The Oil, Gas, and Petrochemical Industry Newsletter Edition 18
DEEPAK RASTOGI
Oil & Gas Professional | 10+ years experience in Refining and Petrochemical Industry | Chemical Engineer | Energy Sector | Production Manager@ IndianOil
1. Price Trends for Brent, WTI, and Natural Gas
Before diving into the latest developments, let's take a look at the recent price trends for Brent, WTI, and Natural Gas.
2. Circular Economy and Sustainability
The Circular Economy: Insights on Plastics Recycling
The concept of a circular economy aims to minimize waste and make the most of resources. In the context of plastics recycling, this involves designing products to be recyclable, establishing systems to recover end-of-life plastics, and reusing these materials to create new products. John Thayer of Nova Chemicals discusses how his company is advancing this approach by developing new recycling centers and decarbonizing chemical facilities. The goal is to reduce the environmental impact of plastics by ensuring they are reused rather than discarded. This shift not only helps the environment but also creates economic value from waste materials.
Haffner Energy’s New Sustainable Aviation Fuel Venture
Haffner Energy has launched SAF Zero, a new spin-off focused on the sustainable aviation fuel (SAF) market. This venture leverages Haffner Energy’s advanced technology, which can convert various types of organic waste and biomass into syngas (a mixture of hydrogen and carbon monoxide used as a fuel). SAF Zero aims to capitalize on the growing demand for SAF, which is expected to attract over $1 trillion in investments by 2050. This initiative will help reduce the aviation industry’s carbon footprint by providing a cleaner alternative to traditional jet fuels.
Zeopore’s Global Production of Advanced Hydrocracking Zeolites
Zeopore is preparing to commercialize its unique zeolite mesoporization technology, which enhances the performance of hydrocracking (a process that breaks down large hydrocarbon molecules into more valuable smaller ones). Their optimized zeolites can increase the yield of middle distillates (like diesel and kerosene) by 3-7%. This technology not only improves efficiency but also reduces costs and environmental impact. Zeopore is targeting a $200 million revenue over the next decade by partnering with global companies to bring this innovation to market.
Gevo’s Patent for Ethanol-to-Olefins Technology
Gevo has been granted a U.S. patent for its ethanol-to-olefins (ETO) process, which converts ethanol into olefins (key building blocks for producing fuels and chemicals). This process uses proprietary catalysts to achieve high yields and energy efficiency, making it a cost-effective method for producing sustainable aviation fuel (SAF) and other chemicals. Olefins like propylene and butenes are essential for various industrial applications. This patent strengthens Gevo’s position in the renewable fuels market and supports its mission to reduce reliance on fossil fuels.
Louisiana’s Carbon-Negative Biofuels Complex
Woodland Biofuels is investing $1.35 billion to build the world’s largest carbon-negative renewable natural gas and ultra-green hydrogen facility at the Port of South Louisiana. This project will use waste biomass to produce biofuels, significantly reducing carbon emissions by capturing and storing CO2 underground. Phase 1 will remove 210,000 tonnes of CO2 annually, with Phase 2 increasing this to 660,000 tonnes. The facility will create hundreds of jobs and contribute to Louisiana’s economic growth while supporting global efforts to combat climate change.
Hygenco’s Green Ammonia Project in India
Hygenco Green Energies has partnered with REC Ltd. to finance a green ammonia project in Gopalpur, Odisha. Green ammonia is produced using renewable energy sources, making it a sustainable alternative to traditional ammonia, which is used in fertilizers and industrial processes. The project will receive up to $280 million in funding and aims to reduce carbon emissions significantly. Hygenco plans to invest $2.5 billion over the next few years to expand its green hydrogen and ammonia projects across India, supporting the country’s climate goals.
Future of Low-Carbon Solutions: Blue Ammonia
Blue ammonia is produced by capturing and storing the CO2 generated during ammonia production, making it a low-carbon alternative to conventional ammonia. Companies like BASF and Yara are exploring large-scale blue ammonia projects to meet the growing demand for clean energy. These projects aim to capture up to 95% of the CO2 emissions, significantly reducing the carbon footprint of ammonia production. Blue ammonia can be used in various applications, including as a fuel for shipping and power generation, and as a hydrogen carrier, supporting the transition to a low-carbon economy.
3. Global Oil Market Trends
China’s Oil Demand Slowdown and Global Implications
China, the world’s largest oil importer, is experiencing a slowdown in oil demand due to an economic slump and the rise of electric vehicles (EVs). This decline is significant because China’s oil consumption has been a major driver of global demand for decades. The slowdown is causing a ripple effect, leading to lower global oil prices. The International Energy Agency (IEA) notes that this trend could signal a peak in global oil demand sooner than expected. Factors like a weakening real estate market and increased adoption of EVs and high-speed rail are contributing to this shift. This change is reshaping the global oil market, impacting prices and future demand projections.
Russia’s Increasing Idle Oil Refining Capacity
In September, Russia’s idle oil refining capacity surged by 34% compared to August. This increase is due to a combination of technical outages, Ukrainian drone attacks, and seasonal maintenance. The offline capacity reached 3.87 million metric tons, which is 14.5% of Russia’s total refining capacity. This rise in idle capacity typically allows for more crude oil to be available for export. However, the ongoing geopolitical tensions and maintenance schedules are affecting the overall production and refining capabilities. This situation highlights the vulnerabilities in Russia’s oil infrastructure and its impact on global oil supply.
Russia’s Lowest Oil Exports in Three Years
In August 2024, Russia’s oil exports dropped to their lowest level in three years, with a decrease of 290,000 barrels per day, bringing the total to 7 million barrels per day. This decline is attributed to a combination of falling global oil prices and the impact of Western sanctions. The revenue from these exports has significantly decreased due to the lower prices. The price cap imposed by the EU and the U.S. on Russian oil has further pressured Russia’s oil revenue. This situation underscores the challenges Russia faces in maintaining its oil export levels amid economic and geopolitical pressures.
Indian Refiners’ Negotiations for Russian Oil Supplies
Indian refiners are jointly negotiating with Russia for oil supplies for 2025. India, the world’s third-largest oil importer, relies heavily on Russian oil, especially after Western sanctions on Russia. To circumvent the price cap of $60 per barrel imposed by the G7, EU, and Australia, Indian refiners are using Russian insurance for oil priced above this cap. This strategy allows India to secure cheaper oil while ensuring stable supplies. The negotiations also involve discussions with Middle Eastern suppliers to diversify sources. This move highlights India’s efforts to balance its energy needs with geopolitical considerations.
4. Innovations in Energy Technology
Chevron’s Innovative Wind-Powered LNG Vessel
Chevron and Mitsui O.S.K. Lines (MOL) are collaborating to launch the world’s first LNG carrier equipped with Wind-Assisted Ship Propulsion Systems. This vessel, set to be operational by 2026, will feature the Wind Challenger system, which uses telescopic sails to harness wind power, reducing fuel consumption and greenhouse gas (GHG) emissions. The Wind Challenger is designed to integrate seamlessly with the LNG carrier’s existing structure, ensuring safety and efficiency. This innovation represents a significant step towards decarbonizing maritime transport, particularly in the LNG sector, which is crucial for the global energy transition. The project aligns with Chevron’s and MOL’s goals to achieve net-zero emissions by 2050.
SLB and Aker Carbon Capture’s New Decarbonization Company
SLB and Aker Carbon Capture have launched a new joint venture named SLB Capturi, focusing on industrial-scale carbon capture solutions. This company aims to accelerate the adoption of carbon capture technologies, which are essential for reducing industrial CO2 emissions. SLB Capturi offers modular solutions like Just Catch? and Big Catch?, designed to be scalable and adaptable to various industrial needs. These technologies have already been deployed in significant projects across Europe, capturing hundreds of thousands of tonnes of CO2 annually. The venture underscores the importance of carbon capture in achieving global climate goals and supports industries in their decarbonization efforts.
Halliburton’s New Well Intervention Technology
Halliburton has introduced the Clear portfolio, a suite of electromechanical well intervention technologies. This portfolio includes tools like the ClearTrac? wireline tractor and ClearCut? pipe cutters, designed to enhance well intervention operations. The ClearTrac? wireline tractor is particularly notable for its ability to operate in highly deviated or horizontal wells, using real-time telemetry for precise control. These technologies improve efficiency, safety, and performance in well interventions, reducing the need for more invasive and hazardous methods. Halliburton’s innovations aim to extend the productive life of wells and optimize their performance.
Advancements in Natural Gas Compression Technologies
Recent advancements in natural gas compression technology are making the transportation and storage of natural gas more efficient and environmentally friendly. Innovations include the shift from diesel-powered compressors to electric motors, which reduce greenhouse gas emissions and operational costs. New compressor designs are more compact, lightweight, and efficient, benefiting mobile applications. Additionally, digital technologies like sensors and advanced analytics enable real-time monitoring and predictive maintenance, ensuring optimal performance and reducing downtime. These advancements support the broader energy transition by making natural gas a more viable and sustainable energy source.
5. Major Contracts and Projects
Saipem’s $4 Billion Offshore Qatar Contract
Saipem, an Italian engineering and construction firm, has secured a $4 billion EPC (Engineering, Procurement, and Construction) contract from QatarEnergy LNG. This project is part of the North Field Production Sustainability Offshore Compression Program, aimed at maintaining the production levels of the North Field, one of the world’s largest natural gas reservoirs. Saipem’s responsibilities include the engineering, procurement, fabrication, and installation of six platforms, 100 km of corrosion-resistant alloy subsea pipelines, 100 km of subsea composite cables, and 150 km of fiber optic cables. This contract follows a previous EPC package awarded to Saipem in 2022, further solidifying its presence in Qatar. The project is crucial for sustaining Qatar’s LNG production capacity, which is set to increase significantly by 2030.
SOCAR’s Expansion of Heydar Aliyev Refinery
SOCAR, the State Oil Company of Azerbaijan Republic, has awarded NEXTCHEM two contracts to upgrade and expand the Heydar Aliyev Oil Refinery in Baku, Azerbaijan. The expansion includes upgrading the existing sulphur recovery unit (SRU) and adding a new SRU using NEXTCHEM’s proprietary NX SulphuRec? technology. This technology integrates modified Claus and tail gas treatment processes, which are widely used for effective sulphur recovery. The project aims to increase the refinery’s capacity and reduce the environmental impact of sour gases produced during refining. This expansion is part of SOCAR’s broader strategy to modernize its refining capabilities and meet higher environmental standards.
KazMunayGas’s New Polyethylene Plant in Kazakhstan
KazMunayGas, Kazakhstan’s national oil and gas company, has begun construction on a $7.4 billion polyethylene complex in the Atyrau region. This plant, with a capacity of 1.25 million tonnes per year, will be the largest project in Kazakhstan’s manufacturing sector. The project aims to establish an oil and gas chemical industry cluster in the western region of the country. The plant will produce polyethylene, the world’s most common plastic, used in various industries. The construction is expected to be completed by 2029, creating around 8,000 jobs during the construction phase and 800 permanent jobs once operational. This project will boost Kazakhstan’s GDP by 1.2% and reduce reliance on imported polyethylene.
6. Refinery Operations and Expansions
Moscow Oil Refinery Resumes Operations Post-Drone Attack
The Moscow Oil Refinery, owned by Gazprom Neft, resumed operations at its crude distillation Unit-6 (CDU-6) after a drone attack on September 1, 2024. The attack caused a fire, leading to a temporary halt in operations. The Euro+ unit, which processes about 50% of the refinery’s total capacity, was particularly affected. The refinery processes crude oil into products like petrol, diesel, and jet fuel. The quick resumption of operations highlights the refinery’s resilience and the importance of maintaining energy supplies despite geopolitical tensions. This incident underscores the vulnerabilities of critical infrastructure to modern warfare tactics like drone attacks.
Oil India’s Expansion Plans for Numaligarh Refinery
Oil India Ltd. is expanding its Numaligarh Refinery in Assam to increase its capacity to 180,000 barrels per day (bpd) by March 2027. The expansion includes a new pipeline to Paradip Port, expected to be completed by December 2025. This project, with an investment of $3 billion, aims to triple the refinery’s capacity from the current 60,000 bpd. The refinery will also produce ethanol using bamboo as feedstock, contributing to India’s renewable energy goals. This expansion is crucial for meeting the growing energy demands in northeastern India and ensuring a stable supply of fuel to neighboring countries like Bangladesh.
领英推荐
Indian Oil Partners with Univation for Paradip Petrochemical Unit
Indian Oil Corporation (IOC) has awarded Univation Technologies a major contract for its proposed polyethylene unit at the Paradip Petrochemical Complex. This unit will be a critical part of the downstream derivatives operation, integrated with the existing refinery on India’s northeast coast. The complex aims to produce high-quality polyethylene, a key material in various plastic products.
Univation will license its UNIPOL? PE Process technology, which is known for producing a wide range of polyethylene grades efficiently and with fewer environmental impacts. This move aligns with India's strategy to boost domestic production and reduce dependency on imports of petrochemical derivatives.
This collaboration is a significant step for India's growing petrochemical industry, promising enhanced polymer production and catering to both domestic and global markets.
7. Decarbonization and Emission Reductions
UK’s Offshore Oil and Gas Industry Exceeds Emission Goals
The UK’s offshore oil and gas industry has achieved its 2027 emissions reduction target four years ahead of schedule. By the end of 2023, companies reduced their greenhouse gas emissions by over 25%, a goal initially set for 2027 under the North Sea Transition Deal. This was accomplished by making power systems more efficient and reducing flaring (burning off excess gas) and venting (releasing gas into the atmosphere). The industry also more than halved its methane emissions, a gas that is 80 times more harmful than CO2 over 20 years. These efforts are part of the UK’s broader aim to reach net-zero emissions by 2050. The early achievement highlights the industry’s commitment to environmental sustainability while maintaining energy security.
8. Gastech 2024 Highlights
Oil and Gas CEOs Urge Biden to Support U.S. LNG
At the Gastech 2024 conference, oil and gas CEOs, including Chevron’s Mike Wirth, called on the Biden administration to lift the moratorium on new LNG (liquefied natural gas) export permits. The moratorium, imposed earlier this year, aims to scrutinize the environmental and national security impacts of LNG exports. However, industry leaders argue that this policy raises energy costs, threatens supply security for European allies, and slows the transition from coal to gas, which is crucial for reducing emissions. They emphasize that LNG is a cleaner alternative to coal and essential for global energy security. The CEOs urge the administration to recognize the benefits of LNG and support its role in the energy transition.
Golar LNG’s FLNG Conversion Project
Golar LNG has signed a $2.2 billion EPC (Engineering, Procurement, and Construction) agreement with CIMC Raffles to convert an existing LNG carrier into a floating LNG (FLNG) production vessel. This vessel, known as MK II, will have an annual liquefaction capacity of 3.5 million tonnes. The project will use Black & Veatch’s PRICO? technology, which is known for its efficiency and reliability in LNG production. The MK II FLNG is expected to be operational by the fourth quarter of 2027 and will significantly increase Golar’s liquefaction capacity. This project highlights the growing importance of FLNG technology in meeting global LNG demand.
ConocoPhillips CEO on North America’s Gas Resources
At Gastech 2024, ConocoPhillips CEO Ryan Lance emphasized the substantial natural gas reserves in North America, predicting that these resources could last for a century. He called for permitting reforms and infrastructure investments to fully utilize these reserves. Lance criticized the current administration’s pause on LNG export permits, arguing that it hinders economic prosperity, energy security, and environmental protection. He highlighted the role of natural gas in the energy transition, as it is a cleaner alternative to coal and essential for global energy security. Lance’s remarks underscore the need for supportive policies to leverage North America’s gas resources.
TotalEnergies’ LNG Supply Deal with Türkiye
TotalEnergies has signed a 10-year LNG supply agreement with Türkiye’s state-owned pipeline company, BOTA?. Starting in 2027, TotalEnergies will supply 1.1 million tonnes of LNG annually. This deal is part of Türkiye’s strategy to diversify its energy sources and reduce reliance on coal. Natural gas is seen as a bridge fuel that can stabilize renewable energy sources and lower emissions. This agreement strengthens TotalEnergies’ presence in the Turkish LNG market and supports Türkiye’s energy transition goals. It also highlights the growing importance of long-term LNG contracts in ensuring energy security.
RWE and AM Green Ammonia’s Supply Agreement
RWE Supply & Trading has signed a Memorandum of Understanding (MoU) with AM Green Ammonia for the long-term supply of green ammonia from India. Starting in 2027, RWE will receive up to 250,000 tonnes of green ammonia annually. Green ammonia is produced using renewable energy sources, making it a sustainable alternative to conventional ammonia. This agreement supports the EU’s Renewable Fuels from Non-Biological Origin (RFNBO) standards. The partnership aims to help industries achieve their climate goals by providing a reliable supply of low-carbon ammonia. This deal underscores the growing demand for green ammonia in the global energy market.
Ammonia unplugged: The future of low-carbon solutions
At Gastech 2024, Maurits van Tol, Chief Executive of Catalyst Technologies at Johnson Matthey (JM), discussed the future of low-carbon ammonia. He highlighted the role of blue ammonia in decarbonization, which involves capturing and storing CO2 produced during ammonia production. Van Tol also talked about autothermal and gas-heated reforming, innovative processes that enhance the efficiency of ammonia production. The demand for low-carbon ammonia is expected to triple in the coming decades, driven by its use in agriculture, power generation, and heavy industry. This session emphasized the importance of ammonia in achieving global climate goals.
9. Natural Gas and LNG Developments
The Evolution of Natural Gas and LNG
Natural gas has become a crucial energy source due to its lower emissions compared to coal and oil. Historically, most natural gas was transported via pipelines, but liquefied natural gas (LNG) has gained popularity because it can be shipped globally. LNG is natural gas cooled to a liquid state, making it easier to transport. The demand for LNG is expected to grow significantly, driven by countries transitioning to cleaner energy sources. Investments in LNG infrastructure are increasing, with new export facilities being built worldwide. This shift is reshaping the global energy market, making LNG a key player in the future of energy.
Woodside’s Long-Term LNG Supply Deal with JERA
Woodside Energy, an Australian company, has signed a 10-year LNG supply agreement with Japan’s JERA. Starting in April 2026, Woodside will supply approximately 0.4 million tonnes of LNG annually. This deal is part of a broader strategic relationship between the two companies, which includes JERA acquiring a 15.1% stake in Woodside’s Scarborough joint venture. The LNG will be sourced from Woodside’s global portfolio, ensuring a reliable supply for Japan. This agreement supports Japan’s efforts to decarbonize its energy sector by providing a cleaner alternative to coal. It also strengthens Woodside’s position in the Asian LNG market.
CNOOC’s New Deepwater Oil Production in China
China National Offshore Oil Corporation (CNOOC) has started production at the Liuhua 11-1/4-1 oilfield in the South China Sea. This project features China’s first cylindrical floating production, storage, and offloading (FPSO) unit, named Haikui-1, and a new deepwater jacket platform, Haiji-2. The FPSO is a vessel used to process and store oil extracted from offshore fields. The project includes 32 development wells and is expected to reach a peak production of 17,900 barrels of oil equivalent per day by 2026. This development showcases CNOOC’s technological advancements and contributes to China’s energy security by tapping into deepwater oil reserves.
10. Corporate Strategies and Investments
Diamondback Energy’s Natural Gas Plans for Permian Basin
Diamondback Energy, one of the largest oil producers in the Permian Basin, is exploring the use of natural gas produced during its drilling operations to generate electricity for its drilling and fracking activities. This approach aims to reduce reliance on the Texas power grid, which can be unreliable, especially in remote areas. By using natural gas, Diamondback can lower its carbon footprint and operational costs. The company is also considering small nuclear reactors for future electricity needs but has not committed to building its own gas-fired power plants. This strategy highlights Diamondback’s commitment to sustainability and operational efficiency.
Fed Rate Cut Impact on Oil and Gas Prices
The Federal Reserve recently announced a 50-basis-point rate cut, lowering its key interest rate to around 4.8%. This move is expected to boost the economy by making borrowing cheaper, which in turn can increase spending and investment. For the oil and gas industry, lower interest rates typically lead to higher demand for energy as economic activity picks up. Additionally, a weaker U.S. dollar, often a consequence of rate cuts, makes oil cheaper for holders of other currencies, further supporting prices. This rate cut is seen as a positive development for the oil market, helping to stabilize prices amid global economic uncertainties.
11. Energy Conferences and Exhibitions
Attend the World’s Largest Energy Exhibition
The ADIPEC (Abu Dhabi International Petroleum Exhibition and Conference) is the world’s largest energy exhibition, taking place from November 4-7, 2024 in Abu Dhabi. This event attracts over 184,000 energy professionals from around the globe, including representatives from 2,200 exhibiting companies and 54 national and international oil companies (NOCs and IOCs). ADIPEC provides a platform for industry leaders to explore market trends, source solutions, and conduct business across the entire energy value chain. The exhibition features specialized areas for decarbonization, maritime & logistics, and digitalization, showcasing the latest innovations and technologies driving the energy sector. Attendees can network with decision-makers, learn from industry experts, and discover new business opportunities. This event is crucial for anyone involved in the energy industry, offering insights into the future of energy and the transition towards more sustainable practices.
12. Q&A and Feedback Section
Q&A from Subscribers
Q: What is the significance of CPChem's ethylene project expansion in Texas?
A: The expansion focuses on increasing ethylene production for plastics and chemicals, while reducing greenhouse gas emissions through advanced technology.
Q: How does Sea6 Energy’s seaweed-to-crude oil project contribute to renewable energy?
A: Sea6 Energy converts seaweed into bio-crude oil, providing a renewable alternative to fossil fuels, helping in reducing carbon emissions.
Q: How is India managing corn imports for ethanol production?
A: Due to rising ethanol demand for blending with gasoline, India has become a net importer of corn, with plans to import around 1 million tons to support ethanol production.
Feedback from Readers
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