Scrubbers' future hinges on carbon capture
The International Maritime Organization's (IMO) requirement for vessels to reduce CO2 emissions could dampen investments in marine exhaust scrubbers unless they are redesigned to capture carbon while remaining cost competitive with low-carbon bunkering options.
The IMO in June set carbon intensity reduction targets that require ships to reduce CO2 emission by 40pc by 2030 from 2008 base levels. For scrubbers to remain a viable investment, they need to be refashioned to capture and store CO2 in a way that is cost competitive with low-carbon versions of ammonia, hydrogen and methanol as well as biofuels and LNG.
The IMO allows ships that burn high-sulphur fuel oil (HSFO) to use scrubbers to remain compliant with its January 2020 regulation capping marine fuel sulphur content at 0.5pc. Scrubbers are designed to capture sulphur oxide (SOx), nitrogen oxide (NOx) and particulate matter, but not greenhouse gas emissions. A study conducted by consultancy CE Delft showed that the use of scrubbers boosts CO2 emissions by 1.5-3pc because of the additional fuel required to operate the scrubber.
Scrubber manufactures such as Alfa Laval, Wartsila, Teco 2030, Value Maritime and Yara Marine are developing scrubbers that capture CO2. The IMO would allow for the use of on-board carbon capture and storage technology to meet its 2030 target, but has not yet developed guidelines. It is currently looking into guideline proposals from member countries.
The cost of capturing and storing CO2 is a moving target. A 2021 paper penned jointly by the Massachusetts Institute of Technology and ExxonMobil pegs the cost at $4-45/metric tonne (t), depending on scale and transportation costs, among other factors. Burning 1t of HSFO emits about 3.151t of CO2,so carbon storage and capture could add between $12.60-141.80/t, or between 3-36pc to the current cost of HSFO of about $400/t in Rotterdam. But fueling ships with low-carbon fuels appears far more expensive.
Argus pegs the cost of grey ammonia as an alternative marine fuel at $1,056/t premium, or 264pc of the cost of HSFO in northwest Europe. The cost of green ammonia exceeds HSFO by about $2,262/t or 565pc. LNG as an alternative marine fuel currently exceeds HSFO by about $417/t or 104pc, and fatty acid methyl ester (Fame) biodiesel exceeds HSFO by $2,058/t or 514pc.
In the eight plus years until the 2030 CO2 regulation takes effect, carbon capture and storage costs are likely to stabilize, and green ammonia prices could drop as the cost of renewable electricity used for its production declines. If scrubbers with CO2 capture capabilities gain traction, they could breathe new life into the HSFO bunker market, which saw consumption drop last year.
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Karoon cuts 2024 guidance on lower US output
Karoon cuts 2024 guidance on lower US output
Sydney, 19 April (Argus) — Australia-listed oil producer Karoon Energy has cut its production guidance for 2024 to reflect lower production from its stake in the Who Dat floating production system in the US' Gulf of Mexico. Who Dat's weaker well and facility performance has led to the lower guidance, with Karoon now expecting to produce 29,000-34,000 b/d of oil equivalent (boe/d) in 2024, down from a previous 31,000-37,000 boe/d guidance. Karoon said it and joint-venture partner LLOG Exploration will continue to prioritise higher value oil production over gas for the remainder of the year. The firm's January-March output rose by 17pc against October-December 2023 . Who Dat's production on a net revenue interest (NRI) basis was 9,000 boe/d for January-March, with Karoon downgrading its forecast NRI production from 4mn-4.5mn boe in 2024 to 3-3.5mn boe. But output from Karoon's Bauna asset offshore Brazil was 15pc lower than the previous quarter because of continuing reliability problems with Bauna's floating production, storage and offloading (FPSO) vessel, the shut-in of the SPS-88 well for the full period and natural field decline. Production for January-March at Bauna was 24,000 b/d, down from 28,000 b/d the previous quarter. Karoon expects to resume production from the well during July-September following an intervention, assuming no delays in regulatory approval. Bauna's annual maintenance will take place next month with a three-week shutdown of the FPSO planned to boost reliability. By Tom Major Karoon Energy results Jan-Mar '24 Oct-Dec '23 Jan-Mar '23 y-o-y % ± q-o-q % ± Sales revenue ($mn) 197 209 144 37 -6 Production (b/d) 34,000 29,000 22,000 55 17 Sales volume (b/d) 30,000 28,000 22,000 36 7 Average prices ($/bl) Bauna oil price 76 83 73 4 -8 Who Dat sales gas ($/mn ft³) 2.95 2.22 n/a n/a 33 Who Dat oil, condensate, NGLs 78 73 n/a n/a 7 Source: Karoon Energy Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Australia’s Woodside records weaker Jan-Mar LNG output
Australia’s Woodside records weaker Jan-Mar LNG output
Sydney, 19 April (Argus) — Australian independent Woodside Energy's January-March output dropped against a year earlier and the previous quarter, as reliability fell at its 4.9mn t/yr Pluto LNG project offshore Western Australia. Woodside produced 494,000 b/d of oil equivalent (boe/d) across its portfolio for January-March, 5pc below the 522,000 boe/d reported during October-December and 4pc below its 2023 full-year figure of 513,000 boe/d. Lower production at its Bass Strait, Pyrenees and Pluto assets was partially offset by increased production at the 140,000 b/d Mad Dog phase 2 oil field in the US Gulf of Mexico, which hit peak production of 130,000 b/d during the quarter. Reliability at Pluto was 94.6pc for the quarter because of an offshore trip and an onshore electrical fault. Woodside made a final investment decision (FID) on the Xena-3 well to support Pluto production during the quarter. The 16.9mn t/yr North West Shelf (NWS) LNG achieved 97pc reliability for the quarter with NWS' joint-venture partners taking a FID on the Lambert West field, which will support continuing production. Lower seasonal market demand and offshore maintenance activity saw production drop at the firm's Bass Strait fields, while production ended at the Gippsland basin joint venture's West Kingfish platform because of slowing oil output from Kingfish field. The Pyrenees floating production storage and offloading vessel began planned maintenance in early March and will return to crude production for April-June, Woodside said. Two 550,000 bl cargoes of Pyrenees crude loaded each quarter during 2023. Revenue dropped by 31pc to $2.97bn from $4.33bn a year earlier and 12pc from $3.36bn during October-December. Woodside's total average realised price dipped to $63/boe, 6pc down on the previous quarter's $67/boe and 26pc below the year-earlier figure of $85/boe. Woodside's average realised price for LNG produced was $10.40/mn Btu or 10pc down on the previous quarter's $11.50/mn Btu. The firm is more heavily exposed to spot prices and gas hub pricing than fellow domestic LNG producer Australian independent Santos, with about 30pc of Woodside's equity-produced LNG sold at these spot prices. By Tom Major Woodside LNG production (mn boe) NWS Pluto Wheatstone* Total Jan-Mar '24 8.2 11.8 2.4 22.3 Oct-Dec '23 7.8 12.4 2.5 22.7 Jan-Mar '23 9.7 12.2 2.5 24.3 2023 32.8 45.6 10.2 88.6 2022 29.7 46.2 9.2 85.1 y-o-y % ± -15 -3 -4 -8 q-o-q % ± 5 -5 -4 -2 Source: Woodside *Woodside controls a 13pc interest in Wheatstone LNG Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Wind capacity additions down 93pc under AMLO
Wind capacity additions down 93pc under AMLO
Mexico City, 18 April (Argus) — Mexico installed just 96MW of wind power capacity in 2023, a new low amid President Andres Manuel Lopez Obrador's policy to limit private sector development. Last year's wind power capacity additions were down by 93pc from the 1,281MW installed during Lopez Obrador's first full year in office in 2019, according to the Global Wind Report 2024 published by the Global Wind Energy Council. New wind power additions were also down by 39pc from the 158MW installed in 2022. Lopez Obrador's statist energy policy has sought to claw back state-owned utility CFE's market position in the face of an enormous private sector clean energy build out launched during the previous administration. Between 2016 and 2018 CFE held three long-term power auctions, contracting 7,000MW of new renewable energy projects as the government made a push to decarbonize Mexico's power matrix. But Lopez Obrador ruled out further auctions and has actively curtailed the award of new generation permits, stalling the development of 5,800MW of wind projects, according to wind energy association Amdee. Mexico has 7,413MW of installed wind capacity, accounting for 8.2pc of the country's 89,890MW total installed generation capacity, according to the energy ministry. Despite the slowed pace in Mexico, new wind installation continued to grow in Latin America last year, led by Brazil with 4.8GW to bring total onshore capacity in the country to 30.4GW in 2023. GWEC expects 28.7GW of new wind capacity in Latin America over the next five years, on top of the 50.6GW of current capacity. Globally 117GW of new wind energy capacity was installed last year, up by 50pc on the previous year and a new record. GWEC expects global wind capacity to double to 2TW by 2030, as governments agreed to triple global renewable energy capacity at the climate talks in Dubai last year. The outlook for Mexican wind power also looks more positive with both presidential candidates in the 2 June election committed to accelerating the energy transition through the build out of new clean energy capacity. Governing party candidate and current frontrunner Claudia Sheinbaum pledged to make renewable energy a "hallmark" of her administration and committed this week to investing $13.6bn in clean energy projects if elected. By Rebecca Conan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
TUI Cruises receives methanol-ready ship
TUI Cruises receives methanol-ready ship
New York, 18 April (Argus) — Cruise ship company TUI Cruises took delivery of a methanol-ready cruise ship which will start operations at the end of June. Methanol-ready vessels allow ship owners to easily retrofit their vessels to burning methanol in the future. The 7,900t deadweight Mein Schiff 7 will operate in the North Sea, the Baltic Sea, along the European Atlantic coast and in the Mediterranean and run on marine gasoil (MGO). It was built by Finland's Meyer Turku shipyard. In January, TUI Cruises signed a memorandum of understanding with trading company Mabanaft for future supply of green methanol. Mabanaft would cover TUI's methanol needs in northern Germany, and gradually add other European locations. Grey methanol was pegged at $717/t MGO equivalent and biomethanol at $2,279/t MGOe average from 1-18 April in Amsterdam-Rotterdam-Antwerp. About 0.9 times and 2.9 times, respectively, the price of MGO, Argus assessments showed. TUI Cruises is a joint venture between the German tourism company TUI AG and US-based cruise ship company Royal Caribbean. By Stefka Wechsler Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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