Tag: ammonia

Refinery closures combined with growing demand for gasoline, diesel, and jet fuel are about to start squeezing available volumes—and this squeeze is about to become marked next year. That’s according to the Energy Information Administration, which warned this would plunge inventories to the lowest levels since 2000.

Two refineries are set to shut down this year, the EIA said in the latest edition of its monthly Short-Term Energy Outlook. One is in Houston, and the other in Los Angeles. The Houston facility, owned by LyondellBasell, which has already begun the process of the shutdown, has a capacity of 263,776 barrels daily. The Los Angeles refinery, property of Phillips 66, can process 138,700 barrels of crude daily. The closure of these two would reduce fuel production capacity in the country by 400,000 barrels daily.

The refining industry globally has been experiencing the effects of a declining supercycle even though demand has continued to grow, and, as confirmed by the EIA, this growth will continue. Even so, the record margins of 2022 and 2023 are gone now. Before the new cycle begins, some belt-tightening is in order.

In the U.S., refiners were also subjected to additional pressure during the Biden administration to join the federal government’s climate change-oriented energy policy and switch to biofuels from petroleum fuels. In California, specifically, pressure has been strong, both on the federal and state level, with the government in Sacramento recently demanding from refiners in California to keep a certain level of fuel inventories to avoid price spikes that the refiners themselves attribute to the state government’s energy policies seeking to phase out vehicles using petroleum fuels.

The closure of the Phillips 66 refinery in Los Angeles is one consequence of that policy. There are even reports that California authorities are considering refinery nationalizations to secure the supply of fuels to drivers in the state. Two refineries in California have already converted to biofuel production plants because biofuel production fetches generous subsidies from the state government: Phillips 66 is closing the L.A. facility by the end of this year, and Chevron and Valero are also considering shutdowns.

As a result of these refinery closures, the supply of fuels will understandably tighten, with diesel and jet fuel especially vulnerable, it seems. The diesel tightness will be global and manifest this year, as an estimated 1 million barrels per day of refining capacity across Europe and the U.S. is set to close permanently. Another 800,000 barrels daily in new capacity is set to come online in China, India, and Indonesia, Reuters estimated at the end of 2024, which leaves a gap of about 200,000 bpd. Demand for fuels, meanwhile, has continued to surprise to the upside.

In the United States specifically, refining output is estimated to decline by 190,000 barrels daily this year, the Energy Information Administration said this week, with a further decline of 180,000 barrels daily in 2026. “To meet the forecast increase in U.S. consumption of petroleum products with less U.S. refinery capacity, we expect refinery utilization to remain relatively high and for net U.S. exports of petroleum products to decrease to meet domestic fuel demand,” the EIA said in its Short-Term Energy Outlook.

If demand for fuels continues growing, a shortage may well be on the way, as suggested by the chief executive of Phillips 66 last year. Mark Lashier said in September 2024 that refinery closures prompted by low margins could shave some 700,000 bpd from global refining capacity. He saw this as a positive for U.S. refiners, however. “The US has become very competitive in refining,” Lashier said. “We’re able to compete out in the world global markets.”

By Oilprice.com / Irina Slav – Mar 04, 2025.

U.S. natural gas futures jumped in Monday’s early trading session, rebounding from recent lows driven by robust export flows and strong demand forecasts. Henry hub gas was trading at $3.98 per MMBtu at 11.25 am ET, up from a two-week low of $3.74 per MMBtu a week ago. U.S. LNG exports hit a fresh record 15.6 bcfd in February, boosted by new units at Venture Global’s (NYSE:VG) Plaquemines plant. The Arlington, Virginia-based LNG exporter commenced LNG production at its Plaquemines LNG plant 30 months after the final investment decision (FID) was made, making the plant with a 20 mtpa nameplate capacity one of the two fastest greenfield projects to reach first production. Once fully operational, Plaquemines will be among the largest LNG facilities in the world, featuring 36 electrically-driven 0.626 million tonnes per annum (mtpa) liquefaction trains, configured in eighteen blocks. 

“Reaching first LNG at Plaquemines at this pace will enable the United States to remain the top exporter of LNG in the world. Between current and planned facilities, Venture Global is prepared to invest $50 billion in energy projects based in the United States which will create jobs, support local economies, strengthen the balance of trade and unleash much-needed US LNG supply to our allies,” remarked Venture Global CEO and Co-Founder, Mike Sabel. 

The U.S. is rapidly developing LNG plants to meet Europe’s surging demand for the commodity. Two weeks ago, Cheniere Energy, for the first time, started producing liquefied natural gas (LNG)  from the first train (Train 1) of its Corpus Christi Stage 3 Liquefaction Project. As of Nov. 30, the overall project completion for the project was close to 76%; however, the company expects substantial completion achieved at the end of the first quarter of 2025. The project consists of seven midscale trains, projected to produce over 10 million tonnes per annum (mtpa) of LNG.

Meanwhile, gas demand in the Lower 48 states is projected to be higher than previously anticipated despite milder weather expected through March 18. Also, stockpiles remain about 12% below the five-year average due to earlier extreme cold. U.S. gas output hit a fresh record of 104.7 bcfd in February.

By Alex Kimani for Oilprice.com / Mar 03, 2025

Shell is considering a potential sale of its chemicals assets in Europe and the United States, the Wall Street Journal reported on Sunday, citing sources familiar with the matter.

The energy group has hired Morgan Stanley to conduct a strategic review of its chemicals operations, the report said.

Shell and Morgan Stanley declined to comment.

Potential buyers could include private equity firms and Middle Eastern entities seeking to expand their Western presence, according to the newspaper.

The review is in its early stages and Shell has not yet made any definitive decisions regarding a potential sale, the Journal reported, adding that one of the assets included in the review was Shell’s Deer Park facility in Texas.

The Deer Park operation is adjacent to a refinery that Shell previously sold its 100% stake to joint-venture partner, Mexican state oil firm Pemex.

Last year Shell sold its refining and chemicals hub in Singapore, one of the world’s largest.

The British company warned earlier this year that it expects trading in its chemicals and oil products division to be significantly lower quarter-on-quarter due to lower seasonal demand.

Shell chief executive Wael Sawan has been focused on cutting costs and pivoting the company back to its most profitable sectors — oil, gas, and biofuels — while shifting away from renewable power.

Last December, Reuters reported exclusively that the oil major was stepping back from new offshore wind investments and is splitting its power division after a review of the business that was once seen as a key driver of the company’s energy transition strategy.

By: Reuters / March 03, 2025.

 U.S. crude oil refinery inputs averaged 15.3 million barrels per day (b/d) during the week ending Jan. 31, 159,000 b/d more than the previous week’s average, according to the weekly report issued by the U.S. Energy Information Administration (EIA) on Wednesday.

Refineries operated at 84.5 percent of their operable capacity last week, said the Weekly Petroleum Data Report.

During the same period, both gasoline and distillate fuel production declined, averaging 9.2 million b/d and 4.6 million b/d respectively.

U.S. commercial crude oil inventories, excluding those in the Strategic Petroleum Reserve, surged by 8.7 million barrels from the previous week to 423.8 million barrels, about 5 percent below the five-year average for this time of year.

Total motor gasoline inventories rose by 2.2 million barrels last week, slightly above the five-year average for this time of year.

Finished gasoline inventories went down while blending components inventories went up last week.

Distillate fuel inventories dropped by 5.5 million barrels last week, around 12 percent below the five-year average for this time of year.

Propane/propylene inventories shrank by 4.8 million barrels last week, 2 percent below the five-year average for this time of year.

Total commercial petroleum inventories went down by 2.7 million barrels last week.

Total products supplied over the last four-week period averaged 20.6 million b/d, up by 3.3 percent from the same period last year.

Over the past four weeks, motor gasoline product supplied averaged 8.3 million b/d, down by 0.2 percent from the same period last year.

Distillate fuel product supplied averaged 4.3 million b/d over the past four weeks, up by 13.7 percent from the same period last year.

Jet fuel product supplied was up 4.6 percent compared with the same four-week period last year. 

By: Xinhua / February  19, 2025

Canadian pipeline operator Trans Mountain said it expects to see increased interest to ship on its system if the United States slaps tariffs on Cana*dian oil imports in a month.

The pipeline, which can carry up to 890,000 barrels per day of crude from Alberta to Canada’s Pacific Coast, has been about 80% utilized, with about 20% capacity available for spot shipping at more expensive rate.

While exports of crude oil that flowed through Trans Mountain’s pipelines represented only 9% of Canada’s total crude exports, it has come in the spotlight after U.S. Presi-*ent Donald Trump said he would slap 10% tariffs on Canadian oil imports by the United States.

The tariffs, which were due to take effect on Tuesday, were paused for 30 days on Monday.

Nearly all of Canada’s oil exports – some 4 million barrels per day – head to the United States to be processed by refiners or re-exported from U.S. Gulf Coast ports to Asia.

The Trans Mountain pipeline expansion, which started operations in May, provided Canada an alternative route to export more volumes of crude directly, primarily to Asia, and reduced the country’s reliance on the United States.

“We anticipate there will be increased interest to ship on our system in the face of U.S. tariffs, but it is too early to predict what the volumes will be,” Trans Mountain said in an emailed statement.

Deliveries to Asia are also likely to increase, the company said, adding that deeper discounts for Canadian crude were likely.

The company said it was investigating ways to improve the throughput efficiency and increase the capacity of the expanded system, ideally in the next four to five years under the current regulatory regime.

Exports from Vancouver averaged about 370,000 barrels per day in the last eight months, according to data from ship tracking firm Kpler. About 51% of that headed to Asia, primarily China, in 2024, while the rest went to the United States.

By Reuters / February 4, 2025

Dutch tank storage group Vopak (VOPA.AS), opens new tab said on Wednesday it expected to see little change in 2025 earnings, even as strong demand for energy storage infrastructure buoys its results.

“Gas terminals performance showed firm throughput levels, backed by growing energy demand and energy security considerations around the globe,” Vopak said in a statement.

Shares of the company, which operates terminals and storage facilities for fuels and chemicals worldwide, fell 7% by 0927 GMT, with analysts citing a quarterly core profit miss and a cautious outlook.

For the final quarter of 2024, Vopak flagged a negative one-off effect related to technical issues at one of its LNG terminals in the Netherlands, and an impairment in Mexico due to local legislation significantly reducing imports of crude oil and related products.

“The impact of these items will continue into FY25 and have led to a cautious outlook for FY25,” ING analysts wrote in a note to clients.

Fuel distribution is difficult in Mexico at the moment and the limited amount of permits has resulted in empty capacity there, Vopak’s finance chief Michiel Gilsing told Reuters.

“We invested six years ago to an amount of 58 million euros so there was a significant write off,” Gilsing said.

A policy shift under the current administration is unlikely, he added, which means continued negative market outlook for imports of clean petroleum products into Mexico.

Vopak expects its proportional earnings before interest, taxes, depreciation and amortisation (EBITDA) to land between 1.15 billion and 1.20 billion euros in 2025.

The metric grew by 9% to 1.17 billion euros ($1.22 billion) in 2024, but fell 2% to 277 million in the fourth quarter.

Vopak said it would launch a share buyback of up to 100 million euros on Thursday and propose a dividend of 1.60 euros per share, thanks to its strong cash generation.

By Alban Kacher and Anna Peverieri, Reuters / February 19, 2025

U.S. gasoline prices have resumed their uptrend, with AAA reporting the national average at $3.161 per gallon of regular compared to $3.139 a week ago and $3.115 a month ago. The national average price of diesel has increased 0.8 cents and now stands at $3.632 per gallon.

“The national average has inched higher, driven primarily by sharp gas price increases on the West Coast, where refinery maintenance and outages have created a ripple effect in neighboring states, pushing prices higher in many communities,” said Patrick De Haan, head of petroleum analysis at GasBuddy. “While most of the country has experienced a relatively quiet week for gas prices, the West Coast has seen rapid increases — a trend that should slow in the coming days. Although the surge remains isolated to the West for now, refinery maintenance will soon begin in other regions, and with the transition to summer gasoline blends underway, prices in most areas are likely to start rising in the weeks ahead. Meanwhile, oil prices remain subdued in the low $70s as President Trump works on a potential peace deal between Russia and Ukraine — an event that, if realized, could have significant implications for oil markets in the months ahead.”

The oil price selloff accelerated last week after U.S. President Donald Trump took the first big step towards ending Russia’s war in Ukraine three weeks after his inauguration. However, oil prices edged higher on Monday: Brent crude for April delivery rose 0.2% to trade at $74.92 per barrel at 10.50 am  ET, while WTI crude for March delivery was up 0.4% to change hands at $71.03 per barrel. 

On social media, Trump said he and Putin “agreed to have our respective teams start negotiations immediately, and we will begin by calling President Zelenskiy, of Ukraine, to inform him of the conversation, something which I will be doing right now.”

A ceasefire to the Russia-Ukraine war could be bearish for oil prices if Trump pushes for the removal of sanctions on the Russian energy industry, Tyler Richey, co-editor at Sevens Report Research, told MarketWatch. Geopolitical stability may also “largely extinguish the still simmering ‘fear bid’ in the oil market.” 

By : Alex Kimani for Oilprice.com / Feb 17, 2025.

Energy transition presents a massive opportunity for the project supply chain to drive innovation and efficiency, but success rests on early collaboration between stakeholders, listeners were told during a panel session at Breakbulk Middle East.

Tim Killen, head of growth for projects at Fracht Group, said logistics providers were “excited” about the opportunities and challenges emerging from the global switch to cleaner energies. The industry had a “proven track record” of adding value to all aspects of the project process.

“We saw in the wind sector how it took many years to identify, learn and then implement the efficiencies that are needed in order to be able to drive down the delivered cost of logistics for those projects. And our appetite for engagement in energy transition is significant,” he said.

“From pre-FEED and FEED, then solution design and into implementation, with all those new commodities, clients and supply chains that are going to be created, there’s an opportunity for us to innovate when it comes to different logistics solutions, different handling methods and the different equipment types that are going to be needed.”

Juma Al Maskari, director of Asyad Logistics, a division of Oman’s state-led Asyad Group, said having a seat at the table early on was “crucial”. Maskari pointed to Oman’s potential to become one of the world’s leading green hydrogen producers.

“Oman is very ambitious when it comes to this industry,” he said. “We have already given eight concessions around Oman with a total area of 50,000 square kilometers. This translates roughly into about 2,000 wind turbines and 40 million solar panels.”

But, he added, concession areas are located on average 500 kilometers inland from Oman’s ports, with routes often crossing oilfield concessions. Transporting out-of-gauge cargo therefore requires collaboration between EPCs, traffic control authorities and drilling firms.

“A simple mistake can become extremely expensive. You could have the ship owner unable to offload because the port is congested or trucks that cannot get through to the construction site. Things can go wrong, and you need to be it prepared for it.”

Torben Berger, director of business development at United Heavy Lift, told listeners that energy transition was driving growth for carriers, with 60% to 70% of the cargo transported by UHL related to renewable energy projects.

“Early engagement is also key from our point of view,” Berger said. “With all carriers you have engineers, and it’s very important for them to engage and understand where to put the lifting points, the lashing points, to know if there’s a possibility to optimize the module sizes for onshore and offshore transportation.”

Killen noted that over his three decades in the industry, project lead times had increased from about four months to 18 months, significantly raising the demand for contributions from logistics providers.

“As an industry we need to make sure we have the capacity and resources within our organization to plan, design and then deliver these projects in the right way,” Killen said.

Middle East Energy Transition Still Nascent

Iman Nasseri, managing director for the Middle East at energy consultancy FGE Dubai, had opened the discussion by saying that energy transition projects in the region – with the exception of solar – had been slower to gain momentum compared with other regions, with the project mix still dominated by fossil fuels.

“Over 90% of Middle East energy investments in 2023 were in the oil and gas sector. And this trend is not slowing,” he said. Part of the problem has been the lack of projects reaching final investment decision (FID), echoing comments made by the EIC’s Ryan McPherson in an earlier presentation.

He continued: “But I think we’re at the beginning of a curve. Percentage growth numbers are encouraging even if absolute numbers are perhaps not.

Session moderator Vineet Bakshi, regional director of logistics at Fluor, was bullish on the region’s outlook, highlighting an estimated US$50 billion spend on energy transition projects by the end of the decade.

“This includes possible US$5 billion in technologies such as carbon capture, maybe another US$5 billion in battery storage and energy system projects,” he said. “These new technologies are actually changing the way projects used to happen and the way logistics service providers used to traditionally work.”

By: Simon West, Breakbulk / Feb 17, 2025

OPEC+ producers are not considering delaying a series of monthly oil supply increases that is scheduled to begin in April, Russian Deputy Prime Minister Alexander Novak said on Monday, Russia’s RIA state news agency reported.

Bloomberg News reported on Monday, citing delegates, that OPEC+, which groups the Organization of the Petroleum Exporting Countries with Russia and other allies, was examining whether to postpone the supply increases, despite calls from U.S. President Donald Trump to lower oil prices.

Three OPEC+ delegates told Reuters that so far there had been no discussion on delaying the increase. One of them said the oil market may be able to absorb extra supply from April as a result of tougher sanctions and higher Chinese demand, although it was too early to make that call.

All sources declined to be identified by name.

Some analysts, such as Morgan Stanley, have said they expect OPEC+ to extend its current output levels again. OPEC and the Saudi government communications office did not immediately respond to requests for comment.

OPEC+ is cutting output by 5.85 million barrels per day (bpd), equal to about 5.7% of global supply, agreed in a series of steps since 2022.

In December, OPEC+ extended its latest layer of cuts through the first quarter of 2025, pushing back the plan to begin raising output to April. The extension was the latest of several delays due to weak demand and rising supply outside the group.

Based on that plan, the unwinding of 2.2 million bpd of cuts – the most recent layer – and the start of an increase for the United Arab Emirates, begins in April with a monthly rise of 138,000 bpd, according to Reuters calculations.

The hikes will last until September 2026. Based on OPEC+’s previous practice, a final decision to go ahead with the April increase is expected around early March.

By Reuters / February 17, 2025