Latest storage news
Global Petro Storage and Equinor have signed an agreement to develop South East Asia’s first independent LPG storage terminal in Port Klang, Malaysia.
The facility will be the first independent, refrigerated LPG terminal in Malaysia, and will provide storage services exclusively to Equinor.
Equinor will bring LPG to the terminal and sell into the domestic market in Malaysia as well as selling volumes to markets like Bangladesh, the Philippines, India, Indonesia and Vietnam.
It will have capacity to turn over 1.5 million tonnes of LPG each year and will be able to handle VLGC and pressurised LPG vessels on its jetty.
Construction work will begin in January 2019 and the 135,000 m3 facility is expected to be complete by early 2021.
GPS is the majority shareholder for the project and will develop, own and operate the LPG facility.
Eric Arnold, MD and CEO of GPS, says: ‘The new LPG terminal is a highly strategic, unique asset that will give Equinor a new platform in South East Asia, and enhance its reach into the region, where the LPG market is growing.
‘GPS’s focus is on developing the infrastructure that suppliers of gas and petroleum like Equinor need to access the global marketplace. This is the latest example of how our technical and operational expertise combine with our financial muscle to deliver industry-changing projects.
Molly Morris, vice president for products and liquids in Equinor, adds: ‘Malaysia is an attractive market and we believe that we will be a competitive supplier to the wholesale Malaysian LPG market as well as to other markets in the region.
‘The terminal and storage are also strategically located for blending and selling to other growing markets in the region.’
This agreement represents the first time the companies have entered into a formal partnership.
This follows GPS’s recent announcement on starting construction works on a new terminal in the Port of Hamriyah, in the UAE.
Tristar Group has acquired a 300,000-barrel crude oil terminal located within the Louisiana Offshore Oil Port.
The Canal Crude Oil Terminal has 18 tanks on a 50-acre site with a loading capability of 3,000 to 4,000 barrels per hour.
LOOP, a deep-water port in the Gulf of Mexico off the coast of Louisiana, is the only mainland port capable of offloading a wide range of vessels, including ULCCs and VLCCs.
Eugene Mayne, Tristar Group CEO, says: 'This is a strategic investment that will not only complement Tristar's fuel farm business but also position Tristar for an entry into the lucrative shale oil industry in the US.
'This is the first small step in our endeavour to enter and be a player in the US shale industry and I am confident that we will develop and grow this facility to be a major export terminal for US crude.'
US oil production rose from 5.5 million barrels to 10 million barrels per day between 2010 and 2017. By mid-2018 US crude oil exports reached 3 million barrels a day.
WorleyParsons has entered into a joint venture with BP Oil New Zealand for a 50% shareholding in New Zealand Oil Services.
Under the JV, New Zealand Oil Services has been awarded a terminal services agreement for the operation of BP's seven bulk fuel storage, handling and distribution facilities in New Zealand. WorleyParsons also becomes NZOS's preferred contractor to deliver engineering, project delivery and asset management services.
Andrew Wood, CEO of WorleyParsons, says: 'This contact demonstrates the synergies following our acquisition of AFW UK Oil & Gas in 2017. It builds upon our established relationship with BP and utilises WorleyParsons' MMO expertise and capability.'
Dialog Group is considering further investments in petrochemical plants within the Pengerang Integrated Complex.
The group is exploring opportunities to further develop its investment in the Pengerang Deepwater Terminal its director of corporate services Chew Eng Kar told reporters following the company's AGM.
He said: 'We have enough land, so there are opportunities where we can move on to the petrochemical industry. We are discussing with partners and are exploring these opportunities but have yet to make any firm decisions.'
In its first quarter 2019 financials, the company says that the expansion of phase 1 is currently on going and that phase 2A, the dedicated petroleum and petrochemicals terminal for RAPID remains on track for full completion in early 2019.
Additional, progress has been made for phase 3 with the signing of a MoU with the State Government of Johor Darul Ta'zim and the State Secretary, Johor to invest and develop common tankage facilities and deepwater marine facilities to support and promote the petroleum and petrochemicals storage and handling tank terminal business.
Land reclamation activities for phase 3, which will be developed on 300 acres of land, have started, and Dialog are in discussion with potential customers for this phase.
Green Plains has completed the sale of three ethanol plants to Valero Renewable Fuels Company for $319 million.
The sale includes ethanol plants in Bluffton, Indiana, Lakota, Iowa and Riga in Michigan, which represented 20% of the company's reported ethanol production capacity.
In additional, Green Plains Partners has completed the sale of the storage assets and assignment of the rail transportation assets associated with the three ethanol plants to Green Plains.
The consideration for the transaction consisted of 8.7 million Green plains units and a portion of the general partner interest equating to 0.2 million hypothetical limited partner units to maintain the general partner's 2% interest.
Green Plains Partners will receive as additional consideration approximately $2.6 million in cash related to the present value gain on railcars transferred.
Limetree Bay Refinery and BP's supply and trading arm have reached a definitive agreement for tolling, supply & offtake of the restarted refinery in St. Croix in the US Virgin Islands.
This announcement follows from the press release on November 4 which stated that Limetree Bay had reached an agreement in principle with a major international oil company.
Limetree Bay anticipates completion of the restart by late 2019.
Governor Mapp says: 'This agreement marks a significant milestone for the refinery restart effort.
'With more than $1.5 billion of total capital investment in the project, we can look forward to a period of significant growth in employment and the economy.'
American Midstream will sell its refined products terminalling business to Sunoco for $125 million.
The refined products terminalling business consists of terminals located in Caddo Mills, Texas and North Little Rock, Arkansas with a total of 1.3 million barrels of storage capacity spread across 21 tanks. The facilities have 77,500 barrels per day of total throughput capacity.
The acquisition builds on Sunoco's strategy of adding fee-based refined product terminals into the overall portfolio.
The acquisition is expected to close in the fourth quarter of 2018.
American Midstream says that this divestiture represents continued progress towards its capital allocation strategy designed to reduce leverage and strengthen the partnership. In addition, the divestiture of the terminals simplifies its business profile while creating capital flexibility.
Tallgrass Energy plans to expand capacity on its Pony Express pipeline up to an additional 300,000 barrels per day.
The company has announced a binding open season soliciting shipper commitments for crude oil transportation services from the Guernsey, Wyoming origin point to refinery delivery points along the Pony Express system and to Cushing, Oklahoma.
The open season is expected to conclude on January 18, 2019.
Based on commitments received, the capacity expansion of 300,000 barrels per day beyond expected year-end capacity of approximately 400,000 barrels per day.
The expansion is expected to be staged over the next two years, with full-in service in the third quarter of 2020.
The Louisiana Offshore Oil Port has confirmed its deepwater loading capabilities can meet market demand after successfully loading multiple VLCCs for export during 2018.
In February 2018, LOOP achieved a milestone by loading its first VLCC at the deepwater port, offshore of Port Fourchon, Louisiana. Houston-based Shell Trading Company US was the shipper of record for that historic cargo. This capability by the port has been described as having game changing potential by Marathon Petroleum Company, which is the majority owner of LOOP.
LOOP is the only US port capable of fully loading a VLCC. This now enables inbound vessels to deliver foreign crude oil and then leave LOOP with US crude oil, rather than returning empty.
Since the Crimson/MPLX announcement of the Swordfish pipeline reversal, public information officer Wade Tornyos says that customer requests concerning its deepwater port export capabilities have skyrocketed.
Marathon says in a statement that with domestic production surpassing 10 million barrels per day, the capability 'truly optimises America's energy supply chain'.
Marathon Petroleum logistics and storage executive vice president John Swearingen says: 'LOOP started talking about vessel loading several years in the effort to diversify their overall business offerings. They were able to offer a solution to the marketplace quickly and at a fraction of the cost of other options.
Terry Coleman, LOOP president, says: 'Today, customers are seeking more options to load petroleum produced in the US onto the largest ocean-going ships for delivery to international destinations.
'The service has been embraced by customers and connects our Clovelly Hub in Galliano, Louisiana, with our deep-water port and to the global refining market.'
Oiltanking has announced plans to sell its indirect investment in Exir Chemical Terminal PJSCo in Iran.
The company says this decision has been made as a result of the difficult market situation in Iran and as part of its continuous portfolio optimisation.
The company has sold its indirect investment to the Iranian joint venture partner.
The terminal, located in the Petrochemical Special Economic Zone in the port of Bandar Imam Khomeini in Iran, was commissioned in January 2010 and is connected by pipelines to the jetties of the Petzone at the Persian Gulf.
Policy choices made by governments across the globe will determine the shape of the energy system of the future as the energy sector experiences a series of major transformations.
The International Energy Agency's World Energy Outlook 2018 sets out global energy trends amid a time of significant geopolitical change and influence.
While the geography of energy consumption continues its historic shift to Asia, the document finds mixed signals on the pace and direction of change.
Oil markets are now entering a period of renewed uncertainty and volatility, including a possible supply gap in the early 2020s and demand for natural gas is on the rise.
Oil consumption will grow in the next few decades as a result of rising petrochemicals, trucking and aviation demand. Meeting this growth in the near term means that approvals of conventional oil projects need to double from their current low levels.
According to the WEO without such a pick-up in investment, US shale production would have to add more than 10 million barrels a day from today until 20205, which is the equivalent of adding another Russia to global supply in seven years. This would be an historically unprecedented feat.
In all cases, governments will have a critical influence in the direction of the future energy system. According to the documents new policies scenario, under current and planned policies, energy demand is set to grow by more than 25% to 2040, which will require more than $2 trillion a year of investment in new energy supply.
Dr Fatih Birol, IEA's executive director, says: 'Our analysis shows that over 70% of global energy investments will be government-driven and as such the message is clear – the world's energy destiny lies with government decisions.
'Crafting the right policies and proper incentives will be critical to meeting our common goals of securing energy supplies, reducing carbon emissions, improving air quality in urban centres and expanding basic access to energy in Africa and elsewhere.'
Read the full report in the December/January edition of Tank Storage Magazine.
ADNOC has signed a MoU with the Indian Strategic Petroleum Reserves to examine the possibility of storing ADNOC crude oil at its underground oil storage facility in Karnataka, India.
The MoU stipulates that ADNOC could store crude in two compartments at Pardur, which has a total storage capacity of 17 million barrels.
The memorandum follows the arrival of the final shipment of the initial delivery of ADNOC crude to be stored in another ISPRL underground facility at Mangalore, which will store 5.86 million barrels of ADNOC crude oil.
ADNOC is the only foreign oil and gas company so far to invest by way of crude oil in Indian's strategic petroleum reserves programme.
H.E. Dr Al Jaber, ADNOC Group CEO, says: 'India is an important oil market and this agreement underscores the strategic energy partnership between the UAE and India that leverages the UAE and ADNOC's expertise and oil resources.
'It is our firm hope that we will be able to convert this framework agreement into a new mutually beneficial partnership that will create opportunities for ADNOC to increase deliveries of high-quality crude oil to India's expanding energy market and helping India meet its growing energy demand and safeguard its energy security.'
H.E. Dharmendra Pradhan, minister of petroleum and natural gas skill development and entrepreneurship, Government of India, adds: 'This MoU will allow ISPRL to explore, with ADNOC, opportunities related to the possible storage of ADNOC crude at Padur, which would help to significantly strengthen the country's strategic petroleum reserves. This agreement reflects the strong bonds of cooperation between India and the UAE and provide a foundation for strengthening and expanding our strategic energy relationship.'
India is over 82% dependent on imports to meet its crude oil needs, around 8% of which is supplied by the UAE.
USD Partners has announced it is moving forward with the Hardisty South expansion, which adds one unit train per day of takeaway capacity at the facility.
The existing Hardisty terminal, which is owned by USD Group, has designed capacity for two unit trains per day, around 150,000 barrels per day of capacity.
Hardisty South will add 75,000 barrels per day of takeaway capacity to the terminal by modifying the existing loading rack and building additional infrastructure and trackage.
The project is expected to be in-service by January 2019. To date, 67% of Hardisty South's capacity has been commercialised through take-or-pay agreements with minimum volume commitments.
Additionally, USD Partners has entered into a four-year extension with an oil infrastructure focused company at its Hardisty terminal.
The Canadian-based company has significantly increased its position by more than doubling its contracted capacity at the terminal.
The contract extension contains consistent take-or-pay terms with average minimum monthly payments and rates that exceed those of the original terminalling services agreement.
To date, the company has renewed and extended 65% of the capacity at the terminal through mid-2022, with 42% extended through to mid-2023.
Saras has announced plans to build a marine bunkering terminal and will market a new, cleaner marine fuel ahead of the IMO 2020 regulation.
The new terminal will be built at the Italian refiners Sardinia plant. Speaking to Reuters CEO Dario Scaffardi says that by producing the new fuel, the company has a competitive advantage over others as the low sulphur specs are difficult to achieve for technical reasons.
He says: 'With a small investment, we will have bunkering infrastructure and a lightering vessel and start selling local fuels to expand the market.'
The plant will initially produce 500,000 to 600,000 tonnes of ultra-low sulphur fuel oil per year.
Inter Pipeline increased its funds from operations by $30.8 million in its third quarter 2018 financials, compared to the same period the previous year.
The company reports funds from operations of $299.7 million and says this is primarily driven by record performance in the NGL processing business, which continued to provide exceptional results from higher production volumes and increased frac-spread pricing.
Its bulk liquid business generated funds from operations of $14.8 million in the quarter, compared to $25.2 million in the third quarter 2017. Storage demand for certain petroleum products in Europe continued to be impacted by a backwardated commodity pricing environment.
As a result, average utilisation rates during the quarter dropped from 95% in 2017 to 74%, which was largely reflective of unfavourable market conditions in Denmark, where storage utilisation rates averaged 50% during the quarter, compared to 96% in the same period in 2017. Utilisation remained at 90% or better in Sweden, the UK and Germany.
Christina Bayle, Inter Pipeline's president and CEO, says: 'Inter Pipeline's record results this quarter is proof of the company's resilience despite the volatility in Western Canada's commodity price.
'Our oil sands and conventional pipeline assets provide stability in challenging times, while our NGL processing franchise positions us for significant cash flow growth from elevated North American gas liquids pricing.'
Caliche Development Partners has put its first NGL subsurface hydrocarbon storage project in Beaumont, Texas into service.
This follows a detailed commissioning effort, providing safe and on-specification handling and storage of ethylene from Caliche's initial pipeline connection. Caliche is a Houston-based company focused on the development, construction and operation of subsurface hydrocarbon storage assets and related pipelines in North America.
The cavern allows for storage of up to 600 million pounds of ethylene and connects to a 12.8 mile-header system crossing five operating ethylene pipelines, two more of which will be connected to the facility before the end of 2018.
Additionally, drilling has been completed on a five-million-barrel cavern for ethane storage.
Caliche expects to provide up to 120,000 barrels per day of ethane deliverability, as well as a 12-mile ethane header mirroring the path of Caliche's ethylene system.
By the end of 2019, the ethane header will cross five ethane pipelines connecting more than 50% of Gulf Coast ethane consumption with the Mont Belvieu NGL complex.
The company has also begun drilling for a planned three-million-barrel cavern for other NGL storage with up to another 120,000 barrels per day of deliverability.
Once fully developed, Caliche Coastal will provide up to 32 million barrels of salt cavern storage facilities.
Dave Marchese, CEO of Caliche Development Partners, says: 'Caliche has received tremendous support from the market and Beaumont community over the past year-and-a-half, and it is rewarding to pass such a significant milestone.
'Customers are asking for ethane and other NGL storage, and we have the people, location and assets to serve these markets and customers.'
Odfjell has reported stable financial results for the third quarter of 2019, with an EBITDA of $32 million.
The company's terminals segment reported an EBITDA of $4 million compared to $9 million in the second quarter. It reported losses of $16 million related to the sale of the Rotterdam terminal that included currency translation and tax losses in addition to transaction costs.
The segment's financial was impacted by the fuel oil spill in the Rotterdam harbour, interrupting storage and distillation business due to the closure of the port. The sale of the terminal also led to fewer days of income contribution for the terminal.
The result was also impacted by higher G&A related to the restructuring of the Odfjell Terminals organisation.
The company's US terminals showed a stable EBITDA of $4.4 million compared to the previous quarter thanks to strong market demand and high activity in the country.
Odfjell CEO Kristian Mørch says: 'Adjusting for the Rotterdam terminal, our terminal division delivered stable results. We have positioned ourselves well for the future, both within tankers and terminals, with one of the most energy efficient fleets in the world.'
Anadarko Petroleum is selling all of its remaining midstream assets, including pipeline and oil systems in the Delaware and DJ Basins for $4.015 billion to Western Gas Partners.
At the same time, Western Gas Partners has entered into a merger agreement with Western Gas Equity Partners, which will result in a simplied midstream structure.
Anadarko is selling all of its interest in DBM Oil Services and APC Water Holdings to Western Gas. Western Gas is also acquiring a 50% stake in the Bone Spring Gas Plant and a 50% stake in MiVida Gas Plant in the Delaware Basin.
In the DJ Basin Western Gas will acquire Anadarko's 100% interest stake in both the DJ Basin Oil System and the Wattenberg Plant.
Additional assets being acquired include equity stakes in the Saddlehorn Pipeline, the Panola Pipeline and the Wamsutter Pipeline.
Anadarko will maintain operating control of the largest midstream master limited partnerships with 55.5% pro-forma ownership of the combined entity.
Al Walker, Anadarko chairman, president and CEO, says: 'The size of this asset sale, along with the clear benefits of the simplification transaction, highlights the tremendous value of Anadarko's midstream business.
'This will enhance the read-through value of Anadarko's midstream ownership through increased liquidity and a less complex structure.'
I Squared Capital has committed more than $500 million and contributed its Delaware Basin midstream portfolio company, Pinnacle Midstream, as part of a new partnership with EagleClaw Midstream and Blackstone Energy Partners.
Proceeds from I Sqaured, together with additional investments by Blackstone and EagleClaw's management team, are being used to fund EagleClaw's continued growth, including the expansion of EagleClaw's system, the acquisition of Caprock Midstream, and the ongoing construction of the Permian Highway Pipeline.
This investment by I Squared and the acquisitions of Caprock and Pinnacle further augment EagleClaw's position as the leading privately-held midstream operator in the Permian's Delaware Basin in west Texas.
Pro forma for these acquisitions, EagleClaw operates almost 1,000 miles of natural gas, natural gas liquids, crude and water gathering pipelines, more than 1.4 billion cubic feet per day of processing capacity and crude storage and disposal facilities.
It now has nearly half a million acres in the core of the southern Delaware Basin under long-term dedication for midstream services.
EagleClaw is also a 50% partner with Kinder Morgan on the Permian Highway Pipeline.
The acquisition of Caprock Midstream and Pinnacle Midstream marks the next step in the overall Delaware Basin midstream consolidation as EagleClaw continues to grow and diversify its business.
Bob Milam, CEO of EagleClaw, says: 'The acquisition of Pinnacle, coming on the heels of our recent announcements of the acquisition of Caprock and our partnership on the Permian Highway Pipeline, is another exciting chapter in the continued growth story of EagleClaw. This transaction expands our business in every aspect, from asset footprint to customer diversity, while remaining true to EagleClaw's core mission of providing best-in0class midstream service to Delaware Basin producers.'
Buckeye will sell a package of non-integrated domestic pipeline & terminal assets in locations across the US for $450 million.
This is in addition to the company selling its entire equity stake in VTTI for case proceeds of $975 million to Vitol Investment Partnership and IFM Investors.
These actions are the result of a strategic review that the company says will maintain its investment grade credit rating by reducing leverage, provide increased financial flexibility and reallocate capital to higher return growth opportunities across its remaining assets.
The assets include: a jet fuel pipeline from Port Everglades, Florida to the Ft. Lauderdale and Miami, Florida airports, pipelines and terminal facilities serving the Reno, Nevada; San Diego, California and Memphis, Tennessee airports, and refined petroleum products terminals in Sacramento and Stockton, California.
Clark C. Smith, chairman, president and CEO says: 'I am confident that the actions taken as a result of our strategic review will not only strength our balance sheet and solidify our investment grade rating but also meaningfully improve distribution coverage.
'We are now well positioned to fund our annual growth capital spend without accessing the public equity markets. In addition, the sales of our interest in VTTI and the domestic asset package allow us to reallocate available growth capital to higher return initiatives across our domestic assets, particularly the opportunities we are actively pursuing along the US Gulf Coast.
'Our improved financial flexibility along with our remaining portfolio of pipeline and terminal assets and attractive growth opportunities are expected to provide solid long-term returns for our unitholders through all business cycles.'
In its third quarter financials reported a net loss of $745.8 million compared to the net income attributable for Buckeye's unitholders for the same period in 2017 of $116.2 million.
The third quarter was negatively impacted by a $537.0 million non-cash goodwill impairment charge, related primarily to its Caribbean assets, following an interim assessment of the recoverability of goodwill that was initiated in conjunction with the completion of the strategic review.
Smith adds: 'Buckeye's third quarter results fell short of prior year largely as a result of continued weakness in segregated storage, particularly in the Caribbean.
'Our domestic pipelines and terminals segment saw strong demand across the markets in which we operate, which drove increased pipeline and terminalling throughput volumes and increased revenues.'
The company's global marine terminals segment continued to benefit from strong operating performance from Buckeye Texas Partners, partially offsetting the continued impact of challenging market conditions in the segregated storage market, which drove lower utilisation and rates in this segment.
Limetree Bay Refining has reached an agreement in principle with the supply and trading arm of a major international oil company on the restart of the idled St. Croix refinery in US Virgin Islands.
As part of the agreement the oil company, which has not been named, would enter into a tolling agreement and serve as the refinery's supply and offtake counterparty.
Limetree Bay Refining anticipates completion of the restart by late 2019.
Limetree Bay Terminals bought the refinery and associated terminal assets out of bankruptcy in 2016. Since then the company has returned more than 25 million barrels of storage capacity to service.
In addition, the company has spent the last two years exploring opportunities for a restart and earlier this year negotiators a new operating agreement, which was ratified by the 32nd Legislature of the Virgin Islands.
Brian Lever, president of Limetree Bay Refining, says: 'The refinery restart project is the product of a collaborative effort with many Virgin Islanders. My team and I look forward to further advancing the refinery restart and the positive impact we hope to have on the local community through jobs, taxes and economic activity.
Kenneth E. Mapp, Governor of the Virgin Islands, adds: 'The refinery will bring at least $1.5 billion in outside investment over the next 14 months. Over the next ten years, the restarted refinery will product hundreds of millions of dollars in new direct revenues to the government. I am grateful to our partners at Limetree Bay for creating this opportunity, and I look forward to a productive and collaborative relationship with both companies now and in the future.'
The Duqm refinery project secured multi-source project financing of $4.61 billion, making it the largest project financing in the Sultanate of Oman.
The 230,000 barrel per day refinery project is a joint venture between Kuwait Petroleum International and the Oman Oil Company. Located at the special economic zone in Duqm along the south east coast of the country, the project comprises the development, construction and operation o f the refinery, on-site utilities, infrastructure and storage, together with offsite facilities including crude tank storage facilities in Ras Markaz, an 80km crude oil pipeline to the refinery and a product export terminal at the Port of Duqm.
The facilities comprise an international commercial facility, an onshore commercial facility, an Islamic facility, a United Kingdom covered facility, a Spain covered facility, a South Korea covered facility, and a K-EXIM direct facility.
Project chief financial officer Mubarak Al Naamany says: 'The $4.61 billion multi-sourced financing signed for the project is not only the largest project financing in the Sultanate of Oman, it also includes the largest shariah-compliant facility to a green field project in Oman provided by a consortium of Islamic financing institutions.
'These facilities provided by 29 institutions from 13 countries and insurance and guarantees provided by three major export credit agencies, is a testament of the confidence placed by international, regional and local lenders on the Sultanate of Oman, the shareholders and the project.'
The refinery is designed to be able to process a range of blended crude oils and is configured as a full-conversion hydrocracker/coking facility, which will utilise advanced technology, commercially proven at the scale of the project, supplied by leading technology licensors. Formal notice to proceed with three lump sum turn-key contracts with world class contractors was issued to them in June 2018.
Vitol Investment Partnership and IFM Investors will acquire Buckeye Partners' 50% equity interest in VTTI.
Once complete, VTTI will be owned 50% by IFM, a global institutional funds manager, and 50% by Vitol and Vitol Investment Partnership.
It will continue to be managed by an independent management team led by CEO Rob Nijst. The transaction is subject to certain conditions precedent and is expected to close by year end.
Sempra Energy and Total have signed an MoU that details the framework for co-operator in the development of North American LNG export projects.
The scope of the MoU covers continuing the development of the Cameron LNG liquefaction-export project in Louisiana and Energía Costa Azul liquefaction-export project in Baja California, Mexico.
The MoU between the two companies envisages Total potentially contracting for up to nine million tonnes per annum of LNG offtake across Sempra Energy's LNG export development projects on the US Gulf Coast and west coast of North America, specifically Cameron LNG Phase 2 and Energia Costa Azul LNG. Total may also acquire an equity interest in ECA LNG.
Jeffrey Martin, CEO of Sempra Energy, says: 'The US is increasing its global leadership position in the production of oil and natural gas. In large measure, the next step in fulfilling our country's energy potential is the development of critical export infrastructure for LNG.
'Sempra Energy has a long-term goal of developing more than 45 million tonnes per annum of LNG export capacity in North America. That is why our relationship with Total is so important. We plan to leverage the competitive strengths of both companies to accelerate development of North American LNG exports to global markets.'
Patrick Pouyanné, chairman and CEO of Total, adds: 'We are pleased to collaborate with Sempra Energy and the other Cameron LNG co-owners to extend the Cameron LNG project and to further enhance its competitiveness, but also participate in the development of export capacity on the west coast of Mexico, which will benefit from synergies with existing infrastructure and from a significant shipping cost advantages for customers in Asia.'
The $10 billion phase 1 of the Cameron LNG JV liquefaction-export projects includes three liquefaction trains with 14 Mtpa of export capacity under construction in Louisiana. Phase 2 of the project comprises up to two additional liquefaction trains and up to two additional LNG storage tanks with nine Mtpa of capacity.
ECA phase 1 is a one-train facility with an expected total export capacity of 2.5 Mtpa, utilising the existing LNG receipt terminal's tanks, loading arms and berth. ECA phase 2 is expected to have additional export capacity of 12 Mtpa of LNG.
Vopak has announced plans to expand its gas storage capabilities, with a new LPG terminal in South Africa as well as expanding its terminal in the Netherlands.
The operator and its partner Retile will invest in a new LPG import and distribution terminal with an initial capacity of 15,000 m3 in Richards Bay.
This investment facilitates further imports of a cleaner energy source into South Africa.
The additional capacity is expected to be commissioned in the second quarter of 2020.
Vopak will also expand it wholly-owned gas terminal in Vlissingen, the Netherlands. A total of 9,200 m3 of capacity will be built for LPG and chemical gases to serve the northwest European market.
The additional capacity is also expected to be commissioned in the second quarter of 2020.
The imposition of US sanctions on Iranian exports will result in a drop of one million barrels per day of oil exports and highlights vulnerability in the oil market.
As of today, November 5, Iran's current oil consumers have been ordered to completely eliminate their Iranian oil imports. According to energy consultancy Wood Mackenzie, these sanctions are the critical factor behind Brent's rally to over $80 a barrel in October.
While there is enough supply to meet demand this winter, the margin for error is narrow.
Ann-Louise Hittle, vice president macro oils, says: 'There are implications for the oil market.
'The biggest risk is this winter. Losing another one million barrels per day or more from Iran comes on top of a similar loss in supply from Venezuela over the last couple of years. Saudi Arabia, UAE and Kuwait have stepped up production since July to minimise the increase in price as the market tightens.
'We think there's just enough growth in supply from elsewhere to muddle through the next few months, meet winter demand and avert a price spike. Brent should hold around $78 a barrel, but it's a very fine line. OPEC spare capacity was an ample four million to five million barrels per day two years ago. There's only 700,000 barrels per day of additional available within 30 days right now.
'That means the market is vulnerable to strong demand in a cold winter or any new supply outage.'
She adds that they expect supply to grow 1.6 million barrels per day in 2019, with US tight oil driving this. 'But with Iran in the full grip of sanctions and Venezuela continuing to decline, that limited OPEC spare capacity will cast a shadow over the market for some time.'
Homayoun Falakshahi, senior research analyst with Wood Mackenzie's Middle East upstream team, adds: 'Beyond November 5, we expect crude exports to fall to one million barrels per day, though it could vary month to month; and condensate to 100,000 barrels per day.
'Crude sales will be concentrated around a core of supportive state buyers, China, India and Turkey.'
To read Tank Storage Magazine's in-depth analysis of the impact these sanctions will have on global markets, click here to read the full article.
As of Monday, October 29 total oil product stocks in Fujairah stood at 20.626 million barrels – down by 4.6% week on week.
Stocks of light distillates rose by 3.6% week on week to 9.203 million barrels. The lights category set a new record high for a second week in a row. Despite some support from recent declines in crude prices, gasoline markets remain bearish in both the East of West of Suez. Gasoline cracks in the US and Europe remain around the lows for the year, while Singapore gasoline cracks against Dubai are currently at their lowest since November 2013. 'The overall gasoline complex is weak with concerns of oversupply," a gasoline trader said. China recently released an additional 740,000 mt of gasoline export quotas for 2018, which would add further pressure on an already weak market.
Stocks of middle distillates were again little changed week on week, rising by 1% to 4.395 million barrels. Arbitrage of ultra-low sulfur diesel from the Middle East and the west coast of India to Europe looks set to rise with a weaker East-West gasoil exchange for swaps (EFS) see recently. The EFS fell sharply over the past week to an 11-month low of minus $15.72/mt on Tuesday. At such levels arbitrage to move Asian gasoil to Europe becomes viable on paper. 'The east/west spread is a bit more favourable so we could see within three weeks more product coming to Europe,' a trader said. The European gasoil market has been experiencing resurgent strength recently, with demand driven by tightness both on land and along the ARA region.
Stocks of heavy residues fell by 16.1% week on week to 7.028 million barrels – a seven month low. Bunker demand in Fujairah remains firm, supported by lower flat prices on the back of the recent slump in crude. Uncertainty remains on the supply side as buyers reduce their commitments to buy fuel oil from Iran in preparations for US sanctions that come into effect next week.
Fuel oil supply from Iran is expected to decline to below 1 million mt in October from the usual 1.2 million-1.4 million mt a month, market sources said this week. Iran is considered as a supplier of high-quality cutter stocks for bunker fuel as it sells 280 CST straight-run high sulfur fuel oil. Industry sources estimate about 500,000-600,000 mt/month of the Iranian fuel oil goes into the Fujairah bunker market.
Meanwhile, 'supply is not too tight [in Fujairah] at the moment,' a bunker trader in the Middle East said this week.
Bidvest Tank Terminals and Petredec have started construction of a mounded LPG import and storage facility in Richards Bay, South Africa.
The R1 billion facility will be the largest in Africa and will provide security and reliability of supply, which has been the biggest obstacle to the increased use of LPG in South Africa.
It will also allow for exports of the fuel to neighbouring countries. Currently, South Africa uses 400,000 tonnes of LPG annually. The facility is expected to increase this by 200,000 tonnes a year.
End-to-end LPG supply requires a vast national value chain, and this will expand as a consequence of this facility being commissioned. The increased and sustainable supply will mean that the price of LPG will compete favourably with that of other energy sources.
David Leisegang, Bidvest Tank Terminals' managing director says: 'An increased LPG supply will result in the fuel becoming a significant alternative to South Africa's current energy supply, with little additional infrastructure required.
'From an engineering point of view, it is a noteworthy achievement. The facility will comprise four five 650 tonne tanks, the largest such tanks in the world, and dedicated 24-hour road tanker and railcar loading facilities will ensure a reliable supply all year. The facility will have a substantial downstream effect on the wholesale and distribution industries, and of course on the southern African consumer.'
The facility is expected to be operational in 2020.
Reform and economic diversification will be key in helping major oil & gas exporters cope with the changing dynamics of global energy.
A new report from the International Energy Agency – the Outlook for Producer Economies - examines economies in Iraq, Nigeria, Russia, Saudi Arabia, UAE and Venezuela which are the pillars of global energy supply.
The report details that the changing dynamics include rising production from new sources such as shale, uncertainties over the pace of oil demand growth and deployment of new energy technologies.
The report says that the significant peaks and troughs in the oil price has highlighted the structural weaknesses in many of the major exporters. Since 2014, the net income available from oil and gas has fallen by between 40% (for Iraq) and 70% (for Venezuela).
Additionally, the volatility of hydrocarbon revenues presents dilemmas for countries whose budgets depend on them. The extent to which producer countries steer through essential economic transformation can have major implications for energy markets and energy security, according to the report.
Dr Fatih Birol, IEA's executive director, says: 'More than at any other point in recent history, fundamental changes to the development model of resource-rich countries look unavoidable.
'Following through with the announced reform initiatives is essential, as failure to take adequate action would compound future risks for producer economies as well as for global markets.
The countries examined are very diverse, and the report considers a wide range of experiences and prospects. Many of them have pushed forward plans to boost investment and growth in the non-oil sectors of their economies. However, Venezuela provides an example of how badly things can turn out when economic and energy headwinds gather strength.
Birol adds: 'The reform process should be much wider than energy; but it relies on a well-functioning energy sector. Successful reform programmes can open a broader range of strategic options for producers, as well as new opportunities for engagement on a range of energy issues. There is a lot at stake.'
To read the report in full, click here.
Crowcon Detection Instruments has launched a new dual range portable monitor to add to its Gas-Pro range.
Gas-Pro TK has been designed for use in specialist inerted tank environments to monitor levels of flammable gases and oxygen. An environment where standard gas detectors will not work.
Fiona Macrae, regional marketing manager at Crowcon says: 'We have created the new Gas-Pro TK device for the specialist application of monitoring inerted tank spaces during purging or gas freeing. It enables users to monitor the gas mix in tanks carrying flammable gas during transport at sea or on shore, such as oil tankers and oil storage terminals. At 340g, Gas-Pro TK is up to six times lighter than other monitors for this application; a boon if you have to carry it with you all day.'
In tank check mode, the Crowcon Gas-Pro TK (rebranded from Tank-Pro), monitors concentrations of flammable gas and oxygen, checking that an unsafe mixture is not developing. It uses dual IR sensor technology which detects the spectrum of possible flammable gas concentrations from high %vol to low %LEL. The device auto-ranges, switching between %vol and %LEL as gas concentration demands, without manual intervention, and notifies the user as it happens.
'What makes this detector special is the fact that the dual IR is not inhibited by high concentrations; nor does it require oxygen to work - unlike catalytic bead sensors which are totally unsuitable for this application,' adds Macrae.
The Gas-Pro TK is available calibrated methane, propane or butane. With IP65 and IP67 ingress protection, Gas-Pro TK meets the demands of most industrial environments. With optional MED certifications, it is a valuable tool for tank monitoring on-board ship. The optional High H₂S Sensor addition allows users to analyse possible risk if gases vent during purging, as well as the potential risk from pyrophores. With this option, users can monitor over the 0-100 or 0-1000ppm range.
As with other units in the Gas-Pro range of detectors, Gas-Pro TK has the additional benefit of offering full personal gas detection and confined space pre-entry check functionalities.
It will appeal to health and safety managers responsible for marine fuel tankers and on-shore oil storage terminals and tank farms and it provides atmosphere monitoring whilst purging inerted tank spaces or returning to breathable atmosphere (gas freeing).