Westlake says Louisiana facilities largely undamaged
Westlake Chemical said its Louisiana plants "incurred limited physical damage" from Hurricane Ida.
Westlake shuttered operations at its plants ahead of the storm, and did not provide an estimate as to when operations will resume. Restarting will depend on the availability of power and industrial gases, the Houston-based operator said.
Westlake operates a 1.36mn t/y steam cracker and derivative units in Lake Charles, Louisiana, and operates other derivative units in Geismar and Plaquemine, Louisiana.
Local utility Entergy said eight major power transmission lines serving much of the refinery-heavy New Orleans area were knocked out over the weekend, as well as some generating plants serving greater New Orleans. Power was restored to about 10pc of affected customers in the state by last night, but it may take much longer to restore power to the region.
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LNG-burning vessels well positioned ahead of 2025
LNG-burning vessels well positioned ahead of 2025
New York, 19 September (Argus) — Vessels outfitted with dual-fuel LNG-burning engines are poised to have the lowest marine fuel expense heading into 2025 when the EU will tighten its marine EU emissions trading system (ETS) regulations and add a new regulation, " FuelEU", from 1 January 2025. Considering both regulations, at current price levels, fossil LNG (also known as grey LNG) will be priced the cheapest compared with conventional marine fuels and other commonly considered alternative fuels such as biodiesel and methanol. The EU's FuelEU maritime regulation will require ship operators traveling in, out and within EU territorial waters to gradually reduce their greenhouse gas (GHG) intensity on a lifecycle basis, starting with a 2pc reduction in 2025, 6pc in 2030 and so on until getting to an 80pc drop, compared with 2020 base year levels. The FuelEU GHG intensity maximum is set at 85.69 grams of CO2-equivalent per MJ (gCO2e/MJ) from 2030 to 2034, dropping to 77.94 gCO2e/MJ in 2035. Vessel pools exceeding the FuelEU's limits will be fined €2,400/t ($2,675/t) of very low-sulphur fuel oil (VLFSO) energy equivalent. GHG emissions from grey LNG vary depending on the type of marine engine used to burn the LNG, but ranges from about 76.3-92.3 gCO2e/MJ, according to non-governmental environmental lobby group Transport & Environment. This makes a number of LNG-burning, ocean-going vessels compliant with FuelEU regulation through 2034. The EU's ETS for marine shipping commenced this year and requires that ship operators pay for 40pc of their GHG generated on voyages within, in and out of the EU. Next year, the EU ETS emissions limit will increase to 70pc. Even with the added 70pc CO2 emissions cost, US Gulf coast grey LNG was assessed at $639/t VLSFOe, compared with the second cheapest VLSFO at $689/t, B30 biodiesel at $922/t and grey methanol at $931/t VLSFOe average from 1-18 September (see chart). "In 2025, we expect [US natural gas] prices to rise as [US] LNG exports increase while domestic consumption and production remain relatively flat for much of the year," says the US Energy Information Administration. "We forecast the Henry Hub price to average around $2.20/million British thermal units (mmBtu) in 2024 and $3.10/mmBtu in 2025." Provided that prices of biodiesel and methanol remain relatively flat, the projected EIA US 2025 LNG price gains would not affect LNG's price ranking, keeping it the cheapest alternative marine fuel option for ship owners traveling between the US Gulf coast and Europe. LNG for bunkering global consumption from vessels 5,000 gross tonnes and over reached 12.9mn t in 2023, according to the International Maritime Organization (IMO), up from 11mn t in 2022 and 12.6mn t in 2021. The maritime port authority of Singapore reported 111,000t of LNG bunker sales and the port authorities of Rotterdam and Antwerp reported 319,000t in 2023 from all size vessels. Among vessels 5,000 gross tonnes and over, LNG carriers accounted for 89pc of LNG bunker demand globally, followed by container ships at 3.6pc, according to the IMO. The large gap between LNG global and LNG Singapore, Rotterdam, and Antwerp bunker demand, is likely the result of most of the demand taking place at the biggest LNG export locations where LNG carriers call, such as the US Gulf coast, Qatar, Australia, Russia and Malaysia. By Stefka Wechsler USGC bunkers and bunker alternatives $/t VLSFOe Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Indonesia issues regulation to build energy reserves
Indonesia issues regulation to build energy reserves
A strategic energy reserve comprising stocks of LPG, oil and gasoline could be ready by 2035 under a presidential decree, writes Prethika Nair Singapore, 17 September (Argus) — Indonesia's government has issued a presidential decree outlining plans to build strategic energy reserves, including LPG, by 2035. The decree sets out the goal of establishing stockpiles amounting to 9.64mn bl of gasoline, 10.17mn bl of oil and 525,800t of LPG within the next 11 years. "The government is aware of the importance of having sufficient energy reserves to handle risks such as global oil price fluctuations, natural disasters, or supply disruptions," Indonesian agency the National Energy Council's (NEC) secretary general, Djoko Siswanto, said on 6 September. "The provision of the [reserves] will be carried out in stages until 2035, according to the country's financial capabilities." Funds for establishing the reserves will come from the state budget and other legitimate resources, he said. The NEC will oversee the regulations while the energy ministry and companies with permits in the energy sector will manage the reserves, according to Djoko. Management includes procurement of supplies from domestic production or imports, as well as investment in infrastructure and maintenance, and the use and recovery of the reserves. The location of the reserves will be based on local geology, ease of distribution, spatial planning, supporting infrastructure and the potential for crises or emergencies, and where infrastructure is not sufficient, new facilities will be built, Djoko said. Indonesia aims to reach 1mn b/d of oil production and 12bn ft³/d (124bn m³/yr) of gas production by 2030. But its oil output fell to 606,000 b/d in 2023 from 612,000 b/d in 2022, energy ministry data show. The country's LPG imports amounted to about 6mn t in 2023, energy minister Bahlil Lahadalia says. This contrasts with imports of just over 7mn t, relatively unchanged from a year earlier, Kpler data show. The country imported around 369,000 b/d of gasoline and 29,000 b/d of crude. The energy ministry in August announced plans to boost oil and gas output by reactivating up to 1,500 idle wells, drilling more than 1,000 new wells a year and increasing recovery rates at existing wells to 50pc from 30pc. Indonesia gas production Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Duqm plans key to Oman’s LPG export outlook
Duqm plans key to Oman’s LPG export outlook
The revival of a major petrochemical project could cap exports despite rising production, writes Ieva Paldaviciute Dubai, 17 September (Argus) — Production from the new Duqm refinery has boosted Oman's LPG output this year, and driven an 89pc year-on-year rise in exports to 371,000t for the first eight months of 2024, according to data from analytics firm Kpler. But plans for new petrochemical facilities linked to the refinery could put a cap on export capacity in the near future. Oman's LPG output has more than doubled within the past decade, from 420,000t (13,400 b/d) in 2015 — the earliest year for which energy and minerals ministry data are available — to around 990,000t last year. That is due in large part to the start-up of state-owned OQ's Salalah LPG extraction plant in the southern Dhofar governorate. The first-of-its-kind gas treatment project in Oman and now contributes close to 300,000 t/yr to the country's LPG output. The majority of Oman's LPG production now comes from downstream facilities operated by OQ — around 62pc of last year's output came from its 198,000 b/d Sohar and 106,000 b/d Mina al Fahal refineries. Another 30pc came from the Salalah LPG plant, and just 8pc from the upstream Bukha and West Bukha, Saih Rawl and Wadi Aswad fields. Shortly before the Salalah plant came on line, OQ in early 2021 started up its Liwa Plastics Industrial Complex (LPIC), whose 880,000 t/yr ethylene steam cracker would fast become a major LPG consumer. Output from the steam cracker, in turn, feeds the complex's 880,000 t/yr polyethylene and 300,000 t/yr polypropylene units. This contributed to a near collapse in Omani LPG exports in the first quarter of 2021, as OQ started diverting the Sohar refinery's LPG output to feed LPIC. But once the Salalah LPG plant began to ramp up, Oman managed to gradually resume exports, this time from Salalah port. This has enabled Oman to export refrigerated LPG cargoes on larger tankers, with Sohar previously only able to accommodate pressurised or midsize carriers. Oman is now a net LPG exporter, but still imports the occasional cargo when Sohar is unable to provide sufficient feedstock supply to LPIC — Sohar port received 104,000t of LPG between January and August, according to data from analytics firm Kpler. Both the Sohar refinery and LPIC are in northern Oman, far from the sultanate's other LPG production points. Chemical ambitions Oman's LPG output and exports have been lifted this year by new supply from the 230,000 b/d Duqm refinery, which at full capacity can produce up to 15,000 b/d of LPG. The facility was inaugurated in February but appears to have exported its first LPG cargo in September 2023, according to Kpler data, although this is not recorded in government data. But future exports could be capped if a new planned petrochemical complex, fed with naphtha and LPG produced at Duqm, is built alongside the refinery. Operator OQ8 — a 50:50 joint venture between OQ and Kuwait's state-owned KPI — initially had plans to build a 1.6mn t/yr petrochemicals complex, but design works were suspended in 2020, during the early part of the Covid-19 pandemic, because of the uncertain demand outlook. Plans appeared to have been revived in 2022, when OQ and KPI welcomed Saudi chemical giant Sabic onboard to develop a jointly owned petrochemical complex in Duqm. This project envisaged construction of a steam cracker and derivative units, as well as a natural gas liquid extraction facility. The three parties signed a non-binding agreement in late 2022, but a final investment decision has not yet been made. Oman LPG infrastructure Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
LPG World editorial: Cracks appear
LPG World editorial: Cracks appear
The emergence and growing supplies of alternative feedstocks are challenging LPG's position in Europe London, 17 September (Argus) — The European petrochemical sector's growing appetite for LPG has been vital in maintaining the region's position as an important LPG hub over the past few decades. But this outlet could come under increasing strain from more readily available and competitively priced naphtha from European refineries, as well as ethane from the US, all while regional olefins production flags. Europe's LPG production and demand for LPG as a fuel is in a state of long-term decline. The former is being constricted by North Sea field decline and energy transition pressures in Norway and the UK, even if investment is made to try to shore up North Sea oil and gas supplies in the prelude to net zero. It is also hamstrung by an ageing refining sector sorely lacking in investment and also at threat from the energy transition. Non-petrochemical LPG consumption meanwhile has been sliding and would have fallen more sharply were it not for the growth in autogas sales in eastern Europe — another sector moving towards decarbonisation. This demonstrates how important cheap and abundant US LPG imports have been in terms of supply, and investment in the flexibility of Europe's fleet of ethylene steam crackers in terms of demand. The latter has arisen from the year-round discounts LPG has secured over naphtha feedstock since US supplies started washing up on Europe's shores. But healthy LPG discounts to naphtha could be about to shrink, because European refineries are increasingly producing more naphtha at the same time as oil products and cracker feedstock demand wanes. The region's refiners have found naphtha weighing much more heavily on their bottom lines since the Covid pandemic. Naphtha's discount to North Sea Dated crude has averaged $8/bl this year in northwest Europe and $11/bl since 2022, compared with $4/bl in 2010-19. EU refiners produced much more naphtha this year and last year than they delivered domestically, including to petrochemical producers, Eurostat data show. This is because the best-value crude for them has become increasingly light. The loss of Russian medium sour Urals owing to EU sanctions has been partly offset by more naphtha-rich US light sweet WTI arriving in the region — climbing to about 1.86mn b/d in the first half of the year from 1.45mn b/d in 2022, Kpler data show. The light naphtha increasingly emerging from refineries is more suitable for cracking. But EU olefins output has shrunk since the pandemic, with cracker operating rates still trailing far behind those prior to 2020. European polypropylene production last year was the lowest since at least 2013 and 20pc lower than a 2017 peak, Eurostat data show. This is partly because the EU petrochemical sector has lost competitiveness with its Asian rivals. Cheap slates The US shale boom that has flooded Europe with cheap LPG has also blessed the US with bountiful volumes of an even cheaper petrochemical feedstock — ethane. Overseas shipments have grown over the past two decades, but the investment needed in ethane-fed crackers, US export capacity and ethane vessels has limited European uptake. Yet flows are increasing. Europe has imported around 180,000 t/month of US ethane this year, steady from 2023 but 12pc more than in 2022, Kpler data show. The US has been shipping 750,000 t/month since 2023, more than triple the 2017 volume. US ethane prices meanwhile keep falling as supplies keep growing. European producer Ineos is due to open Europe's largest cracker in Antwerp by 2026, a 1.4mn t/yr ethane-fed unit. Other investments in new ethane-fed capacity could emerge, or in conversions of crackers. The challenge of getting the ethane over the Atlantic may prolong plans to increase its use in Europe, but it is likely to arrive in increasing volumes and probably join swelling naphtha supplies, potentially reducing LPG's appeal among producers looking to regain their competitive edge. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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