027, following repeated permit denials from the New Mexico State Land Office to approve a proposed route for the line.
Another point Mr Potter makes is that natural gas storage is somewhat below average in Europe, perhaps in part because purchasers might have been hoping for an early end to hostilities around the Strait of Hormuz, and lower prices. That hasn’t happened.
However, a very big wild card, the currently building Super El Niño, could have a moderating effect on winter temperatures globally, but could also bring unpredictable jet stream activity and massive polar vortex outbreaks.
Bottom line for US customers who have been largely insulated from surging gas prices – as more export terminals are completed along the Gulf of Mexico, Americans will compete with Europeans and Asians willing to pay 10x US prices.
Do the math. Renewables critical to keep prices down.