Biden win raises doubts on new US pipeline projects
US pipeline projects will face greater obstacles under a Joe Biden presidency, and some could face the end of the road. But a clampdown on new lines may make existing ones more valuable, and some could be repurposed in an energy transition.
Biden's election win promises an abrupt shift in federal energy policy, including expanding renewables and rescinding preferential policies for the oil and gas sector. His victory over President Donald Trump could spell the end of a very long road for the totemic Keystone XL — an $8bn, 830,000 b/d project that has been on the books for more than a decade, seeking to move crude from western Canada to the US midcontinent (see map). Biden's campaign has pledged to withdraw the presidential permit needed for Keystone XL to operate, ringing a possible death knell for the pipeline.
Canadian firm TC Energy downplayed the Biden risk, banking on the appeal of its partnerships with five indigenous peoples groups as well as $1.6bn in labour agreements with US trade unions. But the company is facing legal headwinds after a key water permit was thrown out by US courts.
The new Democratic administration will be under pressure from environmental groups to take aggressive action on climate issues, and one of the biggest targets is US midstream firm Energy Transfer's Dakota Access pipeline. The 570,000 b/d line, in service since 2017, is facing a possible shutdown in December because of a court case surrounding its environmental permitting. Biden's running mate Kamala Harris was one of three dozen lawmakers who in May urged a federal court to shut the line while a new environmental review is pending. Energy Transfer says it is confident that Dakota Access will continue to operate as the case moves through the courts. But a Biden administration could intervene.
A Biden presidency will also bring a halt to an overhaul of infrastructure permitting rules that Trump finalised this year. Those revisions sought to fast-track the approval of natural gas pipelines and other infrastructure by removing the need for regulators to evaluate "remote" effects such as climate change. Biden has vowed to reverse the changes and apply greater scrutiny on how building new pipelines could increase or reduce emissions. His victory could also pose permitting obstacles for large projects under construction, such as the $6bn Mountain Valley gas pipeline. Environmentalists have asked regulators to revisit how construction could affect endangered species and water quality along the line's route.
Taking the high ground
While some projects face a tougher road ahead, US midstream operators are touting the value of pipelines already in the ground. A Biden government could lift the value of existing infrastructure and rekindle interest in a waning midstream corporate structure, US independent refiner Phillips 66's chief executive, Greg Garland, says. Higher corporate taxes favoured by Democrats could increase the value of master limited partnerships that proliferated under President Barack Obama but have consolidated under Trump. And a Democratic administration would support the spread of interest in climate programmes and accounting for the cost of carbon, he says.
US pipeline operator Kinder Morgan chairman Richard Kinder says the firm's vast pipeline infrastructure could be adapted to "play an important role in facilitating many of the changes being advocated to lessen global emissions". Kinder Morgan could modify lines to carry green hydrogen or renewable diesel, he says. Midstream firms' third-quarter earnings calls showed a clear pivot on climate change in the sector, with pipeline giant Enbridge going as far as to pledge net zero carbon emissions from its operations by 2050.
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Indonesia's Pertamina to complete gasoline unit in Aug
Indonesia's Pertamina to complete gasoline unit in Aug
Singapore, 25 April (Argus) — Indonesian state-controlled refiner Pertamina aims to finish building its new 90,000 b/d residual fluid catalytic cracker (RFCC) in the Balikpapan refinery in August, the firm said. The RFCC is a gasoline production unit, which typically uses residual fuel as a feedstock. The unit will be able to produce propylene, LPG and 92R gasoline that will meet the Euro V specifications, said Pertamina last week, without disclosing further details such as the start-up date. The newly built RFCC unit will be the largest in Indonesia, with the second-largest being the 83,000 b/d RFCC in Balongan and the third-largest the 54,000 b/d RFCC in Cilacap. The new RFCC will also help reduce Indonesia's reliance on gasoline imports. Indonesia currently imports around 9mn-11mn bl/month of gasoline, making it the largest gasoline buyer in the Asia-Pacific. The new RFCC will increase Pertamina's gasoline production by a conservative estimate of 45,000 b/d or 1.3mn bl, or around 10pc of Pertamina's current import demand, according to estimates from an oil analyst. The installation of the new RFCC is part of Pertamina's Refinery Development Master Plan (RDMP), which will take place in two phases. The first phase includes revamping existing units at the Balikpapan refinery, such as the crude distillation unit, vacuum distillation unit, and hydrocracking unit. It also involves building new units, such as the aforementioned RFCC, a gasoline hydrotreater, diesel hydrotreater, and naphtha hydrotreater. The second phase includes building a new residue desulphurisation unit. The RDMP also includes expanding the capacity of the Balikpapan refinery from 260,000 b/d to 350,000 b/d, said Pertamina's chief executive officer Nicke Widyawati. The Balikpapan expansion is expected to be completed in May. By Aldric Chew Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
India’s Gail to shut Dabhol LNG terminal for monsoon
India’s Gail to shut Dabhol LNG terminal for monsoon
Mumbai, 25 April (Argus) — Indian state-controlled gas distributor Gail is planning to shut its 5mn t/yr Dabhol LNG terminal on the west coast from 15 May, ahead of monsoon rains. Gail will also stop importing LNG from mid-May at the terminal, a company official told Argus . This is because of the lack of a breakwater facility at the terminal, which prevents it from anchoring ships in turbulent seas. The breakwater facility was expected to be completed in January, but the cause of the delay is unknown. The terminal is likely to resume operations from the end of September, similar to its plans in 2023 , as this shutdown over the monsoon season is routine. Gail is set to receive a total of 139,635t LNG at the Dabhol terminal in May, which will arrive in two separate shipments from the US' 5.75mn t/yr Cove Point export facility. Both cargoes will be the last that the terminal will receive before it shuts in mid-May. It has received 583,326t of LNG at the terminal since the beginning of the year, lower by 4pc on the year, data from market analytics firm Kpler show. The Dabhol terminal only receives about 2.9mn t/yr of LNG, despite having a nameplate capacity of 5mn t/yr, because it is not used during the monsoon season. Gail intends to gradually increase the capacity of the Dabhol terminal to 12mn t/yr by April 2030–March 2031. By Rituparna Ghosh Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Barge delays at Algiers lock near New Orleans
Barge delays at Algiers lock near New Orleans
Houston, 24 April (Argus) — Barges are facing lengthy delays at the Algiers lock near New Orleans as vessels reroute around closures at the Port Allen lock and the Algiers Canal. Delays at the Algiers Lock —at the interconnection of the Mississippi River and the Gulf Intracoastal Waterway— have reached around 37 hours in the past day, according to the US Army Corps of Engineers' lock report. Around 50 vessels are waiting to cross the Algiers lock. Another 70 vessels were waiting at the nearby Harvey lock with a six-hour wait in the past day. The closure at Port Allen lock has spurred the delays, causing vessels to reroute through the Algiers lock. The Port Allen lock is expected to reopen on 28 April, which should relieve pressure on the Algiers lock. Some traffic has been rerouted through the nearby Harvey lock since the Algiers Canal was closed by a collapsed powerline, the US Coast Guard said. The powerline fell on two barges, but no injuries or damages were reported. The wire is being removed by energy company Entergy. The canal is anticipated to reopen at midnight on 25 April. By Meghan Yoyotte Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Cepsa supplies HVO bunker fuel in Algeciras
Cepsa supplies HVO bunker fuel in Algeciras
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