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Imperial Oil Ltd. on April 26 released first quarter financial results, confirming that construction on its renewable diesel project under development at its Strathcona refinery near Edmonton, Alberta, is progressing as scheduled and remains on track for startup in 2025.

Imperial Oil in mid-2021 announced plans to construct a 20,000-barrels per day renewable diesel complex at its Strathcona refinery. The company made a final investment decision in January 2023, with construction beginning soon after.

During a first quarter earnings call, Imperial Oil President and CEO Brad Corson said a number of process unit modules have arrived on site, including the main reactor, which was fully installed during the quarter.

Corson also discussed work to secure renewable feedstock. He noted the company will primarily process feedstock sourced from agricultural producers in Western Canada and thanked the government of Alberta for its recent recognition of the biorefinery’s benefits to the agricultural industry through the Agri-Processing Investment Tax Credit Program.

That tax credit program, established in 2023, offers a 12% non-refundable tax credit bas on eligible capital expenditures. To be considered for the program, corporations must invest at least $10 million in a project to build or expand a value-added agri-processing facility in Alberta. The Alberta government on April 22 announced that the Strathcona biorefinery project had qualified for the program, indicating that Imperial has received conditional approval for an estimated $70 million in tax credits.

By: Biodiesel Magazine / ERIN VOEGELE , May 02, 2024

Saad al-kaabi, the minister of state for energy affairs, the president and ceo of qatarenergy, took part in the world economic forum’s special meeting on global collaboration, growth, and energy for development, which was held in riyadh, the kingdom of saudi arabia, under the patronage of his royal highness muhammed bin salman al saud.

Al-Kaabi took part in a panel discussion titled “People, Policy, Finance: Realizing an Equitable Energy Transition” along with Prince Abdulaziz Bin Salman Al Saud, the Minister of Energy of Saudi Arabia, Kadri Simson, the Commissioner for Energy at the European Commission, Vicki Hollub, the President and CEO of Occidental Petroleum Corporation, Darren Woods, the Chairman and CEO of ExxonMobil, andBørge Brende, the President of the World Economic Forum in Geneva.

The panel placed special emphasis on issues related to a realistic and equitable energy transition that will enhance energy’s role as an enabler of development, while achieving global climate goals.

Speaking at the panel discussion, Al-Kaabi highlighted the important issue of access to energy and the need for a fair energy transition, saying: “There are a billion people who do not have access to basic electricity. There will be anywhere between one and two billion additional people within the next thirty years, who will need access to energy. Therefore, they shouldn’t be selfish and just talk about what they want for their house and forget the neighborhood, if you will.”

Minister Al-Kaabi criticised demonising oil and gas, saying this will not do humanity any good. He said: “Demand for oil is going to be there for a very long time. You need petrochemicals that wind farms and solar energy cannot produce, and you also need petrochemical plants to make refined products for a very long time. Gas is going to be needed to power the electricity that is needed for expansion and growth. The most important thing is that they all do it in a responsible manner to make sure that humanity can develop and grow.

Al-Kaabi highlighted Qatar’s CO2 capture efforts from production to ship, saying: “Since 2015, they’ve been injecting two and a half million tons per annum of CO2 that they’re capturing from their LNG facilities. They have been doing that long before anybody was talking about sequestration or capture. Qatar has the lowest emissions in an LNG scheme from production to ship in the world.”

Highlighting Qatar’s LNG expansion projects in the North Field, which will reach 142 million tons per annum by 2030, he noted that Qatar “will sequester 11 million tons of carbon from that project. Add to that the construction of 104 LNG ships, all of which will be powered by LNG. They are building the largest blue ammonia plant in the world that has solar power and CO2 sequestration facilities. They are also capturing CO2 from their production sites in the north and sending them via pipeline across Qatar to be injected in the oil field of Dukhan as part of their enhanced oil recovery efforts.”

He added: “They are doing their part, and they have many great stories to tell. They are responsible producers but not many care to look at that.”

Discussions also tackled prospects for energy markets and global growth, the impact of geopolitical crises, and Qatar’s leadership and excellence in leading the global efforts for the energy transition.

Energy access and energy security were also high on the panel’s points of interest, as it remains a prominent challenge amid the energy transition, particularly in emerging and developing markets.

The World Economic Forum Special Meeting on Global Collaboration, Growth and Energy for Development aims to facilitate dialogue between thought leaders and the broader public on a range of topics, including environmental challenges, mental health, digital currencies, artificial intelligence, and smart cities.

By: Trade Arabia / May 02, 2024

Russia, which descended to a negligible trade and economic partner of India with the breakup of the Soviet Union and the great Indian economic reforms in 1991, has emerged as indispensable for the South Asian country. Besides defense, it is an important trade  partner of India. Additionally, with the onset of global sanction on Russia, it has become a major shield to India’s oil economy. 

Paradoxically, while global sanctions on Russia dashed the European economy, it has become boon to India. Russia became the biggest crude oil supplier to India in 2022-23 and the trigger for India’s exports of petroleum refinery products. India imports over 90 percent of crude oil demand.  

In 2022-23, Russia was the 5^th biggest trading partner of India, compared to 25^th in 2021-22.  This has invoked a new era of India-Russia economic relations.

The greater part of the revival in India–Russia economic relations was due to oil supply. Russia played a key role in protecting  India from oil turbulence due to global the oil sanction on Russia. India and China were non-parties to the sanctions. 

As a result, there was no major hike in the prices of petrol, diesel and other refinery products. Inflation, which is the immediate shock of oil price hike, remained cooled.

The EU prohibited maritime exports of Russian oil and levied a price cap of US$60 per barrel in December 2022. This followed suit to the USA, G-7 and Australia for price capping on Russian oil. The angry Russia retaliated and banned the export of oil to these nations on February 1, 2023.

In 2022-23, nearly 22 percent of total crude oil was imported from Russia. Eventually, Russian oil became the biggest base for India’s manufacturing oil refinery products and exports. India imports crude oil, refines them domestically and exports refinery products, such as petrol, diesel, ATF and others. 

To ride over the sanctions, India and Russia set up alternative arrangements. Indian refineries have accepted Russian insurance. Russian oil suppliers are trying to handle Urals oil transport to India by themselves, using their own vessels and shipping arrangement. Further, the Indian government has permitted nine Indian banks to open vostro accounts with Russian banks. This facilitated to deal with Russian oil in rupee trade in a currency swapping deal. The Indian UCO bank has opened the vostro accounts with Russian Gazprombank and VTB banks.

Petroleum refinery products have been the major products in the Indian export basket. Since Russia was the biggest supplier  of crude oil in 2022-23, it played a key role in boosting export of petroleum refinery products. Oil refinery products, which hold biggest share in the total export basket, was the engine for India’s overall exports growth. 

Both in terms of share in growth and share in exports , petroleum refinery products are topping the export basket. For example, while all other major export items  exhibited a normal growth in between 8 to 10 percent, petroleum refinery products spurred by 44.5 percent in 2022-23  y-o-y basis. It’s share in total exports of the country increased to 22.6 percent in 2022-23 , from 15.9 percent in 2021-22.

Russian crude oil, converted into refinery products and exported from India, does not violate internationally recognized Rules of Origin. It has been defined that crude, once refined in another country, is classified for the purpose of trade as originating from the refinery country.  

Thus, notwithstanding ban on import of Russian crude oil under sanctions, Russian crude was flowing through India and China in the form of petroleum refinery  products like petrol, diesel, jet fuels and others. India and China, who are not part of sanctions, were able to legally import Russian  crude and refine them in oil products, according to Centre for Research on Energy and Clean Air (CERA). 

This demonstrates India’s unique balancing imports of crude oil by export of petroleum refinery products. This led to lesser pressure on BOP (Balance of Payment). In 2022-23, India imported crude oil worth US$157,531 million. It exported petroleum refinery products worth $ 97,468 million, leaving a balance of US$60,063 million as the net imports. 

In the preceding year 2021-22, when Russia had negligible share in crude oil imports, net imports were much bigger. It was US$76,237 million, casting more pressure on BOP. This demonstrates Russian significance over Arab oil, depicting a bonanza for a new economic engagement with Russia.   

Russian oil prices were lower than the average basket price of oil imported in India. During April-August 2023-24, while the average basket price of oil was ranging between US$75.9  to $89.7 per barrel, the average price of Russian oil was US$68.9 per barrel. 

The crucial point of the revival of the trade relation with Russia is India’s shift of oil dependency from the Arab world to Russia. This shields India from global uncertainty in oil prices. Repeated OPEC threats for cuts in production and triggering oil prices increased the vulnerability of oil influenced economy of India.

Oil volatility incurs pressure on inflation since over 60 percent of transport of goods, particularly food products, are dealt by  diesel. For the past one and half years, inflation hovers within comfortable zone.

In summing up, earlier oil dependency on Arab countries used to be an uphill task to project the growth of the economy. With the dependency shifting to Russia, it has become palpable to foresee future growth.

By: eurasiareview / John Howard Newcomb April 29, 2024 

Canada’s Trans Mountain pipeline expansion (TMX) is set to enter partial operation on May 1, years behind schedule and at more than four times the original cost – but with the potential to affect oil flows even outside North America.

Canada, the world’s fourth-largest oil producer with nearly 5 million barrels per day (bpd) of output, will have more than enough export pipeline capacity once the C$34 billion ($24.9 billion) TMX becomes fully operational.

The expanded pipeline will ship an extra 590,000 bpd from Alberta to Canada’s Pacific Coast, giving Canada’s heavy crude producers access to U.S. West Coast and Asian markets, and boosting prices for their grades.

Here are some key issues facing the project.

WHEN WILL TMX BE FULLY OPERATIONAL?

Crude will flow through both TMX and the existing 300,000 bpd Trans Mountain line from May 1. The Westridge Marine Terminal in the Port of Vancouver will be able to load cargoes from all three berths, a spokesperson said.

However, Trans Mountain does not expect the first ship to load until the second half of May, and is still awaiting permission to open six more sections of the project, the Canada Energy Regulator (CER) said on Friday.

WHERE WILL THE CRUDE GO?

TMX cargoes are expected to sell to both Chinese and Californian refiners, traders and analysts say.

Many Chinese refineries are set up to process heavy sour crudes, but shipping brokers have warned the cost of hauling crude to Asia on Aframax vessels, a roughly 18-day trip one way, may limit demand.

California has complex refineries that can process both light and heavy crude and is 2-4 days’ voyage away from Vancouver.

WHO ARE THE SHIPPERS?

There 11 committed shippers on TMX, accounting for 80% of volumes. The remaining 20% of capacity will be available for spot shipments.

Committed shippers include Canadian Natural Resources (CNQ.TO), opens new tab, MEG Energy (MEG.TO), opens new tab, Cenovus Energy (CVE.TO), opens new tab, Suncor Energy (SU.TO), opens new tab, BP (BP.L), opens new tab, Chinese state energy major PetroChina and Marathon Petroleum (MPC.N), opens new tab.

WHAT CRUDE WILL IT TRANSPORT?

The new pipeline is expected to ship primarily heavy crude, while the existing line moves mainly light barrels. Multiple grades are being offered for sale from TMX but traders expect this to stabilize to a few grades once trade matures, one source said.

Commodities pricing agency Platts has launched two new daily assessments for crude loaded at Westridge. Pacific Dilbit is similar in quality to Access Western Blend, and Low TAN Dilbit aligns with Cold Lake crude, the agency said last week.

WHY IS THERE A TOLLING DISPUTE?

The budget blowout means TMX has had to raise tolls to recoup some costs. The shippers are disputing the rate increase, and the CER, which approved higher interim tolls last year, will hold a hearing this year to decide the final tolls.

ast week the CER approved a request from shippers to disclose additional detailed cost and expense information.

The dispute is significant because the final tolls will determine the value of the pipeline when Ottawa puts it up for sale.

WHAT IS TMX WORTH TO CANADA?

Some analysts predict the discount on benchmark Canadian heavy crude Western Canada Select will narrow to less than $10 a barrel versus U.S. crude, from a $14 a barrel discount currently, resulting in millions of extra dollars in revenue for Canadian producers.

TMX operations will contribute C$9.2 billion to Canadian GDP and C$2.8 billion in taxes over 20 years from 2024 to 2043, according to Ernst & Young.

The Bank of Canada said the start of commercial operations on TMX will add roughly a quarter of a percentage point to second-quarter GDP growth.

($1 = 1.3669 Canadian dollars)

By: Reuters / Nia Williams, April 29, 2024

Much lower natural gas prices this year compared to 2023 dragged down profits at some of the largest oil and gas companies, which have so far reported a mixed bag of earnings for the first quarter of 2024.

U.S. supermajors ExxonMobil and Chevron, as well as France’s TotalEnergies, all cited lower natural gas prices as a key downward pressure on earnings that couldn’t be fully offset by stable crude oil and liquids realizations and refining margins.

Exxon reported on Friday underwhelming earnings for the first quarter that were lower than consensus estimates due to declining natural gas prices and non-cash adjustments.

The U.S. supermajor booked first-quarter earnings of $8.2 billion, down from $11.4 billion for the first quarter of 2023. Earnings per share were $2.06 for the first quarter of 2024, down from $2.79 for the same period last year.

Exxon’s Q1 2024 earnings per share were below the analyst consensus forecast of $2.19 compiled by The Wall Street Journal.

“Natural gas prices moved back inside the 10-year range, reflecting continued high inventory levels and lower demand,” Exxon’s executives said on the conference call.

Related: Growing Shadow Fleet Makes Oil Price Cap Impossible to Police

On the other hand, refining margins rose to the top of the 10-year range, driven by strong demand, industry downtime, and supply disruptions, while average crude prices were flat in the quarter as the market remained relatively balanced, the company said. But these and a stellar performance in Guyana could not fully offset the weak natural gas prices.      

During the first quarter, the benchmark U.S. natural gas prices at the Henry Hub mostly traded below $2 per million British thermal units (MMBtu) amid a market glut in a warmer winter and lower demand. The low prices even prompted major gas-focused producers to curtail some output in March and April.

The lower natural gas prices hit Chevron’s earnings, too. But unlike Exxon, Chevron slightly beat the analyst earnings estimates, thanks to higher oil and gas production that offset part of the weaker refined product margins and low natural gas prices.

The annual drop in Chevron’s Q1 earnings was primarily due to lower margins on refined product sales and lower natural gas realizations, partly offset by higher upstream sales volumes in the U.S. The supermajor reported a 406,000-barrels-per-day rise in net oil-equivalent production in the United States due to the acquisition of PDC and higher production in the Permian and DJ Basins.

Chevron’s worldwide production was up 12% from a year ago, primarily due to the acquisition of PDC, strong operational performance in the Permian and DJ Basins in the U.S., and the Tengizchevroil affiliate in Kazakhstan.

“Adjusted first quarter earnings were down $1.3 billion versus last year. Adjusted upstream earnings were down modestly. Higher liftings were more than offset by lower natural gas realizations,” Chevron’s CFO Eimear Bonner said on the earnings call with analysts.

Similarly to Chevron, European major TotalEnergies also beat first-quarter estimates even as its net income dropped by 22% from a year ago. Stable oil prices and healthy refining margins failed to fully offset a decline in natural gas prices, but helped TotalEnergies beat analyst forecasts as it reported Q1 earnings on Friday. The company announced additional share buybacks and an increase in the first interim dividend for 2024.

“In a context of sustained oil prices and refining margins but softening gas prices, the Company announced first quarter 2024 adjusted net income of $5.1 billion and cash flow of $8.2 billion, in line with its ambitious 2024 objectives,” TotalEnergies’ chief executive officer Patrick Pouyanné said.

UK-based Shell, the world’s top LNG trader ahead of TotalEnergies, said earlier this month that it expects the trading results in its Integrated Gas division to be lower in the first quarter of 2024 compared to an exceptionally strong fourth quarter of 2023.

The trading and optimization results in Integrated Gas “are expected to be strong, but significantly lower than an exceptional Q4’23,” the company said ahead of the results release on May 2.

By Oilprice / Tsvetana Paraskova – Apr 29, 2024

Saudi oil giant Aramco is exploring the formation of a joint venture in the Saudi Aramco Jubail Refinery Company (SASREF) with Chinese partner Rongsheng Petrochemicals, Aramco said in a statement on Saturday.

Aramco recently signed a cooperation framework agreement that envisions Rongsheng’s potential acquisition of a 50% stake in SASREF, it added.

“The agreement also lays the groundwork for the development of a liquids-to-chemicals expansion project at SASREF, in addition to Aramco’s potential acquisition of a 50% stake in Rongsheng affiliate Ningbo Zhongjin (ZJPC),” Aramco said.

Aramco acquired a 10% interest in Rongsheng in July 2023 through its subsidiary Aramco Overseas Company BV, based in the Netherlands.

Rongsheng in turn owns a 100% equity interest in ZJPC, which operates an aromatics production complex and has an interest in a joint venture that produces purified terephthalic acid.

By: Reuters / Adam Makary,   27 Abr, 2024.

The IEA has released its first forecast for 2025 which shows global oil demand growth slowing to 1.15mn b/d next year — some 700,000 b/d lower than Opec’s latest projection.

In its latest Oil Market Report (OMR), the Paris-based agency also lowered its oil demand growth forecast for this year by 130,000 b/d to 1.2mn b/d, citing lower heating fuel use and a protracted factory slump in advanced economies.

The 2024-25 figures contrast sharply with 2022 when the global economy’s emergence from the Covid-19 pandemic led to a demand increase of 2.25mn b/d — something the IEA said had now largely run its course.

“Despite the deceleration that is forecast, this level of oil demand growth remains largely in line with the pre-Covid trend,” it said. The IEA also reiterated its view that a peak in oil consumption is in sight this decade, although it notes that without an increased investment push into clean energy technologies, “the decline in global oil demand following the peak will not be a steep one”.

The IEA said its 2025 forecast reflects a “somewhat sub-par economic outlook” and included vehicle efficiencies and an expanding electric vehicle (EV) fleet acting as “further drags on oil consumption.”

China, which has led much of the world’s oil demand growth over the past few decades, is slowing down, according to the IEA. The agency lowered its 2024 forecast for Chinese oil demand growth by 80,000 b/d to 540,000 b/d, falling to 330,000 b/d in 2025, although China still remains the single largest contributor to global growth next year.

The IEA’s latest forecasts continue to reflect stark differences with Opec in the way they see oil demand unfolding over the years and decades ahead. Opec sees oil demand growth substantially higher at 2.25mn b/d in 2024 and 1.85mn b/d in 2025.

On global oil supply, the IEA nudged down its 2024 growth estimate by 30,000 b/d to 770,000 b/d. While non-Opec+ production is projected to expand by 1.6mn b/d, this is partially offset by an 820,000 b/d forecast fall from Opec+ — assuming the group’s latest voluntary cuts remain in place until the end of the year.

Relentless oil supply growth from outside Opec+ is set to continue putting pressure on the alliance to keep production lower for longer. The IEA said that additional production from the US, Brazil, Guyana and Canada “alone could come close to meeting world oil demand growth for this year and next.”

The IEA’s latest supply forecast assumes Opec+ voluntary cuts remain in place until the end of 2024, which would keep the market in a deficit of 270,000 b/d, it estimates. Opec+ has yet to decide on its output policy for the second half of the year and may do so at a ministerial meeting scheduled for 1 June in Vienna.

Global observed oil stocks increased by 43.3mn bl to a seven-month high in February, despite a further 24.6mn bl decline in on land stocks, the IEA said. Oil on water rose to a “sizeable” 67.8mn bl in February, driven by shipping disruptions in the Red Sea that have forced vessels to take the longer alternate route around the southern tip of Africa.

By: Argus, Aydin Calik / April 16, 2024

In recent years, the production of renewable diesel and sustainable aviation fuels from biological sources, particularly natural oils, has experienced remarkable growth. This surge is largely driven by global climate change initiatives mandated by governments worldwide, coupled with the increasing emphasis on carbon capture and sequestration. As a result, substantial investments have been made in retrofitting and adapting existing refinery hydroprocessing infrastructure to accommodate natural oils or blends of natural oils with crude oil, facilitating the production of RD and SAF.

The rationale behind these investments lies in the molecular compatibility of natural oils with mid-distillate fuel products like diesel and aviation fuel, as well as the optimization of hydroprocessing units for the removal of unwanted sulfur and oxygen compounds. In modified hydroprocessing applications, the high-temperature decomposition of triglycerides leads to the production of RD and SAF through the hydroprocessing of esters and free fatty acids. The resulting oxygen-free RD and SAF products are fully interchangeable with petroleum hydrocarbons.

However, hydroprocessing of refined natural oils presents its own set of challenges, particularly in terms of corrosion. To address this issue, the authors have developed a molecular mechanistic model to quantify simultaneous high-temperature corrosion caused by naphthenic acids and sulfidation in refinery operations. This model, known as CorrExpert®-Crude, has been adapted to address high-temperature FFA corrosion, given the similarities between FFA and naphthenic acids.

A crucial aspect of modelling corrosion for FFA is understanding the inhibitive role of hydrogen in the presence of iron sulphide species. Although natural oils do not contain sulphur compounds, reactive sulphur species present in coprocessing applications facilitate the formation of a potentially protective nano barrier layer of iron sulphide. Additionally, FeS acts as a catalyst for the reduction of FFA through atomic hydrogen, generated from the dissociation of molecular hydrogen.

The prediction model incorporates factors such as hydrogen partial pressure, residence time, and reactive sulfur concentration to assess FFA corrosion risk for various commonly used natural oils in renewable applications. By considering these parameters, the model provides a comprehensive framework for evaluating corrosion risk and metallurgical performance in RD/SAF units. This pioneering solution offers an easy-to-use tool to enhance the reliability of unit piping and equipment in renewable fuel production facilities.

By: Storage Terminals Magazine, April 15, 2024