Rosneft files $1.4 billion lawsuit against Sakhalin-1 firms ONGC Videsh, others
Russia’s largest oil company Rosneft filed an 89 billion rouble ($1.41 billion) lawsuit on Monday against participants of the Sakhalin-1 oil and gas project operated by ExxonMobil subsidiary Exxon Neftegaz Ltd. The suit, received by an arbitration court in the Sakhalin region in Russia’s Far East, seeks to recover funds gained by parties between 10 July 2015, and 31 May 2018, through “unjust enrichment and interest gained by using other people’s money”, according to paperwork issued by the court. The lawsuit has been filed against five entities, claiming 10 billion roubles from Sakhalinmorneftegaz, 7.5 billion from RN-Astra, 26.7 billion from Exxon Neftegaz Ltd, 26.7 billion from Sakhalin Oil and Gas Development Co., and 17.8 billion from India’s ONGC Videsh Ltd. Sakhalin-1 is operated by Exxon Neftegaz Ltd, through which ExxonMobil owns 30% in the project. Rosneft and ONGC control 20% each. Japanese consortium SODECO owns 30%. A Rosneft spokesperson confirmed it had filed the suit, but declined to elaborate. Exxon Neftegaz said it was “aware of the court action, rejects the claims and will take action to defend the rights of the Sakhalin-1 consortium”. A preliminary court hearing was set for 10 September. Barkevious Mingo Jersey
Oil industry concerned over BNSF’s move to limit retrofit tank cars
U.S. refiners and producers are seeking ways to counter efforts by BNSF Railway Co to limit use of retrofitted oil tank cars following an Iowa derailment last month, Reuters has learned. The crackdown by the country’s largest railroad, owned by Warren Buffett’s Berkshire Hathaway Inc, could take thousands of tank cars off a key rail line at a time when producers and refiners are scrambling to hire them. Demand for oil tanker cars has surged in recent months as oil production in the largest U.S. and Canadian oil plays has outpaced pipeline capacity. The bottleneck has forced rail freight prices up and crude prices down. Lease rates for the new tank cars, called DOT 117s, have surged to more than $1,000 a month per car from $400 a month late last year, according to two brokers. Last month, 14 tank cars carrying sludgy, Canadian oil derailed and punctured in Iowa, sending some 230,000 gallons of oil into a state waterway. The tank cars were retrofits, called DOT 117Rs, according to state and federal officials. After the incident, BNSF told shippers that it was going to ban the retrofitted tank cars in all new contracts, according to three sources familiar with the discussions. Shippers include refiners and producers like Phillips 66 and Exxon Mobil Corp, along with logistics companies such as Enbridge Energy Partners LP. Since 2016, some 11,000 older tank cars have been retrofitted with thicker shells to comply with regulations issued in 2015 following a series of fiery derailments, according to the Railway Supply Institute. Thousands more will need to retrofitted by 2020 to comply with the new regulations. Many of those retrofitted cars are used to carry crude. The American Fuel and Petrochemical Manufacturers, the largest U.S. refinery association, said its members “have raised concerns with BNSF’s decision to refuse certain DOT-authorized tank cars and are currently considering options to address these concerns with the railroad.” The options being considered by the oil industry include legal action and meetings with the head of the rail company. ConocoPhillips, which owns the retrofitted tank cars that derailed in Iowa, owns a number of the redesigned cars. It deferred questions to the American Petroleum Institute (API). The API said it would continue working with federal regulators to ensure oil transportation was safe. BNSF spokeswoman Jessa Lewis said all companies involved in oil transportation by rail needed to work together to ensure only the safest tankers were used. The oil tank cars are owned by shippers, not BNSF, Lewis said. She declined to comment on whether the company had told clients that the retrofitted cars would no longer be available for new contracts. BNSF rail lines haul the most crude oil in the nation, accounting for nearly half of the 88,571 carloads moved in the last quarter of 2017, according to the latest data from the U.S. Department of Transportation. Marquise Goodwin Authentic Jersey
LNG import plan for South Australia targets first gas in mid-2020
A private firm is looking to import liquefied natural gas (LNG) to South Australia starting in 2020, around the same time as two other proposed import projects, looking to fill a supply gap as domestic gas gets sucked into LNG exports. Venice Energy, set up by former BHP Billiton executives, plans to submit a development application to the South Australian government within the next month to park a floating storage and regasification unit (FSRU) in Port Adelaide, Managing Director Kym Winter-Dewhirst said. If regulatory approvals come through by March, construction could begin by June 2019, he told Reuters in an interview. The project would be funded partly by Venice’s owners, management consultancy Integrated Global Partners, with other equity sources which have yet to be lined up. “And then we could have first gas into the South Australian market by June/July 2020,” Winter-Dewhirst said. The LNG import plan is part of a three-stage project with a budget estimated at A$750 million to A$800 million ($556 million to $593 million). That investment includes building a 500 megawatt gas-fired power plant in two phases. Japanese trading company Mitsubishi Corp backed feasibility work on the project and Venice is in talks with Mitsubishi for future participation, Winter-Dewhirst said. “We are studying many possibilities for our future business developments in Australia and it’s one of the options,” a Mitsubishi spokesman said when asked about the project. He declined to elaborate further. Venice Energy’s plan coincides with projects proposed by AGL Energy and a group called Australian Industrial Energy, backed by top Japanese LNG importer JERA, to import the superchilled fuel to the states of Victoria and New South Wales. Gas prices have soared there as domestic supply has been piped into LNG export plants in Queensland. At the same time, the dominant gas supplier to those states, ExxonMobil Corp, has also said it was considering importing LNG to Victoria. All are pushing ahead despite a recent report by Australia’s energy market operator saying it no longer expects a gas shortfall in southeastern Australia before 2030. Australia’s government commodities forecaster said in a recent report that imports could help cap soaring gas prices, but the economics might not work as it might be tough to find cheap LNG beyond 2022. Energy consultants Wood Mackenzie forecast in a report last week that only one LNG import terminal would be needed until the 2030s. However, Venice Energy’s Winter-Dewhirst said given the costs of piping gas across long distances in Australia, his company might be able to work out gas swaps with AGL’s LNG project. “They’re complementary in some ways,” he said. Venice Energy’s plans were first reported by the Australian Financial Review. Jake Muzzin Jersey
Ban on non-BS-VI-compliant vehicles: Oil, environment ministries clash in Supreme Court
In a peculiar case, petroleum and environment ministries have taken a contradictory stand before the Supreme Court on banning sale of non-BS-VI-compliant vehicles from April 1, 2020, the date by which the cleaner fuel will be made available across the country. In an affidavit, the ministry of petroleum and natural gas contended that not only manufacturing but even sale of BS-VI non-compliant or lower vintage vehicles be banned from April 2020 to realise full benefit of the cleaner fuel. This stand, however, is contradictory to the submission of ministry of environment and forests which has consistently taken a stand that automobile companies should be allowed to sell their inventory of BS-IV vehicles till the end of June 2020 for two wheelers and up to September for four wheelers. “The Public Sector Oil Marketing companies are investing approximately Rs 28,000 crore for upgradation of refineries for supply of BS-VI fuels. This investment is being made to upgrade the fuel quality for better environment. The environmental benefits of BS-VI fuels are only marginal if it is used in BS-IV or lower vintage vehicles. If sale of BS-VI non-compliant vehicles is allowed after April 1, 2020, the environmental benefits in terms of reduction in particulate matter emission is only marginal in spite of huge public investment. Hence, sale of BS-VI non-compliant vehicles should not be allowed after March 31, 2020,” the petroleum ministry said. It even hinted the cut-off date to stop manufacturing of BS-IV vehicle should be advanced to ensure such vehicles are not sold after March 31, 2020. The environment ministry had earlier told the apex court that manufacturing of BS-IV vehicles be banned and not their sale after BS-VI norms kick in to allow auto manufactures to exhaust their stocks. “If the date of shift to BSVI becomes date of registration then it would actually reduce the time available to industry for manufacturing to a mere two years or so although BS-VI fuel will not be available across the country till April 1, 2020 … It may also be difficult to have zero stock of BS-IV with dealers on March 31, 2020 as sales cannot be predicted in advance,” the ministry’s affidavit said. Advocate Aparajita Singh, who is assisting the court as amicus curiae, contended that people are dying of pollution and there was no need to give grace period to auto-makers to sell BS-IV vehicles beyond March 31, 2020. The advocate, appearing for manufacturers, said the companies will have to switch over to BS-VI vehicles from December, 2019 which would be a difficult task. Holding that the health of millions of people was more important, the apex court had in March last year dismissed the plea of automakers to allow them to dispose of existing stocks of BS-III vehicles. Chris Boswell Womens Jersey
Government considering using LNG as transportation fuel: Dharmendra Pradhan
The Government is actively considering using Liquefied Natural Gas (LNG) as a transportation fuel, Union Minister Dharmendra Pradhan said today. LNG is being imported under open general license on terms and conditions mutually agreed upon between buyers and sellers and it is being traded in the country on market-based mechanism. During Question Hour, Pradhan told the Lok Sabha that the government is actively considering using LNG as a transportation fuel. It is a new, cost-effective and clean proposal, the Petroleum and Natural Gas Minister said. To a query, he said that at present, there is no pipeline in the country to transport LNG in liquid form from LNG terminal to end user directly. “The LNG after re-gasification is being transported in the gaseous state through trunk gas pipelines from terminals to end consumers of such pipeline,” the minister said. Martin Brodeur Womens Jersey