Author: admin

European producers and traders of biodiesel say Chinese product entering the EU is being wrongly labelled as an ‘advanced’ biofuel, and sold into Germany where it is counted twice towards emissions savings targets in transport. This, they say, is having multiple effects on supply-demand balances and prices.

Advanced liquid or gaseous biofuels — those produced from feedstock listed in Annex IX Part A of the EU Renewable Energy Directive (RED II) — are mandated in Germany and are permitted to count twice towards the country’s greenhouse gas (GHG) reduction target for transport fuels, once a baseline target of 0.3pc by energy content has been met. The domestic advanced biofuels target will rise to 2.6pc by 2030.

Suppliers of biodiesel to Germany told Argus they are seeing offers for advanced biodiesel made from feedstocks such as sludge from food production waste, acid oils from soap stocks and palm oil mill effluent (Pome). They say the amount being shipped in bulk from China is far in excess of what can reasonably be available for export.

A European producer said that between 130,000-150,000t of such product is being sent to Europe each month.

“This has a brutal effect on the whole market,” the producer said. “Advanced product counted against the [German] quota allows blenders to use smaller amounts of biodiesel to reach their targets. This destroys our market here and makes it impossible to produce and trade.”

Chinese customs data, which groups all fatty acid methyl ester (Fame) biodiesels together, show a significant rise in exports destined for Europe.

Biodiesel exports more than doubled on the year to 455,000t in January-February and the vast majority this made its way to the Netherlands from where it will be redistributed within Europe.

The European producer said that with most product recently offered out of China having a cold filter plugging point (CFPP) of +10°C — the sort of warmer weather grade now in favour ahead of the summer months — “there is little choice but to participate in the flow if [companies] want to stay afloat.”

The European Waste-based & Advanced Biofuels Association (Ewaba) said it is treating reports relating to these concerns “as a matter of high priority” given they are “creating worrying conditions for our members.”

“We are taking different steps involving certification schemes and customs authorities and if any dubious practice is identified we are confident it will stop shortly,” it told Argus.

Germany’s federal office for agriculture and food (BLE) told Argus that while it is responsible in Germany for the implementation of the sustainability criteria of RED II in sustainability regulations, the responsibility for monitoring and controlling cultivation, supply and production chain rested with independent certification systems and bodies, which are previously recognised and then monitored.

Knock-on price shocks hit EU producers

This influx of advanced biofuels has weighed on German greenhouse gas (GHG) emission reduction certificate prices.

These are used by companies that bring liquid or gaseous fossil fuels into general circulation and are obligated to pay excise duty or energy tax on those fuels. Also known as tickets, the tradeable certificates are primarily generated by blending renewable fuels into fossil fuels.

The Argus price for advanced double-counting GHG certificates, which are generated by blending advanced biofuels excluding Pome, fell by 51pc from the end of 2022 to €430/t CO2e on 24 March.

Tickets generated by blending biofuels made from Pome declined in that time by the same value share, to €218/t CO2e.

In physical terms, losses to spot prices for biodiesel produced from used cooking oil (Ucome) since the start of the year have led to reduced runs in Europe, as producers contend with negative margins given higher supply of competitively priced advanced grades from outside the EU.

The Argus Ucome fob ARA range spot price declined by close to 30pc from the last trading day of 2022 to a near 29-month low of $1,176/t on 22 March, before rebounding slightly. Suppliers to Germany have sold Ucome stocks into other European markets given the lack of domestic demand.

Rising targets rely on feedstock availability

There no confirmed release date for 2022 data for German biofuels consumption, BLE told Argus. In 2021, the most common source of advanced biofuels was the biomass fraction of industrial waste typically used to produce biomethane, followed by Pome used to produce biodiesel or hydrotreated vegetable oil (HVO).

Pome is excluded from the double-counting incentive but its use is not capped. Argus estimates global availability of Pome at just over 760,000t in 2023, with more than 680,000t of this from Asia-Pacific.

Argus estimates availability of acid oils from soap stock at a little more than 2mn t in 2023, with just over 900,000t in Asia-Pacific.

These are based on assumptions about vegetable oil production, chemical refining shares and free fatty acid (FFA) content.

Estimated global used cooking oil (UCO) availability is 9.4.mn t, of which Asia-Pacific represents close to 5.7mn t. UCO falls under Annex IX Part B of RED II, as do waste animal fats (Tallow categories 1 and 2), for which estimated availability is just under 700,000t in Europe this year.

Germany caps the energetic share of biodiesel from Part B feedstocks at 1.9pc to 2030 and there is no double counting.

Germany recently revisited a potential ban on crop-biofuels. The environment ministry plans to submit a draft law to ban the use of biofuels from crop and feed “as soon as possible”, minister Steffi Lemke said in January. The cap on crop-based biofuels used to fulfil Germany’s GHG quota is 4.4pc in energy terms.

German biofuels association VDB has said ethanol producers mostly use grain that is unsuitable for the food sector, and biodiesel producers have already cut back output in favour of food production.

Germany’s greenhouse gas (GHG) reduction target for 2023 is 8pc.

Argus by John Houghton-Brown, April 11, 2023

Following my recent article detailing Average Gasoline Prices Under The Past Four Presidents, I received a flurry of feedback. Some commentors were angry about a comment I made in that article that Russia’s invasion of Ukraine helped boost gasoline prices last year to record levels.

If I can summarize the gist of the comments, it would be: “You don’t know what you are talking about. This is all Biden’s policies. It had nothing to do with Russia or Ukraine.” One person insisted that I don’t understand the oil industry or oil refining, despite having spent years actually working in a refinery.

As I pointed out to some in response, I didn’t delve deeply into causation of high gas prices in that article. But let’s do that here. First, let’s look at the average weekly retail gasoline price in 2022, with several significant events highlighted on the graphic.

We can see that gasoline prices began a steep climb within a week of Russia’s invasion. In the midst of that initial climb, President Biden signed an Executive Order (E.O.) to ban the import of Russian oil, liquefied natural gas, and coal to the United States.

One can certainly debate whether this ban was the right move (and I warned about the implications beforehand in Russia Is A Major Supplier Of Oil To The U.S.), but there is no question that this decision had an impact on oil and gas prices.

Of course, correlation does not imply causation, so let’s talk about what actually happened to impact gasoline prices.

The Russian oil we imported was largely finished products and partially finished products that were largely used to produce diesel in U.S. refineries. There are two high-demand seasons for diesel each year — spring planting season for farmers and fall harvesting season.

So, we had a refinery disruption that impacted diesel production just before a high demand period. In addition, this came at a period of extremely high jet fuel (like diesel, jet fuel is a “distillate”) demand, as people started to travel in large numbers after being pent up for some long as a result of the pandemic.

That caused an even greater spike last year in distillate prices, and it forced refiners to respond. However, when refiners shift production toward distillates, it comes at the expense of some gasoline production. This negatively impacted gasoline production just as refiners start building up stocks heading into high-demand gasoline season (summer).

Note that this isn’t just idle speculation. I had several discussions about these events with one of my former refinery managers, who explained exactly what the refiners were facing.

The other major event on the graphic is President Biden’s decision to release an unprecedented amount of oil from the U.S. Strategic Petroleum Reserve (SPR) as a tool to combat rising prices. This was a move I opposed, because I don’t view high prices as the kind of emergency the SPR is supposed to protect against. That would be more of a significant loss of oil imports that threatens to cause shortages. This wasn’t the situation last year, so I thought the SPR release was unwarranted.

But, as one of my critics argued “The only reason prices went down last year was that President Biden used the SPR politically in an election year.” Indeed, that probably helped reverse the price rise last year. At the same time, the withdrawals put the U.S. in a more vulnerable position with respect to our emergency oil reserves. Further, it’s easy to be cynical about this move, because politicians — of both parties — have often treated the SPR as the “Strategic Political Reserve”, to be used to placate voters upset with rising prices.

All of this led to the historic price increases in 2022. There isn’t one single cause, which is why some will say “It was Biden’s policies” and some will say “It was Russia’s invasion of Ukraine.” Both are true, but neither is the exclusive cause. Russia invaded Ukraine, and in response President Biden made an executive order that caused disruptions in the refining sector — even if many agree it was the right thing to do.

Forbes by Robert Rapier, April 4, 2023

Phillips 66, a renowned oil and gas company found on the NYSE, has recently received a boost in its price target. According to reports, JP Morgan Chase & Co. increased the price target from $112.00 to $120.00, much to the delight of both clients and investors alike.

With a potential upside of almost 25%, this boost could potentially lead to even greater profits for Phillips 66. This development follows on from their recent quarterly earnings report, which showed mixed results. The company reported earnings per share (EPS) of $4.00 for the quarter, missing out on the consensus estimate by a margin of $0.35.

While not quite hitting expectations with regards to EPS, Phillips 66 still displayed promising data regarding their revenue stream. During that particular quarter they generated a total revenue stream of $40.91 billion; an impressive feat when compared with an earlier estimate of $34.30 billion.

Phillips 66 conducts business through several sections or “segments,” including Midstream, Chemicals and Refining & Marketing Specialties. These segments each focus on different aspects of processing, transportation, storage and marketing of fuels and other related resources.

The Midstream segment offers crude oil and refined products transportation services as well as providing terminaling services and natural gas transportation alongside various processing and marketing services relating to liquefied petroleum gas (LPG). Meanwhile, the Chemicals division is responsible for producing such chemicals as styrene, polymers as well as aviation fuel among others.

Overall this is an exciting turn for shareholders and industry analysts alike who are hopeful that despite some hiccups along the way; Phillips 66 will come out on top when it comes down to continuing success in their area of operations moving forward into the future.

Phillips 66: Analyst Reports, Market Performance, and Business Operations

Phillips 66, a company that specializes in the processing, transportation, storage, and marketing of fuels and other related products, has recently been the subject of several reports by equities research analysts.

Morgan Stanley increased its price target on the company from $115.00 to $125.00 and gave it an “equal weight” rating in a report on Friday, January 20th.

Similarly, Royal Bank of Canada increased their price objective on Phillips 66 from $130.00 to $132.00 and gave the stock an “outperform” rating in a report on Wednesday, February 8th.

Meanwhile, UBS Group initiated coverage on Phillips 66 with a “buy” rating and a $139.00 price target for the company in a report released on Wednesday, March 8th.

However, Piper Sandler decreased its price objective on the company from $155.00 to $137.00 and set an “overweight” rating for it in a report published on Monday, December 19th. Finally, Mizuho decreased its price objective for Phillips 66 from $121.00 to $120.00 in its report released on Friday, March 10th.

According to data from Bloomberg, there are currently five investment analysts who have rated Phillips 66 as a hold and nine have given it a buy rating with an average consensus rating of “Moderate Buy”. The average price target for the company is at $121.80.

Phillips 66 currently holds a market capitalization of $44.64 billion with NYSE:PSX opening at $96.23 as of Tuesday’s trading session; having recorded a year low (2019) value of just over USD74 per share and another high value at just above USD113 per share respectively.

The Midstream segment provides crude oil and refined product transportation services while also offering terminaling and processing services alongside natural gas, natural gas liquids and liquefied petroleum gas transportation, storage, processing and marketing services. The company’s portfolio of products encompasses a variety of offerings that cater to the needs of various industries; from industrial customers to consumers.

In other Phillips 66 news, Director Gregory Hayes purchased 10,250 shares of the firm’s stock at an average cost per share of $97.75 in early February for a total transaction amounting to over $1 million. Given his recent acquisition, Director Gregory now directly owns 14,299 shares in the said company valued at $1,397,727.25.

Additionally, many hedge funds have recently made changes to their positions in Phillips 66’s business operations. Among these institutions are Wellington Management Group LLP which currently owns 7,188,087 shares worth $620,979k; Vanguard Group Inc whose total hold is currently valued at $4.09 billion across its over 50 million available shares.

The firm boasts strong fundamentals which have enabled it to navigate through challenging economic conditions with impressive results. Its PEG ratio is one of the lowest within its peer group and with notable initiatives aimed at expanding its reach globally leveraging on its Midstream segment capability among others there is much optimism surrounding its prospects for shareholders both existing and prospective.

Best Stocks by Ronald Kaufman, April 4, 2023

Earlier this month, as the market leader in data insights, market research and data intelligence in the energy sector, Insights Global was present at the StocExpo and the Tank Storage Awards Gala. 
 
It was a productive week, meeting many clients and partners in the ecosystem and the icing on the cake was that Insights Global won 2 Bronze Awards:

✓ Our CEO Patrick Kulsen won the ‘Outstanding Achievement Award’ (award for an individual who has gone above and beyond to ensure the success of a company and impact in our market).

✓ And we won a Bronze Award in the category ‘Terminal Optimisation’ for our Vessel Clearing Tool Service (an award for the software, service, or model that succeeds in optimising, streamlining, or improving the storage terminal).

We are grateful and want to thank everyone and especially the organization for a wonderful week and the recognition.

The largest U.S. refinery expansion in more than a decade has ramped up southeast of Houston at ExxonMobil’s Beaumont refining complex.

The $2 billion project, considered one of the largest in the world, bumped up capacity for transportation fuels by 250,000 b/d, to total 630,000 b/d-plus. The last big refinery expansion was in 2012.

“ExxonMobil maintained its commitment to the Beaumont expansion even through the lows of the pandemic, knowing consumer demand would return and new capacity would be critical in the post-pandemic economic recovery,” said President Karen McKee of ExxonMobil Product Solutions. 

“The new crude unit enables us to produce even more transportation fuels at a time when demand is surging. This expansion is the equivalent of a medium-sized refinery and is a key part of our plans to provide society with reliable, affordable energy products.”

The refinery is connected to pipelines from ExxonMobil’s Permian Basin operations. Permian crude is processed at the Beaumont refinery, where the company manufactures finished products, including diesel, gasoline and jet fuel. 

With the completion of the Wink-to-Webster crude line, which moves Permian oil to markets near Houston, as well as Beaumont pipelines, the new crude unit is positioned to further capitalize on segregated crude from the Permian Delaware sub-basin, where most of ExxonMobil’s production is underway.

As Permian oil output grew, construction on the Beaumont expansion began in 2019, involving 1,700 contractors. More than 50 full-time employees work at the expanded operations. 

ExxonMobil’s integrated operations in Beaumont also include chemical, lubricants and polyethylene production. More than 2,000 people work for ExxonMobil in the Beaumont area, with operations accounting for around one in every seven jobs in the region.

Meanwhile, Calgary-based affiliate Imperial Oil Ltd. in January agreed to invest about $560 million to construct what could be the largest renewable diesel facility in Canada. The project at Imperial’s Strathcona refinery is expected to produce 20,000 b/d of renewable diesel, primarily from locally sourced feedstocks.

Through 2027, ExxonMobil plans to invest around $17 billion in lower-emission initiatives.

Natural Gas Intelligence by Carolyn Davis, March 24, 2023

After years of relative stagnation, Brazil is likely to resume investments in oil refining capacity.

On Friday, the national energy policy council (CNPE) revoked a resolution that established guidelines for the divestment of federal oil company Petrobras’ refining assets and made the expansion of infrastructure to guarantee national fuel supply a strategic goal.

Brazil’s refining park comprises 19 refineries with processing capacity of about 2.4Mb/d (million barrels a day), which is insufficient to handle the 3Mb/d of oil produced. 

Professor Adilson de Oliveira, a member of the board of trustees of the UFRJ federal university, said a country like Brazil, which is heavily dependent on oil products, cannot rely on imports while it increases its exports of crude. 

“We pay freight and insurance to import the refined petroleum that we export. We burden our population with this absurd incompetence,” Oliveira told BNamericas.

In recent years, the hike in fuel prices contributed to Brazil’s inflation and ended up generating friction between previous president Jair Bolsonaro and Petrobras’ management, leading to the resignation of three CEOs.

Currently, according to the government, the state-run firm’s refineries operate at below the rate at which they operated in the past.

“Whether by stimulating greater use of the installed refining capacity, or by expanding the national refining park, the focus now is on energy security, manifested through the search for reducing external vulnerability in the supply of derivatives,” said the mines and energy minister, Alexandre Silveira.

In 2019, Petrobras signed an agreement with antitrust authority Cade to sell eight refineries that accounted for about 50% of its capacity: Abreu e Lima (Rnest), Presidente Getúlio Vargas (Repar), Alberto Pasqualini (Refap), Gabriel Passos (Regap), Landulpho Alves (RLAM), Issac Sabbá (Reman), Lubrificantes e Derivados do Nordeste (Lubnor) and Paraná Xisto (SIX).

Only three of them (RLAM, now dubbed Mataripe), Reman and SIX were sold, to Mubadala Capital, Atem Distribuidora and Forbes & Manhattan, respectively. 

Lubnor has a sale contract signed with Grepar Participações, but the transaction is still being analyzed by Cade. 

The other plants that were part of Petrobras’ divestment program are now expected to remain in its portfolio, as the new federal administration of Luiz Inácio Lula de Silva considers that Petrobras must keep a verticalized profile. 

CAR WASH EFFECT

Alongside Comperj and the Premium I and II plants, RNEST was one of the refinery projects that Petrobras had been carrying out before the Lava Jato (Car Wash) corruption probe, launched in 2014 and which led to a halt in the works. 

Claiming it needed to invest in more profitable activities to reduce its debts and generate more dividends for shareholders, the firm has been focusing on exploration and production in deep and ultra deepwater assets, especially pre-salt areas.

After the election of Lula last October, the Workers Party leader’s energy transition team recommended that Petrobras modernize its refineries and resume halted construction works.

Petrobras’ current business plan, which is likely to be modified due to the change in the federal government, foresees US$9.2bn investment in the refining and gas & energy areas by 2027. 

PRODUCTION SHARING SUPPLY

Meanwhile, the CNPE decided that Pré-Sal Petróleo SA (PPSA), which oversees pre-salt production-sharing contracts, should start conducting studies into the technical and economic feasibility of mechanisms to prioritize the domestic supply of petroleum-based fuels.

The CNPE’s measure is based on a law that allows state-owned PPSA to sign contracts on behalf of the government to refine and process oil, natural gas, and other hydrocarbons arising from production-sharing contracts. 

Currently, all of the government’s oil is sold in its raw form, via the offshore production unit.

“We want the government’s oil and natural gas from production-sharing contracts to promote the industrialization of Brazil and ensure the security of national supply of energy, petroleum inputs, nitrogen fertilizers and other chemicals, reducing foreign dependence and valuing local content. Our companies need to prioritize the national supply,” Silveira said.

On Monday, PPSA said that production-sharing contracts set a new record in January, producing an average of 845,000b/d of oil, almost twice as much as a year earlier.

FUEL HANDLING CAPEX

Oil and gas watchdog ANP authorized last year investments of 1.15bn reais (US$220mn) in fuel handling infrastructure. 

Of this amount, approximately 665mn reais will be invested in terminals, 126mn reais in oil pipelines and 341mn reais in gas pipelines.

During 2022, investments of around 400mn reais were made in the segment, mostly for transportation or transfer pipelines.

The availability of fuel storage in Brazilian terminals increased by about 175,000m3 last year. 

Authorizations issued by the ANP in 2022 involved gas liquefaction units on behalf of New Fortress Energy in São Paulo and Bahia states; fuel tanks for Ultracargo in Maranhão; ship-to-ship operations for Braskem in Rio Grande do Sul; NTS’s Gasig pipeline in Rio de Janeiro; oil pipelines for Refinaria de Manaus; and a gas compression station for Vibra Energia in Espírito Santo.

By bnamericas, March 22, 2023

Oil markets have been affected by financial market challenges, inflation, and the war in Ukraine. Nevertheless, Arab Gulf countries remain resolutely optimistic, evidenced by new refinery and storage plans being developed in Iraq and the UAE.

This week, Iraqi minister of oil Hayan Abdul Ghani said that Baghdad has invited investors to set up seven new oil refineries throughout the country. Ghani said also that bidding has opened for three refineries today, while offers for three other ones are expected on April 2.

Ghani also reiterated that the new investments “constitute a shift in the government’s strategy towards encouraging foreign investment in oil refining and opening new horizons for international companies and the local private sector in this industry”. Sources have indicated that the first three refinery projects entail a 50,000 bpd refinery in the Southeastern Maysan Governorate, a 70,000 bpd refinery in the Nineveh Governorate in North Iraq, and a 30,000 bpd refining unit in Basra.

The April 2 offers are for a 50,000 bpd refinery in the Southern Dhi Qar Governorate, a 100,000 bpd refinery in Wasit (East Iraq), and a 70,000 bpd refinery in Muthanna (South Iraq). The seventh refinery project is slated to be for a 70,000 bpd refinery in the Western Al Anbar Governorate. 

The refinery expansion strategy comes at a time when Iraq is still struggling to adhere to its OPEC quotas. State-owned Iraqi oil marketeer SOMO reported that in February 2023, Iraq produced around 4.34 million bpd, a small change from the previous month, and still 92,000 bpd below official OPEC quota levels. 

In January 2023 production levels also were around 100,000 bpd below OPEC production quota, while December 2022 levels were at 4.43 million bpd. The main underlying reason for the current low production levels is the maintenance work taking place at the 400,000 bpd West Qurna 2 oil field. The shortfall however contradicts official statements made in January 2023 that other Iraqi oilfields would be able to compensate for lower production at West Qurna 2.

A more positive development this month is the rapprochement between Baghdad and the KRG, which have been at loggerheads about oil revenues from Iraq’s northern oil operations. According to Iraqi PM Mohammed Shia’ Al Sudani, Baghdad and the KRG government have reached an agreement to end the Baghdad – Erbil dispute over the Kurdistan region’s oil revenues.

Al Sudani stated to the press that the Kurdish oil revenues will be put in a single account that both the PM and the Kurdistan PM will have control over.

And the stakes in Iraq’s north are huge. Often dubbed as one of the last oil frontiers, the lifting cost for oil remains the lowest in the world at around U$2-3 per barrel, on a par with that of Saudi Arabia, and reserves are vast.

Genel, a major partner working in the Kurdish region oil and natural gas industry, has reported that year-end 2022 gross 2P reserves at its Tawke license (Genel holds 25% working interest) are 327 million barrels.

According to DeGolyer and MacNaughton international petroleum consultants, production was 39 million bpd in 2022 with an upward technical revision of 9 million barrels.

Through implementation and observation of the performance of phase 1 of the Tawke field Enhanced Oil Recovery (EOR) project, 11.7 MMbbls out of 23.3 MMbbls were moved from 2C resources into 2P reserves.

Meanwhile, at its Taq Taq concession (44% working interest, joint operator), gross 2P reserves are 24 million barrels as of end-2022 (26 million barrels at end-2021) after producing 1.6 million barrels according to McDaniel & Associates independent assessment.

And at its Sarta concession (Genel 30% working interest, operator) Genel’s estimate for gross 2P reserves is 9 million barrels at the end-2022 mark (32 million barrels at end-2021) following production of 1.7 million barrels after evaluation of results from appraisal wells and pilot production.

At the same time that Iraq is looking to give its downstream industry a nudge, the UAE’s plan to create a global oil hub at Fujairah looks much brighter. The Emirate hub is facing pressure due to the increased influx of Russian oil volumes, which has resulted in a strain on available storage and transit options. European markets have banned Russian oil, and Moscow has redirected its flows to Asia, providing an opportunity for Fujairah and other Emirati parties to take advantage.

VTTI Fujairah Terminals commercial manager Maha Abdelmajeed stated at the Fuel Oil Forum (FUJCON) that the terminal has seen a significant influx of Urals and naphtha, which he expects to last in the near future.

However, existing tanks are already full, indicating that Fujairah’s storage capacity of 1.1 million cubic meters has been reached.

Vessel data from 2022 shows that Fujairah has received around 12,500 vessels, with total volumes up by approximately 10%. The Port of Fujairah’s BD Manager, Martijn Heijboer, expects a healthy appetite for new transit volumes and storage demand.

Additionally, Fujairah is set to commission a dry bulk export facility soon, which will add approximately 18 million tons of aggregate handling capacity in Dibba. By 2050, methanol and LNG are projected to have the top market share of alternative bunker fuels at Fujairah, followed by biofuels and ammonia.

With these developments, Fujairah is expected to be well-positioned to become one of the world’s largest bunkering hubs.

OilPrice by Cyril Widdershoven, March 22, 2023

The global liquefied natural gas (LNG) storage tanks market is projected to grow to $20.8bn by 2027.

LNG is seeing a boom in demand, driven by the transition to a lower-carbon economic system and heightened need for energy security following Russia’s invasion of Ukraine. In 2022, the global LNG storage tanks market was estimated to be $14.5bn.

LNG storage tanks, used to store LNG at cryogenic temperatures, are essential for the safe and efficient transport and storage of LNG. Both single containment and full containment vessels are used globally.

Over the last few years, the global trade of LNG has steadily increased, setting a record of 516bcm in 2021.

The worldwide increase in LNG trade has been caused by an increase in the number of liquefaction plants, and sudden increase in the number of plants among European countries, such as Germany, which have been rapidly brought online in direct response to the recent war and sanctions against Russia.

The increase in LNG trade worldwide is because of higher production at new liquefaction plants in Australia, the US, and Russia.

LNG is a clean source of energy; and with increasing environmental regulations, globally, the use of natural gas and LNG as marine fuels is increasing. An increase in the global liquefaction capacity and LNG import has enabled robust growth in LNG consumption.

Global LNG regasification is increasing every year. Regasification is the process of converting liquid LNG at -259°F back to a natural gas at the atmospheric temperature.

Currently, Japan has the world’s largest LNG regasification capacity at 211.4 million MT per year.

Two new regasification terminals were added in the new markets of Bangladesh, and Panama, which started receiving LNG supply in 2018. This, in turn, is responsible for the increase in demand for LNG storage tanks.

Global regasification is increasing every year. A number of key industries are driving the increasing need for gas storage, such as metal processing (especially the steel industry). LNG is also being used by heavy transport industries, such as trucking and in large ships.

gasworld by Vaughn Entwistle, March 22, 2023