Russia is considering changing its key budget-building mechanism in response to sliding oil revenue, in a sign the Kremlin expects crude prices will remain lower for longer while the war in Ukraine continues to drain state coffers. The government may reduce the threshold of its so-called budget rule to around $50 per barrel from $60 currently from next year if crude prices remain low, according to a person familiar with the matter, asking not to be identified because the considerations aren’t public. Discussions are at an early stage and a key challenge for officials is that it would require cuts in state spending while the war continues absorbing resources, according to that person. Russia has long used the budget rule as a kind of insurance against falling oil prices. That mechanism allows the state to transfer surplus energy revenue to its National Wellbeing Fund when Russian crude costs more than $60 per barrel. The accumulated reserves then help compensate for when oil prices are lower. A Russian Finance Ministry spokesman didn’t respond to a request for comment. Crude has slumped to around a four-year low on expectations that US President Donald Trump’s trade war will hurt demand, and as the OPEC+ alliance led by Saudi Arabia and Russia abandons its longstanding strategy of supporting oil prices. Russia depends on revenue from oil and gas sales for 30% of the state’s income. The debate about lowering the threshold under the budget rule indicates the government is increasingly certain that the slump in global oil prices will continue and that it can’t expect a significant rebound any time soon. That would force the Kremlin to find other ways of replenishing its war chest amid record levels of spending on the military. The wellbeing fund has already been heavily depleted due to the

In this week’s Charging Forward, Drax will not bid its Cruachan II pumped storage hydro project into the UK government’s long duration energy storage scheme. Elsewhere, renewable energy developer Elmya has launched plans for a battery energy storage system (BESS) project at the Kelburn Estate in North Ayrshire. This week’s energy storage headlines: Drax pulls Cruachan II bid from LDES cap and floor Elmya launches 400 MW Kelburn Estate BESS Reform warns off battery storage developers after local election wins Grenergy Renewables 20 MW Peak District BESS approved Macquarie takes over UK solar and BESS developer Island Green Power Scottish government approves Ladyfield Renewable Energy Park Gresham House approved for 300 MW Mossmorran BESS Masdar Arlington Energy 100 MW Upton Lane BESS approved International energy storage news: Australian startup MGA Thermal claims “world’s first industrial steam heat energy storage demonstrator” Drax pulls Cruachan II cap and floor bid UK power generation firm Drax Group has said it will not enter its £500 million Cruachan II pumped storage hydro project into a government support scheme. The UK government launched the long duration energy storage (LDES) cap and floor scheme in 2024, aiming to accelerate the development of LDES projects. The scheme is targeted at LDES technologies including pumped hydro, liquid air energy storage, compressed air energy storage and flow batteries. A boy and his dog view Cruachan hydro electric power station in Argyll. But Drax said due to a “significant rise in the capital costs” associated with its Cruachan II expansion in Scotland, the company will not enter the cap and floor. ‘The projected cost of Cruachan II has risen over the past two years, whilst at the same time, the recoverability of all capital invested in the project remains unclear,” the company said in a trading update. “Therefore, Drax will not participate

Why is the oil price rising today? That was the question Rigzone asked Tamas Varga, an analyst at PVM Oil Associates, and Rebecca Babin, a senior equity trader for CIBC Private Wealth in New York. Responding to the query, Varga told Rigzone, “after Houthi rebels launched an attack on Israel’s Ben-Gurion airport, Israeli planes struck Houthi targets in Yemen leading to a jump in geopolitical risk premium, hence the rally”. In a video posted on the Associated Press website on May 5, Yahya Saree, who the video describes as the “Houthi military spokesman”, states, “the Yemeni Armed Forces announce that they will work to impose a comprehensive aerial blockade on the Israeli enemy by repeatedly targeting airports, foremost among them Lod airport, named by Israel as Ben-Gurion airport”. The video included subtitles. Saree describes himself on his X page as the “spokesperson of the Yemeni Armed Forces”. In a statement posted on its X page on May 6, Israel Defense Forces (IDF) said IDF fighter jets “struck and dismantled” Houthi infrastructure at the “main airport in Sana’a”. The IDF added in the statement that “several central power plants were struck in, and surrounding, the Sana’a area”. A statement posted on the IDF’s X page on May 5 announced that IAF fighter jets struck Houthi targets along the Yemen coastline. In her response to Rigzone’s question, Babin said, “crude is up today largely because the market was very short heading into the OPEC meeting – not just on flat price, but particularly through put spreads”. “While the 400,000 barrel per day increase from OPEC was widely expected, some participants were positioning for a more aggressive signal – specifically, guidance toward a full unwind of the 2.2 million barrel per day cut by October, which didn’t materialize,” Babin added. “The relatively muted

Reform leader Nigel Farage has branded the debate around net zero as the “next Brexit” after his party stormed to unprecedented success in English local elections last week. Farage’s party seized control of ten local authorities, alongside defeating Labour in the Runcorn and Helsby Westminster by-election. Reform candidates also won two newly created mayoral positions in Greater Lincolnshire and Hull and East Yorkshire, where there are billions expected to be invested in clean energy schemes. Former Tory MP Dame Andrea Jenkyns becomes Greater Lincolnshire’s first mayor, while former boxer and Olympic gold medallist Luke Campbell won in Hull and East Yorkshire. The Greater Lincolnshire Combined County Authority (GLCCA) is host to the £2 billion Humber Zero project led by VPI and Phillips 66. North Sea operator Harbour Energy leading the £7bn Viking carbon capture and storage scheme (CCS) in the region. In addition to CCS and hydrogen investments, the offshore wind sector is also having a transformative effect in places like Hull and Grimsby. Reform takes aim at net zero ‘lunacy’ The victory for Reform in the northern regions, which comes amidst a growing political backlash against net zero policies, could pose significant challenges for the energy sector. In the wake of its electoral wins, Reform deputy leader Richard Tice said the party will use its newfound council powers to use “every lever” to block renewable energy projects including solar farms and electricity pylons. “Whether it’s planning blockages, whether it’s judicial reviews, whether it’s lawsuits, whether it’s health and safety notices, we will use every available legal measure to an extreme way in order to frustrate these people,” Tice said. Similarly, Farage told reporters that any council staff in Reform-controlled authorities who work in roles related to climate change should be looking for “alternative employment”. The Reform leader has made

Venture Global Inc. has secured $3 billion in syndicated borrowings to help fund the under-construction CP2 LNG in Cameron Parish, Louisiana. “This new capital, on top of the more than $4 billion we have already invested to date, will enable continued fabrication, manufacturing and procurement at an accelerated pace, similar to Plaquemines”, Venture Global chief executive Mike Sabel said in an online statement. Sabel was referring to another Venture Global liquefied natural gas (LNG) project in Louisiana that dispatched its first cargo about two years earlier than the normal Energy Department timeframe. In March the Department of Energy (DOE) granted a conditional permit for CP2 LNG to export to countries with no free-trade agreement (FTA) with the United States. The project has already secured authorization for its export volume, the equivalent of about 1.45 trillion cubic feet a year of natural gas, when it won FTA export approval April 2022. A final permit for the non-FTA portion has been withheld pending a DOE review of permitting considerations concerning greenhouse gas emissions, environmental impact, energy prices and domestic gas supply. “DOE expects to issue a final order to CP2 LNG in the coming months”, the department said in an online statement March 19. The loan from a group of 19 banks follows the launch of CP2 LNG’s FID (final investment decision) process in March. SMBC served as left lead arranger and sole bookrunner. Caixabank and LBBW served as right lead arrangers. Bank of America, BBVA, Deutsche Bank, ING, Goldman Sachs, JP Morgan, Mizuho, MUFG, NBC, RBC, Santander, Scotiabank and Wells Fargo served as coordinating lead arrangers. ICBC, NordLB and Regions served as joint lead arrangers.   Last month Venture Global closed a two-tranche offering of senior secured notes with a principal amount of $2.5 billion for the Plaquemines LNG facility in Plaquemines

Commonwealth LNG has roped in an unnamed “major” Asian customer with the signing of a deal for the supply of 1 million metric tons per annum for 20 years. “This offtake agreement marks another important milestone for Commonwealth as we work toward a final investment later this year and first offtake planned for 2029”, Ben Dell, managing partner of project owner Kimmeridge, said in an online statement. “We look forward to working with this Buyer, a longstanding leader in LNG, as we further our integrated wellhead-to-water strategy in delivering LNG to critical markets around the world”. “This Buyer is one of the world’s leading energy corporations, operating comprehensively across the oil and gas value chain from upstream to downstream”, added the statement by Kimmeridge and Commonwealth. “In the liquefied natural gas (LNG) sector, this Buyer is currently one of the largest global suppliers of LNG”. Located along the Calcasieu River on the Gulf Coast near Cameron, Louisiana, the project has a planned capacity of 9.5 MMtpa, equivalent to about 441.4 billion cubic feet per year of natural gas according to Commonwealth. “Commonwealth’s phase 1 development is expected to bring an investment of more than $11 billion to Louisiana and generate an estimated $3.5 billion in annual export revenue”, the statement added. “The project is expected to employ approximately 2,000 workers at the peak of construction and provide approximately 275 high-paying jobs when the facility begins operations in late 2029”. In February the Department of Energy (DOE) granted the project a conditional permit to export to countries with no free trade agreement (FTA) with the United States. This was the first LNG-related order issued by the DOE under Donald Trump’s second non-consecutive administration, which immediately ended ex-President Joe Biden’s pause of pending decisions on LNG export to countries with no FTA