Category: Nieuws

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

European Commission has awarded nearly €720 million to seven renewable hydrogen projects in Europe, selected through the first competitive bidding process under the European Hydrogen Bank.

The winning bidders will produce renewable hydrogen in Europe and will receive a subsidy to bridge the price difference between their production costs and the market price for hydrogen, which is currently driven by non-renewable producers, the Commission said, adding that the renewable hydrogen they produce will be used in sectors such as steel, chemicals, maritime transport and fertilizers.

The Commission revealed that together, the winning bidders plan to produce 1.58 million tonnes of renewable hydrogen over ten years, avoiding more than 10 million tonnes of CO2 emissions.

The selected projects will now start preparing their individual grant agreements with the European Climate, Infrastructure and Environment Executive Agency (CINEA), which are expected to be signed by November 2024 at the latest.

According to the Commission, the projects will have to start producing renewable hydrogen within a maximum of five years after signing the grant agreement and will receive the awarded fixed premium subsidy for up to ten years for certified and verified renewable hydrogen production.

The funds for this auction come from the revenues of the EU Emissions Trading System, and the Commission plans to launch a second European Hydrogen Bank auction by the end of 2024.

Maros Sefcovic, Executive Vice-President for European Green Deal, Interinstitutional Relations and Foresight, stated: “The European Hydrogen Bank will provide valuable support to the decarbonisation of European industry. The high number of bids and the investments awarded today are a clear signal of confidence in the nascent renewable hydrogen market. There is a strong project pipeline in Europe and a competitive industry. These are encouraging signs for the future of this important net-zero technology.”

Wopke Hoekstra, Commissioner for Climate Action, noted: “The results of our first EU-wide auction for renewable hydrogen production are very encouraging. These innovative auctions, funded by the revenues from emissions trading, are a game-changer when it comes to producing renewable hydrogen in Europe. The high level of interest shows the strong potential for this market, and the need for resources beyond the EU budget.”

Kadri Simson, Commissioner for Energy, commented: “The EU is becoming a hub for clean technologies. The results of the first auction of the European Hydrogen Bank prove the high interest from European industry to produce and use hydrogen on our continent. The selected projects will help us to deliver the EU’s 2030 energy and climate targets, while creating new opportunities for green jobs and skills. The second hydrogen bank auction later this year is another exciting opportunity for European industry and I hope to see similar interest then.”

To remind, in addition to this grant, through the new Auctions-as-a-service mechanism, €350 million in national funding has been made available by Germany for the highest-ranked projects in the country which did not qualify for EU-level support, but which do meet the eligibility criteria.

The Auctions-as-a-service scheme is open to all European Union member states, enabling them to benefit from the EU-level auction platform and award national funding to additional projects, the Commission reminded, inviting the states to take advantage of this service for future auctions.

By: Offshore Energy / May 03, 2024

INEOS Oxide and LyondellBasell (LYB) have today completed the sale of LYB’s Ethylene Oxide & Derivatives (EO&D) business and associated production facilities located in Bayport, Texas to INEOS.

Tobias Hannemann, CEO of INEOS Oxide said, “We are pleased to complete this strategic acquisition in the U.S. INEOS Oxide is a leading producer in Europe and this significant step expands our Ethylene Oxide & Derivatives business into the U.S, which is the world’s largest market. It also complements our existing Ethanolamines production facility in Plaquemine, Louisiana.”

“There is available land on the Bayport site for INEOS’ growth aspiration. It is an ideal location to develop our third-party business supporting customers to co-locate and integrate into an existing Ethylene Oxide & Derivatives platform. We look forward to incorporating the business, site and team of very professional and highly motivated people within the global INEOS group.”

The Bayport EO&D business produces high-purity ethylene oxide and associated derivatives. Access to cost-advantaged feedstocks and logistics networks contributes to its excellent performance and market reputation.

Peter Vanacker, CEO of LyondellBasell said,“This divestiture of the EO&D business demonstrates progress against our company strategy and allows us to focus on further strengthening our core businesses. We are confident that the EO&D team will continue to thrive under new ownership and remain committed to collaborating closely with INEOS for a seamless transition.”

The closing of the transaction follows the completion of planned maintenance at the Bayport facility and satisfaction of regulatory and other customary closing conditions.

By: Ineos / INEOS Group, May 02, 2024

Imperial Oil Ltd. on April 26 released first quarter financial results, confirming that construction on its renewable diesel project under development at its Strathcona refinery near Edmonton, Alberta, is progressing as scheduled and remains on track for startup in 2025.

Imperial Oil in mid-2021 announced plans to construct a 20,000-barrels per day renewable diesel complex at its Strathcona refinery. The company made a final investment decision in January 2023, with construction beginning soon after.

During a first quarter earnings call, Imperial Oil President and CEO Brad Corson said a number of process unit modules have arrived on site, including the main reactor, which was fully installed during the quarter.

Corson also discussed work to secure renewable feedstock. He noted the company will primarily process feedstock sourced from agricultural producers in Western Canada and thanked the government of Alberta for its recent recognition of the biorefinery’s benefits to the agricultural industry through the Agri-Processing Investment Tax Credit Program.

That tax credit program, established in 2023, offers a 12% non-refundable tax credit bas on eligible capital expenditures. To be considered for the program, corporations must invest at least $10 million in a project to build or expand a value-added agri-processing facility in Alberta. The Alberta government on April 22 announced that the Strathcona biorefinery project had qualified for the program, indicating that Imperial has received conditional approval for an estimated $70 million in tax credits.

By: Biodiesel Magazine / ERIN VOEGELE , May 02, 2024

Saad al-kaabi, the minister of state for energy affairs, the president and ceo of qatarenergy, took part in the world economic forum’s special meeting on global collaboration, growth, and energy for development, which was held in riyadh, the kingdom of saudi arabia, under the patronage of his royal highness muhammed bin salman al saud.

Al-Kaabi took part in a panel discussion titled “People, Policy, Finance: Realizing an Equitable Energy Transition” along with Prince Abdulaziz Bin Salman Al Saud, the Minister of Energy of Saudi Arabia, Kadri Simson, the Commissioner for Energy at the European Commission, Vicki Hollub, the President and CEO of Occidental Petroleum Corporation, Darren Woods, the Chairman and CEO of ExxonMobil, andBørge Brende, the President of the World Economic Forum in Geneva.

The panel placed special emphasis on issues related to a realistic and equitable energy transition that will enhance energy’s role as an enabler of development, while achieving global climate goals.

Speaking at the panel discussion, Al-Kaabi highlighted the important issue of access to energy and the need for a fair energy transition, saying: “There are a billion people who do not have access to basic electricity. There will be anywhere between one and two billion additional people within the next thirty years, who will need access to energy. Therefore, they shouldn’t be selfish and just talk about what they want for their house and forget the neighborhood, if you will.”

Minister Al-Kaabi criticised demonising oil and gas, saying this will not do humanity any good. He said: “Demand for oil is going to be there for a very long time. You need petrochemicals that wind farms and solar energy cannot produce, and you also need petrochemical plants to make refined products for a very long time. Gas is going to be needed to power the electricity that is needed for expansion and growth. The most important thing is that they all do it in a responsible manner to make sure that humanity can develop and grow.

Al-Kaabi highlighted Qatar’s CO2 capture efforts from production to ship, saying: “Since 2015, they’ve been injecting two and a half million tons per annum of CO2 that they’re capturing from their LNG facilities. They have been doing that long before anybody was talking about sequestration or capture. Qatar has the lowest emissions in an LNG scheme from production to ship in the world.”

Highlighting Qatar’s LNG expansion projects in the North Field, which will reach 142 million tons per annum by 2030, he noted that Qatar “will sequester 11 million tons of carbon from that project. Add to that the construction of 104 LNG ships, all of which will be powered by LNG. They are building the largest blue ammonia plant in the world that has solar power and CO2 sequestration facilities. They are also capturing CO2 from their production sites in the north and sending them via pipeline across Qatar to be injected in the oil field of Dukhan as part of their enhanced oil recovery efforts.”

He added: “They are doing their part, and they have many great stories to tell. They are responsible producers but not many care to look at that.”

Discussions also tackled prospects for energy markets and global growth, the impact of geopolitical crises, and Qatar’s leadership and excellence in leading the global efforts for the energy transition.

Energy access and energy security were also high on the panel’s points of interest, as it remains a prominent challenge amid the energy transition, particularly in emerging and developing markets.

The World Economic Forum Special Meeting on Global Collaboration, Growth and Energy for Development aims to facilitate dialogue between thought leaders and the broader public on a range of topics, including environmental challenges, mental health, digital currencies, artificial intelligence, and smart cities.

By: Trade Arabia / May 02, 2024

Russia, which descended to a negligible trade and economic partner of India with the breakup of the Soviet Union and the great Indian economic reforms in 1991, has emerged as indispensable for the South Asian country. Besides defense, it is an important trade  partner of India. Additionally, with the onset of global sanction on Russia, it has become a major shield to India’s oil economy. 

Paradoxically, while global sanctions on Russia dashed the European economy, it has become boon to India. Russia became the biggest crude oil supplier to India in 2022-23 and the trigger for India’s exports of petroleum refinery products. India imports over 90 percent of crude oil demand.  

In 2022-23, Russia was the 5^th biggest trading partner of India, compared to 25^th in 2021-22.  This has invoked a new era of India-Russia economic relations.

The greater part of the revival in India–Russia economic relations was due to oil supply. Russia played a key role in protecting  India from oil turbulence due to global the oil sanction on Russia. India and China were non-parties to the sanctions. 

As a result, there was no major hike in the prices of petrol, diesel and other refinery products. Inflation, which is the immediate shock of oil price hike, remained cooled.

The EU prohibited maritime exports of Russian oil and levied a price cap of US$60 per barrel in December 2022. This followed suit to the USA, G-7 and Australia for price capping on Russian oil. The angry Russia retaliated and banned the export of oil to these nations on February 1, 2023.

In 2022-23, nearly 22 percent of total crude oil was imported from Russia. Eventually, Russian oil became the biggest base for India’s manufacturing oil refinery products and exports. India imports crude oil, refines them domestically and exports refinery products, such as petrol, diesel, ATF and others. 

To ride over the sanctions, India and Russia set up alternative arrangements. Indian refineries have accepted Russian insurance. Russian oil suppliers are trying to handle Urals oil transport to India by themselves, using their own vessels and shipping arrangement. Further, the Indian government has permitted nine Indian banks to open vostro accounts with Russian banks. This facilitated to deal with Russian oil in rupee trade in a currency swapping deal. The Indian UCO bank has opened the vostro accounts with Russian Gazprombank and VTB banks.

Petroleum refinery products have been the major products in the Indian export basket. Since Russia was the biggest supplier  of crude oil in 2022-23, it played a key role in boosting export of petroleum refinery products. Oil refinery products, which hold biggest share in the total export basket, was the engine for India’s overall exports growth. 

Both in terms of share in growth and share in exports , petroleum refinery products are topping the export basket. For example, while all other major export items  exhibited a normal growth in between 8 to 10 percent, petroleum refinery products spurred by 44.5 percent in 2022-23  y-o-y basis. It’s share in total exports of the country increased to 22.6 percent in 2022-23 , from 15.9 percent in 2021-22.

Russian crude oil, converted into refinery products and exported from India, does not violate internationally recognized Rules of Origin. It has been defined that crude, once refined in another country, is classified for the purpose of trade as originating from the refinery country.  

Thus, notwithstanding ban on import of Russian crude oil under sanctions, Russian crude was flowing through India and China in the form of petroleum refinery  products like petrol, diesel, jet fuels and others. India and China, who are not part of sanctions, were able to legally import Russian  crude and refine them in oil products, according to Centre for Research on Energy and Clean Air (CERA). 

This demonstrates India’s unique balancing imports of crude oil by export of petroleum refinery products. This led to lesser pressure on BOP (Balance of Payment). In 2022-23, India imported crude oil worth US$157,531 million. It exported petroleum refinery products worth $ 97,468 million, leaving a balance of US$60,063 million as the net imports. 

In the preceding year 2021-22, when Russia had negligible share in crude oil imports, net imports were much bigger. It was US$76,237 million, casting more pressure on BOP. This demonstrates Russian significance over Arab oil, depicting a bonanza for a new economic engagement with Russia.   

Russian oil prices were lower than the average basket price of oil imported in India. During April-August 2023-24, while the average basket price of oil was ranging between US$75.9  to $89.7 per barrel, the average price of Russian oil was US$68.9 per barrel. 

The crucial point of the revival of the trade relation with Russia is India’s shift of oil dependency from the Arab world to Russia. This shields India from global uncertainty in oil prices. Repeated OPEC threats for cuts in production and triggering oil prices increased the vulnerability of oil influenced economy of India.

Oil volatility incurs pressure on inflation since over 60 percent of transport of goods, particularly food products, are dealt by  diesel. For the past one and half years, inflation hovers within comfortable zone.

In summing up, earlier oil dependency on Arab countries used to be an uphill task to project the growth of the economy. With the dependency shifting to Russia, it has become palpable to foresee future growth.

By: eurasiareview / John Howard Newcomb April 29, 2024 

Canada’s Trans Mountain pipeline expansion (TMX) is set to enter partial operation on May 1, years behind schedule and at more than four times the original cost – but with the potential to affect oil flows even outside North America.

Canada, the world’s fourth-largest oil producer with nearly 5 million barrels per day (bpd) of output, will have more than enough export pipeline capacity once the C$34 billion ($24.9 billion) TMX becomes fully operational.

The expanded pipeline will ship an extra 590,000 bpd from Alberta to Canada’s Pacific Coast, giving Canada’s heavy crude producers access to U.S. West Coast and Asian markets, and boosting prices for their grades.

Here are some key issues facing the project.

WHEN WILL TMX BE FULLY OPERATIONAL?

Crude will flow through both TMX and the existing 300,000 bpd Trans Mountain line from May 1. The Westridge Marine Terminal in the Port of Vancouver will be able to load cargoes from all three berths, a spokesperson said.

However, Trans Mountain does not expect the first ship to load until the second half of May, and is still awaiting permission to open six more sections of the project, the Canada Energy Regulator (CER) said on Friday.

WHERE WILL THE CRUDE GO?

TMX cargoes are expected to sell to both Chinese and Californian refiners, traders and analysts say.

Many Chinese refineries are set up to process heavy sour crudes, but shipping brokers have warned the cost of hauling crude to Asia on Aframax vessels, a roughly 18-day trip one way, may limit demand.

California has complex refineries that can process both light and heavy crude and is 2-4 days’ voyage away from Vancouver.

WHO ARE THE SHIPPERS?

There 11 committed shippers on TMX, accounting for 80% of volumes. The remaining 20% of capacity will be available for spot shipments.

Committed shippers include Canadian Natural Resources (CNQ.TO), opens new tab, MEG Energy (MEG.TO), opens new tab, Cenovus Energy (CVE.TO), opens new tab, Suncor Energy (SU.TO), opens new tab, BP (BP.L), opens new tab, Chinese state energy major PetroChina and Marathon Petroleum (MPC.N), opens new tab.

WHAT CRUDE WILL IT TRANSPORT?

The new pipeline is expected to ship primarily heavy crude, while the existing line moves mainly light barrels. Multiple grades are being offered for sale from TMX but traders expect this to stabilize to a few grades once trade matures, one source said.

Commodities pricing agency Platts has launched two new daily assessments for crude loaded at Westridge. Pacific Dilbit is similar in quality to Access Western Blend, and Low TAN Dilbit aligns with Cold Lake crude, the agency said last week.

WHY IS THERE A TOLLING DISPUTE?

The budget blowout means TMX has had to raise tolls to recoup some costs. The shippers are disputing the rate increase, and the CER, which approved higher interim tolls last year, will hold a hearing this year to decide the final tolls.

ast week the CER approved a request from shippers to disclose additional detailed cost and expense information.

The dispute is significant because the final tolls will determine the value of the pipeline when Ottawa puts it up for sale.

WHAT IS TMX WORTH TO CANADA?

Some analysts predict the discount on benchmark Canadian heavy crude Western Canada Select will narrow to less than $10 a barrel versus U.S. crude, from a $14 a barrel discount currently, resulting in millions of extra dollars in revenue for Canadian producers.

TMX operations will contribute C$9.2 billion to Canadian GDP and C$2.8 billion in taxes over 20 years from 2024 to 2043, according to Ernst & Young.

The Bank of Canada said the start of commercial operations on TMX will add roughly a quarter of a percentage point to second-quarter GDP growth.

($1 = 1.3669 Canadian dollars)

By: Reuters / Nia Williams, April 29, 2024

Much lower natural gas prices this year compared to 2023 dragged down profits at some of the largest oil and gas companies, which have so far reported a mixed bag of earnings for the first quarter of 2024.

U.S. supermajors ExxonMobil and Chevron, as well as France’s TotalEnergies, all cited lower natural gas prices as a key downward pressure on earnings that couldn’t be fully offset by stable crude oil and liquids realizations and refining margins.

Exxon reported on Friday underwhelming earnings for the first quarter that were lower than consensus estimates due to declining natural gas prices and non-cash adjustments.

The U.S. supermajor booked first-quarter earnings of $8.2 billion, down from $11.4 billion for the first quarter of 2023. Earnings per share were $2.06 for the first quarter of 2024, down from $2.79 for the same period last year.

Exxon’s Q1 2024 earnings per share were below the analyst consensus forecast of $2.19 compiled by The Wall Street Journal.

“Natural gas prices moved back inside the 10-year range, reflecting continued high inventory levels and lower demand,” Exxon’s executives said on the conference call.

Related: Growing Shadow Fleet Makes Oil Price Cap Impossible to Police

On the other hand, refining margins rose to the top of the 10-year range, driven by strong demand, industry downtime, and supply disruptions, while average crude prices were flat in the quarter as the market remained relatively balanced, the company said. But these and a stellar performance in Guyana could not fully offset the weak natural gas prices.      

During the first quarter, the benchmark U.S. natural gas prices at the Henry Hub mostly traded below $2 per million British thermal units (MMBtu) amid a market glut in a warmer winter and lower demand. The low prices even prompted major gas-focused producers to curtail some output in March and April.

The lower natural gas prices hit Chevron’s earnings, too. But unlike Exxon, Chevron slightly beat the analyst earnings estimates, thanks to higher oil and gas production that offset part of the weaker refined product margins and low natural gas prices.

The annual drop in Chevron’s Q1 earnings was primarily due to lower margins on refined product sales and lower natural gas realizations, partly offset by higher upstream sales volumes in the U.S. The supermajor reported a 406,000-barrels-per-day rise in net oil-equivalent production in the United States due to the acquisition of PDC and higher production in the Permian and DJ Basins.

Chevron’s worldwide production was up 12% from a year ago, primarily due to the acquisition of PDC, strong operational performance in the Permian and DJ Basins in the U.S., and the Tengizchevroil affiliate in Kazakhstan.

“Adjusted first quarter earnings were down $1.3 billion versus last year. Adjusted upstream earnings were down modestly. Higher liftings were more than offset by lower natural gas realizations,” Chevron’s CFO Eimear Bonner said on the earnings call with analysts.

Similarly to Chevron, European major TotalEnergies also beat first-quarter estimates even as its net income dropped by 22% from a year ago. Stable oil prices and healthy refining margins failed to fully offset a decline in natural gas prices, but helped TotalEnergies beat analyst forecasts as it reported Q1 earnings on Friday. The company announced additional share buybacks and an increase in the first interim dividend for 2024.

“In a context of sustained oil prices and refining margins but softening gas prices, the Company announced first quarter 2024 adjusted net income of $5.1 billion and cash flow of $8.2 billion, in line with its ambitious 2024 objectives,” TotalEnergies’ chief executive officer Patrick Pouyanné said.

UK-based Shell, the world’s top LNG trader ahead of TotalEnergies, said earlier this month that it expects the trading results in its Integrated Gas division to be lower in the first quarter of 2024 compared to an exceptionally strong fourth quarter of 2023.

The trading and optimization results in Integrated Gas “are expected to be strong, but significantly lower than an exceptional Q4’23,” the company said ahead of the results release on May 2.

By Oilprice / Tsvetana Paraskova – Apr 29, 2024

Saudi oil giant Aramco is exploring the formation of a joint venture in the Saudi Aramco Jubail Refinery Company (SASREF) with Chinese partner Rongsheng Petrochemicals, Aramco said in a statement on Saturday.

Aramco recently signed a cooperation framework agreement that envisions Rongsheng’s potential acquisition of a 50% stake in SASREF, it added.

“The agreement also lays the groundwork for the development of a liquids-to-chemicals expansion project at SASREF, in addition to Aramco’s potential acquisition of a 50% stake in Rongsheng affiliate Ningbo Zhongjin (ZJPC),” Aramco said.

Aramco acquired a 10% interest in Rongsheng in July 2023 through its subsidiary Aramco Overseas Company BV, based in the Netherlands.

Rongsheng in turn owns a 100% equity interest in ZJPC, which operates an aromatics production complex and has an interest in a joint venture that produces purified terephthalic acid.

By: Reuters / Adam Makary,   27 Abr, 2024.