Tag: crude

Saudi Aramco controls 259 billion barrels worth of oil and gas reserves, which is unmatched by any other company globally. This is a key factor in the company’s massive $1.8 trillion valuation.

To illustrate that, Visual Capitalist’s Marcus Lu created this chart to compare the proved reserves of major oil companies as of 2022.

Saudi Aramco is the national oil company of Saudi Arabia. As of 2024, it is the sixth-largest company in the world by market capitalization.

Its oil reserves are over four times bigger than the reserves of all the other six companies on our list combined.

Behind Saudi Aramco, American company ExxonMobil comes in second with 17.7 billion barrels of oil equivalent, followed by another American company, Chevron, with 11.2 billion barrels of oil equivalent.

Saudi Aramco produces 9 million barrels of oil a day, more than any other firm and nearly a tenth of the world’s total.

In addition, the state-run oil giant is the world’s most profitable company, generating $722 billion in profits between 2016 and 2023.

Saudi Aramco is also expected to play a big part in Saudi Arabia’s plans to diversify its economy and reduce oil dependence. Recently, Saudi Arabia’s Crown Prince Mohammed Bin Salman confirmed that the kingdom is in talks to sell a 1% stake in the state oil giant, which could help fund the country’s projects in clean energy and technology.

By: Oilprice / June 26, 2024

The International Energy Agency’s (EA) Oil 2024 report outlines a period
of significant transformation for the global oil market through to 2030.
While oil has historically fuelled economic growth. the report predicts a slowdown in demand growth, particularly in developed economies, as clean energy technologies and electric vehicles (EVs) gain traction.

This trend stands in stark contrast to the anticipated surge in ail production.
especially from non-OPEC+ countries, potentially leading to a substantial oil surplus by 2030.
Whe report suggests a global peak in oil demand by the end of the forecast period. driven by Two opposing regional trends. Emerging economies in Asia, particularly China and India, will experience continued growth in oil demand to supplet their expanding economies. In contrast, developed economies are expected to witness a steady decline in oil consumption as they transition tovares cleaner energy sourges ang emprace electric vehicles. This geographical disparity will reshape glopal oil trade fovs.
The anticipated rise in oil production capacity outpacing projected demand, could lead to a significant surplus of oil by 2030. This surplus has the potential to exert downward pressure on oil prices posing a chalenge for major producers. particularly the US shale industry, which is known for its rapid esporse to changing market conditions.

Eastward shift
The report noted that the centre of gravity for oil demand is migrating eastward, with Asia becoming a major mporter of crude oi, natural gas lougs NGLs, and refined products.
Emerging economies in Asia.particulary China and india. account for all of global demand
growth.By contrast.ordemnandinacvanced aconomee falla sharply said the reporty This
trend is fuelled by Asias burgeoning economic growth and riSing energy needs The Middle East and the Americas are expected to emerge as key suppliers, catering to this growing Asian certane, Ths eastward saft yil necessitate a reconfguration of global oft trade routes.

Added to this, the rise of NGLs and biofuels will disrupt the traditional landscape of refined products. A surge in natural gas liquids (NGLs) and condensates will account for 45% of new capacity increases over the forecast period, the report said. Refineries will be forced to adapt their production processes to accommodate this shift, potentially facing challenges as demand for some products wanes. For example, the report highlights a looming gasoline surplus as a consequence of increasing EV adoption and biofuel use. Conversely, the market for middle distillates like diesel is expected to remain tight, creating a product imbalance that refiners will need to navigate. Non-refined fuels are set to capture a staggering three-quarters of projected global demand growth over the 2023-2030 period,” the report said.
The report notes a major shift in strategy from Saudi Arabia, which has put on hold its planned crude dil capacity increase and will now focus on expanding natural gas liquids and condensates, which aligns with its efforts to boost domestic gas supply. “It may also reflect an acknowledgment of the rapidly building surplus in global crude oil production capacity, added the lEA.
As noted, a major challenge for the global oil market will be how the US shale industry reacts to a potential oil glut. This, in turn, could impact global oil supply and prices, creating a domino effect throughout the market. “How the industry will adapt and adjust to the new supply landscape will have wide-ranging consequences for producers and consumers globally through the remainder of the decade and peyondie lEA said.
Geopolitical considerations further complicate tie picture. The report acknowledges the ongoing influence of sanctions on Russian oil exports-which are pushing trade flows eastward
Asia’s thirst.

The surge in demana from Asia Cartcutary China anc incia, is poised to Gramatically reshape global product trade balances py 2039 The lEA report forecasts a rise in product exports from the Atlantic Basin, led by the US, to guench Asias growing torst.
The Middle East meanvnite sset t sauditi positiones the yards ung pted poduct
export kingpin. This dominance stems from a combination orfactorstinoreased retning activity and a regional decline in fuel oil demand. The surplus created oy these trends vill be readily absorbed by Asia’s import needs.

As noted. a major challenge for the global oil market will be how the US shale industry reacts to a potential oil glut. This, in turn, could impact global oil supply and prices, creating a domino effect throughout the market. “How the industry will adapt and adjust to the new supply landscape will have wide-ranging consequences for producers and consumers globally through the remainder of the decade and beyond, the lEA said.
Geopolitical considerations further complicate the picture. The report acknowledges the ongoing influence of sanctions on Russian oil exports, which are pushing trade flows eastward.
Asia’s thirst.
The surge in demand from Asia, particularly China and India, is poised to dramatically reshape global product trade balances by 2030. The lEA report forecasts a rise in product exports from the Atlantic Basin, led by the US, to quench Asia’s growing thirst.
The Middle East, meanwhile, is set to solidify its position as the world’s undisputed product export kingpin. This dominance stems from a combination of factors: increased refining activity and a regional decline in fuel oil demand. The surplus created by these trends will be readily absorbed by Asias import needs
Europe’s diesel demand is forecast to take a significant plunge. leading to a subsequent decline in net diesel imports. This creates an opportunity for North America to step in and fill the gap. potentially supplying the majority of Europe’s diesel needs by 2030.
Elsewhere. China is.on track to retain its crown as the world’s top refiner. However. the report highlights a potential challenge to Chinas product trade balance: its substantial need for petrochernical feedstocks such as LPG, ethane, and naphtha. This dependence is likely to keep.
China a net proquet impeter The potential for a gasoline glut may also prompt Chinese refineries to aust the rprecuction melas ta betenation with domestic demand for petrochemical feedstocks. This could lead to a risen naphtha and jet fuelylelds, potentially at the expense of gasoline ang ciese prectetion

By:International Shipping News / 02/07/2024.

Shell Nederland Raffinaderij B.V., a subsidiary of Shell plc, is to temporarily pause on-site construction work at its 820,000 tons a year biofuels facility at the Shell Energy and Chemicals Park Rotterdam in the Netherlands to address project delivery and ensure future competitiveness given current market conditions.

As a result, contractor numbers will reduce on site and activity will slow down, helping to control costs and optimise project sequencing.

Temporarily pausing on-site construction now will allow us to assess the most commercial way forward for the project,” said Huibert Vigeveno, Shell’s Downstream, Renewables and Energy Solutions Director.

“We are committed to our target of achieving net-zero emissions by 2050, with low-carbon fuels as a key part of Shell’s strategy to help us and our customers profitably decarbonise,” added Vigeveno. “And we will continue to use shareholder capital in a measured and disciplined way, delivering more value with less emissions.”

By AJOT /  Jul 02 2024 

Recently, Sungrow Hydrogen has won the bidding of China Energy Engineering Corporation (CEEC) Songyuan Hydrogen Energy Industrial Park project in Jilin China, which is the world’s largest green hydrogen, ammonia and methanol integrated project. Accounting for the largest share of this Section, Sungrow Hydrogen 1000Nm³/h ALK hydrogen production system will be applied in this project.

CEEC Songyuan Hydrogen Energy Industrial Park project is among the first batch of “Green and Low-carbon Advanced Technology Demonstration Projects” of China National Development and Reform Commission(NDRC), the largest green hydrogen, ammonia and methanol integrated project worldwide, and also the the first batch of large-scale demonstration projects of”Hydrogen Powers Jilin”. With more than $4 billion investment, this project is expected to produce 110,000 tonnes of green hydrogen, 600,000 tonnes of green ammonia and 60,000 tonnes of green methanol annually after it is put into operation.

Sungrow Hydrogen ALK and PEM water electrolyzer products have outstanding performance, and both of them had won the bidding of CEEC hydrogen production equipment centralized purchasing in 2023. Sungrow Hydrogen ALK hydrogen production system has reached the international leading level in technologies such as flexible green hydrogen production, electro-hydrogen coupling, energy management, and cluster control, and could realize efficient matching with synthetic ammonia and methanol production systems.

This project is the third project Sungrow Hydrogen won in Jilin province. In the future, Sungrow Hydrogen will actively promote the completion of the project and also the implementation of more projects on a global scale, opening up the path of large-scale production of green hydrogen, ammonia and methanol, promoting the further development of renewable energy hydrogen production and green hydrogen based chemical industry.

By: PR Newswire / July 01, 2024

Saudi Aramco has awarded contracts worth more than $25 billion to support projects aimed at growing sales gas production.

Saudi Aramco has awarded contracts worth more than $25 billion to support projects aimed at growing sales gas production by more than 60% by 2030, compared to 2021 levels.

The contracts relate to phase two development of its Jafurah unconventional onshore natural gas field, phase three expansion of Aramco’s Master Gas System, new gas rigs, and ongoing capacity maintenance.

Aramco contract awards

The operator awarded 16 contracts, worth a combined total of around $12.4 billion, for phase two development at Jafurah. The work will involve construction of gas compression infrastructure and associated pipelines, expansion of the Jafurah gas plant including construction of gas processing trains, and utilities, sulfur and export infrastructure. It will also involve construction of Aramco’s new Riyas NGL fractionation infrastructure in Jubail—including NGL fractionation trains, and utilities, storage, and export infrastructure—to process NGL received from Jafurah.

Another 15 lump sum turnkey contracts, worth a combined total of around $8.8 billion, have been awarded to begin the phase three expansion of the Master Gas System, which delivers natural gas to customers across the Kingdom of Saudi Arabia. The expansion, being conducted with the Ministry of Energy, aims to increase the size of the network and raise total capacity by 3.15 bscfd by 2028, through the installation of around 4,000 km of pipelines and 17 new gas compression trains.

An additional 23 gas rig contracts worth $2.4 billion have also been awarded, along with two directional drilling contracts worth $612 million. Meanwhile, 13 well tie-in contracts at Jafurah, worth a total of $1.63 billion, have been awarded between December 2022 and May 2024.

Jafurah

Jafurah unconventional gas field is estimated to contain 229 tcf of raw gas and 75 billion stb of condensate. Phase one of Jafurah development, which began in November 2021, is progressing on schedule with initial start-up expected in third-quarter 2025 (OGJ Online, Dec. 1, 2021). Aramco expects total overall lifecycle investment at Jafurah to exceed $100 billion and production to reach a sustainable sales gas rate of 2 bcfd by 2030, in addition to volumes of ethane, NGL, and condensate.

Master Gas System expansion

Aramco’s Master Gas System is a network of pipelines that connects Aramco’s gas production and processing sites throughout the Kingdom of Saudi Arabia. Its expansion will increase access to domestic gas supplies for customers in the industrial, utility, and other sectors—providing a lower greenhouse gas emission alternative to oil for power generation, the company said

By: Oil & Gas Journal / July 1, 2024

Over the last decade, there has been a rise in drone usage at bulk liquid terminal facilities throughout the U.S. and the world.

Of course, with new technology comes both advantages and disadvantages as terminals continue to grapple with the changing physical security landscape at their facilities.

Bulk liquid terminals, which are the primary midstream storage node for bulk goods like petroleum products, chemicals, asphalt, agricultural products like molasses and beyond, house critical resources as they make their way through the supply chain from producer to end user. As such, they are a potential target for bad actors and must constantly be monitored for any deviation from their normal operation.

The primary benefits of drones in these facilities are improved overall security and safety, such as allowing blind spots and traffic flow to be easily monitored. Their remotely accessed footage and aerial maneuverability provide improved viewpoints to terminal operators quickly and efficiently. Drones can reach storage tanks, pipelines and conveyor belts for more frequent and accessible inspections. The technology can also assist with inventory assessment using specialized sensors that can accurately monitor inventory levels of bulk materials. Additionally, drones can contribute valuable insight by recording data through thermal imagery and geo-location. Current drone technologies also have features such as object-tracking, loudspeakers and high-powered lighting.

Furthermore, drone usage can help reduce the number of workers in high-risk areas, serving as an extra layer of safety defense for staff or any personnel that pass through the facilities. The technology aids supervisors in promptly detecting incidents and creating a safer environment for all. Through enhanced and streamlined routine monitoring, operators can better communicate operational disruptions or hazards, enabling onsite staff to respond more effectively. Depending on the type of drones, some may even be able to deliver emergency supplies and assistance where needed.

However, the implementation of drones is not without drawbacks. Usage can be costly depending on the model and brand, and there is also the obvious question of whether it would be utilized frequently enough for the purchase to be worthwhile. At the same time, drones can be fragile and susceptible to damage if not maintained or used with care. Another factor to consider is regulatory compliance. Incorporating the technology within industrial settings requires that certain regulations and permits be followed, adding another potential level of regulatory burden to a site’s operations. Technical aspects like high-speed network connectivity for proper performance can be a liability as well.

The timeframe for regular drone usage could also vary. It could take some time for users to adjust and learn to navigate the technology before it could be fully incorporated into regular employment. It is important to consider that if any drone usage were to take place outdoors, adverse weather conditions such as heavy rain, wind or fog could hinder visibility. The unpredictability of these situations could lead to potential delays and disruptions.

There’s a chance that drones could be misused if security protocols and weaknesses are exploited, potentially putting them in a vulnerable position. The large amount of sensitive data recorded in the technology requires protection to prevent any form of unauthorized access to it.

All these points are internal concerns within a terminal facility. Given their small and quiet construction, external actors could use drones to monitor a site’s security setup and routines, potentially allowing them to find gaps. The various imaging capabilities of drones could also be used maliciously to target specific products on site, raising a location’s threat factor.

As technological developments like drones evolve and become further incorporated into terminal facilities, it is important to consider the different aspects of how they could affect the entire operation of the establishment. Only with time and further advancements will we understand the net advantages gained with this new branch of terminal operations.

BY JAY CRUZ / 26 june 2024

China appears to have taken advantage of low prices in the spot market so far in 2024 to boost the amount of gas in storage, absorbing some of the extra fuel that would otherwise have been sent to Europe.

But as storage facilities fill and spot prices rise, the intake is likely to taper over the summer, redirecting more liquefied natural gas (LNG) cargoes to Europe and accelerating the fill rate at the other end of Eurasia.

To the frustration of foreign analysts, China does not publish statistics on gas, oil or coal inventories, which are considered commercially sensitive and a matter of national security.

But the country consumed a record 55 million metric tons of gas from overland pipelines and sea-borne LNG in the first five months of 2024, according to data from the General Administration of Customs.

The intake rose from 47 million tons in the first five months of 2023 and 46 million in the same period of 2022, when Russia’s invasion of Ukraine sent spot gas prices soaring.

It comfortably exceeded the pre-invasion record of 50 million tons set in the first five months of 2021.

LNG imports ran above prior-year levels every month between January and May, and pipeline imports were also above prior-year levels in every month except April.

At the same time, domestic production surged to a record 76 million tons in the first five months of 2024 from 72 million tons in 2023, 68 million tons in 2022 and 64 million tons in 2021.

Output from Sichuan, easily the largest gas-producing province, has doubled since 2016, as the government has prioritised expansion of domestic fields to reduce reliance on imports.

As a result, the total amount of gas available from domestic production and imports hit a record 130 million tons in the first five months of 2024, up from 118 million in 2023 and 114 million in 2021.

China continues to connect more urban households to the gas network to reduce coal burning and improve air quality.

But the enormous increase in the amount consumed so far this year far outstrips additional demand from households and industry.

Much of the extra imported gas has likely been used to top up domestic storage after inventories were allowed to deplete in 2023 and 2022.

ACTIVE MANAGEMENT

China has a long tradition of actively using government-run inventories to stabilise commodity prices, which has been seen as a core function of the state.

In imperial China, the government’s “ever-normal granaries” purchased surplus grain when supplies were plentiful and sold when supplies were low to stabilise prices at a moderate level.

In recent years, the same active approach has been extended to oil, copper, aluminium and other commodities. Now there are signs it is being applied to gas via changes in LNG imports.

China’s importers have contracted large volumes of LNG from Qatar, Australia, Malaysia and a host of other smaller exporters, but in some cases they have been able to insist on flexibility to resell to third countries.

The result is that China can adjust LNG imports and inventories in response to changes in spot market prices.

In 2022/23, flexibility was employed to trim LNG imports and run down inventories in response to surging spot market prices. In 2024, the flexibility has been employed in reverse to take in more cheap gas and refill storage.

But spot market prices for gas delivered to Northeast Asia have climbed to an average of more than $12 per million British thermal units so far in June, up from less than $9 in February and March.

Prices are no longer especially cheap compared with prior years. China is likely to reduce discretionary purchases and slow the rate of inventory accumulation.

As it backs away from the spot market, more LNG will be sent to Europe as well as price-sensitive customers in south and southeast Asia.

By Reuters, John Kemp / June 24, 2024

Oil refiners are making less money selling their gasoline as demand during the peak summer driving season has fallen short of what they expected when many of them boosted production.

Softness in gasoline markets have upended years of record profits on selling transportation fuels. In the U.S., the world’s largest gasoline market, refiners ramped up sharply, expecting demand that never materialized. U.S. gasoline demand was 9 million barrels per day (bpd) in the first week of June, 1.7% below last year and seasonally the lowest since 2021, government data showed.

In Asia, weakness in the gasoline market has already led to run cuts, and refiners elsewhere are also likely to pull back in weeks ahead. This could reduce global demand for crude oil.

“Given the retreat from elevated margins, we cite risk to refiners’ continued maximum output strategy to reap record profits,” BMI, a unit of Fitch Solutions, said in a note last month.

Brent oil prices are down about 9% from a mid-April peak to around $83 a barrel, most recently on concerns that the OPEC+ producer group will add supply to the market. The producer group last week warned that a slow start to the summer driving season and low margins are weighing on sentiment.

Even with crude prices slipping, Asian refiners’ profit on making gasoline from a barrel of Brent halved in the last week of May to about $4 per barrel. A glut of fuel supplies prompted the fall in refining margins, Wood Mackenzie analyst Priti Mehta said.

Overall refining margins fell under $2 a barrel in Singapore in May, compared with an average of $5 a year ago.

European gasoline refining margins fell to $10.80 a barrel on June 13, the lowest since January 25. U.S. gasoline crack spread, the difference between gasoline futures and the cost of WTI crude oil , was under $22.50 a barrel for the first time since February.

PULLBACK

Taiwan’s Formosa Petrochemical Corp, one of Asia’s largest refined products exporters, plans to cut run rates at its crude distillation units in June to 440,000 bpd, down 40,000 bpd from its original plan to process 480,000 bpd.

“Increased flows from the Middle East to Asia and increased Indian exports are weakening the cracks, otherwise demand in Asia is healthy,” a spokesperson for Formosa told Reuters.

U.S. demand has been pressured by a mix of factors, including more people flying instead of driving long distances and more fuel-efficient cars and electric vehicles, UBS analyst Giovanni Staunovo said last month.

Higher output from American refineries, combined with weak demand, has lifted U.S. gasoline stockpiles by 5.7 million barrels since the start of April to 233.5 million barrels by June 7, the highest for this time since 2021.

U.S. refiners cut run-rates to 95% in the week ended June 7, after utilizing a one-year high of 95.4% in the prior week, U.S. Energy Information Administration (EIA) data showed. That was the first cut since April.

They will need to lower rates further if demand remains lackluster, Mizuho analyst Robert Yawger said.

“We’re looking at the potential for one of the worst years for summer U.S. gasoline demand in the post-COVID world. No way that refiners can continue to crank fuels at 95% utilization,” he said.

The EIA on Tuesday lowered its forecast for U.S. gasoline consumption this year to 8.89 million bpd from an earlier estimate of 8.91 million.

OVERWHELMING SUPPLY

Margins should improve as U.S. gasoline rises as it typically does throughout the summer, Rabobank strategist Joe DeLaura said. Yet he warned the market has consistently underperformed.

Margins should get some support from a slower-than-expected ramp up of new refineries such as Mexico’s Olmeca refinery in Dos Bocas, which is aiming to lower the country’s import needs. As of May, however, Dos Bocas was behind schedule and did not produce commercially viable gasoline and diesel. In Nigeria, the Dangote refinery delayed gasoline deliveries until July.

The market must still adjust to overwhelming supply growth from new refineries ramping up and expansions of existing plants which have boosted fuel exports from the Middle East, India and China.

Gasoline exports from the Middle East have been at seasonal records over the last six months, according to Kpler data.

Indian and Chinese refiners are taking advantage of access to discounted Russian oil, Mehta said. Their higher supplies are likely to keep Asian gasoline cracks under pressure through the summer, she said.

“The peak for gasoline (cracks) was already reached in April, when cracks averaged $17.3/bbl Dubai crude in Asia. We don’t expect them to strengthen a lot through the summer period,” Mehta said.

Chinese gasoline exports grew by about 100,000 bpd in May from April, ending last month at around 350,000 bpd, according to WoodMac. Indian gasoline exports averaged 360,000 bpd in May, up 50,000 bpd on the month.

By: Reuters / June 18, 2024

U.S. crude oil refining capacity rose 1.5% to 18.38 million barrels per day (bpd) this year, a government report showed on Friday as a major new expansion in Texas boosted capacity.

The Energy Information Administration (EIA) said the figures indicate capacity online as of Jan. 1, which reflected for the first time the startup last year of an about 250,000 bpd expansion to Exxon Mobil’s Beaumont, Texas, refinery.

The gain was a second year in a row of increases due to expansions at existing operations. Still, processing capacity at the start of 2024 remained more than 500,000 bpd below the 2019 peak of 18.98 million bpd, which came before a wave of plant closures and conversions during the COVID-19 pandemic.

Refiners process crude oil into gasoline, diesel, jet fuel and other products.

Marathon Petroleum Corp remained the largest refiner in the United States, able to process up to 2.95 million bpd, or 16% of the country’s total, at its 13 U.S. plants, the EIA report showed.

Valero Energy Corp (VLO.N) was the second-largest U.S. refiner by volume with its 2.21 million bpd capacity equal to about 12% of the total.

Exxon was third largest with nearly 1.95 million bpd after a $2 billion expansion to its Beaumont refinery came online in spring, 2023, raising that facility’s processing capacity to 609,000 bpd.

The fourth largest refiner, Phillips 66, can process 1.39 million bpd while the fifth and sixth largest – PBF Energy and Chevron Corp – can each process more than 1 million bpd.

The sixth-largest refiner, Citgo Petroleum, is facing a court-ordered auction of shares in its parent that could lead to a change in ownership before the summer ends. Court officials are reviewing multi-billion-dollar bids for the shares and have scheduled a hearing on the offer in July.

By: Reuters / June 18, 2024

Glocal Green and Norwegian Hydrogen will collaborate on the development of green hydrogen in conjunction with bio-methanol production.

The two companies entered into a Letter of Intent two years ago and have now agreed to establish hydrogen production that will be connected to Glocal Green’s planned bio-methanol plant.

The concept will combine bio-waste and hydrogen, with the energy from the biomass, together with the energy from the added hydrogen, providing an “outstanding yield” to the input power, resulting in a green liquid hydrogen carrier at a competitive price.

The initial project is in Oyer, Norway, and will have an annual production of 150,000 tonnes of bio-e-methanol, which will involve local production of 15,000 tonnes of green hydrogen from electrolysis.

The hydrogen production will be organised into a separate, joint owned company.

Glocal Green’s CEO, Dag Nikolai Ryste, explained that the two-year study carried out by the companies has now resulted in a “clear win-win model between the parties.” He added, “This efficiency will benefit all other parties along this holistic value chain, and not least the market.”

Jens Berge, CEO of Norwegian Hydrogen, added, “By combining our resources and expertise, we can offer sustainable solutions that meet the increasing demand for green fuels.”

Beyond the initial project in Oyer, the two organisations will aim to develop similar projects in the Nordic region, before potentially expanding.

By: H2 View / June 18, 2024