Shell Invests to Repurpose German Energy and Chemicals Park Rheinland

Shell Deutschland GmbH has taken a final investment decision (FID) to convert the hydrocracker of the Wesseling site at the Energy and Chemicals Park Rheinland into a production unit for Group III base oils, used in making high-quality lubricants such as engine and transmission oils. Crude oil processing will end at the Wesseling site by 2025 but will continue at the Godorf site.

Huibert Vigeveno, Shell’s Downstream and Renewables Director, said: “The repurposing of this European refinery is a significant step towards serving our growing lubricant customer base with premium base oils. This investment is part of Shell’s drive to create more value with less emissions.”

The high degree of electrification of the base oil plant, as well as the ceasing of crude oil processing into fuels at the Wesseling site, is expected to reduce Shell’s scope 1 and 2 carbon emissions (those which come directly from our operations and those from the energy we buy to run our operations) by around 620,000 tonnes a year. Shell’s target is to become a net-zero emissions energy business by 2050.

The new base oil plant is expected to start operations in the second half of this decade. It will have a production capacity of around 300,000 tonnes a year, equivalent to about 9% of current EU demand and 40% of Germany’s demand for base oils.

By Shell / Hamburg , 01.29.2024

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

By Atishya Nayak

ARA gasoline stocks at 25-month low (Week 1 – 2024)

The volume of oil products held in independent storage at the Amsterdam-Rotterdam-Antwerp (ARA) hub rose in the week to 3 January, according to consultancy Insights Global.

Independently-held gasoline stocks at ARA continued their downward trend for a fifth consecutive week, dropping to the lowest since December 2021. The stocks fell after a drop in the week to 27 December, reflecting slower export demand, while gasoline blending activity remained low. Inland demand also declined as there was little need to move refined products up the Rhine after refining capacity in southern Germany was brought back online.

Gasoline cargoes arrived at ARA from origins in Scandinavia and across western and southern Europe on the week. Cargoes went out to the Mediterranean and Latin America, but not the US. Cargoes also went to Germany and France.

Despite slower gasoline blending demand on the week, some naphtha restocking took place up the Rhine. The Dimitri, a Litasco-booked LR2 tanker departed the hub with naphtha with delivery options in Japan. Naphtha stocks at the ARA hub fell on the week.

Independently-held gasoil stocks, which are mostly road diesel, were a pc lower on the week and another pc lower on the year, registering. Exports appeared to be stronger while fewer cargoes arrived. Gasoil cargoes mostly came from western Europe, India and the US. Outgoing cargoes were on the way to Latin America, Scandinavia, western Europe and Poland.

Jet fuel stocks increased on week to their highest in nearly two months, which may reflect weaker air travel demand after the Christmas holiday period. Cargoes arrived at ARA from Kuwait and India, while they left for Norway and the UK.

Independently-held fuel oil stocks grew on week to their highest since July. Higher prices for HSFO in ARA and a weaker Singapore market meant that the arbitrage to Singapore was not workable on the week, helping the stocks to build. Fuel oil cargoes left ARA for the Caribbean, western Europe, the Mediterranean and Scandinavia, while they arrived from India, the Mediterranean, western Europe and the US.

By Mykyta Hryshchuk