Germany inks energy security agreement with UAE
Germany and the UAE on Sunday signed an "energy security and industry accelerator" agreement which includes LNG and diesel supply deals. The agreement also underlines an intent to collaborate on decarbonisation and climate action, according to UAE state news agency WAM.
Under the agreement, Abu Dhabi's state-owned Adnoc will reserve a number of LNG cargoes exclusively for German customers in 2023, WAM said without elaborating. Adnoc will also provide an LNG cargo to German utility RWE in late 2022, which will be used in the commissioning of a floating LNG import terminal at Brunsbuttel in northern Germany.
Germany is seeking to accelerate construction of LNG import facilities to wean itself off Russian gas. It does not have any import terminals in operation at the moment, but there are plans to install at least five floating storage and regasification units (FSRUs) in various locations in the country.
Today's deal also includes an agreement for Adnoc to supply 250,000 t/month of diesel to Germany throughout 2023. In addition, Abu Dhabi's state-owned Masdar will be exploring opportunities in offshore wind in the German sectors of the North and Baltic seas, which could generate up to 10GW of renewable energy production capacity by 2030, subject to the necessary German policy and regulatory requirements being met.
Germany and the UAE have also reiterated plans to look at more opportunities to collaborate across the hydrogen value chain. Adnoc has entered into a number of agreements with German customers for demonstration cargoes of low-carbon ammonia, a carrier of hydrogen. The first of these arrived in Hamburg earlier this month.
The energy security agreement comes on the back of German chancellor Olaf Scholz's visit to the Mideast Gulf this weekend. Scholz visited Saudi Arabia yesterday and will head to Qatar next. Berlin is looking to secure alternative energy sources to replace Russian supplies.
Related news posts
Hurricane Francine brings rain to the lower Miss. River
Hurricane Francine brings rain to the lower Miss. River
Houston, 13 September (Argus) — Hurricane Francine dropped 4-8 inches of rain around the lower Mississippi River, raising forecast water levels on the river and potentially improving shipping conditions for barges. Points between Cairo, Illinois, and Vicksburg, Mississippi, that were at their low water thresholds over the week are now forecast to exit those thresholds in the coming week according to the National Weather Service (NWS). Increased rainfall from Hurricane Francine has locations like Greenville, Mississippi and Helena, Arkansas entering regular water levels as soon as this weekend. Other locations, such as Memphis, Tennessee, will see a bump in water levels, but will remain at its low water threshold, said NWS. The US Coast Guard has not made any changes to the draft and towing restrictions since 10 September when they changed the point for heavier loading from Greenville, Mississippi, to Vicksburg for southbound limits. More water is likely to enter the lower Mississippi River through its tributaries in the coming days, after Francine has passed the Mississippi Delta. The storm made landfall as a hurricane on the Louisiana coast the evening of 11 September but downgraded to a tropical storm as it moved northward. By Meghan Yoyotte Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
About 42pc of US Gulf oil output still shut on Francine
About 42pc of US Gulf oil output still shut on Francine
New York, 13 September (Argus) — About 42pc of oil output in the Gulf of Mexico was still shut-in on Friday, just days after Hurricane Francine passed through the region. Around 732,316 b/d of offshore oil output was off line as of 12:30pm ET Friday, according to the Bureau of Safety and Environmental Enforcement (BSEE), while 973.20mn cf/d of natural gas production, or 52pc of the region's output, was also off line. The volume of crude production shut in rose slightly from yesterday, by about 2,000 b/d, while curtailed gas output fell. Operators evacuated workers from 144 platforms this week ahead of the storm. Shell said today it is ramping up production at its Appomattox, Mars, Vito, Ursa and Olympus platforms after resolving downstream issues. However, the company's Perdido, Auger and Enchilada/Salsa assets remain shut-in due to other downstream issues. And drilling remains on hold at its Whale asset, which is scheduled to begin operations later this year. The port of New Orleans resumed all normal operations Thursday evening. Preliminary damage assessments showed no significant damage to facilities or infrastructure, port officials said, while onshore refinery operational issues appear to be minor . By Stephen Cunningham and Tray Swanson Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Fulcrum Bioenergy files for Chapter 11 relief
Fulcrum Bioenergy files for Chapter 11 relief
New York, 13 September (Argus) — A US company that had set ambitious plans to convert garbage into sustainable aviation fuel (SAF) and attracted investments from major airlines and energy companies filed for Chapter 11 bankruptcy protection this week. Fulcrum Bioenergy and subsidiaries filed for relief before the US Bankruptcy Court for the District of Delaware on Monday, estimating outstanding obligations to over 200 creditors at more than $456mn. A lawyer representing Fulcrum, Robert Dehney, said at a Thursday hearing that the company was on the verge of declaring Chapter 7 bankruptcy, which typically involves liquidation of assets, before a late-breaking bid from an interested company prompted a change in plans. Fulcrum chief restructuring officer Mark Smith said in a declaration to the court that the company wants to initiate the sales process and move through the chapter 11 process on an "expeditious timeline." Judge Thomas Horan on Thursday preliminarily approved various first-day motions, including a request to continue paying Fulcrum's handful of remaining employees. Fulcrum began initial operations at its flagship Nevada facility in 2022, becoming the first company to commercialize a clean fuels pathway based on gasifying garbage and signing offtake agreements with BP, United Airlines, and others. The process at the Nevada site involved receiving and sorting landfill waste, converting that to a synthetic crude oil through a gasification process, and then sending that feedstock to a Marathon Petroleum refinery to be processed into a usable low-carbon fuel. Fulcrum eventually wanted to be able to upgrade the synthetic crude into SAF on site. An archived version of the Fulcrum website, which is no longer online, also set plans for eventual biorefineries and feedstock processing facilities in Indiana, along the US Gulf coast, and in the UK and said its suite of facilities could ultimately support 400mn USG/yr of production capacity. But Fulcrum has reported few updates on its progress more recently, and there were signs of financial struggles. Multiple contractors have filed lawsuits alleging missed payments, while UMB Bank indicated in October last year that Fulcrum had defaulted on debt obligations. The Nevada site ceased operations in May and plans for other US facilities are apparently on hold, though filings indicate that Fulcrum has not yet determined whether to begin restructuring proceedings for any subsidiaries outside the US. Fulcrum's business "represents a revolutionary idea," Smith said in his declaration, but "as with all cutting-edge businesses, the cost of innovation has been born through delays in operations and the inability to anticipate issues based on prior ventures and experiences." There were necessary equipment changes after initial operations begun, but these were expensive and affected by supply chain delays, he said. It is unclear how much feedstock was successfully delivered to Marathon, which declined to comment. The Hong Kong-based airline Cathay Pacific, which had signed an offtake agreement with Fulcrum, told Argus that it never received any SAF. Other companies that had signed offtake agreements did not immediately respond to requests for comment or declined to comment. Fulcrum had been soliciting interest from potential buyers for months and finalized an agreement with a company called Switch LTD, which agreed this month to offer a "stalking horse" bid to purchase Fulcrum's assets for $15mn and issue a loan of up to $5mn to fund Fulcrum's bankruptcy cases. A stalking horse bidding method is a way to arrive at a minimum bid price that other prospective buyers then must exceed. Filings before the court this week did not elaborate on the nature of Switch's business or its reasons for wanting to acquire Fulcrum's assets. Dehney described Switch as a "disinterested third party" and said that Fulcrum has received other interest from prospective buyers, some eyeing all of Fulcrum's assets and some just looking at physical property, intellectual property, or the UK subsidiary specifically. Failure to launch The idea of gasifying waste to produce fuel has long been attractive, since feedstock costs would be low and the Fischer-Tropsch chemical process to convert synthetic gas to liquids has been known for decades. Demand for low-carbon alternatives to jet fuel is high among major airlines, some of which have government mandates to meet or voluntary goals to rapidly scale up SAF consumption by 2030. While Fulcrum's Chapter 11 filing "was not really a surprise" given its recent financial troubles, it could give investors pause about future projects aiming to use similar technology, according to BloombergNEF renewable fuels senior associate Jade Patterson. The large majority of SAF capacity currently and the bulk of planned capacity additions through 2030 come from the more established method of hydroprocessing non-petroleum feedstocks like fats, oils, and greases, Patterson said. Efforts to build gas-to-liquids facilities, by comparison, have faced delays and financial challenges. Red Rock Biofuels had aimed for a refinery converting forest waste to begin operations in 2020 , but the company that later acquired the Oregon site at auction is now targeting a 2026 launch for its clean fuels facility. And Fulcrum's plans for converting waste into fuel go back more than a decade, having inked its first deal with a municipal solid waste supplier in 2008. Kickstarting a market for a novel fuel pathway has also not been helped by a dip over the last year for prices of US federal and state environmental credits, which function as a crucial source of revenue for biofuel producers. There is also uncertainty about how much federal subsidy certain fuels will earn when an Inflation Reduction Act tax credit for low-carbon fuels kicks off next year. But other gas-to-liquids companies are marching on — including DG Fuels, whose president told Argus last month that the company plans to reach a final investment decision by the first quarter next year on a potentially 178mn USG/yr SAF plant in Louisiana that will gasify biomass. The company has earlier-stage plans for similar facilities in Maine and Nebraska. By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
India’s higher LNG regas rates receive customer flak
India’s higher LNG regas rates receive customer flak
Mumbai, 13 September (Argus) — Indian LNG terminal developers led by state-run Petronet LNG and Shell are charging some of the highest rates among the world to regasify LNG, prompting consumers to complain, raising concerns over the government's plan to more than double the share of gas in the country's energy mix to 15pc by 2030. Petronet is charging as much as Rs62.91/mn Btu ($0.75/mn Btu) to regasify the fuel received at the 17.5mn t/yr Dahej terminal on the west coast, the country's largest such facility, according to consumers using the import facility. Coupled with the annual escalation in charges, the rates are "unsustainable in the longer-run," a person who did not wish to be identified said. "Going by the 5pc increase in regas rates every year, by 2030, regas rates could become Rs84/mn Btu ($1/mn Btu), which is not justified," the source added. State-run Petronet has lifted regasification rates by 5pc in recent years. "The 5pc hike in regas rates every year may eventually have to stop in the coming years before it reaches a dollar," an equity analyst at a foreign investment bank said. Shell is also charging similar rates at its 5.2mn t/yr Hazira LNG import facility on the west coast at $0.75/mn Btu, industry sources said. Both Dahej and Hazira are well connected to consumption centres by pipelines and operate year-round, unlike many of India's other terminals which suffer from lack of a breakwater facility or weak pipeline connectivity. Higher regas prices account for the lower usage levels in other terminals, because the country's overall LNG imports are lower than major importers like China or Japan, market participants say. India's regasification rates are much higher compared to terminals in the Europe. The 9.2mn t/yr Gate terminal in Netherland charges around $0.35/mn Btu for unloading and regasification, while Spain is much lower. Regasification rates in Japan LNG terminals are around $0.5/mn Btu, while rates at terminals operated by Jera, like the 22.9mn t/yr Futtsu LNG facility, are much lower, according to market participants. Regasification rates in China, however, are also higher, on a par with India as PipeChina's eight LNG terminals, including the largest 12mn t/yr Tianjin terminal in north China, and 6mn t/yr Dalian terminal in Liaoning. These are charging $0.7-1.3/mn Btu for unloading and regasification, sources say. Regas rates across the world are mostly determined by market forces based on demand fundamentals compared with fixed prices charged by Indian terminal operators. But record regasification rates have not stopped city gas utilities and industries from using Petronet and Shell's terminals to import the fuel, enabling Petronet to operate Dahej at around 109pc in April-June, a record for the facility, according to oil ministry data. Hazira, which in the past has operated at over 80pc, operated at 46.5pc in the second quarter. Capacity usage at LNG terminals in Europe, China and Japan are mostly in the range of 30-50pc, and the rest of India's five terminals with a combined 25mn tons a year in capacity operate at 20-40pc of that. Judging by deliveries in January-July this year, India's LNG imports stood at 16mn t, compared to an annual installed import capacity of 47.7mn t. Strategic location Importers in the country have little option of switching to other facilities because of the strategic location of Dahej and Hazira, which are well connected by major pipelines to the country's western region — where consumption is strong. The cost structure breakdown for a customer comes to $11.62/mn Btu at the Dahej terminal, which is calculated based on a delivered LNG price at $10/mn Btu, custom duty of 2.75pc at $0.275/mn Btu, regas price at $0.76/mn Btu, system used gas at $0.07/mn Btu and zone 1 pipeline tariff at $0.51. Tariffs under zone 2 are $0.95/mn btu and zone 3 is at $1.27/mn Btu. The zone 1 tariff is application for pipelines defined as up to 300km from the terminal, followed by between 300-1,200km for zone 2 and zone 3 more than 1,200km. Regulatory scrutiny Weak capacity utilisation levels in India's LNG terminals have attracted the attention of India's Petroleum and Natural Gas Regulatory Board (PNGRB), as it issued a draft proposal for enhanced regulatory control earlier this year. The draft regulations state the PNGRB must approve new facilities or capacity additions, review regasification fees and approve setting up pipeline infrastructure for regasified LNG. Terminal operators are reluctant to share information with the regulator. Total Adani, operator of the 5mn t/yr Dhamra LNG terminal on the east coast, said "requirement to share commercially sensitive information" such as project costs, regasification tariffs and capacity allocation are "not consistent" with the PNGRB Act. "An authorisation regime for LNG terminals may indeed negatively impact healthy competition and create monopolistic behaviour by the existing terminals." Each project would require a certification of registration by PNGRB, and may even face penalties if there are any start-up delays. Developers will also need to publicly disclose their regasification tariffs and other charges for transparency. By Rituparna Ghosh 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