Category: Nieuws

The sale of 1.5 billion shares in Saudi Aramco, which launched on Sunday, has drawn demand that exceeded the supply of stock, Reuters has reported, noting demand overtook supply just hours after the sale began.

The news of the secondary stock offering broke last week when the government of Saudi Arabia announced it would sell 1.545 billion shares in Aramco, at a price of between 26.70 and 29 riyals apiece.

To cover potential short positions resulting from any over-allotments, the government has granted Merrill Lynch, which acted as the stabilizing manager of the offering an option, known as a “greenshoe,” to purchase up to 10% of the number of offered shares at the final offer price.

The banks involved in the share sale will continue taking orders from institutional buyers until Thursday, Reuters reported, after which, on Friday, they will announce the final price of the stock sale.

If demand continues as strong, that price is going to be in the upper end of the announced range. That would mean some $12 billion in proceeds unless the banks managing the offering do not add more stock to it. In that case, per Reuters, the total proceeds from the offering could reach $13.1 billion.

However, skeptics note that even the maximum proceeds from the secondary offering would fail to go a very long way towards fulfilling the Kingdom’s Visions 2030—a comprehensive economic diversification scheme spearheaded by the de facto ruler of Saudi Arabia, Crown Prince Mohammed.

The Vision 2030 program has a price tag of about a trillion, compared to which the $13.1 billion that could be raised from the share sale indeed looks like a small change. The diversification challenge for Saudi Arabia becomes even more marked in the context of OPEC+’s latest meeting that yielded a decision to extend production cuts. Despite this decision, oil prices slid lower, compromising the cartel’s effort to put a floor under benchmarks.

By oilprice.com / Irina Slav, 06.06.2024

US policymakers must pursue stability and predictability for the energy system if the US hopes to reap the benefits of global investment dollars expected to come in droves to support LNG and renewable energy projects, Shell CEO Wael Sawan said June 4.

As the British multinational oil and natural gas major focuses its strategic decision making on value and emissions reductions, it plans to hold oil production flat with expectations that oil growth will plateau in the 2030s, Sawan said at an event hosted by the Center for Strategic and International Studies.

However, “we see a big growth opportunity for LNG, which straddles both more value and less emissions” as Asia presents massive growth potential and LNG typically replaces coal, he said. “And then at the heart of our transformation is what I would call our downstream renewables business. There we are fundamentally rewiring the entire infrastructure we have to be able to serve what [we believe] will be lower-carbon demand … from our customers.”

He warned that the US risks missing out on this opportunity if it cannot demonstrate that it can be a reliable and dependable energy supplier, regardless of administration or who controls Congress.

For instance, the current pause on LNG export authorizations realistically will not impact today’s or next year’s supply of LNG, he said, but “it continues to undermine confidence in US LNG at a time when US allies around the world want dependable and reliable supplies so that they can actually anchor that as part of their overall energy system.”

‘Unique role’

Joseph Majkut, director of the CSIS Energy Security and Climate Change Program, chimed in that CSIS has heard similar warnings from other companies and foreign officials.

“My view is that the US is still growing into its role as a large exporter and energy security player globally,” Majkut said. “Washington is not quite ready to deal with both the advantages that can come from that or the responsibilities.”

Yet, the “US plays a very unique role in the global gas system by having free onboard cargoes, destination flexibility, and now we’re seeing a lot of traders, including Shell, be offtakers ready to enter a much more commoditized market than even we had eight to 10 years ago,” he contended.

Sawan concurred, stressing the importance of the US’ role as a global energy supplier, particularly as Europe continues to contend with Russia’s invasion of Ukraine and the shakeup in energy trade flows that caused.

Shell is contemplating not only what technologies to invest in but where is the best location to deploy capital, Sawan said. “The US ranks highly in that regard on the back of multiple different elements, including the support of the [bipartisan infrastructure law] as well as the Inflation Reduction Act.”

With all eyes on the upcoming US presidential election in November, Sawan said he hopes that whoever sits at the helm of power sees the value in those laws and “continues to encourage companies like ours to continue to invest in what I think can be a huge advantage for the US looking into the next 10, 15 years.”

Sawan asserted that “capitalism is at the essence of how you’re going to be able to allow the markets to create the appropriate incentives for the outcomes to materialize, but you might need to be able to nudge it with things like the Inflation Reduction Act or the EU Fit for 55.”

The IRA in the US provides climate change funding and tax credits over the next decade to spur innovation in clean energy and transportation manufacturing and drive down greenhouse gas emissions. The European Commission’s Fit for 55 climate change package aims to cut EU emissions by 55% by 2030 compared with 1990 levels.

“You’re competing against what is a very strong incumbency for coal, oil and gas,” Sawan said, describing those resources as energy dense, easy to transport, high value molecules. “So to be able to counter the forces of gravity, you’re going to have to create new forces, and that’s where some of the support that governments are putting in place hopefully will catalyze some of those movements and over time as you build up the scale, as we’ve seen in solar and wind, you will be able to establish value pools that are investable for companies all around the world.”

Election impacts

Asked more directly about the potential for a 180-degree shift in US energy and environmental policy come January and the impact an easing or rollback of methane and other regulations could have on Shell’s LNG export business, Sawan responded that he’ll be looking for “concrete action” to determine what moves the company will make.

Shell will pivot as needed while also continuing “to drive what we think is a uniquely positioned US LNG market for offtake to the rest of the world,” he said.

Sawan declined to further speculate about what a change in the White House could mean. But regarding methane regulation in particular, he expressed that Shell “fundamentally believes that every single molecule of methane should be captured and should be used constructively and not just allowed to go into the environment.”

“We hold ourselves to a very high bar,” he said. “If the bar in the country [Shell is operating in] is lower than the bar that we hold, then we will meet our own bar.” He added that he doubted that “good stewards of capital and good business people [would] simply let the methane emissions happen.”

By: SP Global / June 06, 2024

In a significant move towards sustainable energy development, Vopak has entered into a strategic cooperation agreement with the delegation led by the vice mayor of Tianjin.

This collaboration is aimed at repurposing the infrastructure of Vopak Tianjin to accommodate new energy sources, such as green methanol, sustainable aviation fuel, and potentially ammonia and Liquid Organic hydrogen carriers. In conjunction with this effort, the Tianjin Port Group is set to join forces with Vopak to create a pioneering green methanol bunkering service solution.
 
Situated in the economic heart of Bohai Bay, Tianjin boasts the title of the largest port in Northern China. With the burgeoning number of new energy projects in the region, Tianjin’s role as a critical logistics hub for these initiatives is becoming ever more pronounced.
 
Vopak is propelling the world towards progress by hastening its investment in new energies and sustainable feedstocks. Following its announcement in June 2022, the company has dedicated a substantial investment of EUR 1 billion towards these sectors, aiming for completion by 2030. Vopak’s strategic focus is centred on developing infrastructure solutions for low-carbon and renewable hydrogen, ammonia, CO2, long-duration energy storage, and sustainable feedstocks. This forward-thinking approach not only shapes the trajectory of Vopak’s future but also makes a meaningful impact on the transition of key industrial clusters and the formation of the energy hubs of tomorrow.

By: Storage Terminals Magazine / June 04, 2024

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