Category: Nieuws

The government has planned to set up three more liquefied natural gas (LNG) terminals in addition to the existing two currently being operated to regasify imported gas.

Besides, the existing two floating storage and regasification unit (FSRU) will also be extended to 630 mmcft per day from 500 mmcft.

The proposed three new LNG terminals will be set up in Payra, Moheshkhali and Matarbari whose total regasification capacity would be 2000 mmcft per day including two floating and another land based.

Two floating terminals with 500 mmcft capacity will be set up at Payra and Moheshkhali while the land based terminal with the production capacity of 1000 mmcft will be set up at Matarbari.

Negotiations for signing agreement with foreign and local investors have been going on.

“Agreements with those investors may be signed by the current year,” Md Kamruzzaman Khan,Petrobangla Director of Operation told the Daily Observer on Saturday.

Petrobangla sources said that Excelerate Energy of USA has made an offer for the Payra site while Summit Group made an offer for Moheshkhali. Petrobangla has shortlisted 12 firms for the Matarbari site, sources said.

If the government gives approval for setting up the terminals, it will take 3-5 years to get them installed and ready for operation, Petrobangla source said.

Presently two floating LNG terminals have been in operation since 2018, of which one was set up by Excelerate Energy at Moheshkhali of Cox’s Bazar with 500 million cubic feet per day while another with the same capacity was set up by the Summit Group in the same area.

With the operation of three terminals including the extension of the existing terminals, the LNG production of the country will rise to 3200 mmcft per day.

Current demand of gas in the country is 4000 mmcft per day. But Petrobangla can supply only 3000 mmcft per day, Petrobangla sources said.

In future the demand of the country will increase furhter. So, there is no alternative to boost up production of gas in the country.

Meanwhile, the floating storage and regasification unit (FSRU) of Petrobangla went into operation on Saturday night after remaining suspended for 8 days.

A two-day disruption in the supply from LNG terminals inflicted by Cyclone Mocha has laid bare the energy crisis Bangladesh is facing, with power stations and factories forced to suspend or reduce production.

Besides power cuts denying people any respite from the scorching heat, low pressure or lack of gas in the kitchen has spelled trouble for many. Cars, auto-rickshaws and other vehicles waited in long queues for gas at refuelling stations. The government decided to suspend gas supply from two floating LNG terminals in Moheshkhali due to severe cyclonic storm Mocha since May 12. The Ministry of Power Energy and Mineral Resources issued a notice on May 12 last.

The daily observer by Nurul Amin, May 31, 2023

The oil ministry is drafting a proposal to combine the two publicly traded subsidiaries of Oil and Natural Gas Corp (ONGC), Mangalore Refinery and Petrochemicals Ltd (MRPL) and Hindustan Petroleum Corp Ltd (HPCL).

When ONGC bought HPCL from the government five years ago, the notion of a merger between MRPL and HPCL was discussed, but little progress was achieved. According to the aforementioned sources, the ministry is currently pressing for the merger, which will probably involve a share exchange.

They claimed that there would be no financial outlay and that HPCL would most likely issue new shares to MRPL owners as part of the merger. The ONGC and HPCL are MRPL’s promoters. The public owns 11.42% of MRPL, followed by HPCL at 16.96% and ONGC at 71.63%.

Through the acquisition, ONGC’s present 54.9% holding in HPCL will be dramatically increased, lowering the free float. The oil ministry will probably ask the cabinet for approval of the proposed combination of HPCL and MRPL. ONGC, HPCL, MRPL, the oil ministry, and ONGC all declined to comment.

The HPCL-MRPL combination might need to wait until next year, according to one individual, who argued that the rule calls for a minimum two-year buffer between any two mergers a business undertakes. Last year, MRPL completed the merger of its subsidiary, OMPL, with itself.

The merger plan, which aims to combine the majority of the downstream assets of the ONGC group under HPCL, will probably result in some tax gains. More fuel is sold by HPCL, which has a substantial retail network, than is produced at its refineries.

It will have internal access to MRPL’s goods following the merger. Since MRPL doesn’t have a robust domestic sales network, a substantial amount of its items are sold to merchants outside of Karnataka and are therefore subject to central sales tax (CST). People claimed that a merger may reduce MRPL’s CST expenses.

According to a person with knowledge of the matter, MRPL personnel may be concerned about a merger because they may be transferred to HPCL’s other refineries.

The oil ministry had suggested the former to conduct a three-way merger of HPCL, MRPL, and OMPL to combine the group’s downstream businesses shortly after ONGC’s Rs 37,000 crore acquisition of HPCL. However, the relationship between the two businesses had deteriorated as a result of HPCL’s year-long refusal to acknowledge ONGC as its promoter.

The merger of OMPL and MRPL was completed because ONGC opposed giving HPCL authority over MRPL. According to the previously referenced individuals, top officials at ONGC and HPCL have changed in the last year, and the two businesses are now more receptive to the concept of a combination.

By Industry Outlook, May 31, 2023

With just four more years to go before the Philippines‘ only gas field might halt production, the country has started importing liquefied natural gas (LNG), adding upward pressure to already worryingly high inflation.

Seven terminal projects have been approved by the Philippines‘ Department of Energy, as it looks to expand LNG usage into industrial, commercial, residential and transport sectors in addition to power.

Following are the project proponents and their partners, proposed capacities, timetable and status as of April 24, according to the energy department.

PHLNG import terminal

(previously Atlantic Gulf & Pacific Co of Manila Inc)

Partner: Osaka Gas Co Ltd 9532.T, which has technical services agreement with AG&P

Description: Floating Storage Unit and Onshore Regasification, and buffer LNG storage tank

Location: Batangas City

Capacity: 3 million tonnes per annum (mtpa)

Estimated Commercial Operations Date (COD): FSU and Onshore Regasification in May 2023, and buffer LNG storage tank in December 2023

Status: LNG cargo from trader Vitol has arrived and will fuel San Miguel Corp’s SMC.PS 1,200-megawatt power plant in Batangas, which is scheduled to come online by May 26

FGEN LNG of First Gen Corp FGEN.PS

Partner: Tokyo Gas Co Ltd 9531.T, which has a 20% interest

Description: Floating Storage and Regasification Unit (FSRU)

Location: Batangas City

Capacity: 5.26 mtpa

Estimated COD: September 2023

Status: Commissioning scheduled in third quarter

Energy world gas operations Philippines Inc.

Proponent: Energy World Corp Ltd EWC.AX

Description: LNG Storage and Regasification Terminal

Location: Pagbilao Grande Island, Quezon Province

Capacity: 3 mtpa

Estimated COD: December 2023

Status: Permit to construct extended for 1 year and issued on Jan. 31, 2023

Shell energy Philippines Inc. 

Proponent: Shell Pilipinas Corp SHLPH.PS

Description: FSRU

Location: Batangas City

Capacity: 3 mtpa

Estimated COD: September 2025

Status: 20-month extension of Notice To Proceed issued in January 2023

Luzon LNG Terminal Inc. 

Description: FSRU

Location: Batangas Bay

Capacity: 4.4 mtpa

Estimated COD: December 2025

Status: Permit to Construct issued in December 2022

Vires Energy Corp

Description: FSRU

Location: Batangas City

Capacity: 3 mtpa

Estimated COD: September 2025

Status: 2-year extension of Notice To Proceed issued and valid until October 2023

Samat LNG Corp

Description: Small-Scale LNG Terminal

Location: Mariveles, Bataan

Capacity: 0.32 mtpa

Estimated COD: Phase 1 in March 2024, Phase 2 in May 2025

Status: Notice To Proceed issued in January 2023

By Intraksyon, May 30, 2023

The oil companies share a lot of similarities.

ExxonMobil (XOM -0.89%) is a global oil and gas industry behemoth. It’s a leading hydrocarbon producer. It also boasts a globally integrated business, enabling it to maximize the value of the hydrocarbons it produces. Meanwhile, Exxon has an emerging low-carbon business.

Occidental Petroleum (OXY -0.59%) shares many of those same features, albeit on a smaller scale. However, the company has grand growth ambitions – it beat out oil giant Chevron (CVX -0.62%) to acquire Anadarko Petroleum in 2019. Here’s a look at whether it could eventually become a mega-cap oil stock like Exxon.

How Occidental stacks up against ExxonMobil

ExxonMobil is currently the largest U.S. oil company by market cap:

As that chart shows, Exxon is over seven times the size of Occidental Petroleum, which currently ranks as the 6th largest U.S. energy company.

Exxon has a much larger global production base. The company produced an average of 3.8 million barrels of oil equivalent per day (BOE/d) during the first quarter. For comparison, Occidental Petroleum produced 1.2 million BOE/d during the period. 

However, oil and gas production is only part of Exxon’s story. The company’s integrated operations also feature a large-scale downstream business of refining, chemicals, and marketing assets. Exxon’s downstream business is a big value driver. The company generated over $4 billion in energy products earnings during the first quarter to go along with nearly $6.5 billion of upstream production earnings. 

Occidental Petroleum isn’t nearly as integrated as Exxon. It has some midstream assets, including owning a stake in Western Midstream (WES -0.50%). It also has a chemicals business, OxyChem. However, they’re not big earnings drivers for the company. OxyChem produced $472 million of income in the first quarter, while the company’s midstream and marketing business only generated $2 million of income.

Add in its oil and gas earnings, and Occidental Petroleum’s total earnings were only $1.1 billion in the first quarter. Exxon’s profits were almost 10 times higher at $11.4 billion. 

What can Occidental Petroleum do to bridge the gap?

The quickest path for Occidental to join Exxon as a mega-cap oil stock is to continue making needle-moving acquisitions like Anadarko Petroleum. It could pursue a merger of equals transaction with a rival like Pioneer Natural Resources (PXD -2.39%), which would boost its market cap up into the triple digits. However, it would have competition since Exxon has already set its sights on acquiring Pioneer to beef up its presence in the Permian Basin.

If it wanted to become more like Exxon, the company could seek to build a more integrated platform by acquiring a refiner like Phillips 66 or Marathon Petroleum. Both refiners used to be part of an integrated oil company (ConocoPhillips and Marathon Oil , respectively).

However, those formerly integrated oil companies spun off their refining and midstream assets over a decade ago so that each company had the freedom to independently pursue growth opportunities.

While Occidental may eventually pursue another needle-moving acquisition, its main focus is organically growing its oil and gas production and carbon capture and storage (CCS) platform. CCS could be a major growth driver. Occidental estimates CCS could eventually become a $3 trillion-$5 trillion global market. The company believes that one day it could generate as much earnings from CCS as it currently makes from producing oil and gas. 

The company is investing heavily to build out its CCS capabilities. Occidental is spending more than $1 billion to build the first of what it hopes will be many direct air capture plants to pull carbon dioxide out of the air. It’s also working to develop sequestration hubs. 

However, Occidental isn’t alone in seeking to capture the CCS opportunity. Exxon is also working to capitalize on what it believes will be a multibillion-dollar revenue opportunity for the company. Exxon thinks CCS could eventually supply it with steadier revenue to help offset some of the volatility of its oil and gas business.

Occidental Petroleum has a long way to grow

Occidental has shown it wants to become a big oil company by wrestling Anadarko away from Chevron a few years ago.

However, to become the next Exxon, it would either need to become more integrated by acquiring a refiner or show it can go toe-to-toe with Exxon in capturing the emerging CCS opportunity. While Occidental could eventually boast an Exxon-sized market cap, it has a long way to grow to catch up to that oil behemoth.

The Motley Fool by Matthew DiLallo, May 23, 2023

The Hong Kong liquefied natural gas or LNG project, whose trial operations started on Sunday, is expected to significantly optimize the energy structure of the Guangdong-Hong Kong-Macao Greater Bay Area while ensuring domestic energy security, industry experts said on Monday.

The LNG project, which includes a dual-berth offshore LNG receiving terminal, an onshore LNG receiving terminal and two submarine pipelines, is the largest offshore energy infrastructure construction project in recent years in Hong Kong, according to its operator China Offshore Oil Engineering Co Ltd or COOEC.

The core of the LNG project, the receiving terminal is the world’s first offshore all-steel double-berth structure, said COOEC, a listed company controlled by China National Offshore Oil Corp or CNOOC.

It is capable of accommodating two of the world’s largest FSRUs — floating storage and regasification units — or LNG transport ships for berthing and operation at the same time, COOEC said.

According to Liu Zhigang, deputy director of the COOEC Hong Kong Offshore LNG Terminal EPC project, the designed service life of the terminal is 50 years, more than twice that of conventional offshore LNG receiving terminals.

Lin Boqiang, head of the China Institute for Studies in Energy Policy at Xiamen University, said CNOOC has, in recent years, formed a complete LNG engineering construction capability, ranging from liquefaction to regasification onshore and offshore. Its assets and capabilities now rank among the world’s top modular, super large LNG storage tanks and LNG receiving terminal construction expertise.

“The company has been strengthening the key core technology research and development of clean energy engineering over the years, which has in turn promoted China’s energy structure transformation and the realization of the dual-carbon goals,” Lin said.

The operation of the Hong Kong LNG project will provide stable and clean power generation fuel to Hong Kong via submarine pipelines and substantially increase the proportion of clean energy generation in the Hong Kong Special Administrative Region, he said.

Oil and gas production of CNOOC reached a record high of 120 million metric tons of oil equivalent last year, with domestic crude oil and natural gas production up by 3.39 million tons and 2.7 billion cubic meters year-on-year, respectively. The increase in crude oil production accounted for over 60 percent of the country’s total increase, it said.

CNOOC imported 26.69 million tons of LNG last year. Overseas oil and gas production rose to 46.24 million tons of oil equivalent so far in 2023 as the company continuously strengthens international energy cooperation while optimizing asset layout in countries and regions participating in the Belt and Road Initiative, it said.

CHINADAILY by Zheng Xin, May 23, 2023

After years of delays and massive cost overruns, Nigeria is set to finally see a 650,000 barrels per day (bpd) oil refinery commissioned later this month.

The Dangote Refinery, built by the group of the same name of Africa’s richest person, Aliko Dangote, is expected to be inaugurated by Nigeria’s outgoing President Muhammadu Buhari on May 22, Nigerian outlet THISDAY reported on Sunday, quoting a source at the refinery.  

Construction at the refinery has been completed, and tests are being carried out, the source told THISDAY.

The Dangote Group has previously said that it aims to commission the refinery before President Buhari leaves office at the end of May after serving the maximum of two consecutive terms per the constitution.

It looks like this time the timeline will be kept, as a presidential spokesperson told Reuters on Sunday that the refinery near Lagos is set for inauguration on May 22.

The refinery has cost around $20 billion, up from initial cost estimates of between $12 billion and $14 billion.

The huge refinery will be able to meet domestic fuel demand and even have some part of the fuel left for exports.

The Dangote refinery expects to export diesel to customers in Europe, as well as gasoline to Latin American and African markets.

Nigeria, OPEC’s top crude oil producer in Africa, has had to rely on fuel imports due to a lack of enough capacity at its refineries, some of which had to undergo refurbishment in recent years.

At the end of last year, the then oil minister Timipre Sylva said that the country expects to stop importing petroleum products starting in the third quarter of 2023.

A refurbished refinery in Port Harcourt in the Niger Delta is expected to be producing 60,000 bpd of refined crude oil per day, and the new Dangote refinery is expected to come online in 2023, Sylva said at the end of November.

OilPrice.com by Tsvetana Paraskova, May 12, 2023

Marathon Petroleum dedicated the bulk of its first-quarter 2023 capex to advancing its balanced approach of optimizing traditional crude oil refining operations while furthering low-carbon projects.

Marathon Petroleum Corp. (MPC) dedicated the bulk of its first-quarter 2023 capex to advancing its balanced approach of optimizing traditional crude oil refining operations while furthering projects in preparation for a low-carbon future in line with the global energy transition.

Of the total $430 million in capital expenditures and investments during the first quarter, MPC dedicated $421 million—up $177 million compared with first-quarter 2022—to ongoing traditional and renewables refining projects, the operator said on May 2.

In its quarterly earnings report to investors, MPC confirmed that it has completed its South Texas Asset Repositioning (STAR) program at the 593,000-b/d Galveston Bay refinery in Texas City, Tex., which included works to further integrate the operator’s former Texas City refinery into the adjacent Galveston Bay refinery to improve the site’s efficiency and reliability by increasing residual oil processing capabilities, upgrading the crude unit, and integrating logistics (OGJ Online, Aug. 2, 2022).

Officially started up in April and scheduled to ramp up throughout second-quarter 2023, the Galveston Bay STAR project, upon reaching full operation, aims to add 40,000 b/d and 17,000 b/d of incremental crude and resid processing capacity, respectively, at the site, MPC said.

Alongside unidentified projects designed to help reduce future operating costs and improve the competitive position across the operator’s US refining assets, MPC said other first-quarter capex covered expenses related to an emissions-reduction program are under way at the 363,000-b/d Los Angeles refinery, as well as furthering second-phase works for the conversion of the former Martinez, Calif., conventional crude refinery into a renewable fuels production site (OGJ Online, Feb. 6, 2023).

Part of its Martinez Renewables LLC 50-50 joint venture with Neste Corp., MPC confirmed Phase 1 of the Martinez conversion project reached its full production capacity for renewable diesel of 260 million gal/year during the first quarter, as planned.

With construction activities currently on schedule for Phase 2 and pretreatment capabilities for renewable feedstocks at the site due online during second-half 2023, MPC said it expects Martinez Renewables to reach full nameplate production capacity of 730 million gal/year by yearend.

Oil&GasJournal by Robert Brelsford, May 12, 2023