Taiwan’s Formosa buys first ever US crude to replace Middle east oil
Taiwanese oil refiner Formosa Petrochemical has bought a US crude oil cargo for the first time to replace Middle East crude, the company spokesman said on Monday. The company bought 1 million barrels of US Mars crude to be delivered between the second-half of September and the second-half of October as its price was competitive with those of Middle East oil, Formosa’s spokesman KY Lin told Reuters. Vernon Davis Jersey
Energy giants opening natural gas spigots, fueling profit rise
The world’s largest oil companies are pumping more natural gas than ever before, helping to spur a rise in profits while sating rising global demand for fuels that can mitigate global greenhouse gas emissions. This marks a shift over the past decade for an industry that once focused predominantly on crude oil, with gas in most cases an after-thought. Now, the rise of gas-powered electric generation, surging production from U.S shale fields and the burgeoning liquefied natural gas (LNG) industry that makes shipping the fuel possible, have conspired to create a boom. BP Plc, Exxon Mobil Corp, Royal Dutch Shell Plc, Total SA and Chevron Corp have collectively increased natural gas output 15 percent in the past decade thanks to better technology and lower costs, according to data from Wood Mackenzie energy consultancy. Analysts expect all to post double-digit increases in second-quarter profit in coming days, according to Thomson Reuters I/B/E/S. “LNG is the growth commodity for these companies,” said Brian Youngberg, an energy industry analyst with Edward Jones, who expects the global LNG industry to grow at least 4 percent annually for the next five years. At Total, gas is actually 61 percent of output, up from 47 percent as recently as 10 years ago, according to WoodMac. Total is expected by analysts to post a 44 percent jump in second-quarter profit on Thursday to $3.56 billion, according to Thomson Reuters I/B/E/S. FUTURE PROSPECTS Even as gas production has risen, so too have reserves of natural gas. International energy companies saw gas reserves jump 16 percent last year to 35.33 billion cubic feet, according to a study by the EY consultancy. “There are investments and capital expenditures being made to increase the level of gas reserves, and that should only continue,” said Herb Listen, an EY energy analyst. Exxon, for its part, sees natural gas usage growing at the fastest rate of any energy type out through 2040, reaching a quarter of global demand by that time. “Worries about energy supplies have faded away, erased in large part by natural gas,” Exxon Chief Executive Darren Woods told the World Gas Conference last month in Washington, D.C. Exxon is expected by analysts to post a 62 percent increase in quarterly profit to $5.45 billion on Friday, according to Thomson Reuters I/B/E/S. Gas does have limitations. It’s harder to transport than crude oil, which can be stored indefinitely in tanks, and it must be processed right away, boosting costs. But greenhouse emissions from gas are far less than coal or oil when it is burned, boosting its appeal for a sector eager to combat allegations that it is the primary cause of anthropogenic climate change. “I’m confident that natural gas will play a central role in meeting global energy needs for decades,” Mike Wirth, Chevron’s chief executive, said at the World Gas Conference. Chevron, which operates two major LNG facilities in Australia, is expected by analysts to post quarterly profit of $4 billion on Friday, more than double year-ago levels, according to Thomson Reuters I/B/E/S. Shell put natural gas at the heart of its long-term strategy with the $53 billion acquisition of BG Group in 2016. The Anglo-Dutch company, already the world’s largest LNG trader, is expected by analysts to post a 68 percent jump in quarterly profit to $6.08 billion on Thursday, according to Thomson Reuters I/B/E/S. London-based BP is going through the fastest growth era in its history with plans to boost production by around 900,000 barrels of oil equivalent by 2021. The company launched eight projects in 2017 and is set to launch seven more this year, most of which are related to gas. Analysts expect BP to post a more-than fourfold jump in quarterly profit to $2.66 billion on July 31, according to Thomson Reuters I/B/E/S. Andrew Luck Jersey
The evolving energy landscape in India: Opportunities for investments
India’s energy use will grow at a rapid pace to fuel economic development, urbanisation, and improved energy access . This provides a $750 billion investment opportunity for investors. The energy sector globally is going through a transition. Oil prices have rallied to a four-year-high, on the back of increasing demand and production cuts by both Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC members. Now it has reached a point where India and other oil importing countries are starting to feel the heat. The Petroleum Planning & Analysis Cell (PPAC) estimates that even at an average crude price of $65 a barrel, India’s import bill could reach almost $110 billion in FY18-19, a jump of almost 25% over $88 billion in FY17-18. This would imply a significant deterioration in the current account deficit, increase in inflation and adverse effect on the overall growth prospects of the economy. India continues to be the fastest growing large economy in the world. The Jan-March quarter of 2018, saw a 7.7% GDP growth rate, with more than 7% growth in electricity consumption, and more than 5% growth in consumption of petroleum products. And this trend in energy consumption will continue in the medium- to long-term. International agencies including International Energy Agency (IEA), OPEC and BP etc. are projecting India’s energy demand to grow in excess of 5% over the next two decades, fastest among major economies in the world. Interestingly, as the world transitions towards a low-carbon economy, the impact on ‘import dependent’ nations is likely to be more profound and rapid. India is heavily dependent on fossil fuel imports (83% for crude, 50% for LNG and 18% for coal, though coal imports have come down in the recent years). Falling prices of solar photovoltaic (PV) power generation costs, expectations of falling battery storage costs, and adoption of electric vehicles (EV) is going to transform the energy landscape in the coming two decades. Prime Minister Narendra Modi, while elaborating on his vision for energy sector in India, alluded to the ‘seven horses of the chariot of the sun God,’ emphasising on the need for India to tap into all affordable and sustainable sources of energy. With overwhelming focus on solar, wind, biomass, diversifying supply reliance beyond the conventional coal, hydro-, nuclear-, and gas- based power generation would be a key imperative for future. India would need to explore all possible sources of energy for greater access, security, affordability and sustainability. Government initiatives over the last four years are a clear indication of the fact that India is gearing up to embrace this transition. It has accelerated the target for renewable energy capacity to reach 225 GW by 2022. The PM has set the target of reducing oil import by 10%, by 2022, through an increase in domestic exploration and production activities, and harnessing the potential of bio-fuels. There is considerable thrust on moving towards a gas-based economy and massive investments have been planned on developing pipeline infrastructure, LNG facilities, and expanding the City Gas Distribution (CGD) network, to support this move. In the wake of these developments, Deloitte came out with a thought paper on energy transitions and investment opportunities in the Indian energy sector, as a part of the IEF Summit in April 2018. Emerging trends reveal a plethora of investment opportunities across the value chain. While part of this investment would be towards capacity ramp-up and development of supporting infrastructure, a large share of it would also be attributed to systemic innovation and digital interventions across the value chain. In the power sector, electricity generation has shown considerable growth in the last few years, and India has successfully transitioned from an era of chronic power shortages, into a situation of over-capacity. This will lead to almost negligible or no investment in the conventional coal- based generation capacity in the next 5 to 7 years. The focus in generation segment will largely be on renewable energy, solar power in particular. Electricity distribution, however, remains an area where state utilities have considerable ground to cover, as the government is targeting universal access of 24*7 electricity to all Indian households, having reached all villages in April 2018. The government is therefore focusing on developing initiatives around smart grids, smart metering, and automation solutions for the utilities. Digital transformation of utilities to improve asset utilisation and reliability, is another area which is likely to see growth. Battery and storage solutions market could also see growth spurt in foreseeable future, and is garnering considerable investor interest. Overall, power and utilities, together with the renewable energy sector, could attract investments of over $425 billion. Oil & gas sector in India has also seen several transformational reforms in the last four years. Access to clean cooking fuel has expanded rapidly. Through PM UJJWALA Yojana, nearly 40 million households have been given free LPG gas connection and the government is targeting another 40 million through this scheme. Through HELP, the entire licensing regime in the upstream sector has been liberalised and through continuous rounds of bidding, India’s sedimentary basin will be fully covered from an exploration & production (E&P) standpoint. Over the last two decades, India has emerged as a refining hub in Asia, serving a massive domestic market for refined petroleum products and also catering to the exports market. Some of the key areas of focus in the downstream value chain include overall energy efficiency, upgrading refineries to produce BS-VI compliant fuels and so on. Petrochemicals also offer a great opportunity for the incumbents and is likely to grow at a CAGR of 10% over the next five years, to reach the $100 billion mark by 2022. Oil & gas segment could witness investments to the tune of $325 billion over the next decade. Overall, what comes out clearly is that India’s energy use will grow at a rapid pace to fuel economic development, urbanisation, improved energy access and improved manufacturing base. This provides a $750 billion investment opportunity for investors in the energy sector over the
5 oil PSUs sign JV pact for N-E Natural Gas Pipeline Grid
Five central oil PSUs – IOCL, ONGC, GAIL, OIL and NRL – today signed a joint venture agreement for executing the North-East Natural Gas Pipeline Grid as a step towards the Urja Ganga Gas Pipeline Project, a NRL statement said here. The JV company shall develop, build, operate and maintain the Natural Gas Pipeline Grid connecting Guwahati to the other major North-Eastern cities and major load centres such as Numaligarh Refinery and integrating it with gas producing fields, wherever feasible, in the region. The JV agreement was signed by IOCL Executive Director (Project) H K Singh, ONGC General Manager R Kaul, GAIL Chief General Manager (PD) D M Rao, OIL Chief General Manager (PL) B K Mishra and NRL Senior Chief General Manager (Corporate Affairs) A K Bhattacharya, the statement said. The Rs 6000 crore Grid’s estimated length would be around 1500 km, the statement said adding that the tentative time schedule for commissioning it would be four years, including one year for pre-project activities. The JV company will have equal equity contribution from all the partners. The project will connect the state capitals of all the eight North Eastern states – Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim and Tripura. The Gas Grid Project will connect all NE States to the National Gas Grid through Barauni-Guwahati Gas Pipeline being laid by GAIL. From Guwahati, the pipeline will extend to Numaligarh, Dimapur, Kohima and Imphal in one direction; Shillong, Silchar, Aizawl and Agartala in the second direction and to Itanagar in the third direction. Gangtok will be connected from Siliguri from the gas pipeline of GAIL coming from Barauni to Guwahati. Evgeny Svechnikov Womens Jersey
Spot LNG prices slide as demand retreats in Japan, China, South Korea
Asian spot liquefied natural gas (LNG) prices softened for another week as the focus of purchasing activity switched to September, encountering weak demand, new supply and a falling yuan potentially sapping Chinese demand. Spot prices for September delivery in Asia were assessed at $9.50 per million British thermal units (Btu), down 50 cents from the previous week. Traders Vitol, Trafigura and Diamond Gas International offered five cargoes in total via the Platts Market on Close process but there were no takers even as offers on some of the cargoes slipped to around $9.05 per mmBtu, traders said. In the world’s three-biggest LNG importers Japan, China and South Korea demand weakened or was set to drop later in the year. Already, Japanese LNG imports in June fell to the lowest in more than two years as utilities switched on more nuclear reactors shut following the Fukushima nuclear disaster in 2011. Japan has six reactors operating and three others have passed safety inspections and could be operating by October, allowing utilities to switch away from LNG. With temperatures in Japan set to fall back in line with average levels over the next week, demand for gas should also be tempered as cooling demand dips. Chinese demand could be reduced by the yuan’s sharp slide against the U.S. dollar to a one-year low as the trade dispute between Beijing and Washington unnerves markets, making U.S. dollar-denominated LNG more costly for Chinese buyers. The pace of spot purchasing has slackened in China although one deal was heard done this week at an estimated $9.50 per mmBtu, sources said. Two Arctic shipments from Russia’s Yamal project flowed to China as ice melt along the Northern Sea Route cleared a path, speeding up deliveries to the world’s second-biggest LNG consumer, potentially curbing China’s call on spot purchases for now. In South Korea, imports are set to ease from record levels racked up in the first half of the year, with appetite for the fuel from utilities seen fading as a raft of nuclear power stations come back online. With an average of only six reactors expected to be offline over the rest of the year, analysts say shipments of LNG into the world’s No.3 importer of the fuel are likely to decline. Restocking LNG inventory at South Korean terminals is already well under way ahead of winter, sources said. South Korea’s Korea Midland Power Co sought a cargo for November delivery via tender on Friday. Russia’s Sakhalin II LNG project added to supply this week after offering a cargo loading on Sept. 5. In the Atlantic, Trinidad’s Point Fortin LNG Exports also offered a cargo loading at the end of August. Furthermore, new supplies are expected in September. Japan’s Inpex expects its Ichthys plant in Australia to start up in September, along with the second production train at Yamal in Russia, boosting shipments to world markets. European spot prices so far remain uncompetitive with Asia in drawing away Qatari cargoes, as storage inventories recover across the continent. Indian Oil Corp was seeking a cargo for late August delivery. Nick Vigil Womens Jersey
Indian Navy helps ONGC in stopping offshore gas leak at Bombay High
Around noon Indian Navy helicopter was deployed to fly with ONGC technician to fix the gas leakage on an unmanned ONGC platform at Bombay High on Sunday. The operation lasted almost 4-5 hours and the leakage was fixed and averted a major disaster. The Indian Navy received an alert from the ONGC about a gas leak reported onboard the offshore ONGC platform S1-6. “Since the ONGC field helicopters could not undertake the mission due to adverse weather conditions they asked for assistance,” said a spokesperson of the Indian Navy. The Indian Navy launched a Seaking 42C helicopter to transfer the ONGC technical team to the platform on 22 so that repairs could be undertaken. “The naval helicopter had to undertake this mission in challenging circumstances including strong and gusting winds of over 30 knots. Due to the small size of the helipad on the imperiled offshore platform, the repair team had to be winched down from the helicopter. The daring mission was carried out with skillful precision and helped to avert a potentially dangerous outcome,” said the official. Morgan Moses Authentic Jersey
Donald Trump Saudi oil Saudis pump more crude oil for Trump, then doubt if it’s needed
Under pressure from US President Donald Trump, Saudi Arabia has rushed to boost oil production — only to discover that global markets might not yet need it. The kingdom’s crude output surged the most in three years last month, as Trump demanded his ally’s help in cooling gasoline prices and filling in the supply gap that will be created by his sanctions on Iran. Yet the Saudis are struggling to sell as much extra oil as they’d hoped, and are privately fretting that they may have opened the taps too quickly, according to people briefed by Riyadh in the last few days. “Saudi Arabia and several other OPEC members have increased exports sharply ahead of sanctions on Iran, and the timing mismatch between these effects is pressuring oil prices,” said Martijn Rats, managing director at Morgan Stanley in London. A rare public statement from the Saudi Energy Ministry on Thursday could be taken as an illustration of their unease. It rejected as “without basis” any concerns that the kingdom was moving to oversupply world markets. Exports would be stable this month and fall in August, it said. Price Pressure The Saudis and their allies — which include several neighbors from the Gulf Cooperation Council and also non-OPEC producer Russia — promised at the Organization of Petroleum Exporting Countries’ last meeting in late June to boost output by about 1 million barrels a day to offset disruptions in Venezuela and Libya, plus the looming losses in Iran. They were reacting to pressure from Trump, who was bashing the cartel on Twitter after London crude price hit a three-year high of more than $80 a barrel in May. Prices have since retreated to about $73 as Libya restored some halted output and the escalating U.S.-China trade war stoked fears about the strength of demand. “They’re pushing out a heck of a lot of crude right now, and they’re worried about the downward pressure on prices,” said Mike Wittner, head of oil market research at Societe Generale SA in New York. “The Saudis are trying to thread a needle right now, and the width of that needle is $70 to $80.” Oil rose in response to the ministry’s statement and Brent crude, the international benchmark, was 0.5 per cent higher at $72.92 a barrel in London as of 8:13 am on Friday. Saudi Arabia initially planned to reach record output of 10.8 million barrels a day this month, people briefed on production policy said late last month. That level was always dependent on the strength of domestic and international demand, so could end up ranging from 10.6 million to 11 million, they said. The kingdom told fellow producers on Wednesday that output in July will be in line with June’s level of just below 10.5 million barrels a day, people familiar with the matter said. Iran Sanctions The impact of US sanctions on Iran’s oil shipments, which remains highly uncertain, will play a big part in determining the final outcome. Since quitting the international nuclear agreement with Iran, the Trump administration has sent conflicting signals, indicating last month that it intended to choke off Iranian crude exports entirely. More recently, however, officials such as Secretary of State Mike Pompeo and Treasury Secretary Steve Mnuchin have suggested a more flexible approach could be taken. Iranian exports are already starting to fall, with shipments to Europe slumping by about 50 per cent in June, according to estimates from the International Energy Agency. A more significant supply gap won’t emerge until sanctions enter full force in November, according to the people who spoke with the Saudis, who asked not to be identified as the talks were private. As a result, the kingdom seems to be having difficulty right now placing all the barrels it wanted to. The problem is being compounded by weak appetite for crude in Asia, where concerns are building about the strength of demand, consultant Energy Aspects Ltd. said. “This is a market where the increase in GCC and Russian supplies has come at a time when the refinery bid is lacking,” said Amrita Sen, Energy Aspects’ chief oil analyst. Uncertain Appetite Saudi crude exports fell by about 500,000 barrels a day to 6.7 million in the first half of July compared with the same period in June, tanker tracking by Bloomberg shows. According to the statement on Thursday from the Energy Ministry, which cited Saudi Arabia’s liaison to OPEC Adeeb Al-Aama, exports for this month as a whole will be in line with June’s levels, and will decline by 100,000 barrels a day in August. With so many factors shifting the balance between global supply and demand, the appetite for additional Saudi crude may change, especially as the extent of Iran’s losses becomes clearer. Market sentiment could flip again to focus on worries over whether the kingdom has enough idle production capacity to prevent a shortage emerging on the global market. “We have hardly started to see a reduction in flows from Iran,” said Societe Generale’s Wittner. “Though there’s a lot of crude coming out from Saudi Arabia now, spare capacity is really going to be the big issue going forward. And spare capacity is getting very tight very quickly.”
Centre clears LNG terminal, hazardous waste treatment plant for TN
Mega projects in Tamil Nadu – a Liquefied Natural Gas (LNG) terminal at Ennore and an integrated common hazardous waste treatment storage and disposal facility in Gummidipoondi – have been cleared by the central government. Minutes of a meeting of the Union ministry of environment, forests and climate change’s expert appraisal committee (EAC) said the environment and coastal regulation zone (CRZ) clearance had been amended for setting up the LNG terminal. The terminal, first taken up by Indian Oil Corporation, is now being executed by Indian Oil LNG Private Limited and will each year handle 5 million tonnes of LNG per annum to be used as fuel for captive power plants, having gas engine generators. Giving a detailed presentation on the hazardous waste management facility at the SIPCOT industrial complex in Gummidipoondi, Tamil Nadu Waste Management Limited (TNWML) and its consultant Ramky Enviro Services Private Limited said industrial waste management association had been roped in to set up the facility. There was no need to hold a public hearing for the project as it was to come up on a 66-acre plot in the SIPCOT complex, it said. TNWML should allocate about 33% of land for greenbelt development, mandated in the ministry’s guidelines, and 9 crore for Environment Management Plan with a recurring cost of 1.50 crore every year. Jake Fisher Jersey
Is The LNG Floating Storage Boom Over?
The relatively young industry of projects using floating storage and regasification units (FSRU) has enjoyed boom years since 2015 as many new importers of liquefied natural gas (LNG) used these floating types of carriers that are cheaper than having to build an entire onshore LNG import terminal. But the golden years of the FSRU, the first of which was used in 2005, may be over, at least for now, because the voracious Chinese natural gas demand has upended the LNG market and made less urgent the need for FSRU projects in new and much smaller markets. The FSRU market is still set to grow, but at a slower pace than in the past two years, according to analysts. Before 2017, a rising trend among emerging markets to seek the cleaner-than-coal fuel raised the number of LNG importers around the world, and many of the newcomers to the LNG ‘buyers’ club’ used the FSRU option. At around US$300-400 million, FSRU projects cost half the price of an onshore terminal. FSRUs are also flexible because the vessel can be used elsewhere once it is not needed. But then came the winter of 2017-2018 and the massive Chinese switch from coal-fired to natural gas-fired energy and surging LNG demand in Asia’s biggest market. This resulted in China lapping up global excess LNG supply and making FSRU projects in other—smaller—countries less attractive. Related: Chinese Oil Demand Growth Could Slow Down Soon “In the last year or so, FSRUs have suffered a bit of a setback from the stellar growth they were previously enjoying,” Andrew Buckland, Wood Mackenzie’s global LNG trade and shipping principal analyst, told Reuters. “Some of that is down to conditions unique to particular proposed projects. But a lot of it is more to do with demand being stronger than expected in existing conventional markets,” Buckland says. The Chinese push to cut pollution and make millions of households switch to natural gas from coal for heating resulted in China becoming the world’s second-largest LNG importer in 2017, outpacing South Korea and second only to Japan, the U.S. EIA said in February. Chinese LNG imports surged 46 percent last year. Despite the fact that China increased its domestic production and pipeline imports last year, natural gas shortages in northern China led to record levels of LNG imports during the winter. Overall, natural gas imports accounted for 40 percent of China’s 2017 natural gas supply, and LNG made up more than half of those imports, the EIA said. China is now looking to double its LNG import terminals, and is also expanding its underground gas storage close to major demand centers and to natural gas pipelines. The change in the LNG demand market, especially in China, has led to slowdown of planned FSRU projects in countries like Chile or South Africa. “Prior to last winter, when it looked like there’d be excess LNG, creating new demand centers via FSRUs looked a more attractive strategy than it does now,” WoodMac’s Buckland told Reuters. “Which is not to say they won’t come back to that in the future,” he added. Major players in the FSRU market are looking to combine FSRU with other business models such as LNG-to-power, or “gas stations” for ships that use LNG as a fuel in north Europe. Related: Houston To Get Its Own Crude Oil Futures As U.S. Exports Rise “The old ‘FSRU only’ business model is becoming crowded with pressure on returns,” one of the leading companies in the sector, Golar, told investors last month, and said it would turn to LNG-to-power projects to boost returns. Still, FSRU technology will continue to unlock demand in new markets, especially in South and Southeast Asia, according to Bloomberg New Energy Finance’s (BNEF) Global LNG Outlook 2018. South and Southeast Asia are expected to become the main drivers for the LNG imports in the world in 2022-2023, said Maggie Kuang, head of Asia-Pacific LNG analysis and lead author of the report. For the LNG market, global imports this year are expected to set a new record and grow by 7.2 percent, BNEF said. “A further surge in demand to 2030 will be driven by environmental measures in China, rising power generation in South and Southeast Asia, and a reduction in domestic gas production in Europe.” Leonard Fournette Jersey