Category: Nieuws

Eni SpA E, together with partners Euglena and Petronas, is exploring the possibility of developing and operating a biorefinery in Malaysia.

Eni and partners are performing technical and economic feasibility assessments for the facility. The proposed biorefinery is expected to complete by 2025.

The biorefinery will be established in the Pengerang Integrated Complex, one of the largest integrated refinery and petrochemical facilities in Southeast Asia. The complex has easy access to major international shipping lanes. The favorable position will enhance the refinery’s ability to meet the rising demand for sustainable solutions worldwide.

The biorefinery would have a flexible configuration to maximize the production of sustainable aviation fuel for aircraft and hydrogenated vegetable oil for on-road vehicles, diesel-powered trains and marine transportation. The flexibility will enable the production to meet the rising customer demands.

The biorefinery is expected to have a processing capacity of 650,000 tons per annum of raw materials. It will have a production capacity of up to 12,500 barrels per day of biofuels, such as sustainable aviation fuel, hydrogenated vegetable oil and bio-naphtha. The Eni-developed ecofining process will be used in the proposed biorefinery.

Eni plans to achieve carbon neutrality by 2050 by reducing emissions generated throughout the entire product lifecycle. The latest collaboration is crucial for unlocking the companies’ abilities and improving their position in the field of biofuels in Malaysia and worldwide.

Price Performance

Shares of Eni have outperformed the industry in the past three months. The stock has gained 25.8% compared with the industry’s 12.7% growth.

By Yahoo! December 27, 2022

Energy Secretary Jennifer Granholm extended an olive branch to the oil and gas industry, telling executives at a meeting in Washington that she recognizes fossil fuels will be around for a long time, even as the Biden administration works to transition away from them to cleaner alternatives.

“We are eager to work with you,” she said at the Wednesday meeting of the National Petroleum Council, an outside federal advisory group that includes executives from Exxon Mobil Corp. and Royal Dutch Shell Plc. “Moving too fast could have unintended consequences that hurt people and cause backlash.”

Her remarks come at the end of a year that’s seen a deterioration in the relationship between the industry and the White House. Biden has accused fossil fuel companies of price gouging and has weighed additional taxes on their profits as well as curbs on exports of refined oil products.

Granholm nodded to that friction Wednesday, beginning her remarks by acknowledging the “elephant in the room” and that the administration has “butted heads” with industry. Fossil fuel production will need to increase soon to meet growing demand, including a shortage of diesel in the Northeast U.S., she said.

By World Oil, December 27, 2022

Saudi Aramco, the world’s biggest oil producer, is set to enter the Kenyan market through the acquisition of US motor oil and lubricants group Valvoline which has a presence locally.

The Competition Authority of Kenya (CAK) gave Aramco Overseas Company, the investment arm of Saudi Aramco, the nod to acquire the Kenyan operations of VGP Holdings as part of the global deal worth $2.65 billion.

The acquisition looks set to trigger shifts in Kenya’s fuel lubricants market that is currently dominated by multinational firms such as Vivo – seller of Shell products —, Total Energies and Rubis.

READ: Kenya seals deal for cheaper Saudi fuel

Saudi Aramco is the largest oil company in the world and the second most valuable after Apple with a market capitalisation of $1.82 trillion (Sh223.86 trillion). Apple is valued at $2.154 trillion (Sh264.94 trillion).

“The Competition Authority of Kenya excludes the proposed acquisition of control of VGP Holdings LLC by Aramco Overseas Company B.V from provisions of the Act ,” CAK Director-General Wang’ombe Kariuki said in a notice.

The exclusion was provided on grounds that it will not affect competition and that the US motor oil and lubricants group remains small in Kenya with annual sales of Sh14.2 million.

The Aramco unit is expected to seek a larger share of Kenya’s lubricants sector and is expected to tap new markets, including fuel importation.

Aramco Overseas Company offers support to operations of Saudi Aramco in Europe, Asia, Australia and Africa but excludes the Saudi Arabia and North American markets.

The support involves finances, supply chain management, technical support and other administrative services.

Valvoline deals in lubricants such as brake fluids, gear oils, greases and transmission fluids and its acquisition by Saudi Aramco will offer it financial muscle and a shareholder who has a focus for Africa.

A small club of dealers, mainly the multinationals like Vivo, Total Energies and Rubis, dominate the local lubricants market due to their vast footprint of retail stations across the country.

Consumption of lubricants in the local market has been growing over the past years, according to data by the Petroleum Institute of East Africa (PIEA) with market players fighting to capitalise on the rising demand.

Data from PIEA shows that consumption of lubricants jumped 10.67 per cent to 61, 602 tonnes last year from 55, 662 tonnes in 2019.

Saudi Aramco first disclosed its intention to acquire Valvoline Global for $2.65 billion in a deal that the Saudi oil firm says will boost its efforts for a wider distribution network.

Consumption of lubricants is set to remain on the rise on the back of increased car ownership and an aggressive industrial sector.

Saudi Aramco, like its international rivals, Shell and BP, has been one of the biggest beneficiaries of the global rally in crude prices since the start of the year.

The firm reported its highest quarterly profits since listing its shares in 2019 with its net income rising to $39.5 billion (Sh4.85 trillion) in the first three months of the year, reflecting an 82 per cent increase from a similar period last year.

Its forecast annual income of over Sh15 trillion is bigger than Kenya’s GDP of Sh14.2 trillion, reflecting the financial might of Aramco.

Saudi Aramco executives attributed the record profits to higher crude prices and volumes sold, along with improved refining margins.

READ: National Oil seeks Sh13bn bailout as loss seen rising

The group’s total production including gas rose to 13 million barrels a day of oil equivalent, up from an average of 12.3 million last year.

The Saudi Arabian government owns 94.2 per cent of Aramco.

Saudi owns more than 11,000 retail fuel stations worldwide with locations in China, South Korea, the United States, and Japan.

It remains unclear if Saudi Aramco will use the acquisition to enter the local wholesale market for fuel which could trigger price reductions for oil marketers, ultimately passing the benefits to consumers.

The deal marks Saudi Aramco’s first direct involvement in the Kenyan fuel market, months after Kenya through the National Oil Corporation (Nock) approached the firm for fuel supplies on credit.

But the deal that would have offered Nock supplies to independent oil marketers in a bid to cut the dominance of the multinational firms was delayed due to the August General elections.

By Business Daily, December 27, 2022

Norwegian oil major Equinor announced Tuesday that it will be investing $1.3 billion in upgrading its Hammerfest LNG liquefaction plant, located on Norway’s far northern Barents Sea coast. 

The project will install new onshore gas compression capacity, ensuring enough flow to the plant to keep exports running at current levels through 2030. In addition, electrification will reduce the plant’s emissions by about 850,000 tonnes of CO2 annually – about two percent of Norway’s total yearly emissions. 

“Electrification will allow us to deliver this gas with close to zero greenhouse gas emissions from production. The project will secure long-term operations and gas exports from Melkøya towards 2050,” said Geir Tungesvik, Equinor’s executive vice president for projects.

Hammerfest LNG is important to Norway’s energy exports and to European energy security. It puts out more than four million tonnes of LNG per annum, equivalent to about five percent of all Norwegian gas exports and enough to fully supply one floating regasification and storage unit (FSRU) at a European port. 

The new project means major electrical system upgrades to the plant and to the nearby grid, including a new transformer station and a new high-voltage power line. These will supply new electric steam boilers, gas compressors and other equipment to switch the plant off of natural gas for power. Since Norway’s electrical grid is powered almost entirely by renewables, electrification means decarbonization.

According to Grete Haaland, Equinor’s senior vice president for exploration and production north, the project is one of the largest emission reduction measures undertaken in Norway’s oil and gas sector. “The project is a key contributor to the energy transition,” said Haaland.

Equinor has also brought online a new offshore gas field in the Barents Sea, Askeladd, which will add another 18 billion cubic meters of gas reserves to the supply for Hammerfest and keep the plant running at full tilt. 

“Askeladd is now producing, the gas will help extend plateau production from Hammerfest LNG on Melkøya up tothree years,” said Thor Johan Haave, Equinor’s vice president operations & maintenance at Hammerfest.

The Askeladd project is a satellite field developed with a tieback to the facilities at neighboring Snøhvit, the giant field that feeds Hammerfest LNG. Askeladd was finished two years ago, but its startup was delayed by a major fire at Hammerfest LNG, which took the plant offline until June 2022. 

By The Maritime Executive, December 27, 2022

The metamorphosis of global refining will likely resume in 2023, after a pause in 2022 and changing the shape of crude and product flows.

New oil refineries are set to come online in the East and old refineries will likely be converted into greener processing plants in the West, according to data from S&P Global Commodity Insights.

That will restart a trend seen in 2020 and 2021 that saw a flurry of closures and conversions — amounting to around 4 million b/d of refining capacity — predominantly in the Atlantic Basin.

“With the start-up of new refineries including mega-refineries in the Middle East and Asia, changes in crude and product trade flows are expected in 2023,” S&P Global oil analyst Rasool Barouni said.

“Sanctions of Russian oil product exports and China’s product export quotas will impact the global trade flows next year.”

The first phase of Kuwait’s new 615,000 b/d Al Zour refinery started in November 2022, and it exported its first naphtha, low sulfur fuel oil and jet fuel in the second half of November. The start-up of the first unit will be followed by the second and third units to reach full capacity next year, Barouni noted.

The commissioning and ramping up of other refineries in the Middle East including Saudi Arabia’s 400,000 b/d Jazan refinery, Iraq’s 140,000 b/d Karbala refinery and Oman’s 230,000 b/d Duqm refinery will increase the region’s crude runs to 9.30 million b/d in 2023, S&P Global estimated, predicting gross exports of major oil products, including gasoline, gasoil, kerosene/jet, and fuel oil, will increase to 3.37 million b/d early next year.

Once the long-awaited start of its hydrocracker comes into effect, Saudi Arabia’s 400,000 b/d Jazan refinery, which has been gradually coming online since late 2021, will fill the void in Europe left by Russian diesel exports.

Russian diesel is likely to travel to the Middle East, where it will be blended with regional material before being shipped back to Europe, analysts suggested.

“However, this may have an impact on diesel prices in the Middle East and Asia. European diesel stocks have been replenished in recent months, but sanctions against Russia could tighten the Atlantic Basin distillate market once again at least for a short period of time,” Refinitiv’s lead oil analyst Ehsan Ul-Haq said.

China

Two new plants in China will achieve full capacity in 2023.

After initially planned start at the end of 2021, China’s 320,000 b/d Shenghong Petrochemical complex commenced commercial operations in November.

In October, another greenfield refinery in China, the 400,000 b/d Guandong Petrochemical, started trial runs.

The two plants have helped boost global refinery throughput in November, the International Energy Agency said in its December report.

Over the next two years, China could see the start-up of two more refineries: the 400,000 b/d Yulong Petrochemical plant and the 300,000 b/d Huajin Aramco Petrochemical complex.

China’s Shenghong and Guandong as well as Malaysia’s 300,000 b/d Pengerang Integrated Complex in the Johor state, which finally resumed operations in May, following an incident in 2020, have also added to global refining capacity.

China will likely increase key product exports, particularly gasoline and kerosene/jet.

Africa

Elsewhere, the commissioning of Nigeria’s 650,000 b/d Dangote refinery was expected next year, though analysts remained skeptical given the project has experienced delays before.

Africa’s long-awaited ‘game changer’ should reduce Nigeria’s need for products imports. The country may actually be able to stop gasoline imports by the second half of next year if so, according to Nigerian National Petroleum Corp.

Also in Africa, a 40,000 b/d complex is getting close to being commissioned in Ghana, which will potentially help the country steer away from fuel imports on which it is now fully reliant due to ongoing problems with the 45,000 b/d Tema refinery.

“New refineries in the Middle East will result in more diesel supply for Asia and Europe in the medium term and Europe could transition from an undersupplied to an oversupplied market,” Ul-Haq said.

“The opening of Dangote’s refinery in Nigeria next year may tighten the light sweet market, particularly in the Mediterranean, while India may need to import more crude from the Caspian region and North Africa instead of West Africa.”

Europe’s green shift

In 2023, Italy’s Eni is likely to launch the transformation to a biorefinery of its Livorno site if it is to achieve the planned completion of construction by 2025.

Meanwhile, France’s Grandpuits is on track to be converted to a zero-oil platform in 2024 and start producing sustainable aviation fuel.

However no other imminent conversion plans are on the cards in Europe with Finland’s Neste exploring a switch of its Porvoo refinery to “non-crude oil refining” as far ahead as the mid-2030s.

Refineries in Japan are also proceeding with planned closures. ENEOS has cut the capacity of the Wakayama sole CDU before decommissioning it in October 2023. The company will also decommission secondary units at its Negishi plant which are attached to the taken out of service this year N0. 1 CDU.

By S&P Global, December 27, 2022

State energy firms Saudi Aramco and Sinopec plans to build a new refinery-petrochemical complex in southeast China which will commence operations by the end of 2025.

The companies have signed a heads of agreement to build the complex at Gulei, Fujian province, which will include a 320,000 barrels per day (bpd) refinery and a 1.5 million tonnes per year cracker, Aramco said in a statement on Sunday. It did not provide an investment figure for the project.

In addition, Aramco, Sinopec and SABIC have signed an initial agreement to study the economic and technical feasibility of developing a new petrochemical complex to be integrated with an existing refinery in Yanbu, Saudi Arabia.

“These projects represent an opportunity to contribute to a modern, efficient and integrated downstream sector in both China and Saudi Arabia,” Aramco Senior Vice President of Downstream Mohammed Y. Al Qahtani said.

“They also underpin our long-term commitment to remain a reliable supplier of energy and chemicals to Asia’s largest economy.”

Aramco seeks to expand its liquids to chemicals capacity to up to 4 million bpd by 2030.

Aramco and Sinopec jointly operate Yanbu Aramco Sinopec Refining Company (YASREF), a 400,000-bpd refinery located in Yanbu.

Nasdaq by Florence Tan, December 27, 2022

The European Union has enough gas for the winter but could face a shortage next year if Russia cuts supplies further, the International Energy Agency (IEA) said on Monday, urging governments to act faster to save energy and expand renewables.

Despite Russia slashing gas deliveries this year, Europe has averted a severe shortage and started the winter with brimming gas storage tanks – thanks in part to emergency EU measures to fill storage, plus a lucky spell of mild weather and high gas prices that dampened demand for the fuel.

But next year may pose an even tougher test than the energy crunch that has this year hiked fuel bills for European households and forced industries to temporarily close to avoid crippling gas costs.

If Russia was to cut the small share of gas it still delivers to Europe, and Chinese gas demand rebounded from COVID-19 lockdown-induced lows, the EU could face a gas shortfall of 27 billion cubic metres (bcm) in 2023, the IEA said. Total EU gas consumption was 412 bcm in 2021.

“This is a serious challenge,” IEA Executive Director Fatih Birol told a press conference with the European Commission in Brussels.

The shortage could be averted by expanding subsidies and policies to renovate gas-guzzling buildings, replace fossil fuel-based heating with heat pumps and massively expand renewable energy, the IEA said.

The 100 billion euro ($106 billion) investment this requires would be paid back within two years through lower gas bills, Birol said.

European Commission President Ursula von der Leyen suggested forming an EU “solidarity fund” to raise cash for energy investments – using both EU money and additional funding sources.

Von der Leyen said the bloc’s gas supply was “safe for this winter” and the 27-country EU was preparing for the next one.

EU country leaders will call for the preparation of early contingency plans for energy supply next winter at a summit in Brussels on Thursday, according to a draft of their meeting conclusions seen by Reuters.

However, countries are still at odds over how to address high energy prices. Their energy ministers hold an emergency meeting on Tuesday to attempt to agree a gas price cap that has divided the bloc.

Last month countries held up deals on other measures over the price cap spat – including faster permits for renewable energy projects that will be crucial to replacing Russian gas and meeting the EU’s climate goals.

Reuters by Kate Abnett, December 2022

Saudi Arabian Oil Company (Aramco) and TotalEnergies will join forces to build a new petrochemicals complex in Saudi Arabia, the French energy group said on Thursday.

The project involves investment of about $11 billion, of which $4 billion will be funded through equity by Aramco (62.5%) and TotalEnergies (37.5%), the statement said.

The investment decision is subject to closing conditions and approvals, with construction scheduled to begin in the first quarter of 2023 and commercial operation targeted for 2027.

The planned Amiral complex, integrated with the existing Saudi Arabia Total Refining and Petrochemical (SATORP) refinery located in Jubail on Saudi Arabia’s eastern coast, will be owned and operated by Aramco and TotalEnergies.

The overall complex, including adjacent facilities, is expected to create 7,000 jobs locally.

The petrochemicals facility will enable SATORP to convert its refinery off-gases and naphtha, as well as ethane and natural gasoline supplied by Aramco, into higher-value chemicals.

The complex will eventually provide feedstock to other petrochemicals and speciality chemical plants in the Jubail industrial area, requiring an estimated $4 billion of additional investment.

Yahoo! by Dominique Vidalon, December 2022

The Department of Energy announced Friday it would purchase 3 million barrels of oil to replenish the U.S. strategic reserve and strengthen energy security, as oil (and related gas) prices have dropped since the summer, when the administration tapped the reserve to counter an energy crisis sparked in part by Russia’s invasions of Ukraine.

The purchase, following an announcement by President Joe Biden in October, is an opportunity to buy the oil at a fixed price before repurchasing it for less than the average of $96 it sold for, the Department of Energy said in a statement.

Secretary of Energy Jennifer Granholm noted in May that the buyback process would coincide with lower oil prices—and consequently lower gas prices—which spiked following Russia’s invasion of Ukraine in February.

On Friday, the international benchmark Brent Crude futures measured at $77.16 per barrel, down from $96.96 at the time of Biden’s announcement in October.

The national average price of a gallon of gasoline in the U.S. is $3.178, according to a tracker by the American Automobile Association, down from last month’s average of $3.743.

The 3 million barrels represent 15% of the average number of barrels consumed per day in 2021 (19.89 million).

Crucial Quote

“As we are thoughtful and methodical in the decision to draw down from our emergency reserve, we must be similarly strategic in replenishing the supply so that it stands ready to deliver on its mission to provide relief when needed most,” Granholm said.

Surprising Fact

Following a subsequent decision by Biden in October to release an additional 15 million barrels after a record release of 180 million barrels in March, the U.S. strategic oil reserve dropped below 400 million barrels for the first time since 1984, according to the Energy Information Administration.

Key Background

The Department of Energy announced the purchase following a global energy crisis fueled by Russia’s invasion of Ukraine, which resulted in a spike in gas prices and the U.S. banning imports of oil, natural gas, coal and petroleum products from Russia. Other causes of the price spike were a refusal by OPEC+ to decrease production and diminishing U.S. refining capacity. Biden projected the U.S. will produce 1 million barrels per day by the end of the year and will continue repurchasing oil to replenish the Strategic Petroleum Reserve when prices fall to $70 a barrel.

Forbes by Ty Roush, December 22, 2022