Japan’s Mitsui Buys 92% Stake In Texas Natural Gas Field
Japan’s Mitsui has bought a 92% stake in a shale gas field in Texas, from which it eyes production of over 200 million cubic feet daily, Reuters has reported, citing the company. The size of the deal was not disclosed but the Japanese company said the acquisition was a “pragmatic solution” for the transition away from fossil fuels. Japan is one of the most heavily import-dependent nations in the world when it comes to energy, and natural gas is one of its biggest imports. Last year, the country regained the top spot of LNG importers globally, overtaking China after it imported 71.99 million cubic meters of the superchilled fuel, while China imported 63.44 million tons. According to Mitsui, one of Japan’s biggest natural gas traders, natural gas and LNG will have a major role to play in the energy transition and the company was set to “continue to contribute to stable energy supply … by further promoting our global natural gas and LNG businesses”. Last year, with fellow trader Itochu and JERA, Japan’s biggest power utility, Mitsui sealed a long-term LNG deal with Oman as part of that natural gas strategy. The Japanese company was also allowed by the Japanese government to retain its stake in the Sakhalin-2 project in Russia despite G7 sanctions on Moscow. The stake will ensure continued deliveries of LNG over the long term. Energy Intelligence reported earlier this year that Japanese commodity traders were on the lookout for longer-term LNG supply deals amid the heightened uncertainty on energy markets sparked by the war in Ukraine. Mitsui’s acquisition deal in Texas may well be one version of securing long-term gas supply. The company said the field has a connection to LNG export plants on the Gulf Coast as well as ammonia production facilities.
Russia’s Gas Giant To Set Up Middle East Unit
A regulatory disclosure revealed on Tuesday that Gazprom is setting up a unit in the Middle East, according to Reuters. Russia’s state-controlled gas company did not provide details, but those details could be a critical factor in determining influence in the Middle East—be that Russia’s or the United States’. The news comes after an exclusive report by Oilprice.com made shortly after the recent Iran/Saudi Arabia deal, who cited a Kremlin official who said, “By keeping the West out of energy deals in Iraq – and closer to the new Iran-Saudi axis – the end of Western hegemony in the Middle East will become the decisive chapter in the West’s final demise.” Russia—as well as China—has been looking to get a better toehold into the gas-rich Middle East, Simon Watkins explained earlier this month. Gazprom, headquartered in Moscow, has stakes in fields granted by Baghdad and Erbil in Iraq, and Russia holds an 80% working interest in five oil blocks in the KRG region, and it owns 60% in the KRG oil pipeline that runs to Turkey, which has been shuttered for weeks following an arbitration ruling against Turkey for oil shipping from KRG to Turkey without Baghdad’s consent from 2014 to 2018. In November, Iran signed a $40 billion gas cooperation deal with Gazprom, with Iran’s Deputy Foreign Minister for Economic Diplomacy, Mehdi Safari, disclosing that Iran hoped to import Russian gas and export its own gas to international markets to keep from having to pay to transfer Iranian gas from the south to the north. The European Union recently sanctioned a Dubai-based subsidiary of Russia’s state-owned shipping company, Sovcomflot, in an attempt to close sanctions loopholes that saw the Dubai company help Russia generate significant revenues from shipping energy products.
Oil Prices Continue To Fall As Demand Concerns Persist
Demand worries outweighed supply concerns this week to push down oil prices, reinforced by heightened expectations of more U.S. rate hikes that lifted the greenback. In morning trade in Asia oil was down for the third day out of the last four, despite the EIA reporting an inventory draw of 4.6 million barrels for the week to April 14, compared to a modest build in crude oil inventories for the previous week, at 600,000 barrels. For the week before that, however, the EIA had estimated a sizable draw of 3.7 million barrels. Instead of reacting to the draw, oil traders apparently were more concerned with other news or rather non-news: the Fed has indicated repeatedly that it is not done with rate hikes. It seems there are expectations for at least one more rate hike, to be announced next month before the Fed pauses with the inflation-control measure. “When the Fed’s commentary indicates further rate hikes, economic troubles look inevitable,” Priyanka Sachdeva, an analyst at brokerage Phillip Nova, told Bloomberg. “The only ray of hope here is China’s reemergence, which is expected to be significant enough to outweigh the dented demand from the West.” “WTI crude is back below the $80 level and it could continue drifting lower if the strong dollar trade resumes,” OANDA’s Edward Moya told Reuters. What’s more, the gloom and doom that oil traders appear to see for the U.S. economy has proven stronger than optimism about China, which earlier this week pushed prices higher for a while after it reported stronger-than-expected GDP growth data. Yet that wasn’t the full picture. “Though China reported better-than-expected GDP data, both industrial production and fixed asset investments fell short of consensus data, which did not help (in) boosting oil prices,” CMC Markets analyst Tina Teng told Reuters.
Centre seeks proposals to develop green hydrogen innovation hubs
The Centre has invited expressions of interest (EoI) for developing hydrogen valley innovation clusters (HVIC) in the country. The Department of Science and Technology’s guidelines define a hydrogen valley as a specific geographic region where hydrogen serves more than one end sector or application in mobility, industry, and energy. This includes all steps in the hydrogen value chain, from production, storage, and transport to distribution to various off-takers, as well as renewable electricity production from hydrogen. The government will provide up to ₹2.5 million in assistance for the preparation of detailed project reports (DPR) which must be completed within 45 days of the project’s allocation. EoIs will be evaluated in May, and funding for the recommended EoIs for DPR preparation will also occur in that month. The DPRs will be evaluated and shortlisted in July, with the project expected to start in October 2023 and finish by 2028.
BPCL to invest $ 5 billion in Bina refinery complex
India’s state-owned Bharat Petroleum Corp Ltd (BPCL) plans to invest rupee (Rs) 430bn-500bn ($5.2bn-6.1bn) to expand its Bina refinery and build a petrochemical complex at the site in the central Madhya Pradesh state. BPCL has received necessary approvals from the Madhya Pradesh state government for the project, the company said in a regulatory filing to the Bombay Stock Exchange (BSE) on 14 April. The planned petrochemical complex is expected to produce linear low density polyethylene (LLDPE), high density polyethylene (HDPE), polypropylene (PP), bitumen, benzene as well as gasoline, diesel and aviation turbine fuel, it said in its statement. The company expects to commission the project by the fiscal year ending March 2028, it added. In a June 2022 report to the Ministry of Environment, Forests and Climate Change, BPCL stated plans to expand the capacity of its Bina refinery by more than half to 12m tonnes/year from 7.8m tonnes/year, it said The planned petrochemical complex will have a cracker with a 1.2m tonne/year ethylene capacity; a 650,000 tonne/year LLDPE/HDPE swing plant; a 500,000 tonne/year HDPE unit; a 650,000 tonne/year polypropylene (PP) line; and a 50,000 tonne/year butene-1 unit, based to the report. ($1 = Rs82.12)