Rotterdam and Shannon Foynes Ports Plan Green Hydrogen Supply Chain to Continent

Ireland’s largest bulk port Shannon Foynes and the Port of Rotterdam have signed an agreement on developing a supply-chain corridor for exporting green hydrogen and renewable fuels into Europe generated from the west of Ireland’s offshore wind power.

Green hydrogen produces energy through electrolysis of water while eliminating emissions by using renewable energy.

The agreement will focus on market and trade development for what are expected to be large volumes of green hydrogen and its derivatives produced at a planned international green energy hub on the Shannon Estuary. Irish offshore wind has potential to generate 80 gigawatts of green electricity; over 10 times Ireland’s current national requirement.

The memorandum of understanding signed by the ports identifies significant volumes of green hydrogen, commencing with proof-of-concept volumes by 2030.

Europe’s green hydrogen strategy for 2030 is to import 10 million tonnes of renewable hydrogen by 2030 for use in heavy industry and transport sectors that are traditionally reliant on coal, natural gas and oil. Rotterdam intends to facilitate volumes of 40 million tonnes from across the world by 2050; a significant proportion of which can come from the Atlantic resource. Backed by the Dutch government, it is already investing heavily in hydrogen infrastructure including investing more than €4 billion in electrolysers though a hydrogen market is in its infancy.

The agreement will explore further opportunities with interested and suitable commercial parties. It also provides for engaging relevant public stakeholders to support the initiative on potential supply of green hydrogen and its derivatives, such as ammonia, and methanol, as well as sharing best practice information on desalination; high-voltage electricity, industrial clustering around hydrogen and “green ship bunkering processes”.

The two ports may also work on market development and jointly finding customers from Ireland. These would include the maritime fuels sector, sustainable aviation fuels, green fertiliser and facilities with direct green hydrogen fuel requirements such as the steel industry.

René van der Plas, international director at the Port of Rotterdam, said it was already Europe’s leading energy hub “and recognises the significance and opportunity for all European citizens and industries arising from the green transition … hydrogen is one of our priorities and we are working hard towards establishing infrastructure, facilities and partnerships that will help deliver on this.

“This agreement with Shannon Foynes port is one such partnership and can support our efforts to set up supply chain corridors for the import of green hydrogen into northwest Europe from countries elsewhere with high potential for green and low carbon hydrogen production,” he added.

Shannon Foynes Port Company chief executive Patrick Keating said: “With the largest wind resource in Europe off our west coast we have the opportunity to become Europe’s leading renewable energy generation hub. That will deliver transformational change for Ireland in terms of energy independence and an unprecedented economic gain in the process.”

Ireland could become a very significant contributor to REPowerEU, Europe’s plan to end reliance on fossil fuels, he added.

“We can produce an infinite supply of renewable energy here, and there are already a number of routes to market emerging for that energy. This agreement with the Port of Rotterdam is a key step towards enabling that. The Port of Rotterdam already works on introducing the fuels and feedstocks of the future with major oil and gas companies and its broader port community of over 3,000 commercial companies.”

With a port area over 40km and a throughput 467 million tonnes of freight a year, Rotterdam is Europe’s largest port.

Shannon Foynes Port Company, Ireland’s deepest sheltered commercial harbour and largest bulk port company, has statutory jurisdiction over all marine activities on a 500km2 area on the Shannon Estuary, which with depths of up to 32m and a handling capacity for large vessels up to 200,000 deadweight tonnes is among the deepest ports in Europe.

Meanwhile ESB Networks has lodged a planning application for its first major hydrogen project in Cork which it believes will play a “critical role” in Ireland achieving net-zero in the coming years. Papers were lodged with Cork County Council earlier this month for the development at the existing ESB generating station at Aghada in Cork Harbour. While this is only a “small-scale generation project”, it said it would be the first step in its wider plans to create a “hydrogen lighthouse around Ireland”.

By The Irish Times / Kevin O’Sullivan -January 29, 2024

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By Storage Terminals Magazine, 01.29.2024

ARA oil product stocks rise further (Week 4 – 2024)

Independently-held oil product stocks at the Amsterdam-Rotterdam-Antwerp (ARA) trading hub rose significantly, in the week to 22 February, according to consultancy Insights Global, as overall demand in the region remains muted.

Naphtha stocks rose on the week, after an increase the previous week. Increased blending interest for gasoline supported stock draws. But petrochemical demand was seen to be waning in the week compared with earlier in the month, which is likely to have increased storage at the hub.

Market participants have continued to indicate increased blending demand for gasoline in anticipation of higher exports to the US in the coming months, but gasoline stocks at the ARA hub declined in the week. There was some increase in export volumes out of the region. Volumes leaving for west Africa up from the previous week, indicating an increase. Departures to the US were also up on the week, according to Kpler data.

Gasoil stocks fell, pressured by longer delivery periods from the east as well as lower demand from Germany. Independently-held jet fuel stocks rose in the week, with cargoes coming into the ARA from the UAE as well as India.

By Atishya Nayak

Refiners Pledge to Invest $4.5 Bil. into Eco-Friendly Fuels

The country’s major refiners have pledged to invest a combined 6 trillion won ($4.5 billion) until 2030 in developing eco-friendly fuels to counter the environmental regulations that are increasing worldwide and improve a new growth engine for local oil companies and consumers, according to the Ministry of Trade, Industry and Energy, Wednesday.

With the pledge, the companies and the ministry have agreed to bolster the country’s refinery industry and stabilize the local consumer market amid rising uncertainties and geopolitical risks to the global energy market.

SK Energy CEO and President Oh Jong-hoon, S-Oil President of Corporate Strategy and Services Ryu Yul, HD Hyundai Oilbank CEO Chu Young-min and GS Caltex Executive Vice President Kim Jung-su on the same day met Second Vice Minister of Trade, Industry and Energy Choi Nam-ho in Seoul. The meeting was arranged by the ministry to discuss with the country’s big-four refiners how to improve national competitiveness in the global oil market.

The vice minister and the private firm leaders agreed to secure a stable supply of petroleum and maintain the price within a consistent range. Choi referred to petroleum as an “essential consumer product that takes up a significant portion of the public economy,” and said that its price must be stabilized to prevent public concerns.

Choi said that stabilizing the price requires the companies’ commitment to further investment and a spirit of mutual growth.

“A recent revision to the country’s Petroleum and Alternative Fuel Business Act has ushered in a legal, fundamental ground to further spread the use of eco-friendly fuels,” Choi said in the meeting. “And we want you companies to respond to the legal change by making bolder investments.”

Choi said the ministry is open to sharing problems the companies might experience during any part of the process, from importing petroleum to exporting their products.

“We expect the companies to pioneer new markets and come up with new products to keep their export momentum going,” Choi said.

The company representatives said their businesses need government support for their imminent grievances like securing fuel, tax exemption incentives, technological advancement and regulatory sandbox.

European Oil Product Imports Fall 20% in Jan on Red Sea Turmoil

01.19.2024 By Tank Terminals – NEWS

January 19, 2024 [Hellenic Shipping News]- Growing pressure on shipowners to avoid the Red Sea took a toll on European refined product imports in the first half of January, S&P Global Commodities at Sea data showed, as rising freight rates and tanker diversions curtailed supplie

While a pivot to US imports has helped Europe compensate for a lull in East of Suez inflows, upcoming refinery maintenance leaves exposed a market already low on inventories, analysts said.

Tanker flows initially appeared resilient to a rising security threat in the Suez, however, a growing number of oil companies, including BP, Shell and Reliance, have reduced shipments through the region.

Europe imported an average of 2.3 million b/d oil products from outside the region over Jan. 1-17, down from 2.9 million b/d in December, according to CAS.

Arrivals from Saudi Arabia, India and Kuwait have already tumbled respectively by 15%, 31% and 43% over Jan. 1-17 from December levels.

For Europe, falling import volumes put diesel supplies most at risk. The continent sources about one-third of its diesel supply from the Middle East, and with Insights Global data showing stock levels 257,000 below the five-year average Jan.11, upside risk is significant.

Higher imports from the US have provided some buffer. To date 237,000 b/d of diesel/gasoil supply has arrived in Europe from the US in January, down from 246,000 b/d in December but up significantly from an average of 155,000 b/d in 2023, CAS data showed.

With a further 416,000 b/d US diesel/gasoil supply loaded in January for export to Europe, a more than six-year high, continued flows are expected to provide a lifeline to the continent in the weeks to come.

East of Suez exports curtailed

In contrast, early January loadings indicate that arrivals could be set to drop further from East of Suez.

India is yet to load any refined product for export to Europe in January, interrupting the normal flow of diesel/gasoil on which Europe has become increasingly reliant since avoiding Russian supply.

Loadings from India have instead been diverted to the Persian Gulf and other destinations in Asia, with suppliers such as Reliance, which shipped all its gasoil to Europe in 2023, appearing to shirk soaring freight costs.

According to CAS data, India’s about 24% of gasoil exports were directed to the Persian Gulf in the first half of January, up from 19% in December.

Saudi Arabian loadings for Europe have also fallen to an average of 147,000 b/d over Jan. 1-17, from 293,000 b/d in December, while dispatched Kuwaiti volumes to the region dropped to 28,000 b/d, from 147,000 b/d, suggesting that European premiums may come under pressure to draw higher volumes.

US maintenance season looms

With Europe increasingly looking to US supply, scheduled maintenance programs could deal a blow to stock levels.

According to a recent S&P Global Commodity Insights refining report, first-quarter refinery utilization was expected to drop in the US as planned works begin, with PBF expected to conduct works on its hydrocracker in the Midwest as part of 45-day maintenance.

Maintenance was already underway at the Torrance, California plant and both Motiva and Valero’s Port Arthur refineries, indicating that a spike in flows to Europe could be short lived.

“Now that planned maintenance and outages due to the cold over there are starting to kick in, it’s looking like it’s [going to be] a tighter balance,” said a European distillates analyst.

He said that European refiners may have limited room to defer their own spring maintenance programs, having already pushed back some works in Autumn.

Demand weakness

Weak European demand has mitigated price shocks across product segments so far. Yet with inventories low, upside risk remains significant.

As the tanker segment has become embroiled by Red Sea disruption, bullish price movements have gathered speed. Month 1 ICE LS Gasoil futures rose 1.89% on the day at 1630 GMT Jan. 16, close to the 2% increase seen during the month through Jan. 15 as the market previously shrugged off signs of escalating tensions.

Market watchers continue to bet against a strong demand revival. S&P Global analysts recently downgraded first-half 2024 oil product demand forecasts by 90,000 b/d, citing diesel weakness, with a macroeconomic downturn expected to add pressure.

Platts, part of S&P Global, assessed ULSD CIF NWE cargoes at $812.25/mt on Jan. 16, up 1.72% on the day and 3.9% on the week

01.19.2024 By Tank Terminals – NEWS

January 19, 2024 [Hellenic Shipping News]- Growing pressure on shipowners to avoid the Red Sea took a toll on European refined product imports in the first half of January, S&P Global Commodities at Sea data showed, as rising freight rates and tanker diversions curtailed supplie

While a pivot to US imports has helped Europe compensate for a lull in East of Suez inflows, upcoming refinery maintenance leaves exposed a market already low on inventories, analysts said.

Tanker flows initially appeared resilient to a rising security threat in the Suez, however, a growing number of oil companies, including BP, Shell and Reliance, have reduced shipments through the region.

Europe imported an average of 2.3 million b/d oil products from outside the region over Jan. 1-17, down from 2.9 million b/d in December, according to CAS.

Arrivals from Saudi Arabia, India and Kuwait have already tumbled respectively by 15%, 31% and 43% over Jan. 1-17 from December levels.

For Europe, falling import volumes put diesel supplies most at risk. The continent sources about one-third of its diesel supply from the Middle East, and with Insights Global data showing stock levels 257,000 below the five-year average Jan.11, upside risk is significant.

Higher imports from the US have provided some buffer. To date 237,000 b/d of diesel/gasoil supply has arrived in Europe from the US in January, down from 246,000 b/d in December but up significantly from an average of 155,000 b/d in 2023, CAS data showed.

With a further 416,000 b/d US diesel/gasoil supply loaded in January for export to Europe, a more than six-year high, continued flows are expected to provide a lifeline to the continent in the weeks to come.

East of Suez exports curtailed

In contrast, early January loadings indicate that arrivals could be set to drop further from East of Suez.

India is yet to load any refined product for export to Europe in January, interrupting the normal flow of diesel/gasoil on which Europe has become increasingly reliant since avoiding Russian supply.

Loadings from India have instead been diverted to the Persian Gulf and other destinations in Asia, with suppliers such as Reliance, which shipped all its gasoil to Europe in 2023, appearing to shirk soaring freight costs.

According to CAS data, India’s about 24% of gasoil exports were directed to the Persian Gulf in the first half of January, up from 19% in December.

Saudi Arabian loadings for Europe have also fallen to an average of 147,000 b/d over Jan. 1-17, from 293,000 b/d in December, while dispatched Kuwaiti volumes to the region dropped to 28,000 b/d, from 147,000 b/d, suggesting that European premiums may come under pressure to draw higher volumes.

US maintenance season looms

With Europe increasingly looking to US supply, scheduled maintenance programs could deal a blow to stock levels.

According to a recent S&P Global Commodity Insights refining report, first-quarter refinery utilization was expected to drop in the US as planned works begin, with PBF expected to conduct works on its hydrocracker in the Midwest as part of 45-day maintenance.

Maintenance was already underway at the Torrance, California plant and both Motiva and Valero’s Port Arthur refineries, indicating that a spike in flows to Europe could be short lived.

“Now that planned maintenance and outages due to the cold over there are starting to kick in, it’s looking like it’s [going to be] a tighter balance,” said a European distillates analyst.

He said that European refiners may have limited room to defer their own spring maintenance programs, having already pushed back some works in Autumn.

Demand weakness

Weak European demand has mitigated price shocks across product segments so far. Yet with inventories low, upside risk remains significant.

As the tanker segment has become embroiled by Red Sea disruption, bullish price movements have gathered speed. Month 1 ICE LS Gasoil futures rose 1.89% on the day at 1630 GMT Jan. 16, close to the 2% increase seen during the month through Jan. 15 as the market previously shrugged off signs of escalating tensions.

Market watchers continue to bet against a strong demand revival. S&P Global analysts recently downgraded first-half 2024 oil product demand forecasts by 90,000 b/d, citing diesel weakness, with a macroeconomic downturn expected to add pressure.

Platts, part of S&P Global, assessed ULSD CIF NWE cargoes at $812.25/mt on Jan. 16, up 1.72% on the day and 3.9% on the week

German gas storage association says no risk of shortages this winter

The prospect of gas shortages this winter was “no longer expected” if no additional risks emerge, German gas storage industry association INES said 

Gas storage facilities in Germany began the year with an above average filling level of 91%, according to data corroborated by Gas Infrastructure Europe. As of Jan. 14, German stores were close to 84% full, according to GIE.

INES, representing over 90% of German gas storage capacity, warned that if extremely cold temperatures persisted, gas storage facilities in Germany “could be emptied extensively and the levels could fall to a low of 14% by mid-March.”

“As long as no additional risks arise, there is no longer any fear of a gas shortage for the remainder of the winter, even in extreme cold,” INES Managing Director Sebastian Heinermann said. “The gas storage facilities can be completely filled again before the next winter of 2024/2025.”

Heinermann noted high winter loads occurring in 2023, causing a “significant need for flexibility,” adding that such flexibility in Germany’s gas system had been provided by gas storage facilities, which made a significant contribution to optimizing the import system.

This translated to an average annual import level of some 2.7 TWh/d, and a corresponding production level of 0.01 TWh/d, with INES noting its peak load, which occurred Jan. 24, 2023, spiking to 5.7 TWh/day.

For 2023, INES said that German gas imports fell by about 468 TWh (44 Bcm), or 32% compared with 2022. This was largely due to the “complete cessation” of Russian pipeline gas from Aug. 31, 2022, it said.

German imports of gas totaled 974 TWh in 2023, with some 70 TWh imported via LNG terminals, INES said.

The country’s domestic gas production was recorded at 40 TWh in 2023, a decline of some 6% compared with 2022, the data showed.

Germany’s energy regulator, the Bundesnetzagentur, set a mandated level for its cumulative storage at 40% full by Feb. 1, 2024, with INES stating the target “can be met at all assumed temperature levels.”

Average temperatures in Germany were recorded as low as minus 8 C in parts of the country Jan. 16, according to German Meteorological Service Deutscher Wetterdienst.

Europewide storage facilities were just over 79% full as of the Jan. 14 gas day, with German gas storage sites recorded at 83.68% full over the same period, according to data from GIE.

Gas prices in Europe have largely reflected high gas storages, in addition to robust gas flows from the Norwegian Continental Shelf.

Platts, part of S&P Global Commodity Insights, assessed the Dutch TTF month-ahead price at a five-month low of Eur29.96/MWh

16 Jan 2024 

US Natural Gas Supplies Drop, Record Demand Forecast

The European Union has agreed a substantial grant to support a carbon capture and green fuel production project in Greece.

Greece’s Vardinoyiannis Group-backed Motor Oil and the European Commission have signed the EU Innovation Fund Grant Agreement of €127m ($138m), for a pioneering Internet Registry Information Service (IRIS) project regarding the construction and operation of a Carbon Capture, Utilisation and Storage (CCS) and e-methanol production system at Motor Oil’s Agioi Theodoroi Refinery.

The IRIS project is among the 41 projects selected, out of the 239 proposals submitted, under the second round of the EU Innovation Fund’s ‘large-scale’ calls for proposals, and just the third in Europe involving a Steam Methane Reformer.

The IRIS project will integrate several innovative industrial processes, on a scale that has never been implemented before in an independent refinery.

In particular, the project will contribute to a 25% reduction of the refinery’s CO2 emissions, and thus to the achievement of the industry’s national and EU carbon reduction targets. At the same time, there are plans to establish an innovative e-methanol production plant, which will be produced from the available renewable hydrogen and part of the captured carbon dioxide, which will be one of the first plants to be set up in Europe.

Part of Motor Oil Group’s ‘Blue Med’ strategic plan, the project aims at the development of a hydrogen value chain in Greece. The quantities of renewable hydrogen produced by the 30MW electrolysis plant under development in Motor Oil’s EPHYRA project will be supplemented by sufficient quantities of low-carbon hydrogen that will comply with the prescribed limits of the EU Classification Regulation.

The launch of the construction of the project, once all the necessary individual agreements have been completed and the final investment decision has been obtained by the company, is expected to start in mid-2025 with a three-year completion deadline, so as to be operational in mid-2028, according to the timetable approved by the European Commission.

George Triantafyllou, gm of strategy at Motor Oil Group, said: “Motor Oil Group is determined to guide the industry’s energy transition and play a leading role in achieving the industrial decarbonisation goals and in establishing the hydrogen and hydrogen derivatives market in Greece.

“The funding from the European Union’s Innovation Fund marks a major milestone for the Group. We remain committed and fully aligned to the €4bn energy transition plan that has been announced, having invested €1bn up to now in this direction.

“We are leading the way, utilising our competitive advantages and we are committed to implementing emblematic and pioneering projects and investments, that will accelerate the transformation of our country’s energy mix, on the road to ensuring energy autonomy.”

January 16, 2024

Biden Administration Plugs Away at Refilling Oil Stockpiles

01.15.2024 By Tank Terminals – NEWS

January 15, 2024 [Oil Price]- The Biden Administration took one more baby step towards refilling the nation’s Strategic Petroleum Reserves (SPR), announcing on Friday a request for proposal for another 3 million barrels of crude oil for May delivery.

The Strategic Petroleum Reserve started out at the onset of the current administration’s term with 638.1 million barrels in storage—the nation’s rainy day oil fund. But by the end of 2021, more than 44 million barrels had been sold off. In 2022, a whopping 221 million barrels had been sold off from the SPR, some of which was sold ostensibly to mitigate high gasoline prices that were at the time squeezing U.S. drivers—a situation that threatened to create a swath of angry voters ahead of the November 2022 mid-term elections. Others were part of a Congressionally mandated sales plan.

The SPR started out 2023 with 371.6 million barrels of oil in the SPR, falling to just 346.8 million barrels in July—just over half of what it was at the beginning of 2021 and the lowest levels since 1983. The Administration said it would eventually refill the SPR should oil prices fall at or below about $67-$72 per barrel. WTI is currently trading at $72.97 per barrel.

In the six months following the 346.8 million barrel low, the SPR has rebounded to 355 million—an increase of 8 million barrels across the six months. At that rate—750,000 per month, it would take years to get the SPR back up to 2021 levels. It would also cost $21 billion at $70 per barrel.

The Administration did cancel 147 million barrels that were previously mandated to be sold out of the SPR, so some argue that 147 million barrels has already been “put back in”

Bigger OPEC+ Quota Will Help Boost UAE’s Economic Growth

01.15.2024 By Tank Terminals – NEWS

January 15, 2024 [Oil Price]- A higher oil production quota will help to stimulate economic growth in the United Arab Emirates this year, according to a forecast by FocusEconomics cited by the Khaleej Times.Last year, the UAE produced less oil than it did in 2022, but for this year it negotiated a higher quota with its partners in OPEC+. For the duration of the year, the UAE can produce up to 3.219 million bpd of crude.

Still, that would mean cutting production during the first quarter of the year by some 160,000 bpd, the Khaleej Times report noted. That would be equal to 5% of its average 2023 output.

As the UAE’s oil output fell in 2023, exports of crude oil also declined, data from shipbroker Banchero Costa revealed earlier this month. Per the data, the UAE exported 129.1 million tons of crude oil in the first eleven months of the year. This was down 1.7% from 2022. In that year, the UAE saw a strong rebound in exports, at 15.3% higher than in 2021.

Also in 2022, the UAE’s economy grew at the fastest rate in more than a decade, according to the Khaleej Times, only to slow down in 2023. This should reverse this year, according to FocusEconomics.

“Regional instability is a downside risk, while Opec+ quota changes are a risk in both directions,” the economic intelligence provider said.

While regional instability is bad news for the economies in the region as investment destinations, the current situation in the Red Sea has revived the war premium attached to oil prices. On Friday, following strikes by U.S. and UK forces on targets in Yemen, Brent crude briefly topped $80 per barrel. Although it later retreated, the benchmark—as well as West Texas Intermediate—is on the rise as traders await news about possible supply disruptions.

Energy Transition: Officials: China’s New Energy Storage Sector Developing Rapidly, Installed Capacity Exceeds 30 Million Kilowatts

January 25, 2024 [CGTN]- China’s renewable energy storage sector is developing rapidly, with installed capacity in operation exceeding 30 million kilowatts of power by the end of 2023. That’s the key message from the National Energy Administration in Beijing on Thursday. Officials said the newly added installed capacity topped 22 million kilowatts in 2023, up more than 260 percent compared to the end of 2022.

The government says the addition of new energy storage installed capacity has promoted investments worth more than 100 billion yuan, or 14 billion U.S. dollars, since the 14th Five-Year Plan. Officials also introduced the International Day of Clean Energy, which falls on January 26. It was declared by the UN General Assembly to raise awareness and mobilize action for a just and inclusive transition to clean energy for the benefit of people and the planet.

PAN HUIMIN Deputy Director General, Dept. of International Cooperation National Energy Administration “According to the latest data, the world’s newly installed renewable energy capacity hit 510 million kilowatts in 2023 and China has contributed more than 50 percent. Overseas clean energy investments by Chinese firms are spread across major countries and regions, covering major fields such as wind power, photovoltaic power generation, and hydropower.”

01.25.2024 By Tank Terminals – NEWS