Korea, Uzbekistan settle Surgil gas field payment issue
South Korea and Uzbekistan have reached an agreement on an unpaid $1bn with regard to their joint Surgil gas field project. The countries plan to develop the project and produce petrochemicals and gas.
A consortium of South Korean companies, comprising Lotte Chemical, GS E&R and state-owned Kogas, and state-owned Uzbekneftegaz (UNG) established joint venture Uz-Kor in 2007 to promote the business, with the consortium and UNG each holding a 50pc stake.
Uz-Kor produces and sells gas through UNG's subsidiary UTG, with UTG buying the gas at a fixed price in US dollars but selling it to the Uzbek domestic market in local currency. But UTG has yet to pay Uz-Kor for the gas produced because of concerns over a large deficit arising from paying a fixed gas price in US dollars.
The repayment issue was also because of the depreciation of the Uzbek currency, according to the economy and finance ministry (Moef), although further details were not disclosed. But the two countries have recently agreed on a repayment plant for the Surgil project receivables, six years after the receivables were incurred in 2017.
South Korea and Uzbekistan plan to jointly develop the Surgil gas field, and are looking to build and operate gas and petrochemical plants. This is scheduled to take place over 2008-2041, with commercial production having started in 2016.
The Surgil field produces, pre-processes and transports over 115,000 t/yr of gas condensate, and transports over 3bn m3 of natural gas, according to Uz-Kor.
The Ustyurt Gas Chemical Complex (UGCC) was completed in September 2015, and consists of a gas separation plant, an ethylene plant, a 387,000 t/yr polyethylene plant, an 83,000 t/yr polypropylene plant and a power plant, Uz-Kor's website shows. The complex can also produce 102,000 t/yr of distillation product and 8,000 t/yr of pyrolysis oil, which is sent to Uzbekistan's 61,000 b/d Bukhara refinery.
The UGCC has currently already produced over 180,000t of PE and over 40,000t of PP, and export of polymer products began in December 2015 to central and east Asia, CIS and Europe.
Related news posts
Japan’s Jera to handle 35mn t/yr LNG until FY2035-36
Japan’s Jera to handle 35mn t/yr LNG until FY2035-36
Osaka, 17 May (Argus) — Japan's largest LNG importer Jera plans to maintain its LNG handling volumes at no less than 35mn t/yr until the April 2035-March 2036 fiscal year. Rising renewable power supplies and the possible return of more nuclear reactors are likely to pressure LNG demand from Japan's power sector. Jera consumed 23mn t of LNG in 2023-24, down by 3pc on the year, although it handled 35mn t through its global operations during the same year. But Jera needs to secure sufficient LNG supplies to adjust for imbalances in electricity supplies and ensure power security, through more flexible operations. It is also looking to further promote LNG along with renewable electricity in Asian countries, while helping to reduce their dependence on coal- and oil-fired power generators. The 2035 target for LNG is part of Jera's three pillars of strategic focus, along with renewables as well as hydrogen and ammonia , which was announced on 16 May to spur decarbonisation towards its 2050 net zero emissions goal. The company plans to invest ¥5 trillion ($32bn) for these three areas over 2024-36. Jera also aims to retire all supercritical or less efficient coal-fired units by 2030-31 . This would help achieve the company's target of cutting CO2 emissions from its domestic business by at least 60pc against 2013-14 levels by 2035-36. By Motoko Hasegawa Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Low-carbon methanol costly EU bunker option
Low-carbon methanol costly EU bunker option
New York, 16 May (Argus) — Ship owners are ordering new vessels equipped with methanol-burning capabilities, largely in response to tightening carbon emissions regulations in Europe. But despite the greenhouse gas (GHG) emissions savings that low-carbon methanol provides, it cannot currently compete on price with grey methanol or conventional marine fuels. Ship owners operate 33 methanol-fueled vessels today and have another 29 on order through the end of the year, according to vessel classification society DNV. All 62 vessels are oil and chemical tankers. DNV expects a total of 281 methanol-fueled vessels by 2028, of which 165 will be container ships, 19 bulk carrier and 14 car carrier vessels. Argus Consulting expects an even bigger build-out, with more than 300 methanol-fueled vessels by 2028. A methanol configured dual-fuel vessel has the option to burn conventional marine fuel or any type of methanol: grey or low-carbon. Grey methanol is made from natural gas or coal. Low-carbon methanol includes biomethanol, made of sustainable biomass, and e-methanol, produced by combining green hydrogen and captured carbon dioxide. The fuel-switching capabilities of the dual-fuel vessels provide ship owners with a natural price hedge. When methanol prices are lower than conventional bunkers the ship owner can burn methanol, and vice versa. Methanol, with its zero-sulphur emissions, is advantageous in emission control areas (ECAs), such as the US and Canadian territorial waters. In ECAs, the marine fuel sulphur content is capped at 0.1pc, and ship owners can burn methanol instead of 0.1pc sulphur maximum marine gasoil (MGO). In the US Gulf coast, the grey methanol discount to MGO was $23/t MGO-equivalent average in the first half of May. The grey methanol discount averaged $162/t MGOe for all of 2023. Starting this year, ship owners travelling within, in and out of European territorial waters are required to pay for 40pc of their CO2 emissions through the EU emissions trading system. Next year, ship owners will be required to pay for 70pc of their CO2 emissions. Separately, ship owners will have to reduce their vessels' lifecycle GHG intensities, starting in 2025 with a 2pc reduction and gradually increasing to 80pc by 2050, from a 2020 baseline. The penalty for exceeding the GHG emission intensity is set by the EU at €2,400/t ($2,596/t) of very low-sulplhur fuel oil equivalent. Even though these regulations apply to EU territorial waters, they affect ship owners travelling between the US and Europe. Despite the lack of sulphur emissions, grey methanol generates CO2. With CO2 marine fuel shipping regulations tightening, ship owners have turned their sights to low-carbon methanol. But US Gulf coast low-carbon methanol was priced at $2,317/t MGOe in the first half of May, nearly triple the outright price of MGO at $785/t. Factoring in the cost of 70pc of CO2 emissions and the GHG intensity penalty, the US Gulf coast MGO would rise to about $857/t. At this MGO level, the US Gulf coast low-carbon methanol would be 2.7 times the price of MGO. By comparison, grey methanol with added CO2 emissions cost would be around $962/t, or 1.1 times the price of MGO. To mitigate the high low-carbon methanol costs, some ship owners have been eyeing long-term agreements with suppliers to lock in product availabilities and cheaper prices available on the spot market. Danish container ship owner Maersk has lead the way, entering in low-carbon methanol production agreements in the US with Proman, Orsted, Carbon Sink, and SunGaas Renewables. These are slated to come on line in 2025-27. Global upcoming low-carbon methanol projects are expected to produce 16mn t by 2027, according to industry trade association the Methanol Institute, up from two years ago when the institute was tracking projects with total capacity of 8mn t by 2027. By Stefka Wechsler Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
LPG World editorial: Clean cooking’s watershed moment?
LPG World editorial: Clean cooking’s watershed moment?
African clean cooking schemes could prove to be an early energy transition success story now that world leaders view them as environmental imperatives London, 16 May (Argus) — The $2.2bn in funding pledged for clean cooking programmes in Africa over the next five years, announced at the IEA's Clean Cooking Summit in Paris on 14 May, could be a "turning point", according to the agency's executive director Fatih Birol. Not only would this be true in terms of tackling what is a long-neglected problem. It is also true for the LPG industry, which has been extolling the benefits of a transition to LPG in sub-Saharan Africa for many years. Other than the dozen or so individual financial commitments made by governments and organisations, what resonated most from the event was just how achievable transitioning sub-Saharan Africa to cleaner fuels such as LPG actually is. Often the immediate reaction is to balk at the challenges — the lack of infrastructure, the lack of regulatory frameworks, the corruption, the cost of the LPG and equipment. Yet this was when it was looked at purely through the prism of the market. Now it is an environmental and social imperative. Many of the political leaders from Europe, Africa and the US that spoke noted that greenhouse emissions from cooking were comparable to the airline and shipping sectors, yet tackling the former is far less complex, less expensive and receives scant recognition in comparison with the latter two. "We can fix it now… it is not high-tech, it is low-tech," Norway's prime minister Jonas Gahr Store told delegates. Another often ignored part of the issue is how disproportionately women are affected by cooking with harmful solid biomass fuels — perhaps an underlying factor behind the many years of neglect at a national and international level. This is a gender issue, both Birol and Tanzania's first female president, Samia Suluhu Hassan, noted. The obvious health and social benefits from the transition to clean cooking will be most keenly felt by women and their children, who are at home breathing in the smoke from open fires. Several of the speakers, including African Development Bank president Akinwumi Adesina and World Health Organisation director-general Tedros Ghebreyesus, even spoke of their own experience of growing up in a household with open fires, and the consequent unnecessary suffering their mothers in particular had to endure. LPG is not the only solution here — others mentioned included electric cookers, biogas, bioethanol and cleaner cooking stoves. And as a fossil fuel, it will ultimately be replaced at some stage by renewable alternatives. But it is the best solution right now for large parts of the region. "LPG is the most efficient in terms of its benefits and its ease of use," Togo's president Faure Gnassingbe said. LPG markets can develop in the region through subsidies and LPG price regulation to moderate volatility, while countries must also invest in domestic LPG production as well as import and distribution infrastructure, he said. Each country will be different, but it is "well within our reach", Gnassingbe added. From pledge to realisation The sub-Saharan African region and the LPG industry must now work with foreign governments, financial institutions and private-sector companies to ensure that the large sums pledged are invested in a pragmatic and fruitful way. The IEA will come back in a year's time to report on the progress of the various commitments made at the summit and will provide updates online in an effort to ensure progress and transparency, Birol said. There is reason for cautious hope. The feasibility of achieving the transition and the relatively low levels of foreign investment involved — and the huge opportunities for LPG companies that will emerge — could create the conditions for success of a kind that has so far eluded many other such ambitions. It would be a huge boon for the world to have one such success story to point to by 2030 in its long, hard struggle to transition to a cleaner energy future. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Japan’s Mol orders dual-fuel LPG, ammonia VLGCs
Japan’s Mol orders dual-fuel LPG, ammonia VLGCs
Tokyo, 16 May (Argus) — Japanese shipping firm Mitsui OSK Lines (Mol) has ordered two dual-fuel very large gas carriers (VLGCs) to deliver LPG and ammonia, with commissioning expected in 2026. Mol has reached a deal with TotalEnergies' shipping arm CSSA Chartering and Shipping Services to charter two 88,000m³ VLGCs to deliver LPG and ammonia, although the specific time period is undisclosed. The vessel will be built by South Korean shipbuilder Hyundai Samho Heavy Industries, which has developed an engine that can use LPG and fuel oil. Japan's LPG consumption totalled 11.8mn t in the 2023-24 fiscal year ending 31 March, down by 3.2pc from a year earlier, according to the Japan LP Gas Association. Japan's trade and industry ministry expects the downwards trend will be driven further by technology innovation of high efficiency equipment. But its expects ammonia demand as a fuel to increase to 3mn t/yr by 2030 and to 30mn t/yr by 2050. Japan has set a goal of a 20pc ammonia co-firing at domestic coal-fired power plants by 2030 and above 50pc by 2050 to achieve the country's 2050 decarbonisation goal. By Reina Maeda Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Business intelligence reports
Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.
Learn more