Stolt Tankers tests marine biofuel at Rotterdam
Norwegian shipowner Stolt Tankers successfully trialled marine biofuel at the Dutch port of Rotterdam last week.
The marine biofuel was supplied by Netherlands-based GoodFuels, and was used in Stolt Tankers' 37,000 dwt chemical tanker Stolt Inspiration on a journey from Rotterdam to Houston to assess its use in engines and boilers.
The fuel supplied was functionally equivalent to conventional fuels, so no modifications had to be made to the engine. GoodFuels' supply is derived from used cooking oil (UCO), tallow, and waste animal fats. GoodFuels said it can reduce carbon emissions by up to 90pc compared with conventional bunker fuels.
Biofuels are one of several alternative fuels under consideration by Stolt Tankers, said its president Lucas Vos, including hydrogen, wind power, ammonia, and methanol as potential future fuels.
Goodfuels, one of several marine biofuel producers in Europe alongside Shell and Finland's Neste, has supplied marine biofuel to shipping firms such as Stena Bulk, Ocean Network Express, Minship, Klaveness, and to German car maker Volkswagen.
Trading firm Trafigura's bunker supply joint venture TFG Marine and Exonnmobil has successfully trialled marine biofuels.
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G7 leaders to meet over Iran's attack on Israel
G7 leaders to meet over Iran's attack on Israel
Dubai, 14 April (Argus) — Leaders of the G7 will meet today, 14 April, to co-ordinate a diplomatic response to Iran's overnight air attack on Israel, which ushered a new phase in a six-month conflict that is threatening regional escalation. G7 presidency Italy "has organized a conference at leaders' level for the afternoon of today," Italian prime minister Giorgia Meloni said on X, formerly Twitter. US President Joe Biden has pledged a co-ordinated G7 diplomatic response and condemned the Iranian assault. Iran fired hundreds of drones and missiles against Israel on the evening of 13 April, according to the country's state-owned news agency Irna. Almost all were intercepted before they reached Israeli airspace and there were no fatalities reported by Israel. One civilian was injured and an air force base in southern Israel was lightly damaged, according to the Israel Defence Forces (IDF). The Iranian attack came in response to a suspected Israeli air strike on the vicinity of Iran's embassy compound in Damascus, Syria, on 1 April. Tehran's foreign minster Hossein Amir-Abdollahian said Iran considers this to be the end of its operation. But energy markets, which have been supported in recent weeks by a geopolitical risk premium, will face a week of uncertainty about whether Israel will retaliate. The front-month June Ice Brent contract was trading at $90.45/bl before markets closed for the weekend, and hit a more-than five month high of $92.18/bl on Friday, 12 April. Israeli officials said the attack was "a severe and dangerous escalation" from Tehran. Israel's war cabinet is meeting today to discuss a response. "We will build a regional coalition and exact the price from Iran in the fashion and timing that is right for us," said cabinet minister Benny Gantz. The US is urging Israel to claim victory for its defence, in an apparent effort to discourage Israeli prime minister Benjamin Netanyahu's government from feeling compelled to retaliate. While noting that Israel ultimately will make the decision as to how to respond, White House national security communications co-ordinator John Kirby, in a televised interview today, hailed what he called Israel's "incredible military achievement" in defending itself against the attack. Very little managed to penetrate the defensive shield, "and the damage was extraordinarily light," he said. The US military played a role in helping to defend against the attack, bringing down "several dozens of drones and missiles," Kirby said. UK prime minister Rishi Sunak said the Royal Air Force shot down "a number of Iranian attack drones". Israel's western allies are urging it to show restraint as they try to prevent a wider conflict in the Middle East, which could directly affect oil producers and send energy prices soaring. President Biden is especially keen to avoid such a scenario in an election year. By Bachar Halabi and David Ivanovich Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
India's Modi exploits energy to boost poll support
India's Modi exploits energy to boost poll support
Short-term support for key election constituencies could weigh on longer-term energy policy priorities, writes Rituparna Ghosh Mumbai, 12 April (Argus) — Energy issues are taking a starring role in India's forthcoming election, less because of what is at stake in terms of long-term policy and more because of how the government of prime minister Narendra Modi is using voter-friendly initiatives to try and secure the support of key parts of the electorate. India's federal elections are set to take place over the next two months, and Modi's BJP party holds a comfortable poll lead over a largely disorganised opposition — a lead they hope will translate into an absolute majority for a third consecutive term. But Modi's government is looking to consolidate that support through a number of measures that embrace both traditional and cleaner energy sources. The government has cut retail gasoline and diesel prices after a two-year freeze, and expanded subsidies for LPG — a key cooking fuel for many Indian households. At the same time, it has subsidised ethanol production, providing a boost to Indian farmers, and launched a $9bn programme to promote rooftop solar power. The 2 rupees/litre ($3.80/bl) cut in fuel pump prices is the most eye-catching move so far, and the most blatant pre-election bribe — it was unveiled just two days before India's election rules prevented the government from making any further new policy announcements. These measures may help Modi secure a third term, but they could also create problems for his next administration in areas of energy security, foreign investment and energy transition. Freezing over The two-year fuel price freeze that preceded the recent cut was the longest in India's history, suspending previous reforms that allowed prices to fluctuate in line with movements in global oil markets. Price controls on diesel and gasoline had been lifted in October 2014, but the government has frequently interfered with pump prices — especially prior to state and federal polls — through the country's state-controlled oil marketing companies — state-run firms, led by Indian Oil, control 90pc of India's fuel market. The two-year freeze began in May 2022, when international crude prices reached $120/bl following Russia's invasion of Ukraine three months earlier, sending Indian pump prices to record highs. Modi's government has also played some other familiar vote-winning cards. LPG subsidies have long been exploited by Indian politicians to win favour with voters, and the BJP increased these subsidies by more than fivefold in its 2023-24 budget — to $1.5bn from $273mn — to boost access to LPG and reduce cooking gas prices for poorer households. Around 322mn Indian households use LPG, but domestic consumption has plateaued at around 28mn t/yr in recent years. LPG subsidies have been maintained at $1.5bn in the 2024-25 budget. The extra funds announced last month enabled the government to extend by one year, to April 2025, a Rs300 ($3.60) LPG cylinder subsidy for poor households, in addition to implementing a general Rs100 price cut for a 14.2kg LPG cylinder to Rs503. Access to LPG has already been vastly expanded by Modi's Pradhan Mantri Ujjwala Yojana programme for women in poorer households, launched during his first term in 2015. The scheme has enabled 100mn poor, rural households to secure access to LPG, helping them switch away from harmful biomass such as wood and reducing the incidence of respiratory disease among rural women. The LPG subsidies are aimed at the rural poor, but Modi's government is framing its enthusiastic support for ethanol and biofuels to woo a different constituency — farmers in the politically powerful states of Uttar Pradesh, Maharashtra and Karnataka. New Delhi is promoting ethanol for blending with gasoline and has set a 20pc blending target by 2025. This move could improve India's energy security and trade balance by reducing its dependence on imported crude, which meets around 88pc of its crude needs. The government estimates it saved $2.7bn by blending ethanol into gasoline in 2021-22, and blending in the three months to January 2024 reached 11pc. But more importantly, particularly with an election looming, biofuels are additional sources of revenue for both farmers and distillers. Ethanol in India is derived primarily from sugar cane, which makes it politically sensitive. India's sugar cane industry is the second-largest in the world after Brazil, and sugar cane farmers are an important voting block — Uttar Pradesh and Maharashtra are the biggest producing states and played a major role in Modi's re-election in 2019. Farmers in these states previously faced regular late payments from sugar distillers, to the tune of hundreds of millions of dollars outstanding. But the additional income that sugar mills now generate from ethanol has allowed them to catch up on these arrears, oil minister Hardeep Puri says. The government has also promoted solar power to households, under a $9bn rooftop solar plan that aims to install solar panels in 10mn households. New Delhi is offering a 60pc subsidy on the entire system cost, with loans available to cover the balance. The proposed scheme may add 30GW of solar power capacity through residential rooftop solar panels, an area where India has lagged behind. Longer-term costs The current focus on voter-friendly energy policies comes at a cost. Longer-term objectives relating to energy security — specifically strategic petroleum storage — energy transition and foreign investment have received less attention. Budget allocations to state-run oil companies for energy transition investments have been halved in the current fiscal year, to $1.8bn, and actual disbursement of these funds has been postponed until the 2024-25 fiscal year. The government in November scrapped its plans to buy $603mn of crude to fill its strategic underground storage, after providing for such outlays in the 2023-24 budget, and it has not made any allocation for refilling strategic stocks in its 2024-25 budget. New Delhi is also facing delays in building the 6.5mn t second phase of its strategic petroleum reserve, owing to challenges with funding and the potential role of foreign partners. It initially wanted to build the reserve on its own but subsequently sought third parties to help with funding. It has now invited bids to build India's first commercial strategic storage, comprising 2.5mn t of underground storage at Padur in Karnataka at a cost of $700mn, with state-controlled Saudi Aramco and the UAE's state-owned Adnoc. Discussions begin this week. India will need to resolve and make progress on these issues, given its aspiration to join Paris-based energy watchdog the IEA, whose rules stipulate that members must hold strategic oil stocks equivalent to 90 days of net imports. The Indian reserve's first phase offers 5.33mn t of storage capacity across three sites, equivalent to only seven days of crude demand, government documents indicate. On foreign investment, India's demand potential is helping attract investors to green energy, to the tune of $6bn over April 2020-September 2023, power minister RK Singh told the Indian parliament in December. But the country's chronic inability to lure investors into oil and gas remains a problem, particularly in light of Modi's ambitions of making India an economic superpower to rival China. Foreign investment in India's oil and gas sector reached a record $806mn in 2019-20, before the Covid-19 pandemic, oil ministry data show. But it plunged to just $56mn in 2021-22 and to $108mn in 2022-23, representing a nugatory 0.2pc of total foreign direct investment flows into the country. Foreign investment in exploration totalled just $16mn in 2022-23, while investment in refining was nil. Indian ethanol blending FDI in Indian oil and gas Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Gunvor set for buying spree after windfall: CEO
Gunvor set for buying spree after windfall: CEO
London, 12 April (Argus) — Trading firm Gunvor plans to use part of a massive earnings windfall over the past two years to build out its asset base, its chief executive Torbjörn Törnqvist told Argus . "Today, we are under-invested in assets so we will change that," Törnqvist said, adding that investments would be broad based and to some extent opportunistic. "We will employ quite a lot of capital in investments." Independent commodity trading companies are sitting on unprecedented piles of cash after two years of bumper earnings arising from supply chain disruptions and market volatility. While Geneva-based Gunvor is smaller than its peers Vitol, Trafigura and Mercuria, it is still a huge company by most metrics. It reported revenues of $127bn in 2023 and a profit of $1.25bn, following a record $2.36bn in 2022. It has kept most of its earnings in house and had an equity position of almost $6.16bn by the end of 2023 — its highest ever. Törnqvist is eyeing further growth. "We will definitely be a much bigger company, that I can say," he replied when asked where he saw Gunvor in 10 years' time. "I think we will grow in tune with the [energy] transition." Trading firms are looking for ways to keep their competitive advantage, particularly given the uncertainties associated with the energy transition. One emerging trend is an appetite for infrastructure. Vitol is in the process of buying a controlling stake in Italian refiner Saras, which operates the 300,000 b/d Sarroch refinery in Sardinia. Trafigura said this week that it is in talks to buy ExxonMobil's 133,000 b/d Fos refinery on the French Mediterranean coast. Part of the rationale behind these moves is to increase optionality and take advantage of the loss of Russian products to the European market, as well the closure of large chunks of local refining capacity. Gunvor owns the landlocked 100,000 b/d Ingolstadt refinery in Germany and a 75,000 b/d refinery in Rotterdam, where it plans to shift away from fossil fuel use. "Many oil refineries have been up for sale and still are," Törnqvist said. Asked if Gunvor was looking for something similar, he said the company is interested in the "right opportunity" whether in upstream, downstream, midstream or shipping. "It all feeds into what we are doing and all supports our underlying trading," he said. But Törnqvist suspects a lot of Gunvor's growth will come from gas and power — areas where trading companies are already seeing rising profits. The company made its first investment in a power generation asset late in 2023, when it agreed to buy BP's 75pc stake in the 785MW Bahia de Bizkaia combined-cycle gas turbine plant in Bilbao, Spain. It has signed a slew of LNG offtake agreements in the past year and continues to grow its LNG tanker fleet . "We're building logistical capabilities in LNG," Törnqvist said. "Oil is here to stay" Törnqvist said Gunvor is well placed to navigate the energy transition, and is stepping up investments in renewables and biofuels and expanding into carbon and metals trading. "There will be disruptions, there will be different paths to the transition in different parts of the world which go at different paces and have different priorities and ways to deal with it," he said. "This will create opportunities." But Törnqvist is clear that oil and gas will remain an integral part of Gunvor's business. "We feel that oil is here to stay," he said. "And it will grow for several years." By Aydin Calik Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
French union eyes strike over Exxon's petchem closure
French union eyes strike over Exxon's petchem closure
Barcelona, 12 April (Argus) — ExxonMobil's plan to close its Gravenchon petrochemical plant in Normandy has raised the possibility of more strike action in France's downstream oil sector. The CGT trade union has called on all ExxonMobil workers in France to down tools and for the "immediate shutdown of installations". The situation is fluid and it is not immediately clear whether workers will vote on strikes today or if ExxonMobil's operations in France will be stopped. "We are preparing our plan of action. We will be announcing it very soon," a union official told Argus. ExxonMobil said on 11 April that the Gravenchon plant has made more than €500mn ($540mn) in losses since 2018 and that it cannot afford to continue operating at such a loss. The firm expects the site to fully close, including the steam cracker and related derivatives units, at some point this year with the loss of 677 jobs. "The configuration of the steam cracker, its small size compared to newer units, high operating costs in Europe and higher energy prices make it uncompetitive," it said. The announcement coincided with news that a consortium comprising trading firm Trafigura and energy infrastructure company Entara is in talks to buy ExxonMobil's 133,000 b/d Fos refinery on the French Mediterranean coast. As well as the direct job losses at Gravenchon, the CGT said there would be an additional loss of work for around 3,000 indirect positions and sub-contractors. The local prefecture of Seine Maritime said the decision will have a "very serious impact on employment and the local economy". The CGT said upgrades costing around €200mn are needed at Gravenchon, which is "around 0.5pc" of ExxonMobil's total profit in 2023. ExxonMobil said the decision to close the plant will not impact operations at its adjacent 236,000 b/d Port Jerome refinery. "In current market conditions, the refinery will continue to operate and supply France with fuels, lubricants, basestocks and asphalt," the firm said. ExxonMobil has reduced its exposure to Europe's downstream sector in recent years, selling the 198,000 b/d refinery at Augusta in Italy to Algerian state-owned Sonatrach in 2018 and divesting its stake in the 126,500 b/d Trecate refinery in northern Italy to local refiner API last year. By Adam Porter Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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