Oman to develop green hydrogen project
Oman will develop its first green hydrogen project using solar and wind power, state-owned energy company OQ said.
The 25,000MW project will be developed by a consortium of OQ, Hong Kong-based green hydrogen firm InterContinental Energy and Kuwait's clean energy investment firm Enertech. It did not give details on a timeline for the project, which has been in a planning phase for three years with wind and solar studies conducted in Oman's central Al-Wusta governorate.
The power generated will be used for water desalination and electrolysis at a coastal facility that will produce 1.8mn t/yr of green hydrogen and up to 10mn t/yr of green ammonia. The hydrogen could be used domestically, exported directly or converted into green ammonia for export, the consortium said.
"Existing energy infrastructure in Oman provides additional future options to develop synthetic fuels for the aviation sector, which will be critical for decarbonization," it said.
InterContinental Energy works with a consortium on a similar project in Australia, using 15,000MW of wind and solar power to produce hydrogen and ammonia for export to Asia-Pacific. It plans to make a final investment decision on that by 2025, and said that the falling cost of wind and solar means it possible for hydrogen and green ammonia export projects to be developed at scale.
These lower costs and the growing importance of reducing emissions has pushed the Mideast Gulf's traditionally oil-and-gas focused economies to consider options for hydrogen and ammonia production. Saudi Arabia shipped its first blue ammonia cargo last September as a trial for use in power plants with no CO2 emissions, and the UAE is building a hydrogen business case and aims to be a major global supplier.
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US southbound barge demand falls off earlier than usual
US southbound barge demand falls off earlier than usual
Houston, 1 May (Argus) — Southbound barge rates in the US have fallen on unseasonably low demand because of increased competition in the international grain market. Rates for voyages down river have deteriorated to "unsustainable" levels, said American Commercial Barge Line. Southbound rates declined in April to an average tariff of 284pc across all rivers this April, according to the US Department of Agriculture (USDA), which is below breakeven levels for many barge carriers. Rates typically do not fall below a 300pc tariff until May or June. Southbound freight values for May are expected to hold steady or move lower, said sources this week. Southbound activity has increased recently because of the low rates, but not enough to push prices up. The US has already sold 84pc of its forecast corn exports and 89pc of forecast soybean exports with only five months left until the end of the corn and soybean marketing year, according to the USDA. US corn and soybean prices have come down since the beginning of the year in order to stay competitive with other origins. The USDA lowered its forecast for US soybean exports by 545,000t in its April report as soybeans from Brazil and Argentina were more competitively priced. US farmers are holding onto more of their harvest from last year because of low crop prices, curbing exports. Prompt CBOT corn futures averaged $435/bushel in April, down 34pc from April 2023. Weak southbound demand could last until fall when the US enters harvest season and exports ramp up southbound barge demand. Major agriculture-producing countries such as Argentina and Brazil are expected to export their grain harvest before the US. Brazil has finished planting corn on time . unlike last year. The US may face less competition from Brazil in the fall as a result. Carriers are tying up barges earlier than usual to avoid losses on southbound barge voyages. Carriers that have already parked their barges will take their time re-entering the market unless tariffs become profitable again. The carriers who remain on the river will gain more southbound market share and possibly more northbound spot interest. By Meghan Yoyotte and Eduardo Gonzalez Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Larger EU H2 bank auction could still clear below €1/kg
Larger EU H2 bank auction could still clear below €1/kg
Hamburg, 1 May (Argus) — The EU will launch a second European hydrogen bank auction later this year, ramping up the budget from a pilot for which results were published on 30 April. A bigger budget will allow more projects to win subsidies, but developers might still have to bid at or below €1/kg to stand a chance of being successful. As a result of the pilot, the EU will subsidise seven renewable hydrogen projects in Spain, Portugal, Norway and Finland with a total €720mn ($768mn), to be disbursed as a fixed premium per kg produced over a 10-year period. The European Commission picked the projects that requested the least support and the auction cleared at €0.48/kg, far below the bid ceiling of €4.50/kg . A second auction later this year is slated to have a much larger budget of around €2.2bn. This could open the door for projects with less competitive bids, but developers may still have to bid for less than €1/kg, data released by the commission suggest. If another €2.2bn had been available to the "next best projects" in the pilot, bringing the total budget to nearly €3bn, the auction would have cleared at around €1/kg, the data indicate. Spanish projects would have been the main beneficiaries of the larger budget. But it would have also unlocked subsidies for projects that did not field any winners in the pilot, including Germany, France, Austria and the Netherlands. This suggests that projects in these countries might be able to get subsidies in the second auction. That said, some German projects that participated in the pilot are bound to get funds from a separate €350mn budget set aside by Berlin , meaning they could not take part in the next round. In any case, the second round could clear even far below €1/kg, if developers revise their bidding strategies now they have indications from the pilot on how low they might have to go. Such signposts were not available for the first round, other than from a Danish auction last year with similar parameters — which had indicated that winning bids in the hydrogen bank pilot were likely to stay well below €1/kg . The commission plans to tighten some of the eligibility criteria for the second round , which might prevent some projects from participating again. A draft document suggests winners of the second round would have to commission their plants within three years, down from five in the pilot. And developers would have to provide a completion guarantee equivalent to 10pc of the requested subsidies, up from 4pc. The second auction will also have a lower bid ceiling of €3.50/kg based on the draft, although this is highly unlikely to be tested by the successful submissions. Budget uncertainties While previous commission comments suggested a budget of around €2.2bn for the second round, the draft rules leave the exact funds open. The commission initially earmarked €800mn for the pilot and might top up the second round with the unused €80mn. It plans to set an unspecified slice of the budget aside exclusively for projects targeting offtake for maritime transport, adding a degree of complexity. Austria is planning to top up the second auction with €400mn , while others, such as Belgium , could follow suit. Moving the needle? While bids in the pilot auction came in well below the ceiling — and are bound to do so again in the second round — the funds will only be enough to support a fraction of the EU's 10mn t/yr renewable hydrogen production target by 2030. The pilot auction will subsidise 1.58mn t, or 158,000 t/yr, of production from the seven selected projects — assuming the support they secured will be enough to get them built as planned. If the next best projects from the pilot were to repeat their bids in a €2.2bn second round successfully, the round could support close to 300,000 t/yr. While this would lift subsidised output across both auctions to nearly 460,000 t/yr, it would still be less than 5pc of the 10mn t/yr target. Assuming developers that missed out in the first round shoot lower in the second and the volume-weighted average of successful bids is in line with the pilot's €0.45/kg, 480,000 t/yr could be subsidised. Together with the pilot, this would yield 640,000 t/yr, or just over 6pc of the EU's target, although extra funds from Germany, Austria and potentially others could lift this further. The EU hopes this initial operating support, combined with subsidies for capital expenses, infrastructure developments and demand-side initiatives, will be enough to kickstart the sector and other projects will follow even without hydrogen bank support. By Stefan Krumpelmann Renewable H2 projects selected in hydrogen bank pilot auction Project Coordinator Project location H2 output t/yr Electrolyser capacity MW Bid price €/kg Requested funding mn € eNRG Lahti Nordic Ren-Gas Finland 12,200 90 0.37 45.2 El Alamillo H2 Benbros Energy Spain 6,500 60 0.38 24.6 Grey2Green-II Petrogal Portugal 21,600 200 0.39 84.2 Hysencia Angus Spain 1,700 35 0.48 8.1 Skiga Skiga Norway 16,900 117 0.48 81.3 Catalina Renato PtX Spain 48,000 500 0.48 230.5 MP2X Madoqua Power2X Portugal 51,100 500 0.48 245.2 - European Commission Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
New US rule may let some shippers swap railroads
New US rule may let some shippers swap railroads
Washington, 30 April (Argus) — US rail regulators today issued a final rule designed to help customers switch railroads in cases of poor rail service, but it is already drawing mixed reviews. Reciprocal switching, which allows freight shippers or receivers captive to a single railroad to access to an alternate carrier, has been allowed under US Surface Transportation Board (STB) rules. But shippers had not used existing STB rules to petition for reciprocal switching in 35 years, prompting regulators to revise rules to encourage shippers to pursue switching while helping resolve service problems. "The rule adopted today has broken new ground in the effort to provide competitive options in an extraordinarily consolidated rail industry," said outgoing STB chairman Martin Oberman. The five-person board unanimously approved a rule that would allow the board to order a reciprocal switching agreement if a facility's rail service falls below specified levels. Orders would be for 3-5 years. "Given the repeated episodes of severe service deterioration in recent years, and the continuing impediments to robust and consistent rail service despite the recent improvements accomplished by Class I carriers, the board has chosen to focus on making reciprocal switching available to shippers who have suffered service problems over an extended period of time," Oberman said today. STB commissioner Robert Primus voted to approve the rule, but also said it did not go far enough. The rule adopted today is "unlikely to accomplish what the board set out to do" since it does not cover freight moving under contract, he said. "I am voting for the final rule because something is better than nothing," Primus said. But he said the rule also does nothing to address competition in the rail industry. The Association of American Railroads (AAR) is reviewing the 154-page final rule, but carriers have been historically opposed to reciprocal switching proposals. "Railroads have been clear about the risks of expanded switching and the resulting slippery slope toward unjustified market intervention," AAR said. But the trade group was pleased that STB rejected "previous proposals that amounted to open access," which is a broad term for proposals that call for railroads to allow other carriers to operate over their tracks. The American Short Line and Regional Railroad Association declined to comment but has indicated it does not expect the rule to have an appreciable impact on shortline traffic, service or operations. Today's rule has drawn mixed reactions from some shipper groups. The National Industrial Transportation League (NITL), which filed its own reciprocal switching proposal in 2011, said it was encouraged by the collection of service metrics required under the rule. But "it is disheartened by its narrow scope as it does not appear to apply to the vast majority of freight rail traffic that moves under contracts or is subject to commodity exemptions," said NITL executive director Nancy O'Liddy, noting it was a departure from the group's original petition which sought switching as a way to facilitate railroad economic competitiveness. The Chlorine Institute said, in its initial analysis, that it does not "see significant benefit for our shipper members since it excludes contract traffic which covers the vast majority of chlorine and other relevant chemical shipments." By Abby Caplan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Milei's bid to open Argentina's economy passes
Milei's bid to open Argentina's economy passes
Montevideo, 30 April (Argus) — Argentina's congress today approved the government's sweeping economic legislation that could open the door to more private-sector investment in energy and commodities. The bill passed on a 142-106 vote, with five abstentions, after a marathon 20-hour debate. Changes include privatizing some state-owned companies, controversial labor reforms and measures to promote LNG development. The omnibus legislation, which includes 279 articles, is an important victory for President Javier Milei's administration and will change the way many sectors, including energy, operate in the country. Lawmakers aligned with Milei's Liberty Advances party swiftly moved to the second stage of the process, which requires approval of individual articles. The omnibus bill was initially approved in February, but the administration withdrew it after congress failed to approve several key individual articles. That original version included 664 articles. Several of the more controversial articles were brought up immediately after the blanket approval and easily passed. They included an article allowing for privatization of state-run enterprises — national power company Enarsa is on the list — and another delegating to the administration the power to eliminate state agencies without having to consult with congress. Also approved was the article on labor reform. The country's oilseed industry and port workers' unions called a strike the previous day to pressure congress to modify the labor reform. That did not happen. It passed in a separate 136-113 vote. The strike started to fizzle with approval of the legislation. Approval of the package includes several articles the administration says will open the door to major investments in the energy sector. Chapter II specifically covers natural gas, and introduces new regulations for LNG. The chapter includes five articles that allow for 30-year contracts for LNG export projects and guarantees that gas supply cannot be interrupted for any reason. The energy secretariat has six months to design the implementing rules for LNG. The government wants to speed up monetization of the Vaca Muerta unconventional play, which has an estimated 308 trillion cf of natural gas reserves. It is pushing for Malaysia's Petronas to fully commit to a large-scale LNG facility that would start with a $10bn investment. Chapter IX of the legislation creates a new framework, known as the Rigi, for investments above $200mn. It offers tax, fiscal and customs benefits. Companies have two years from implementation of the legislation to take advantage of the Rigi. The chapter on this framework is one of the most complex in the bill, including 56 articles. It includes specific references to energy projects, from power generation to unconventional oil and gas development. The administration claims the legislation will help tame inflation and stabilize the economy. Inflation was 276pc annualized through February, but is declining, and Milei announced that monthly inflation would be in single digits when the March numbers are announced. The country recorded a 0.2pc quarterly fiscal surplus in the first quarter of this year, something not achieved since 2008. By Lucien Chauvin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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