Author: Ricardo Perez

The International Air Transport Association (IATA) said its projections for a tripling of sustainable aviation fuel (SAF) production in 2024 to 1.9 billion litres (1.5 million tonnes) are on track.

This would account for 0.53% of aviation’s fuel need this year. To accelerate SAF use, there are several policy measures that governments could take.

“SAF will provide about 65% of the mitigation needed for airlines to achieve net zero carbon emissions by 2050. So the expected tripling of SAF production in 2024 from 2023 is encouraging. We still have a long way to go, but the direction of exponential increases is starting to come into focus,” said Willie Walsh, IATA’s Director General.

Renewable fuel production is shared by many industries and SAF is a part of renewable fuel production. That is why increasing the production of renewable fuel is key to increasing the potential of SAF.

Some 140 renewable fuel projects with the capability to produce SAF have been announced to be in production by 2030. If all of these proceed to production as announced, total renewable fuel production capacity could reach 51 million tonnes by 2030, with production capacity spread across almost all regions.

Renewable fuel production potential could exceed this estimate as investor interest in SAF grows.

With a typical three-to-five-year time lag from planning to production, investment announcements as late as 2027 could be in production by 2030. At the same time, it is also clear that not all announcements reach final investment decisions.

Through the International Civil Aviation Organisation (ICAO), governments set an ambition to achieve a 5% CO2 emissions reduction for international aviation from SAF by 2030. To achieve that ambition, around 27% of all expected renewable fuel production capacity available in 2030 would need to be SAF. Currently, SAF accounts for just 3% of all renewable fuel production.

“The interest in SAF is growing and there is plenty of potential. But the concrete plans that we have seen so far are far from sufficient. Governments have set clear expectations for aviation to achieve a 5% CO2 emissions reduction through SAF by 2030 and to be net zero carbon emissions by 2050. They now need to implement policies to ensure that airlines can actually purchase SAF in the required quantities,” said Walsh.

By: Biofuels International / June 03, 2024

Tank storage company Vopak VOPA.AS on Wednesday raised its full-year profit target, as it beat quarterly earnings expectations on the back of strong demand for energy storage.

Disruptions in energy supply chains due to the war in Ukraine have benefited Vopak, as the West invests in import terminals, floating storage and regasification to reduce its reliance on Russian supplies.

The group could now get a similar boost from the war in the Middle East.

“It could be positive, although you don’t want to benefit from a crisis,” Chief Financial Officer (CFO) Michiel Gilsing said on a call.

Supply disruptions mean gas is “coming from larger distances, and that means it’s not flowing via a pipeline, meaning it has to be stored in tanks,” Kepler Cheuvreux analyst Andre Mulder explained.

Vopak now sees earnings before interest, tax, depreciation and amortisation (EBITDA) of around 970 million euros ($1 billion) in 2023, compared with a previous forecast of more than 950 million.

Its shares were up nearly 4% at 0809 GMT, heading for their best day in about 7 months.

The new guidance factors in the contribution from three chemical terminals in Rotterdam which Vopak is selling, it said in a statement. Gilsing added that sale would “definitely” close in the fourth quarter.

Asked why Vopak is selling chemicals assets rather than oil infrastructure as part of its goal to shift towards greener energy infrastructure, the CFO said: “Oil is effectively still very strong and a growing market.”

Over time, the group will work to re-purpose oil facilities for greener energy, he added.

The company posted EBITDA of 240.5 million euros in the third quarter, exceeding analysts’ average forecast of 238 million.

Vopak also amended its guidance for several other metrics including consolidated growth capital expenditure (CAPEX), now seen at around 275 million euros, compared with around 300 million previously.

($1 = 0.9437 euros)

By xm, Olivier Sorgho / 24.05.2024

Swiss company Metafuels AG is advancing its plans for a sustainable aviation fuel facility in Denmark together with European Energy.

Metafuels AG, a Swiss aviation tech company, has signed an agreement with European Energy to set up a synthetic sustainable aviation fuel (eSAF) facility near Padborg in southern Denmark.

The new facility is set to be constructed adjacent to a future Power-to-X facility from European Energy.
The facility will be able to produce approximately 12,000 litres of eSAF daily.
“European Energy is a key partner for us as we look to take the idea of eSAF from concept to reality – this can drastically cut emissions in the aviation sector, which is one of the hardest to decarbonise. This is a major milestone in our development process and a real-world step towards affordable eSAF replacing kerosene, and its impact on the planet,” said CEO of Metafuels, Saurabh Kapoor.
This facility is a component of a broader effort to meet the aviation industry’s climate targets through the European Union’s RefuelEU Aviation initiative and the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).

Expanding the Role of e-SAF in Achieving Aviation Climate Goals

Metafuels’ scalable aerobrew technology, converts sustainably produced methanol to jet fuel. It features high energetic efficiency and ultra-high conversion of carbon into jet fuel with up to 90% reduction of life cycle emissions compared to conventional jet fuel.
As a drop-in fuel this technology does not require aircraft re-engineering or repurchasing and is compatible with existing fuelling infrastructure.
European Energy is currently developing a Power-to-X facility in Padborg – the plan for the facility is that it will have more than three times the output of the current Power-to-X facility in Kassø constructed by European Energy.
“Reducing the climate impact of aviation fuels through renewable energy is an important part of the green transition.
“Accounting for more than 2% of global CO2-emissions, the aviation sector is another area where green methanol through conversion to sustainable aviation fuel can play a major role in the decarbonisation,” said Emil Vikjær-Andresen, EVP and Head of Power-to-X in European Energy.
The justification for such technology is clear.
The aviation sector accounts for over 2% of global CO2 emissions—some 800 million tonnes. This is in addition to the production of other greenhouse gases and complex climate co-factors arising from the nature and altitude of the emissions which, when total contribution to global heating is considered, represents a contribution of around 3.5%.

By: Biofuels International / May 23, 2024

On average, natural gas releases 50% less emissions than coal upon combustion. As a result, natural gas is uniquely positioned as a transition fuel to support an affordable and secure energy transformation through the displacement of coal power electricity generation.

Ideally, natural gas is transported via pipelines. But in the absence of that being feasible, natural gas is compressed into a liquid for ready transport to alternative markets. Environmentally-sustainable, safe, and reliable delivery of LNG to consumer markets requires investment in new and expanded infrastructure, continuous process improvement, increasingly robust supply chain networks, and collaboration across members of the value chain. This can be achieved by applying digital solutions across the asset lifecycle.

A raft of obstacles in place

A new global gas order

The LNG market is poised for continued near-term growth, fuelled by market demand in Europe and Asia and the beneficial impact of displacing coal fired electricity generation with natural gas. McKinsey, for example, recently reported that the global demand for LNG is expected to increase by 1.5 – 5%/y until 2035.¹ Preventing a shortage in supply requires additional investment in both liquefaction and regasification facilities; however, conflicting energy transition scenarios and evolving regulation is a risk for future expansion of the market and may deter investment. Capital discipline and supply chain agility will be required to entice additional investment needed to meet forecasted LNG demand.

Limited responsivity to market dynamics

Looking to the future, the global LNG market is likely to be subject to substantial geopolitical and price risk. Inflexibility of long-term contract commitments, current infrastructure limitations, and the cost of LNG storage and transportation are a few of the challenges the LNG industry must overcome to be more responsive to market dynamics. To overcome these challenges, the industry needs to invest in infrastructure and improve collaboration across partners such that volume can be best allocated to meet demand and optimise the value chain systematically.

LNG production is an energy intensive process

One of the primary challenges in the LNG industry is optimising the performance of the cryogenic multi-stream heat exchangers, which are central to the gas liquefaction process. These heat exchangers are complex due to their geometry, subjectivity to external weather and temperature variables, and the multiple streams flowing through them. Improved handling of these units presents a significant opportunity for margin improvement as energy costs represent the largest controllable operating cost to an LNG operator, with a typical LNG plant consuming 10% of its own feed.

Enhancing the ability of a site to optimise run rates based on the thermal efficiency of these trains, with digital solutions and advanced sensors, can drive overall profitability, lower energy consumption, and provide a substantial pathway for carbon abatement.

Personnel limitations – a double-edged sword

Natural gas and liquefaction plants often run lean and mean. Advanced sensors and automation technology are a valuable supplement to boots on the ground. Virtual training simulators can also empower operators to run the plant under the most optimal conditions and improve responsivity to process changes.

Feed quality variability

Understanding variability in natural gas inlet feed composition and impurities prior to entering the cryogenic process is critical to defining the best plant configuration, technology and procedures to prevent load disruptions. Digital twins can help simulate and predict the effects of feed quality on plant operations and prioritise corrective action. The agility to respond to feed quality changes with advanced process controls (APC) is imperative to reduce the operating costs of pretreatment and liquefaction and maximise throughput.

Evolving policy around carbon intensity

Calls to action to transition away from fossil fuels, increase renewable energy production, and improve energy efficiency are increasing. As such, so are the policies, regulations, and commitments to do so. While natural gas itself in the near term has been given a bit of a reprieve; to maintain its benefit, increased weight is being placed on producers to limit carbon dioxide (CO₂) and methane emissions during the production and transportation of LNG. Industry leaders must plan strategically to lower the carbon intensity of their operations in advance of increased future regulations. This can be accomplished via improved site efficiency, optimised energy consumption, electrification of assets with renewable energy, leak detection and prevention, and carbon capture technologies.

Key drivers to overcome industry headwinds

These are among the most significant headwinds facing the industry today but at a more granular level, offsetting these challenges boils down to four key operational areas. These are all critical as any shortfalls can lead to a loss in profit and potentially impact safety and environmental compliance.

Minimising resource utilisation

Efficient use of energy and other resources in the production process is critical. The goal is to manufacture products while consuming the least possible amount of energy (and thereby limiting emissions) and resources, which not only reduces costs, but also aligns with environmental sustainability goals.

Maximising equipment uptime

Ensuring that equipment is continuously operational, avoiding performance up-sets, and meeting production targets is another key area. This is fundamental because if equipment is not functioning, other factors like energy consumption, product quality, and cost management suffer and can significantly affect the site’s bottom line.

Optimising product yield and quality

Achieving the highest possible yield and quality of product is a major objective. This involves fine-tuning production processes to ensure that output meets the desired standards of quality and quantity, which in turn maximises profitability and customer satisfaction.

Cost and risk management across asset lifecycles

The fourth key performance indicator focuses on optimising the cost and managing the risks associated with all asset expenditures over their lifecycles. This encompasses making strategic decisions on investment, maintenance, and upgrades of equipment to ensure the most efficient use of capital and resources over the long term.

Building digital and predictive analytics capabilities to ensure long-term financial success

Each of these key initiatives are interconnected and deficiencies in any one of them can have a cascading effect on the others. Digital technologies can be leveraged to determine the right balance between critical performance metrics and sustainable production. When done strategically, LNG producers have the potential to unlock significant value through evaluation of business trade-offs, improved visibility across the organisation, improved overall energy efficiency, reduced emissions, and maximised production.

By: LNG Industry, Jessica Casey / 21 May 2024 

HBK Capital Management, one of the biggest shareholders in Hess Corp., is planning to abstain from voting on the oil company’s $53 billion takeover by Chevron Corp.

The hedge fund agrees with Institutional Shareholder Services Inc. that shareholders should not vote in favor of the deal, one of the firm’s partners, Nikos Panagiotopoulos, said in an interview.

“Hess shareholders are taking all the arbitration risk and should be compensated for the possibility that arbitration goes against them or takes longer than expected,” Panagiotopoulos said.

HBK has economic interests in more than 8 million shares of Hess, Panagiotopoulos said. That likely makes the fund Hess’s fourth-biggest holder, according to data compiled by Bloomberg. HBK Capital Management manages more than $7 billion in assets.

Hess didn’t immediately respond to requests for comment. Chevron said, “we look forward to Hess obtaining a successful shareholder vote and completing the transaction.”

Also See: Chevron Falls as ISS Tells Shareholders to Abstain on Hess Vote

Chevron shares fell 0.9%. Hess declined 0.5%.

(Adds stock moves in the final paragraph.)

Most Read from Bloomberg Businessweek

By: Bloomberg, Kevin Crowley / May 13, 2024

Pipeline operator Enbridge beat market estimates for first-quarter profit on Friday, as demand remained strong amid an uptick in oil production across North America.

Improvements in technology have driven rapid growth in U.S. oil production over the past few years, benefiting pipeline operators such as Enbridge.

The company recorded strong demand for its Flanagan South Pipeline and the Enbridge Ingleside Energy Center, the largest crude oil storage and export terminal by volume in the United States.

Its U.S.-listed shares rose 1.1% premarket.

Adjusted core profit at its liquids pipelines segment rose to C$2.46 billion ($1.80 billion) from C$2.34 billion last year.

Transport volumes at Enbridge’s Mainline – North America’s biggest oil pipeline network – rose marginally from last year, helped by a surge in Canadian oil sands production and a delay in the start-up of a government-owned rival pipeline to the second quarter.

“In Liquids, we saw high utilization across our systems including another quarter of strong Mainline performance,” said CEO Greg Ebel.

The company, which transports nearly a fifth of the natural gas consumed in the U.S., said adjusted core earnings from its gas transmission segment rose 7.1% to C$1.27 billion.

On an adjusted basis, Enbridge reported a quarterly profit of 92 Canadian cents per share for the three months ended March 31, compared with analysts’ average estimate of 81 Canadian cents per share, according to LSEG data.

By: Reuters / May 10, 2024

From petrol to plastics, oil-derived products define modern life. A bold plan to change that comes with huge costs — but researchers and policymakers should take it seriously.

Fossil energy sources need to be eliminated — and communities that will be adversely affected during the clean-energy transition supported, as we wrote in an Editorial last week. In this week’s issue, Eelco Vogt and Bert Weckhuysen, chemists at Utrecht University in the Netherlands, lay out what needs to be done to decarbonize an important component of fossil-fuel infrastructure: crude-oil refineries.

The workings of refineries are little known to most people outside the oil and gas industries, yet are essential to the global economy. They convert crude oil into liquid fuels used in transportation, notably diesel, petrol and jet fuel. Refineries also provide chemicals and synthetic materials that are used to produce most of today’s consumer and health-care goods. In a Perspective article, Vogt and Weckhuysen set out a blueprint for decarbonizing oil-refinery capacity by mid-century. They acknowledge that the cost and scale of the necessary transition are “staggering”. Their vision deserves attention. Industry leaders and policymakers need to take it seriously.

Modern refinery functions include ‘cracking’ crude oil, whereby molecules with long chains of carbon atoms are broken down into shorter ones. This process helps to produce transportation fuels, as well as the chemicals and materials used in many medicines and everyday products, from shampoo to sticky tape. At present, the overwhelming proportion of global refinery output — at least 70% — goes into fuelling transport, including road, rail, shipping and aviation. Under net-zero scenarios, much of this demand will fall with the electrification of transport and with greater use of hydrogen and biomass-derived fuels.

In the net-zero scenario used by the authors, demand for conventionally produced carbon-based transportation fuels is still expected to exist, at around one-third of today’s levels. Such fuels will be needed in part to satisfy future energy needs in Africa, Asia and Latin America as countries there continue to develop economically. Use of fuel in aviation, which is difficult to electrify, will also increase as the tourism industry continues to boom. Some projections forecast less demand for conventionally produced fossil fuels, but all scenarios suggest that alternatives to the production of such fuels are needed.UN plastics treaty: don’t let lobbyists drown out researchers

The authors propose developing refineries that can make chemicals and materials from biomass and recycled plastic, and synthetic fuels from carbon dioxide and hydrogen, instead of from crude oil. It would be necessary to capture CO₂ from existing activities that produce a lot of the gas, such as cement manufacturing, or directly from the air. The hydrogen would come from electrolysing water. The entire process would need to be powered by renewable energy — and is estimated to require ten times as much energy as existing refineries require. In their plan, the authors pose urgent questions. Some are for researchers. Some are for policymakers. Some are for industry. Ideally, answers would come from discussions involving all of these stakeholders.

A key question relates to the energy needed to power refineries. Creating refineries powered entirely by renewables will be a huge challenge. Refineries run continuously, but renewable sources are not always available; for example, solar energy in darkness, or wind energy on a calm day. Technologies that can produce or compensate for energy fluctuations, at the required scale, are still in development.

Refineries’ essential role in the manufacture of drugs and everyday household products also needs to be addressed. For the latter, consideration must be given to the need to reduce humanity’s material footprint — an aim of ongoing talks on the United Nations plastics treaty.

Cost is a third question. Building alternative refinery capacity at large scales won’t come cheap. Here, the obstacles are mostly considerations for decision-makers, rather than technological barriers. In terms of cost, the authors calculate that replacing one oil refinery with technology compatible with net-zero goals would cost between €14 billion (US$15 billion) and €23 billion. They estimate that the total cost of converting the world’s refining capacity by 2050 would be between €320 billion and €520 billion per year.Chemistry can make plastics sustainable – but isn’t the whole solution

That is a large sum — although it is on existing scales of public and private industrial investment. If the world decides to embark on a path to replacing fossil-fuel refineries with net-zero ones, this change must be mandated or incentivized. To unlock the required funding, the authors call for policies including the implementation of carbon taxes and removal of fossil-fuel subsidies. There will be resistance — not least from fossil-energy companies and their advocates — that will almost certainly slow the authors’ timetable.

We don’t know what the world will look like in 2050. In some future scenarios, fewer refineries might be needed. Some researchers have proposed that ammonia could be produced without the emission of CO₂ and used as a fuel for internal combustion engines used in long-distance shipping. That would require less refinery capacity, although large amounts of energy would be needed to generate the hydrogen required to produce the ammonia.

The research community knows enough to start imagining different versions of the future, and recognizing just how hard it might be to reach them before it’s too late. A little over a quarter of a century is a very short period for this scale of technological change. As such, we must take the next step and, following the authors’ advice, evaluate and develop the processes that ensure we reach net-zero targets as soon as and in the most effective way possible.

By: Nature, Springer Nature / May 8, 2024

As India is set to become the world’s largest oil demand growth driver in the coming years, Indian state-owned refiner Chennai Petroleum Corporation Limited (CPCL) plans to commission a new refinery two years later than initially planned by 2025.   

CPCL, a unit of Indian Oil Corporation (IOC), now aims to complete the construction of a 180,000-barrels-per-day refinery by the end of 2027, Reuters quoted CPCL’s head of finance Rohit Kumar Agrawala as saying on Monday.

Chennai Petroleum plans to build the refinery in the southern state of Tamil Nadu, where the refiner already has a 235,000-bpd refinery, Manali, at North Chennai.

Traders Boost Bullish Bets on European Natural Gas Prices

As the company is now changing the capital structure of the joint venture responsible for the new refinery development, Chennai Petroleum will have to wait for government approval for the new capital structure, Agrawala told Reuters.

After approval is obtained, Chennai Petroleum will need 36 months to complete the construction and three months for commissioning the refinery, Agrawala said.

The cost estimate for the new refinery has risen to some $4.36 billion (364 billion Indian rupees), up from previously expected costs of about $3.52 billion (294 billion rupees), Chennai Petroleum’s finance head said.

India plans to add significant refining capacity this decade as its petroleum consumption will continue to grow and is expected to become the single biggest driver of global oil demand growth.

High GDP growth, industrialization, urbanization, and a rising number of middle class in India are all expected to shift the key oil demand growth driver from China onto India.   

India should add 1.12 million bpd to its current total each year until 2028, a junior oil minister told India’s parliament at the end of last year.

“India will become the largest source of global oil demand growth between now and 2030,” the International Energy Agency (IEA) said in a report on the Indian oil market earlier this year.

By Oilprice.com / Charles Kennedy Apr 29, 2024

Provaris Energy and Norwegian Hydrogen AS have announced a new agreement to jointly progress the identification and development of several sites in the Nordic region for the large-scale production and export of hydrogen to European markets.

The projects will utilize locally available renewable energy to produce hydrogen for shipment to European ports. This will assist energy-intensive industries in making an impact on their decarbonization plans and target a scale and level of innovation that aligns with various European Union funding schemes.

New projects will be strategically located in areas with robust grid connections and power supplies. These sites will facilitate the construction of electrolyzers and hydrogen compression facilities linked to export jetties. Provaris’ H2Neo carriers will transport the hydrogen, while the H2Leo barge will serve as storage.

The initiatives will foster circular economies by utilizing by-products like clean oxygen and waste heat in local industries and district heating systems.

Jens Berge, Norwegian Hydrogen’s CEO, commented: “While we develop a comprehensive network of production sites and distribution infrastructure across the entire Nordic region, to reduce emissions in the Nordics, we have also identified several sites with significant export potential. While such locations could also be used to produce other derivatives such as e-methanol or green ammonia, we strongly believe that if the end demand is for gaseous hydrogen, nothing would be better than to avoid going via a derivative solely for transportation purposes. Provaris’ technology makes it possible to bring hydrogen in gaseous form all the way from production in the Nordics to the customers in continental Europe.”

In 2024, the partnership will select sites for further pre-feasibility studies, focusing on hydrogen production and export logistics, including safety, environmental, and regulatory aspects. Provaris is also advancing its H2Neo carrier, with ongoing prototype testing in Norway aimed at final construction approvals by mid-2024.

 By: MarineLink , April 15, 2024