Tag: Refineries

The Dow Chemical Company (“TDCC”), a wholly owned subsidiary of Dow (NYSE: DOW), announced today the closing of its green bond offering of $600 million aggregate principal amount of 5.150% notes due 2034 and $650 million aggregate principal amount of 5.600% notes due 2054.

The notes represent the Company’s inaugural green financing instrument, in alignment with Dow’s Green Finance Framework (“Framework”) published on our website on January 25, 2024. The Framework was established to support the execution of Dow’s sustainability strategy and achieve its targets focused on climate protection and a circular economy. Dow intends to allocate proceeds from this offering toward projects that meet eligibility criteria contained within the Framework, including expenditures and investments related to our Fort Saskatchewan, Alberta Path2Zero project. Additional details on eligibility criteria and use of proceeds are available in the Framework.

“This green bond offering marks a foundational opportunity for investors to participate in Dow’s strategy to decarbonize and drive circularity while growing earnings over the cycle,” said Jeff Tate, Dow’s chief financial officer. “We expect the proceeds of this instrument to primarily support our project to build the world’s first net-zero Scope 1 and 2 emissions ethylene and derivates complex in Alberta, which achieved the critical milestone of final investment decision from our Board in November 2023.”

In 2020, Dow announced its intention to be carbon neutral for Scopes 1+2+3 plus product benefits by 2050. The commitment included a mid-term target to reduce by 2030 the Company’s Scope 1 and 2 net annual carbon emissions^[1] by 5 million metric tons versus its 2020 baseline. Achieving this 2030 target represents a total 30% emissions reduction versus Dow’s 2005 level.

Additionally in 2022, Dow announced its Transform the Waste strategy – which will enable the development of circular ecosystems by transforming plastic waste and alternative feedstock to commercialize 3 million metric tons per year of circular and renewable solutions by 2030.

 Carbon emissions refers to GHG emissions in carbon dioxide equivalent (CO2e).

Cautionary Statement about Forward-Looking Statements

Certain statements in this press release are “forward-looking statements” within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements often address expected future business and financial performance, financial condition, and other matters, and often contain words or phrases such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “opportunity,” “outlook,” “plan,” “project,” “seek,” “should,” “strategy,” “target,” “will,” “will be,” “will continue,” “will likely result,” “would” and similar expressions, and variations or negatives of these words or phrases.

Forward-looking statements are based on current assumptions and expectations of future events that are subject to risks, uncertainties and other factors that are beyond Dow’s control, which may cause actual results to differ materially from those projected, anticipated or implied in the forward-looking statements and speak only as of the date the statements were made. These factors include, but are not limited to: sales of Dow’s products; Dow’s expenses, future revenues and profitability; any global and regional economic impacts of a pandemic or other public health-related risks and events on Dow’s business; any sanctions, export restrictions, supply chain disruptions or increased economic uncertainty related to the ongoing conflicts between Russia and Ukraine and in the Middle East; capital requirements and need for and availability of financing; unexpected barriers in the development of technology, including with respect to Dow’s contemplated capital and operating projects; Dow’s ability to realize its commitment to carbon neutrality on the contemplated timeframe, including the completion and success of its integrated ethylene cracker and derivatives facility in Alberta, Canada; size of the markets for Dow’s products and services and ability to compete in such markets; failure to develop and market new products and optimally manage product life cycles; the rate and degree of market acceptance of Dow’s products; significant litigation and environmental matters and related contingencies and unexpected expenses; the success of competing technologies that are or may become available; the ability to protect Dow’s intellectual property in the United States and abroad; developments related to contemplated restructuring activities and proposed divestitures or acquisitions such as workforce reduction, manufacturing facility and/or asset closure and related exit and disposal activities, and the benefits and costs associated with each of the foregoing; fluctuations in energy and raw material prices; management of process safety and product stewardship; changes in relationships with Dow’s significant customers and suppliers; changes in public sentiment and political leadership; increased concerns about plastics in the environment and lack of a circular economy for plastics at scale; changes in consumer preferences and demand; changes in laws and regulations, political conditions or industry development; global economic and capital markets conditions, such as inflation, market uncertainty, interest and currency exchange rates, and equity and commodity prices; business or supply disruptions; security threats, such as acts of sabotage, terrorism or war, including the ongoing conflicts between Russia and Ukraine and in the Middle East; weather events and natural disasters; disruptions in Dow’s information technology networks and systems, including the impact of cyberattacks; and risks related to Dow’s separation from DowDuPont Inc. such as Dow’s obligation to indemnify DuPont de Nemours, Inc. and/or Corteva, Inc. for certain liabilities.

Where, in any forward-looking statement, an expectation or belief as to future results or events is expressed, such expectation or belief is based on the current plans and expectations of management and expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the expectation or belief will result or be achieved or accomplished. A detailed discussion of principal risks and uncertainties which may cause actual results and events to differ materially from such forward-looking statements is included in the section titled “Risk Factors” contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 and the Company’s subsequent Quarterly Reports on Form 10-Q. These are not the only risks and uncertainties that Dow faces. There may be other risks and uncertainties that Dow is unable to identify at this time or that Dow does not currently expect to have a material impact on its business. If any of those risks or uncertainties develops into an actual event, it could have a material adverse effect on Dow’s business. Dow Inc. and The Dow Chemical Company (“TDCC”) assume no obligation to update or revise publicly any forward-looking statements whether because of new information, future events, or otherwise, except as required by securities and other applicable laws.

By corporate.dow/ The Dow Chemical Company, February 9, 2024

Tank storage and logistics provider Advario plans to build an ammonia import terminal in the Port of Antwerp-Bruges. The Hydrogen Council leadership team visited and toured Advario Gas Terminal (AGT).

The market for hydrogen is global, with significant demand in countries that have lower production potential. These countries will look to others for supply. To facilitate this international trade and match demand with supply, the energy transport, storage and logistics sector is of crucial importance. But transporting large quantities of hydrogen across distances is challenging. Hydrogen carriers, such as ammonia, are part of the solution… but also require dedicated infrastructure and safe handling.

Hydrogen Council member Advario, an internationally operating energy storage and logistics provider, aims to bridge international supply and demand. “We believe in the future of hydrogen, as a key part of the clean energy mix, and in ammonia, as one of the better hydrogen carrier solutions,” says Sjoerd Boer, Vice President New Energies at Advario. “We are well placed, with a global portfolio that includes countries with significant (green) hydrogen production potential, such as the United States, Middle East and Australia, and geographies that will have high demand, such as Europe.”

Advario’s two Belgian terminals, Advario Gas Terminal (AGT) and Advario Stolthaven Antwerp (ASA), are in advanced stages of a feasibility study, executed together with their partner Fluxys. The study explores the build of an ammonia import terminal in Antwerp.

And that’s where Hydrogen in Action takes you. Last Friday, Hydrogen Council Directors Steven Libbrect, Daria Nochevnik and Andrei Tchouvelev visited Advario’s AGT terminal. During the visit, we talked about the important role hydrogen carriers as ammonia play in the development of a hydrogen economy, the European need for import- and export facilities for ammonia, and Advario’s ambition to build ammonia storage facilities at one – or perhaps at some point both – of its terminals in the Port of Antwerp-Bruges. The visit closed with a site tour of AGT.

Safety was the main topic of conversation throughout the visit. The import, export and storage of ammonia needs to be handled by an experienced, safe operator. “I enjoyed our discussions and liked what I saw at AGT,” says Andrei Tchouvelev, Director Safety & Regulatory at the Hydrogen Council. “The site does not store ammonia yet, so I focused on getting a feel for the safety culture, overall level of maintenance and the way the team prepares for the potential addition of ammonia storage. The Advario team at AGT is obviously well-prepared, possesses the know-how with regards to technology and engineering capability, and is well-aware of the nature of ammonia. I am impressed.”

Michel Ruttens, Advario’s Vice President of Technology, agrees. Michel: “I am appreciative of Andrei’s kind words, and the interest and engagement of Andrei, Steven [Libbrecht] and Daria [Nochevnik]. Advario knows what it takes to safely and efficiently handle ammonia. At our terminal in Nanjing, China, we have designed, built and operated a large-scale ammonia storage facility, which has been operational since 2017. Pairing that with AGT’s experience safely handling a wide variety of gases and strong track record operating refrigerated storage, we look forward to taking the next step, and contribute to the further development of the hydrogen ecosystem.”

By Hydrogen Council, February 09, 2024

The World Economic Forum seeks to accelerate clean energy investment and opportunities in emerging markets; sees need for up to $2.8 trillion by 2030s.

Investors seeking clean energy investment opportunities globally are eyeing a new initiative announced at the World Economic Forum’s annual gathering in Davos, Switzerland, last month that could help put a spotlight on developing economies’ clean energy needs and their potential projects.

The WEF outlined the creation of a new platform designed to aid developing economies. In the “Network to Mobilize Clean Energy Investment for the Global South,” more than 20 CEOs and government ministers from countries including Colombia, Egypt, India, Malaysia, Nigeria and South Africa, will work together in an attempt to “accelerate clean energy capital solutions in emerging market contexts,” according to the announcement.

The WEF further described a collaborative approach that includes “innovative policies, new business models, de-risking tools and finance mechanisms,” as well as a place to “exchange best practices for attracting sustainable flows of clean energy capital.”

Whitney Sweeney, an investment director for sustainability at Schroders who is based in New York City, is hopeful that attempts such as the WEF’s platform can help investors better understand, and potentially mitigate, investment risks that could eventually lead to greater interest in clean energy investments in developing countries.

“It’s early and a little light on details, but it’s absolutely a positive step toward accelerating the speed and scale of the energy transition,” Sweeney says. “There are opportunities, of course, but there are always risks when we’re talking about emerging markets. For while the potential for high returns exists, emerging markets also come with risks, including political instability, regulatory changes and currency volatility.”

WEF Seeking Triple the Investment

While clean energy investing has increased in recent years, it has been concentrated geographically and focused more on developed countries and China, with developing economies accounting for less than one-fifth of global clean energy investments, Sweeney notes. Such investing in developing countries in the Global South needs to triple and reach a range estimated from $2.2 trillion to $2.8 trillion annually by the early 2030s, up from the roughly $770 billion per year currently focused on such countries, according to the WEF.

While specifics have not yet been outlined, the WEF published a report at the same time the new platform was announced, “Building Trust through an Equitable and Inclusive Energy Transition,” that highlighted the importance of focusing investment in “countries, regions and communities where it can have maximum positive impact.” It also called for reimagining “established financing and investment approaches to bridge the gap between available capital and the needs of emerging and developing economies, as well as addressing energy poverty in advanced economies.” The report also suggested there may be a need for the creation of “regulatory and fiscal policies, and targeted interventions that address the needs of vulnerable communities.”

“If we’re going to have a successful realization of the energy transition, it’s going to rely very heavily on inclusivity,” Sweeney says.

Addressing risks is part of the aim of the new platform, according to Samaila Zubairu, president and CEO of the Africa Finance Corp., who together with Rania Al-Mashat, Egypt’s minister of international cooperation, will chair the network.

“The perception of high risk has deterred investments in emerging markets, particularly in Africa, over the years; yet, from where I sit, there is no shortage of de-risking instruments and bankable projects that not only deliver profitable returns but also accelerate development impact,” said Zubairu in a prepared statement. “Mobilizing investment for the energy transition is now more urgent. It is time for us to shift the narrative surrounding the financing of clean energy in the Global South from an aid case to a viable investment opportunity, without which we will not reach global net zero.”

Minimizing Increased Risks

Bruce Usher, a professor at the Columbia Business School and the faculty director of the Tamer Center for Social Enterprise, also sees the need to focus on boosting investment in developing countries, since the developed world is farther along in both reducing current emissions and limiting further emissions.

“The challenge is that in developing countries, commercial capital is not available for decarbonization,” Usher says. “The risks are greater in developing countries, as sovereign risk is high, especially foreign exchange risk.”

When it comes to climate change solutions, given the long-term nature of most clean-energy investments, a commensurate long-term currency risk is the most critical for investors to grapple with, Usher says. One of the challenges in the developing market is not just that the risks, such as sovereign and currency, may be higher, but also that there is a lack of experience for most commercial institutions. He sees the opportunity for blended finance or a public-private partnership to help ease concerns, should such an effort emerge from the new platform that could help attract capital while potentially reducing risks. While it is not clear exactly how the new platform will function, he suggests that a foreign exchange guarantee, for example, could match the life of renewable energy project investments.

“I would keep an eye on it, because when those tools are available, they’re going to open up some attractive opportunities,” Usher says.

By CIO / Elizabeth Harris, 02.07.2024

Saudi Aramco’s production U-turn will not hit the demand for oilfield services and equipment in the kingdom, analysts have said.

Shares of major oilfield services companies dropped last week after Aramco, the world’s largest oil exporting company, scrapped plans to boost production capacity to 13 million barrels per day by 2027, from 12 million bpd currently.

Analysts say Aramco’s decision may have been influenced by factors such as escalating costs of developing new projects, ample spare capacity and weakening demand outlook for crude amid growing adoption of renewable energy and electric vehicles.

At the moment, Saudi Arabia is only producing 9 million bpd as part of Opec+ supply cuts aimed at stabilising the oil market.

The announcement comes as oilfield services companies, which assist energy producers in drilling new oil and gas wells, are increasingly turning to the Middle East region to drive future growth, especially with the US shale sector facing a slowdown.

Analysts say Aramco will most likely defer expansion projects at the Safaniya and Manifa offshore oilfields in the Arabian Gulf. The company did not immediately respond to a request for comment.

Safaniya, 200km north of the city of Dhahran, is the world’s largest offshore oilfield in terms of recoverable resources.

Aramco was close to selecting preferred bidders for two large onshore engineering, procurement, and construction (EPC) contracts at Safaniya, worth $5 billion, according to media reports last month.

Several oilfield services firms have a large exposure to the kingdom’s jack-up rig market. These rigs are used to drill wells in shallow waters.

“We think the market overreacted and the jack-up rig count will likely remain stable to modestly up in 2024, and other projects, including Marjan, Berri and Zuluf, will continue to move forward,” said James West, senior managing director at Evercore ISI.

Saudi Arabia was deploying 88 rigs as of January, up from 79 in the same period last year, according to Baker Hughes data.

Aramco, which plans to increase the Marjan and Berri fields’ output capacity by 550,000 bpd by next year, may adjust its capital expenditure target lower or increase spending on natural gas, Mr West said.

Aramco has said it would update its capital spending guidance when its full-year 2023 results are announced in March.

The company’s capital expenditure numbers have consistently increased over the past few years amid a growing focus on downstream operations and gas production.

Before reducing its output target, Aramco was expecting its capital expenditure for last year to be in the range of $45 billion to $55 billion, up from $37.6 billion in 2022. It stood at $31.9 billion in 2021 and $26.9 billion in 2022.

“We remain confident the long-duration offshore and international upcycle will continue and drive significant growth opportunities for oilfield services companies in 2024 [and beyond],” Mr West said.

The Big Three of oilfield services – Schlumberger, Halliburton and Baker Hughes – recorded strong fourth quarter results, with higher oil prices boosting drilling activity in the US and international markets.

The companies are optimistic about the Middle East, where several national oil companies are planning to significantly increase their production in the next few years.

Schlumberger, whose shares fell nearly 10 per cent following Aramco’s announcement on January 30, said it was working “very closely” with the state-run energy giant and that, as per its understanding, only two offshore oil expansion projects that have not yet begun would be suspended.

“Our forecast for significant growth for 2024 in the kingdom remains intact,” said Olivier Le Peuch, the company’s chief executive.

“The combination of our revenue mix in the kingdom, which is weighted toward onshore and the expanding gas market, and our unique market position in other countries in the Middle East will continue to support the multi-year growth cycle in the region.

“Global energy demand continues to increase, and international production is expected to play a key role in meeting supply through the end of this decade.”

Halliburton and Baker Hughes declined to comment.

Expansion plans

Meanwhile, other Middle Eastern countries are pressing forward with plans to increase production.

UAE’s Adnoc is investing in its major onshore and offshore oilfields to increase crude production to 5 million bpd by 2027. The Abu Dhabi-based energy company also aims to reach gas self-sufficiency by 2030.

Kuwait plans to bring its oil production up to 3.2 million bpd by next year and 4 million bpd by 2035. It also aims to double its gas production in the longer term.

To achieve these goals, the Gulf country plans to invest $43 billion in oil and gas projects until 2027.

Iraq, Opec’s second-largest producer, is looking to boost its output to 7 million bpd by 2030.

“We saw several final investment decisions [in Iraq] last year and two new bid rounds opened,” said Alexandre Araman, principal analyst, Middle East upstream, at Wood Mackenzie. “Gas is also a priority with aggressive growth target, mainly thanks to projects to capture flared gas.”

Iraq remains the second-biggest country in terms of flaring after Russia, Mr Araman told The National.

By Thenationalnews / John Benny, 02.07.2024

State oil giant Saudi Aramco is in investment discussions with companies in India, a senior executive said on Wednesday. 

“Hopefully we will see some announcements soon on investment in Indian companies,” Faisal Faqeer, senior vice-president, liquids to chemicals development, downstream, at Saudi Aramco, told delegates at the India Energy Week in Goa, without specifying its plans.

The world’s largest crude oil exporter and OPEC kingpin has been boosting its investments in refining and petrochemicals across Asia to secure new markets for its crude, as it sees growth in chemicals central to its downstream expansion strategy.

The world’s largest crude oil exporter and OPEC kingpin has been boosting its investments in refining and petrochemicals across Asia to secure new markets for its crude, as it sees growth in chemicals central to its downstream expansion strategy.

In 2018, Saudi Aramco and Dhabi National Oil Company (ADNOC) joined a consortium of Indian state-run firms to set up a 1.2 million barrels-per-day (bpd) coastal refinery and petrochemical plant in western Maharashtra but the project has faced land acquisition challenges.

Saudi Arabia is pumping around 9 million bpd, well below its roughly 12 million bpd existing capacity after it cut production as part of an agreement with OPEC and its allies last year.Reuters reported last year that India, the world’s third largest oil importer and consumer, had wanted Saudi Arabia’s Aramco to participate in its planned strategic petroleum reserve(SPR) programme to strengthen ties with its key oil supplier.

By Reuters / Sethuraman NR and Nidhi Verma,  February 6, 2024

Germany’s ruling coalition has agreed plans to subsidise hydrogen-ready gas power plants as part of a scheme to close gaps in wind and solar energy supply, the economy ministry said on Monday.

The tender process for four hydrogen-ready gas power plants with total capacity of up to 10 gigawatts (GW) would take place soon, the ministry said, without specifying a date.

It said hydrogen transition plans for the plants should be drawn up by 2032 in order to be fully switched to hydrogen between 2035 and 2040.

By Natural Gas World /  Riham Alkousaa, 02.05.2024

Exxon Mobil Corp. and Chevron Corp. are generating returns not seen since their heyday over a decade ago, with $58.7 billion handed to shareholders last year and more to come in 2024, even if crude prices drop. And yet, they’re struggling to compete in a stock market beholden to Silicon Valley. 

Chevron hit record production in 2023 while buying back 5% of its stock and forecasts oil and gas growth of as much as 7% this year, led by low-cost barrels from the Permian Basin. It was rewarded with a 3% bump in its shares Friday, slightly better than Shell Plc’s gain a day earlier. Exxon, which is gushing cash from the fast-growing oil discovery in Guyana, fell 0.4%. 

Their stellar operational performance wasn’t enough to prevent them slipping further behind tech giants Meta Platforms Inc. and Amazon.com Inc., which surged 20% and 8% respectively. Meta, which already trades twice the price-to-earnings ratio of the oil giants, added $197 billion to its market value as it lifted buybacks and introduced a dividend. The owner of Facebook, Instagram and Whatsapp is now three times the size of Exxon. 

“We are an essential industry to the global economy, an industry that’s been around for a long time and will be around for a long time in the future,” Chevron CEO Mike Wirth said on Bloomberg TV, adding that the company has increased its dividend for 37 consecutive years. “There’s a real value opportunity here for patient shareholders.” 

The US is now the world’s biggest oil producer, pumping about 45% more than Saudi Arabia, in large part due to Exxon and Chevron’s frenetic drilling in the Permian Basin of Texas and New Mexico. And it’s a commodity still in high demand despite efforts to transition away, with consumption expected to rise through 2030 and perhaps beyond. But investors don’t seem to care. Energy makes up just 3.7% of the S&P 500 Index. 

“It should be a signpost flashing green,” said Jeff Wyll, a senior analyst at Neuberger Berman, which manages about $440 billion. “How much smaller can the sector get given its importance in the global market?” 

Equity investors appear to be sending a clear message that Big Tech is the future, and Big Oil is the past. They’re not wrong. Artificial intelligence and cloud computing offer decades of potential profit growth while the transition to lower carbon energy poses an existential threat to the oil majors. The cyclical nature of oil prices, and dependence on curtailed supply from Saudi Arabia to prop up the market, mean investors view oil companies’ cash flows as more volatile than their rivals in tech. 

“For the sector to trade at a higher multiple, the investors need to view oil as moving back into an era of scarcity,” Wyll said. “We may be there in a few years, but we’re not there now.” 

Exxon and Chevron are determined to build their business to withstand such swings, as they have done throughout their more than 140-year histories. Both companies are investing heavily in Guyana and the Permian, where oil can be pumped profitably at less than $35 a barrel, some $40 below current prices. Refining and petrochemicals provide natural hedges to oil while Exxon is expanding trading to boost profits. 

It may be good business, but it’s a hard sell in this market, said Dan Pickering, founder and chief investment officer of Pickering Energy Partners.

“Meta announced a share repurchase authorization that’s essentially the size of Devon plus Diamondback. That makes people look,” Pickering said in an interview. “Chevron says, ‘We’re doing good in the Permian.’ That doesn’t make people look.”

And like all commodity markets, too much success can lead to their downfall. By growing Permian production by around 10% this year and next, Exxon and Chevron are adding to global supplies that risk outpacing demand. It also risks stealing market share from the Saudis, who crashed prices to flush marginal suppliers out of the market in 2014 and 2020. 

For Wirth, those risks are real. 

“We’re very committed to capital discipline through the cycle,” he said. “It’s an industry that at times hasn’t necessarily exhibited that, and I think it’s important our company and other companies remember the lessons of commodity markets.

by Bloomberg , Kevin Crowley / February 05, 2024

The South Asian nation has set in motion a building blitz at its oil refineries to raise production of traditional transport fuels.

The world is on the cusp of what’s likely to be the last big refining boom as India embarks on a capacity expansion to accommodate the country’s rising thirst for fossil fuels.

The South Asian nation has set in motion a building blitz at its oil refineries to raise production of traditional transport fuels such as gasoline and diesel, which could lift capacity by more than 20% over the next five years. Rystad Energy puts the cost of additions at around $60 billion.

It’s a rare boost for a global refining industry that’s in a state of decline in the US and Europe, while China’s massive sector is adjusting to Beijing’s green goals after years of development made it a processing powerhouse. By contrast, India’s growing transport demand and the slower adoption of electric vehicles will keep appetite for gasoline and diesel higher for longer.

“Expansions in the West are non-existent,” said Giovanni Serio, Vitol Group’s head of research. “Expansions continue to be based in the areas where demand is growing. India is the one where we see the continuation of a trend of growth of over 200,000 barrels a day between now and the next four or five years.”

India’s refining capacity is projected to increase by 56 million tons by 2028, Junior Oil Minister Rameswar Teli said last month, without elaborating. That equates to an overall capacity boost of 22%, or 1.12 million barrels a day.

The government has not provided details of how it will reach those lofty levels. By Bloomberg calculations, state-run refiners have announced about 50 million tons of expansions that could fit Teli’s timeline. Projects that account for almost 37 million tons have commissioning dates from 2024 to 2026, but completion of the remaining capacity remains unclear and includes planned additions that are under execution and a consideration stage.

The biggest is at Indian Oil Corp.’s Panipat plant in Haryana state, which is adding 10 million tons and is due to be commissioned at the end of next year. Hindustan Petroleum Corp.’s new Barmer refinery in the northwestern state of Rajasthan is the next largest at 9 million tons. Development is expected to be completed in 2024, with the facility to run at full capacity by 2025.

Smaller expansions are being conducted at the Visakhapatnam and Gujarat refineries, and the Barauni plant at Begusarai city in Bihar state.

Still, Vitol’s Serio says 56 million tons is not an absurd number. “Having said that, I think from our standpoint, when we look at the probability of these projects, we see roughly half of that more likely right now.”

State-run refiners will likely have to shoulder most of the responsibility. Reliance Industries Ltd. — the biggest private oil processor and owner of the giant Jamnagar complex — is seeking to replace gasoline and diesel with clean fuels to take advantage of a transition toward greener energy.

“India has been a laggard in adding new refinery capacity in the past, which requires some catch up if it wants to be more self-sufficient,” said Sushant Gupta, an oil analyst at Wood Mackenzie. The consultant sees the nation’s demand growing 1.3 million barrels a day by 2030.

The Asian nation is not only meeting its own demand requirements, it’s also playing an important role shipping fuels to other regions such as Europe after Russia’s invasion of Ukraine disrupted supply, most notably for diesel.

“Good opportunities are building up for exports,” said Kumod Kumar Jain, senior vice president of downstream research at Rystad Energy. “In Europe, a lot of refineries are getting closed and that’s what everybody in the market is trying to capture.”

The International Energy Agency estimates that India will add 1 million barrels a day of capacity over the six years to 2028, taking processing to 6.2 million barrels a day — a 19% increase to total refining. China is adding more daily volume but the overall capacity boost is 8%. The Middle East is around 9%.

While the percentage gain is big, India’s refining industry is still dwarfed by most other countries including the US and Europe, which are trimming capacity. China’s sector is over three times larger.

India’s planned additions include petrochemical complexes, but most of the capacity will be for transport fuels. The nation’s overall refining capacity was almost 254 million tons as of April 1, 2023, according to government data.

“Given that India is still a developing economy, it makes sense for the country to still focus heavily on traditional fuels investments while at the same time, putting in some groundwork for green energy transition,” said Dylan Sim, an oil analyst at FGE.

India also has plans to boost liquefied natural gas capacity and still heavily relies on coal for power generation, but the country is seeking to be part of the energy transition and has set itself a net-zero goal by 2070.

By Moneyweb / Rakesh Sharma and Sharon Cho, 4 Feb 2024

The Biden administration, under its view that climate change is an existential threat, has taken action on an LNG dilemma. On January 26, 2024 President Biden paused all approvals to permit new LNG export projects.

The U.S. Department of Energy (DOE) says it needs to update its approval process which includes domestic supply, energy security, and greenhouse gas (GHG) emissions. The order calls for a pause that is temporary and will be followed by a period for public response, and will not likely be resolved until after end-of-year elections. This has caused consternation within the oil and gas industry. Here are some facts that may clarify the government’s actions.

Leaky footprint of natural gas and LNG.

When oil and gas are around, methane leaks abound – from wellheads, storage tanks, pipelines, and refineries. This is important to the U.S. government because methane heats the atmosphere up to 80 times more than its big greenhouse gas sister, CO2.

The UN highlighted worldwide methane emissions in a comprehensive report. Worldwide, 60% of methane emissions come from man-made sources. Fossil fuels contribute a third of this (20%) and oil and gas makes up two-thirds of that (13% of total man-made methane emissions). An independent estimate is 7%. Oil and gas is only responsible for 7-13% of all global methane emissions. But methane’s warming effect on the atmosphere is disproportionately high, causing 25% of global warming, according to EDF.

For comparison, in the U.S. oil and gas is responsible for about 30% of all man-made methane emissions. This is a much higher fraction than the global number, and must reflect the huge role of the oil and gas industry in the U.S.

The EDF Contribution.

Nobody has contributed more to make the world aware of the methane danger than the Environmental Defense Fund (EDF).

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EDF unwrapped the science. “The amount of warming over the long term is important, but so is the speed of warming,” said Dr Ilessa Ocko, senior climate scientist of EDF. “By overlooking the near-term warming from methane, we’re missing an opportunity to make a real difference right now, in our lifetime. This truly is the methane moment.”

The UN picked up the baton and carried it all the way to COP27 in Scotland. More recently, COP28 in Dubai has also formalized the methane issue. Fifty oil companies pledged to achieve net-zero methane emissions by 2030 and to end routine flaring from active oil or gas wells. These fifty oil companies amount to half of global production of oil, so their agreement is highly significant. If the pledge succeeds, it will avoid a rise of 0.1 C degrees, equivalent to about 5 years temperature rise under present conditions.

Satellite surveillance and super-emitters.

EDF’s emphasis on measurement of methane emissions has been invaluable to the oil and gas industry who had been flying blind. Ground-based and satellite detectors have provided numbers, locations, and sources of emission plumes. The plume in Figure 2 enabled the operator to confirm and repair the leak.

A new study, based on measurements of methane emissions from the European Space Agency’s Sentinel-5P satellite, listed eight countries that have methane intensities of 5-25%, much higher than the global average of 2.4%. The countries are Venezuela, Turkmenistan, Uzbekistan, Angola, Iraq, Ukraine, Nigeria and Mexico. This cries out for better regulation to lower methane leaks which are eminently fixable.

MethaneSAT, a subsidiary of EDF, is planned to be launched by SpaceX in early 2024. It will concentrate on emissions from the oil and gas industry, especially lower emissions from many sources that can add up to a serious overall level.

How fed actions may affect the golden age of LNG.

The golden age of LNG has come about because of the need for energy security for the EU after Russia’s war on Ukraine, as well as LNG displacing coal-fired power plants in Southeast Asia and China. An insightful article by Bloomberg epitomizes this LNG boom. QatarEnergy and its backers are investing $45 billion (yes that’s billion) to expand the country’s LNG exports, although its already one of the top three LNG exporters in the world – along with Australia and the U.S. A Japanese firm building the expansion has enlisted 30,000 workers from 50 countries.

Four other huge LNG expansions are planned in Louisiana and Texas: Plaquemines, Rio Grande, Port Arthur and Golden Pass. In a few years, by adding 80 million tons of capacity, the U.S. will separate as the top LNG exporter.

Can the fed pause in LNG impact the LNG industry? Yes, according to Bloomberg. The development of an LNG project is fraught with uncertainties, especially the lengthy timeframe of LNG. LNG developers in the U.S., such as Cheniere, try to get contract commitments from customers that last 10 years or even longer – before they go about finding investors in a new project. But they understand if they expand too fast they risk a glut in the market. If they move too slow, they risk the market switching to coal. The fed pause kicks in a new uncertainty about the future of LNG.

Can the fed pause reduce greenhouse gas emissions? IEA has estimated emissions from all existing LNG facilities, including burning of the LNG, and come up with 1.5 billion metric tons per year of CO2 equivalent, Bloomberg said. This is 3.8% of total global emissions. For 300 million tons of new LNG permitted facilities, this would raise the stakes by an extra 1.2 billion metric tons of CO2 equivalent, or 3.0% of global total. The grand total of LNG emissions would then be almost 7% of global. This needs to be rationalized.

Bill McKibben, famous for his opposition to the Keystone XL oil pipeline, has protested the LNG expansion. “No one can sign a paper that says it’s time to transition from fossil fuels and then permit” new U.S. projects that will add to global emissions, McKibben said.

This is a dilemma for governments. On one hand, LNG provides energy security and reduces emissions by displacing coal-fired power plants. On the other hand, LNG causes carbon emissions, first, from methane leaks in LNG production and distribution and, second, from CO2 when LNG is burned.

By Forbes NEWS / Ian Palmer , 02.02.2024