Trans Mountain oil pipeline expansion may start in September
C onstruction on expanding the Trans Mountain oil pipeline could begin in September, assuming the next regulatory steps go smoothly, the project’s chief executive said on Wednesday. The C$7.4 billion ($5.56 billion) project was stalled a year ago after a Canadian court ruled the federal government, which also owns Trans Mountain, failed to adequately consult indigenous groups. Prime Minister Justin Trudeau on Tuesday reapproved the expansion, cheering the oil industry but angering environmental groups. Expanding Trans Mountain would ease congestion on pipelines that move Alberta crude, lifting Canadian prices. “If things go according to plan, I can see shovels in the ground as early as September,” said Trans Mountain CEO Ian Anderson on a conference call. “… Getting started is the most critical thing.” Construction looks to take 30 to 34 months, he said. Oil could flow through the twinned pipeline by the second or third quarter of 2022, delayed by about a year since last year’s court decision, Anderson said. Work to obtain building permits started on Wednesday, Canadian Finance Minister Bill Morneau said separately in Calgary. Once complete, the project will triple the capacity of Trans Mountain, which carries crude from Alberta’s oil sands to British Columbia’s Pacific Coast. Supporters say it is a vital conduit to help Canadian oil reach higher-priced international markets, but opponents including environmental and indigenous groups and some municipalities along the route argue the risk of a spill is too great. Trudeau’s government bought the pipeline last year from Kinder Morgan Canada for C$4.5 billion to help the expansion project get built. Opponents of Trans Mountain are expected to challenge the approval in court. Morneau said the government felt it had fulfilled its duty to consider environmental impacts and consult with indigenous groups. “Our view is we have done the work we need to do to make sure this project can go forward in the right way,” he said. In British Columbia, where the provincial government opposes the project, a protest against Trans Mountain took place in Vancouver on Tuesday evening and another is planned in Victoria on Saturday.
Indian Oil to invest Rs 700 crore in setting up 2G ethanol plant at Panipat refinery
Indian Oil Corporation (IOC), the country’s largest fuel retailer, is planning to set up a biomass-based second generation ethanol production facility at its flagship Panipat refinery at a cost of over Rs 700 crore. IOC has selected Praj Industries as the licensor and consultant for the proposed 100 kilo litres per day facility to be housed in the Panipat refinery premises, the company said in an application seeking clearance from the environment ministry. The proposed plant will utilize non-food biomass, mainly rice straw and other ligno-cellulosic feed stock, requiring around 473 tonne of raw material every day. “According to various biomass assessment surveys, surplus crop residue availability in India is in the range of 50-60 million tonne annually. According to these reports, by 2020, the available biomass residue could in theory be converted into 10-15 billion liters of second generation ethanol annually, sufficient to meet 20 per cent ethanol blending mandate in India,” IOC said as part of its application. The plan is in line with the government’s larger road-map to set up 12 2G-Ethanol bio-refineries across 11 States including Punjab, Haryana, Uttar Pradesh, Madhya Pradesh, Bihar, Assam, Odisha, Gujarat, Maharashtra, Karnataka and Andhra Pradesh. The estimated investment for the 12 bio-refineries is pegged at Rs 10,000 crore. India’s national biofuel policy released last year had set an indicative target of 20 per cent blending of ethanol in petrol and 5 per cent blending of biodiesel in diesel to be achieved by 2030. The country’s total petrol consumption is expected to reach 381 billion litre by 2020 of which 20 per cent can be replaced by bio-ethanol produced from lignocellulose raw materials, the company said. This replacement of petrol is likely to lead to foreign exchange savings in a range between $8 billion and 10 billion every year.
Shell sees more opportunities for floating LNG after Prelude delays
Royal Dutch Shellsees more opportunities for floating liquefied natural gas projects, but not necessarily like its $17 billion Prelude operation off Australia, which shipped its first cargo last week, over two years behind schedule. Shell Australia Chair Zoe Yujnovich said on Wednesday that it was too early to tell whether Prelude, one of two floating LNG (FLNG) projects in the world, would be replicated in future, as the company was still commissioning the project. “I think that there’s an opportunity for the floating concept. Whether it be used as a decade-long initiative or whether it’s used in alternate fashions is probably something still to be drawn to conclusion,” Yujnovich said at the Credit Suisse Australia Energy Conference. Pipeline costs, improving the FLNG technology and management of early and late-stage output at a field would all be factors in determining whether FLNG might be viable for other gas developments, she said. Yujnovich replied “no” when Credit Suisse analyst Saul Kavonic asked whether there was concern about reserves in the Prelude gas field, as Shell had already started preliminary design work on a new field, Crux, and was seeking environmental approval for it to supply Prelude FLNG from 2025 onward. Shell had originally planned to tap the Concerto field after Prelude, but instead decided to tap the Crux field. It aims to make a final investment decision on Crux in 2020. Crux, owned by Shell, Osaka Gas and a unit of Seven Group Holdings, is one of several gas fields that have long been awaiting development off northwestern Australia. Shell is also involved in the biggest undeveloped gas resource in the area, Browse, run by Woodside Petroleum . Woodside aims to make a final investment decision in late 2020. Before that, the Browse partners need to sign a tolling agreement for processing their gas through the North West Shelf LNG plant, in which Shell and Woodside also have stakes. Woodside had flagged earlier this year it expected to reach a final tolling agreement by the end of June. With around 11 days to go until then, Yujnovich said there were still complex issues to resolve, even though the North West Shelf partners all agree Browse should be the new anchor source for the plant after its current source runs out. “Will we get through it? I’m absolutely certain we will. But I think it’s also important that we don’t try and leap over some of these real issues now and then find ourselves down the track with significantly more complicated problems,” she said.
Anadarko approves $20 billion LNG export project in Mozambique
U.S. energy firm Anadarko Petroleum Corp on Tuesday gave the go-ahead for the construction of a $20 billion gas liquefaction and export terminal in Mozambique, the largest single LNG project approved in Africa. The announcement, which occurred at an event in Mozambique, was widely expected after Anadarko last month flagged the decision date. “As the world increasingly seeks cleaner forms of energy, the Anadarko-led Area 1 Mozambique LNG project is ideally located to meet growing demand, particularly in expanding Asian and European markets,” Chief Executive Officer Al Walker said in a statement here. Anadarko has agreed to be taken over by Occidental Petroleum Corp. Once that deal goes ahead, Occidental has agreed to sell assets including the Mozambique LNG project to French oil major and large LNG trader Total SA. Officials at Total were not immediately available for comment. Natural gas use is growing rapidly around the world as countries seek to meet rising energy demand and wean their industrial and power sectors off dirtier coal. The project, which has committed long-term supplies to utilities, major LNG portfolio holders and state companies around the world, underscores the industry’s conviction that LNG demand will soar in years to come despite a slump in prices this year. Low prices for the gas that is super-cooled for transportation prompted fears final investment decisions (FIDs) such as Anadarko’s would be delayed or scrapped. But the U.S. company gathered enough long-term buyers to underpin the financing of the project. “Flexible commercial arrangements, including an innovative co-purchase agreement with Tokyo Gas and Centrica, have been instrumental in securing the project a roster of high-quality customers in a crowded LNG market,” said Frank Harris, head of LNG Consulting at Wood Mackenzie. LNG prices slumped this year as a jump in supply from new terminals in the United States, Australia and Russia were not totally met by higher demand in Asia. The trade is also nowhere near as developed as the market for crude oil, causing erratic price movements. “At $20 billion, today’s FID is the largest sanction ever in sub-Saharan Africa oil and gas,” added Jon Lawrence, an analyst with Wood Mackenzie’s sub-Saharan Africa upstream team. The project is also expected to be transformational for Mozambique, one of the poorest nations on earth beset by economic crisis, conflict stemming from a civil war and serious governance malaise, whose annual gross domestic product is just $13 billion. The government of Mozambique said the project is expected to create more than 5,000 direct jobs and 45,000 indirect jobs. With a 12.88 million tonne per year (mtpa) capacity, Mozambique LNG is one of the largest greenfield LNG facilities to have ever been approved. It involves building infrastructure to extract gas from a field offshore northern Mozambique, pump it onshore and liquefy it, ready for further export by LNG tankers. On the African east coast, the liquefaction plant will be able to sell LNG to both the lucrative Asian market, home to 75%of global LNG demand, and to the flexible European market, which helps balance global LNG trade by soaking up excess supply. Mozambique LNG joins other mega-projects approved in the past year such as Exxon Mobil Corp’s 16 mtpa U.S. Golden Pass plant and Royal Dutch Shell Plc’s 14 mtpa LNG Canada facility. Still expected this year are approvals from Exxon for a 15.2 mtpa project also in Mozambique, and from Russia’s Novatek for its 19.8 mtpa Arctic LNG-2 plant. Anadarko’s partners in the Mozambique LNG project are Mitsui, Mozambique state energy company ENH, Thailand’s PTT and Indian energy firms ONGC, Bharat Petroleum Resources and Oil India.
Auto Industry Urges Government To Push For Alternative Fuels Adoption; Asks For Reduction Of GST On Bio-Fuel Vehicles
The Society of Indian Automobile Manufacturers (SIAM) has emphasised the need for the government to promote the usage of alternative fuels like Compressed Natural Gas (CNG), Liquefied Natural Gas (LNG), methane, biodiesel and others to reduce the nation’s dependence on imported fossil fuels, reports Livemint. The lobby group of automobile manufacturers, in a white paper, observed that the production of biofuels in India was still catching up, and therefore has pressed for technological collaborations for the same with nations like the United States, Canada and Brazil could be beneficial. To boost the demand for vehicles which run on biofuels, the SIAM also recommended a five per cent GST on vehicles run on such technologies, as compared to the current 18 per cent. It also recommended that viability gap funding should be provided to reduce the high cost of the technology. The white paper also pressed for the government to boost research on combustion, emission development, the environmental impact of fuels and compatible development material.