Power Up: Uranium is picking up speed
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Uranium optimism is growing with governments around the world including nuclear energy in their plans to slash carbon emissions and the US saying outright that achieving its climate goals would not be possible without nuclear plants.
Nuclear energy currently accounts for 20 per cent of US electrical generation so it is no surprise that it is currently evaluating the potential to extend the operating life of its existing plants to 100 years.
China has flagged that it will have 70 gigawatts of installed nuclear power capacity by 2025, up from the current 55GW, with further growth likely.
Uranium spot prices have edged upwards in regard to the increased optimism.
With the expected demand growth, GlobalData has forecast that uranium production could increase by 3.1 per cent to reach 51,200t this year as significant mines come back online.
The market intelligence firm also expects uranium output to grow at a compound annual growth rate of 6.2% between 2021 to 2025 to 62,200t.
Meanwhile, BMO Capital Markets has forecast a 15,000t deficit of uranium this year, or about 18 per cent of current demand, even with the restart of Cameco’s Cigar Lake mine.
Despite the global push towards low emissions energy – particularly renewable energy – natural gas is still expected to play a major role in Asia.
“Asia will account for 60% of global gas demand growth between 2020 and 2050,” Wood Mackenzie vice president Valery Chow said.
“By 2050, a third of all global gas is expected to be consumed in Asia, up from 22% in 2020.
“We see the greatest upside from emerging markets in South and Southeast Asia, all of which are facing declining domestic gas production. LNG demand growth is supported by the development of new regasification, pipeline, and gas-to-power infrastructure.”
The consultancy noted that with coal currently accounting for more than 50 per cent of Asia’s energy supply mix, there are significant opportunities for increased gas consumption as a means of supporting carbon reduction targets.
However, Chow notes that no single energy source would be enough to meet Asian energy demand and that gas will increasingly shift to providing peak load as renewables and battery storage become increasingly dominant.
Woodmac added that while carbon-neutral LNG represented a small part of the global LNG demand, demand for the product is high with volumes increasing from 8 to 14 cargoes in the last six months alone.
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GTI Resources (ASX:GTR) has been given the go ahead to drill up to 40 exploration holes at ‘Section 36’ of its Henry Mountains uranium-vanadium project in Utah.
Drilling is expected to start in late June or early July and will include geophysical logging of an additional 39 existing small diameter drillholes.
Earlier exploration had found that the thickness and grade of uranium mineralisation was consistent with that observed in the region’s past producing mines.
Elevate Uranium (ASX:EL8), formerly Marenica Energy, flew a 1,500km airborne electromagnetic survey over its Namibia uranium projects in April.
Analysis of the data is expected to be completed in July 2021.
Fremont Petroleum (ASX:FPL) expects oil sales in the June quarter to exceed 20,500 barrels, up from 12,894bbl in the March quarter.
This is due to a full quarter’s contribution from the MHP leases and stable production from all other leases.
It noted that it had moderated its inventory selldown to capitalise on the recent strengthening of the West Texas Intermediate crude price.
Horizon Oil (ASX:HZN) is making good progress in the construction and procurement phases of its WZ12-8 East oil development offshore China.
The standalone platform is currently being fabricated in Qingdao with sail away into the field scheduled for July 2021.
Oil production from WZ12-8E will be combined with production from the existing WZ12-8W platform.
In the Northern Territory, Empire Energy (ASX:EEG) has successfully completed four hydraulic fracture stimulation stages at its Carpentaria-1 shale well.
Each stage was placed in one target shale zone and initial flow-back of fluids has started from the C shale.
The company noted that it has already detected gas at service during the first hours of the flow-back.
Extended production testing will take place after flow-back with samples taken to determine gas, liquids and water yields from each stimulated stage.
Meanwhile, State Gas (ASX:GAS) has confirmed a new Bandanna coal seam gas play at its Rougemont-2 well in Queensland.
The well intersected 8m of net coal, which is consistent with predictions and results from the Rougemont-1 well drilled last month.
This suggests that the extensive Bandanna coal measures in ATP 2062 host significant volumes of gas.
Planning has started for production testing and appraisal drilling.
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