Linde plans $1.4 bn Singapore expansion, signs Exxon supply deal
Industrial gases group Linde said on Tuesday it will spend $1.4 billion to boost its Singapore gasification facilities to support the planned expansion of Exxon Mobil Corp’s nearby integrated refining complex. The investment will enable Linde’s facility on Jurong Island to supply additional hydrogen and synthesis gas to Exxon’s Singapore refinery, the company said in a statement. Exxon’s expansion project, which is expected to come online in 2023, would convert fuel oil and other residual crude products into higher-value lube base stocks and distillates to help meet stricter emissions rules. The International Maritime Organisation (IMO) is introducing new rules on marine fuels from 2020, limiting the sulphur content to 0.5 percent from 3.5 percent, to curb pollution from ships. Linde’s project will include building and operating four additional gasifiers, a 1,200 metric tonne per day air separation plant and downstream gas processing units and sulphur recovery plants, the company said. When completed, Linde will also be able to supply hydrogen, carbon monoxide and synthesis gas to other customers on Jurong Island, it said. Construction is expected to begin in the second half of 2019, with start-up due in 2023. Linde Plc was created from the merger of Linde AG and rival Praxair.
Thailand’s PTT CEO: No rush to lock in new LNG purchase contracts
Thailand’s largest energy firm PTT Pcl is in no hurry to lock in new long-term liquefied natural gas (LNG) contracts as it monitors domestic gas output and the growth of renewables over the next 2-3 years, its chief executive said. The country is expected to become more reliant on LNG imports because of falling output in the Gulf of Thailand, but natural gas demand growth has slowed to about 1% or less in the past 3-4 years because of increases in solar power, said PTT President and Chief Executive Officer Chansin Treenuchagron. “Thailand is good in terms of power plan development and we have good alternative energy,” Chansin told Reuters on the sidelines of the Asia Oil and Gas Conference. Renewable energy sources are gaining ground as the cost of solar panels and wind turbines have dropped sharply, while climate change initiatives have also accelerated non-fossil fuel use. Thailand currently consumes 4.7 billion cubic feet per day of natural gas, of which 3 billion cubic feet is from domestic production, 1 billion cubic feet is piped from Myanmar and the rest is imported LNG, Chansin said. He expects natural gas demand growth in Thailand to hold steady at about 1% per year over the next five years. PTT won the rights last year to take over production and development of the country’s largest natural gas fields Erawat and Bongkot in the Gulf of Thailand from 2022-2023. Production from the two fields was forecast to fall by half to 1.5 billion cubic feet per day in the next 5-10 years as the government is keen to sustain output over a longer period, Chansin said. The gas fields are valuable to Thailand because they also produce condensate, an ultralight oil used for petrochemical production. “If production decreases in the Gulf of Thailand then we’ll increase (LNG) imports,” he said. PTT has long-term LNG purchase contracts for 5.2 million tonnes per year (tpy) with Qatargas, Shell, BP and Petronas, but is also looking to ensure demand levels before pursuing new ones, Chansin said. To prepare for more LNG imports, PTT is building a second 7.5 million tpy LNG terminal which will be completed in 2023, bringing its total LNG regasification capacity to 19 million tpy, he added.
India’s MRPL buys Upper Zakum crude in its 1st sour crude tender in 2019
Indian refiner MRPL has bought 1 million barrels of Upper Zakum crude in the first sour crude tender issued by the refiner this year, a source familiar with the matter said * The tender comes after India stopped lifting Iranian oil in May as Washington did not extend waivers from sanctions on Iran for Iranian oil buyers * MRPL bought the cargoes from Shell at $2.05 a barrel above Dubai quotes and they will load on Aug. 1-10, the source said
Northeast Asia’s LNG import demand growth declines on economic headwinds
Economic headwinds are limiting the appetite for liquefied natural gas (LNG) in Northeast Asia, home to the world’s biggest importers of the fuel, even as global supply is expected to rise by 14% this year. The growth in monthly import volumes of LNG into Northeast Asia during the first half of 2019 will decline for the first time since 2015, according to Reuters calculations based on Refinitiv ship tracking data. The region includes Japan, China, South Korea, which are the world’s three largest LNG importers, and Taiwan. Further underscoring the weaker demand, LNG imports into the region in June are set to fall from May, for the first time ever, according to Refinitiv data going back to 2013. Imports typically rise in June as gas demand increases to generate power for air conditioners during the Northern Hemisphere summer. This slowdown is occurring as additional volumes from Russia, the United States and Australia are expected to swell overall LNG supplies to 365 million tonnes by the end of the year, from about 320 million tonnes currently, according to consultancy Wood Mackenzie. The main driver of the slowdown is China, whose LNG imports for June look set to drop by 9% from May as the country’s coal-to-gas switching has moderated amid weaker economic growth. “Asian LNG demand this year so far has been dampened due to a range of factors including mild weather, high storage levels, and a lower policy emphasis on coal-to-gas switching in China,” said James Taverner of consultancy IHS Markit. “New export volumes look likely to come online faster than they can be absorbed in the Asian market.” While China’s long-term LNG demand is still set to grow, the rate will be slower compared with 2017 and 2018, said Wood Mackenzie analyst Nicholas Browne. This is due to factors including “uncertain industrial growth, regasification capacity constraints and the reduced pace of coal-to-gas switching,” he added. In South Korea, the start-up of three new nuclear power plants is expected to further curb LNG imports. Japanese LNG demand is expected to be relatively flat in 2019, though there may be some upside in the third quarter when some nuclear plants undergo maintenance, said Giles Farrer, research director, global LNG, at Wood Mackenzie. Overall, they forecast LNG demand in Japan, South Korea, and Taiwan next year to be 9 million tonnes below 2018. LNG demand has also been pressured by the rise of renewables in power generation, especially in Europe. LNG industry participants are meeting in Singapore this week for a conference where Asia’s demand growth will likely be a key topic of discussion. The global gas glut is expected to persist until at least next year, Bank of America Merrill Lynch’s global research team said last week. “The trade wars are taking their toll on global growth projections, which poses a downside risk to global gas demand and prices,” they said.
LPG tanker operators announce indefinite strike from July 1
The Southern Region Bulk LPG Transport Operators Association has announced that it would launch an indefinite strike from July 1. The strike is in response to failure of oil companies to renew job orders to all the bullet tankers under the association, said office-bearers of the organization. The Namakkal-based association has about 5,500 bullet tankers, which transport LPG from the refineries of three oil companies — Indian Oil, Bharat Petroleum and Hindustan Petroleum — to bottling plants, across south India. “The companies renew their agreements with tanker operators once in five years and the last renewal was due on October 31, 2018. When they came forward for the talks, the association demanded that they give job orders for all the bullet tankers,” an office-bearer with the association said. “However, the oil companies did not renew agreements of 700 bullet tankers. Those tanker operators are facing huge loss for the past nine months,” P Kumaresan, a bullet tank operator said, adding, “the companies failed to deal with the issue.” So, all the LPG tanker operators have decided to take part in the indefinite strike at a general body meeting last week. The operators would not withdraw the strike till their demands were met, M Ponnambalam, president of the association, said.
Indian Oil Corp sees growth in Indian fuel demand above 4% in 2019
Growth in India’s fuel demand is set to remain at 4-4.5 per cent this year, driven by consumption of gasoline and jet fuel in the transportation sector, the head of the country’s largest state-owned refiner said on Tuesday. Gasoline and jet fuel demand are expected to rise by 7-8 per cent this year, while diesel consumption could increase by 3 per cent, Indian Oil Corp Chairman Sanjiv Singh told Reuters. The country’s plans to add smaller airports to improve domestic transport systems will drive appetite for jet fuel, he said. The nation is preparing to raise its fuel quality to so-called Euro 6 standards from Euro 4 from April 2020 to fight pollution. Several refineries in India are scheduled to shut throughout 2019 to prepare for the upgrade. This may cause the country’s fuel imports to be “a little more than normal”, Singh said on the sidelines of the Asia Oil & Gas Conference in Malaysia, although he declined to give a specific volume.
GAIL hires LNG carrier from Japan’s MOL
Japan’s shipping giant Mitsui O.S.K. Lines (MOL) has signed a short-term charter agreement for a liquefied natural gas (LNG) carrier with state-run gas company GAIL India. GAIL is the largest natural gas company in India with around 11,400 kilometers of existing trunk pipeline network and another 4,000 kilometers of pipelines in advance stage of completion. The Indian firm extended its presence in the LNG re-gasification, city gas distribution, and exploration & production. The company currently holds an LNG/RLNG portfolio of about 14 mtpa from various long and short-term contracts. GAIL is also committed to LNG trading globally. It is worth noting that MOL expects that demand for gas will be increasing continuously in India, registering significant economic growth. MOL has been participating in the Indian market since the beginning of LNG import into the country, with the distinction of having brought the first gas from Qatar. The company is currently participating in not only transportation of LNG but also FLNG projects in India and ethane transportation by the first very large ethane carrier (VLEC) in the world.
Centre to provide CNG, PNG infrastructure in 406 districts: Pradhan
Petroleum and Natural Gas Minister Dharmendra Pradhan on Monday said that the Centre has chalked out a plan to provide Compressed Natural Gas (CNG) and Piped Natural Gas (PNG) infrastructure in 406 districts of the country. “Till 2014, only 66 districts of the country were covered under CNG and PNG infrastructure. In last five years we worked to strengthen this infrastructure in a planned way,” Pradhan told Lok Sabha during Question Hour in response to a query. He said that the government was expanding the CNG and PNG infrastructure in other cities. “The CNG and PNG infrastructure will be provided in 406 districts. After expanding these facilities, 70 per cent of the population will get clean energy,” Pradhan said. The Minister informed the House that Rs 1.20 crore will be invested in the next eight years in the energy sector.