Mexico cuts natural gas supply to Braskem plant
Mexico's state-owned pipeline administrator Cenagas cut natural gas supply to Braskem Idesa's Ethylene XXI plant based on corruption allegations.
"The company will have no more natural gas because the contract has expired — supply was not interrupted — and it will not be renewed," President Andres Manuel Lopez Obrador said today.
Braskem Idesa's natural gas transport contract expired at the end of November. Cenagas decided not to renew it given alleged corruption in the awarding of the contract, a government official told Argus today.
Gas transport contracts would usually only be cancelled or not renewed in the event of failure to pay, a former Cenagas official told Argus.
Braskem Idesa's 58,771 GJ/d gas transport contract — required to power operations at its plant — started on 1 July 2017 and expired on 30 November, according to information from the Cenagas electronic bulletin board.
The plant has been at the center of a long-running corruption investigation linked to Braskem's parent company, Brazil's Odebrecht.
President Andres Manuel Lopez Obrador has repeatedly called for cancellation of state-owned Pemex's 20-year contract — signed in 2010 — to sell ethane to the ethylene plant at below-market cost.
The contract has proven controversial as, in addition to the below-market rates, Pemex has been forced to make costly ethane imports to meet demand in its own ethylene plants.
Pemex's ethane production from wet gas processing — which is essential to meet contractual commitments to the plant — dropped to a five-year low of 61,000 b/d in October, down from the 80,000 b/d produced in October last year and down from 70,000 b/d in the previous month.
Following the failure of Braskem Idesa and Pemex to renegotiate terms, Lopez Obrador said he had ordered cancellation of the contract on 13 November. Braskem Idesa maintained at the time that the contract remained valid.
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Japan’s Idemitsu builds stake in refiner Fuji Oil
Japan’s Idemitsu builds stake in refiner Fuji Oil
Tokyo, 17 April (Argus) — Idemitsu has agreed to buy an additional stake in fellow Japanese refiner Fuji Oil from domestic power producer Jera, adding to their existing partnership. Idemitsu on 16 April said it will buy Jera's entire 8.75pc share of Fuji, raising its stake to 21.79pc, for ¥2.5bn ($16.2mn). It is unclear when the companies will complete the deal. Jera declined to disclose the reasons for selling its stake. Idemitsu in March also bought domestic petrochemical producer Sumitomo Chemical's stake in Fuji to boost its share to 13.04pc from 6.58pc, becoming its main shareholder. It aims to further optimise fuel oil production and sales including refinery operations, while promoting decarbonisaton of its businesses. Idemitsu is enhancing its partnership with Fuji in the face of shrinking domestic oil and petrochemical demand and growing consumption in overseas, especially in southeast Asia. Idemitsu owns the 190,000 b/d Chiba refinery in the Keiyo industrial complex in east Japan's Chiba prefecture where Fuji operates the 143,000 b/d Sodegaura refinery. Their refineries are connected to Sumitomo Chemical's Chiba plant. Idemitsu's refineries also include the 150,000 b/d Hokkaido in the northernmost prefecture of Hokkaido, the 160,000 b/d Aichi in Aichi prefecture in central Japan and the 255,000 b/d Yokkaichi in Mie prefecture in the country's west. Idemitsu's subsidiary Toa Oil operates the 70,000 b/d Kawasaki refinery in east Japan's Kanagawa prefecture. By Nanami Oki Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
BHP to expand gas-fired West Australia power station
BHP to expand gas-fired West Australia power station
Sydney, 17 April (Argus) — Australian resources firm BHP plans to increase power generation at its 154MW Yarnima gas and diesel-fired facility near the Pilbara iron ore mining hub of Newman in Western Australia (WA) state. The proposal, according to documents filed with WA's Environmental Protection Authority (EPA), will see output increase by 85MW to a total of 239MW through gas reciprocating engines and associated infrastructure with up to 120MW of nominal new capacity to be built in stages. Peak scope 1 greenhouse gas (GHG) emissions from the project are predicted to be 480,030 t/yr of carbon dioxide equivalent (CO2e), while scope 3 emissions related to supplying the gas are expected to be 37,260t CO2e/yr. Power demand at BHP's iron ore operations in the Pilbara is forecast to increase from 150MW currently to 1GW by 2040, as the company reduces its GHG emissions through electrification of its rail and mining fleets and must balance renewables with firmed generation. The iron ore mining sector is a large-scale producer of Australian GHG emissions through its Pilbara-based operations. Displacing liquid fuels such as diesel, which Australia consumes at an average rate of around 500,000 b/d by electrifying processes and switching to lower CO2-emitting sources such as gas, is expected to trend as Australia's largest polluters meet government mandates . Yarmina currently runs a 35MW diesel-fired temporary power station as part of its installed capacity. Canadian energy firm TransAlta earlier this year lodged plans to build a new 150MW gas-fired power station for BHP's Nickel West operations in WA's Northern Goldfields region. WA's domestic market is likely to be short on gas later this decade despite being Australia's largest LNG export state, the Australian Energy Market Operator (Aemo) has warned in its Western Australia Gas Statement of Opportunities. Aemo's modelling released last year shows the closure of WA's state-owned coal-fired power stations will drive increased requirements for gas-fired electricity generation in the next decade. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US Gulf lowest-cost green ammonia in 2030: Report
US Gulf lowest-cost green ammonia in 2030: Report
New York, 16 April (Argus) — The US Gulf coast will likely be the lowest cost source of green ammonia to top global bunkering ports Singapore and Rotterdam by 2030, according to a study by independent non-profits Rocky Mountain Institute and the Global Maritime Forum. Green ammonia in Singapore is projected to be sourced from the US Gulf coast at $1,100/t, Chile at $1,850/t, Australia at $1,940/t, Namibia at $2,050/t and India at $2,090/t very low-sulphur fuel oil equivalent (VLSFOe) in 2030. Singapore is also projected to procure green methanol from the US Gulf coast at $1,330/t, China at $1,640/t, Australia at $2,610/t and Egypt at $2,810/t VLSFOe in 2030. The US Gulf coast would be cheaper for both Chinese bio-methanol and Egyptian or Australian e-methanol. But modeling suggests that competition could result in US methanol going to other ports, particularly in Europe, unless the Singaporean port ecosystem moves to proactively secure supply, says the study. In addition to space constraints imposed by its geography, Singapore has relatively poor wind and solar energy sources, which makes local production of green hydrogen-based-fuels expensive, says the study. Singapore locally produced green methanol and green ammonia are projected at $2,910/t and $2,800/t VLSFOe, respectively, in 2030, higher than imports, even when considering the extra transport costs. The study projects that fossil fuels would account for 47mn t VLSFOe, or 95pc of Singapore's marine fuel demand in 2030. The remaining 5pc will be allocated between green ammonia (about 1.89mn t VLSFOe) and green methanol (3.30mn t VLSFOe). Rotterdam to pull from US Gulf Green ammonia in Rotterdam is projected to be sourced from the US Gulf coast at $1,080/t, locally produced at $2,120/t, sourced from Spain at $2,150/t and from Brazil at $2,310/t. Rotterdam is also projected to procure green methanol from China at $1,830/t, Denmark at $2,060/t, locally produce it at $2,180/t and from Finland at $2,190/t VLSFOe, among other countries, but not the US Gulf coast . The study projects that fossil fuels would account for 8.1mn t VLSFOe, or 95pc of Rotterdam's marine fuel demand in 2030. The remaining 5pc will be allocated between green ammonia, at about 326,000t, and green methanol, at about 570,000t VLSFOe. Rotterdam has a good renewable energy potential, according to the study. But Rotterdam is also a significant industrial cluster and several of the industries in the port's hinterland are seeking to use hydrogen for decarbonisation. As such, the port is expected to import most of its green hydrogen-based fuel supply. Though US-produced green fuels are likely to be in high demand, Rotterdam can benefit from EU incentives for hydrogen imports, lower-emission fuel demand created by the EU emissions trading system and FuelEU Maritime. But the EU's draft Renewable Energy Directive could limit the potential for European ports like Rotterdam to import US green fuels. The draft requirements in the Directive disallow fuel from some projects that benefit from renewable electricity incentives, like the renewable energy production tax credit provided by the US's Inflation Reduction Act, after 2028. If these draft requirements are accepted in the final regulation, they could limit the window of opportunity for hydrogen imports from the US to Rotterdam to the period before 2028, says the study. By Stefka Wechsler Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Shale discipline even at $200/bl: Ex-Pioneer CEO
Shale discipline even at $200/bl: Ex-Pioneer CEO
New York, 16 April (Argus) — Public independent shale oil producers will remain disciplined and keep production steady even if crude prices soar on geopolitical tensions, according to the former chief executive officer of Pioneer Natural Resources. "Even if oil gets to $200/bl, the independent producers are going to be disciplined," Scott Sheffield said today at the Columbia Global Energy Summit in New York. Public independents showed restraint when oil prices jumped in the immediate aftermath of Russia's invasion of Ukraine in 2022, as they focused on improving shareholder returns rather than ramping up production to take advantage of short-term prices, he said. One benefit of the recent wave of consolidation is that it may kickstart some growth in a sector that has showered shareholders with excess cash via dividends and share buybacks in recent years. Before Pioneer agreed to be bought for $59.5bn by ExxonMobil late last year, the company was only increasing output at around 5pc a year. Once the acquisition closes, the top US oil major is going to grow Pioneer's assets at 10-15pc a year, said Sheffield. "That's an example where somebody is stepping up and adding production," he added. Global crude prices have moved very little since the weekend when Israel and allies thwarted a massive missile and drone attack from Iran. WTI today fell by just 5¢/bl to $85.36/bl while June Ice Brent fell by 8¢/bl to $90.02/bl. The industry veteran stepped down as chief executive at the end of last year but remains on the board of Pioneer. By Stephen Cunningham Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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