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Provided by Dow Jones

Apr 19, 2024 6:58am

Schlumberger Ltd. (SLB) said Friday it had net income of $1.068 billion, or 74 cents a share, in the first quarter, up from $934 million, or 65 cents a share, in the year-earlier period. Adjusted one-time items, EPS came to 75 cents, matching the FactSet consensus. Revenue rose 13% to $8.707 billion, ahead of the $8.696 billion FactSet consensus. The company announced in early April an agreement to buy chemical and drilling technologies company ChampionX Corp. in an all-stock deal valued at about $7.8 billion. The deal "will bolster our production and recovery portfolio," said CEO Olivier Le Peuch in a statement. The stock dipped 1.4% premarket and has fallen 3.1% in the year to date, while the S&P 500 has gained 5%.

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-Ciara Linnane

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This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

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(END) Dow Jones Newswires

https://www.dmlp.net/news-releases/news-release-details/dorchester-minerals-lp-announces-its-first-quarter-13

Hey, window installer here i have couple years of heavy lifting and equipment handling experience but nothing to do with oil industry

I work two jobs and after pills nothing much is left on the pocket, such i am trying to get in to high paying jobs

I am willing to put in all the effort work hard and keep my head down, and never had a drink or a smoke, i have been applying to many oil jobs which had good starting salaries and didn’t require too much experience

When you look at indeed so many people are applying for those roles as well, can you guys notch me in the right direction as to how i can get ahead with it I even tried to find anyone i know in the industry to get them to refer me, but there weren’t any

Any of you guys can help

Appreciate you help and responses in advance

Galveston LNG Files for Construction Permit in Texas

https://www.rigzone.com/news/galveston_lng_files_for_construction_permit_in_texas-17-apr-2024-176439-article/?rss=true?utm_source=GLOBAL_ENG&utm_medium=SM_RI&utm_campaign=SHARE_DESKTOP

Sizing Up a Historic Glut. With gasoline's days numbered, oil companies are sending huge amounts of their production to chemical plants for plastic. What it means for companies and the environment

Salzman, Avi.  Barron's (Online); New York : Dow Jones & Company Inc. (Apr 12, 2024)

Today's oil executives share a tough reality: presiding over the peak and the decline of the gasoline age, a century-long growth period that brought in trillions of dollars in revenue. Gasoline isn't going away, but it won't be the sales driver it once was. So, oil companies are pivoting to the one end market for fossil fuels whose peak is decades away—chemicals.

Saudi Arabian Oil, the world's largest oil company, plans by 2030 to send about a third of its oil to chemical plants, mostly to be used for plastics. The $100 billion project could transform Saudi Arabia from a midsize player in chemicals to a powerhouse, capable of single-handedly supplying enough plastic for all of the cars and planes built each year.

Chevron, whose CEO has said that no large-scale fuel refinery will ever again be built in the U.S., is constructing two major chemical plants through a joint venture with Phillips 66 and QatarEnergy—one in Texas and one in Qatar.

The problem is that too many companies are ramping up chemical production at the same time, leading to a serious glut that looks like it will last for years. Chemical companies could be looking at years of diminished earnings, taking some of the shine off their stocks.

Already, prices for the most abundant chemicals, which go into plastics production, have fallen more than 50% in the U.S. since 2021. The plunge hasn't dissuaded most companies from planning even more new factories, though. Plants with capacity to produce millions of tons of unneeded plastics are set to swamp the market before the end of the decade, even as the chemical industry says it wants to reduce plastic waste. The glut could lead to both financial and environmental damage.

Shell recently opened a chemical complex the size of 300 football fields in Pennsylvania, with capacity to produce 1.6 million tons of plastic pellets a year. And China has built so many plastics factories in the past five years that it's on pace to add as much capacity by the end of this year as currently exists in Europe, Japan, and Korea combined.

The global ramp-up is swamping an already saturated market.

"You're looking at a historic oversupply," says Nick Vafiadis, who leads Chemical Market Analytics' global plastics and polymers team. "We've never seen anything like this in the industry."

Chemical Market Analytics, a data and consulting service owned by Barron's parent company, Dow Jones, is projecting that chemical plants making the basic plastic ingredient polyethylene will operate at less than 80% of their capacity this year for the first time in 40 years. For the industry to be solidly profitable, global operating rates usually have to be closer to 90%. Profit margins for chemical producers in Asia are already negative, and they've fallen sharply in Europe and North America, too.

"Barring shutdowns of existing capacity, this oversupplied situation will extend to 2030 and potentially beyond," adds Vafiadis.

This isn't just the normal ebb and flow of a cyclical business. For years, chemicals companies could count on demand rising one or two percentage points faster than global gross domestic product, with supply ratcheting higher or lower in response to the market. That's not happening anymore, and it's starting to rock the industry. BASF, the world's largest chemicals company by sales, is slashing billions of dollars in costs and laying off thousands of workers at its flagship chemical complex, warning investors that "these conditions are not expected to improve anytime soon because they have become structural."

It's easy to see why fossil-fuel companies see chemicals as their best expansion opportunity. Most analysts think that gasoline consumption in the Europe and the U.S. is already past its peak. J.P. Morgan strategist Natasha Kaneva predicts that global consumption will peak next year, followed by a gradual—and permanent—decline. Chemical demand, by contrast, isn't expected to shrink as the energy transition accelerates.

Most chemicals end up as plastics, and the plastic content of several everyday products has been growing. The average car had 411 pounds worth of plastic in 2021, 16% more than it did in 2012, according to the American Chemistry Council. Aside from single-use plastics like detergent bottles and straws, which have been targeted because of their environmental harm, most of the industry has escaped deeper scrutiny and regulations. Consumers don't think of oil rigs when they pull on their polyester pants. Those pants—along with the bumper on your car, the rug in your office, and the PVC pipes in your home—will be much harder to replace than gasoline.

That's encouraging news for companies pumping out the base chemicals that go into those products, like polyethylene and polypropylene. Energy research firm Wood Mackenzie expects that demand for naphtha and liquefied petroleum gas, two of the fossil fuels that act as feedstocks for chemicals, will grow by 50%, or seven million barrels a day, by 2050.

But it isn't so simple to draw a straight line from here to there. Chemicals are derived from several feedstocks, including natural gas, that have historically been more cost-efficient as building blocks for plastics than oil. So, companies that make chemicals out of oil are at a cost disadvantage to those that have easy access to natural gas.

What's more, the overall market for chemical products is considerably smaller than the market for fuels. Today, about 12 million of the 102 million barrels of oil produced every day end up as chemicals, according to the International Energy Agency. Gasoline, diesel, and jet fuel use roughly 60 million barrels. When a big oil company adds capacity in fuel markets, it's like a large person doing a cannonball dive into a swimming pool. When that company jumps into the chemical market, it's like they're cannonballing into a bathtub.

China, historically the world's largest importer of chemicals, is making the biggest splash of all. For more than a decade, chemical companies had relied on near-insatiable demand from China to sop up all of their excess supply. Its plastics demand rose more than 10% a year on average from 2015 to 2020, accounting for 70% of global growth. But China is now in the midst of an aggressive effort to become self-sufficient in the building blocks of its economy, from energy to materials and specialized manufacturing. Its plastics program is particularly monumental. The country has been using so much more oil for chemicals production since 2019 that it's single-handedly lifting the market. Were it not for petrochemicals, and China's in particular, total global oil consumption would still be below 2019 levels, according to the IEA.

Just as China's capacity to produce plastic has boomed, the country's demand for it has slowed, along with its broader economy. The result is that China can satisfy an increasing proportion of its own plastics needs, without as many imports. In 2018, China's plants had the capacity to produce about three-quarters of the major plastics it used by ton. By the end of this year, China will make enough plastic to account for 105% of its consumption, though it will still need to import some plastics because the materials it produces don't line up perfectly with the materials it uses.

Saudi Arabia is betting big on chemicals, too. State-controlled Saudi Arabian Oil, better known as Saudi Aramco, wants to turn four million barrels of crude oil and other petroleum liquids a day into chemicals by 2030. Aramco now processes about one million barrels of oil into chemicals, analysts say, so the expansion could have a major impact on the market, adding perhaps 10% more production capacity to global supplies.

"A shift of that scale is a significant commitment, on top of what they're already doing," says Daniel Yergin, an energy expert and vice chairman of S&P Global. Yergin thinks that Saudi's move reflects a growing interest in product flexibility by oil companies as the energy transition advances.

Aramco's chemicals program is estimated to cost at least $100 billion, and includes joint ventures both inside and outside the country. Sabic, a chemicals company that's 70% owned by Aramco, has partnered on new chemical plants in China, as well as a new Texas plant co-owned by Exxon Mobil. Aramco didn't respond to questions about its plans and the impact of oversupply on the market. Salem Al-Subayee, director of the liquids to chemicals program, wrote on LinkedIn last month that the company is "on track" to meet the four-million barrel goal by 2030.

The enormous investments by state-sponsored entities, and a demand slump, are weighing on independent chemicals companies.

Most of them missed earnings estimates in the fourth quarter, according to Matthew Blair, an analyst at Tudor, Pickering, Holt. Analysts have been reducing their estimates for the first quarter since the start of the year, dropping them by more than 15% for heavyweights like LyondellBasell Industries and Dow.

Still, the industry's problems have not been reflected in most of the stocks. The average chemical company stock rose 18% in 2023, and is up another 9% this year, according to Blair. "We had major negative revisions, yet the stocks still moved up," Blair says. Investors who are used to the normal cyclical patterns in chemicals are holding on to the stocks in anticipation of a rebound, but it keeps getting pushed off, he says. Without a substantial bounceback, the stocks could follow estimates lower. Dow and Lyondell didn't respond to requests for comment.

Meanwhile, capacity is still on the rise. Big plastics producers such as Exxon Mobil, Lyondell, Shell, and Dow have collectively plowed tens of billions of dollars into new plants. Tom Sanzillo, director of financial analysis at the Institute for Energy Economics and Financial Analysis, calls them "business-as-usual investments that will fail to achieve climate and pollution-reduction goals, maintain profitability, and encourage investor confidence." Chemicals were once considered an "industry savior" for fossil fuels in a decarbonizing world, Sanzillo says. Now, they're looking like another albatross.

Although BASF has begun to downsize, several other companies are still ramping up. Shell opened its Pennsylvania polyethylene complex in stages starting in 2022. Once complete, it will span 386 acres. Former Gov. Tom Wolf said the complex, which is receiving an estimated $1.6 billion in state tax breaks and credits, was the largest industrial project built in the state since World War II.

But the rollout hasn't gone smoothly. The facility has already had to pay fines for pollution, parts of the start-up were delayed, and it has opened into a particularly weak chemicals market. In the fourth quarter, Shell's chemicals division posted an adjusted loss of about $500 million.

Sanzillo believes that the plant also came in way over budget and could eventually cause Shell to take impairments. Several media reports and a Shell-funded study had said the plant was expected to cost $6 billion. But CEO Wael Sawan noted on Shell's latest earnings call that it cost "$14 billion or so." A Shell representative said the company never released cost estimates in advance of construction, and that Shell wouldn't comment on potential impairments. The company said in February that it would lay off 25% of the commercial staff in its chemical division.

The decision to build the plant was made before Sawan took over, but he's grappling with its impact now. "The margins aren't great," he said on the company's latest earnings call. "I mean that's obvious, and I don't know how long that lasts."

Asked if he would greenlight the plant again if he had the choice, Sawan said that "we will make sure that we do less of what we would call the mega, mega projects." He said Shell expects the Pennsylvania venture to become profitable in the next few years, and that the company will hold its chemicals spending flat through the end of the decade.

Exxon has likewise been expanding its chemical operations, and has run into some financial difficulties. In the fourth quarter, the company took $294 million in impairments in its chemical products division, although it didn't respond to questions about what caused them. Big oil companies can weather downturns in chemicals because of the strength of their other businesses, but negative results can still sting. Shell's chemicals loss was a 6% drag on fourth-quarter earnings.

The expansion of plastics production also complicates a public relations push by the industry to promote its efforts at boosting plastics recycling. Shareholder advocacy group As You Sow says 14 million metric tons of plastic is discarded in waterways every year, an amount that could triple by 2040 without more industry action. The oversupply of plastics has caused the price gap between virgin and recycled plastics to grow. New polyethylene is now 42% cheaper than the recycled version, making it more challenging for companies to go green in products and packaging.

The Plastics Industry Association, a trade group, disputed the idea that chemical companies are overproducing, arguing that recycling rates are improving and giving businesses more options. "Stable supplies of both virgin and recycled materials benefit end markets, particularly those favoring plastics for packaging," said chief economist Perc Pineda in a statement. "Markets are more efficient when businesses have choices." The group's marketing slogan is "recycling is real," an attempt to push back on statistics showing that 10% or less of plastics get recycled.

The industry is looking forward to a temporary slowdown in new chemical plant construction next year. The buzzword today is "destocking." Companies that make raw plastic say their customers—who turn pellets into bottles and pipes—are working through excess inventories, which they hope causes prices to rebound. But a new wave of plants are coming in 2027 that are likely to destabilize the market again. By 2028, global capacity to produce polyethylene is expected to grow to 176 million metric tons a year from 147 million in 2023, and that's before including the Saudi liquids-to-chemicals program, according to Chemical Market Analytics.

Somehow, the supply side of the industry will have to shrink. European plants owned by companies like BASF may be in the most precarious shape of all. The continent has minimal reserves of oil and natural gas, and has seen costs rise as companies stopped importing Russian gas following Russia's invasion of Ukraine. Asian producers are in a similar crunch because they have to import feedstock. Companies operating in the U.S. and the Middle East sit on top of cheap natural gas and oil, giving them a cost advantage. But that doesn't mean they aren't exposed to the market's problems.

Chemicals may well be the future of oil. But there can still be too much of them.

Write to Avi Salzman at avi.salzman@barrons.com

Credit: By Avi Salzman

SINGAPORE, April 18 (Reuters) -QatarEnergy has set the term price for June-loading al-Shaheen crude at the highest premium in six months on robust demand in Asia and tighter supply of medium high-sulphur grades from the Middle East, trade sources said on Thursday.

The term premium for June-loading al-Shaheen crude rose to $2.54 a barrel to Dubai quotes, they said, up from $1.47 a barrel in the previous month.

Hey everyone! im curious if whta are the things that you think are the problems needed to be research in the industry? like machine learning or bioremediation? I'm hoping you could share. Thanks!!

https://www.bicmagazine.com/industry/natgas-lng/the-us-exported-a-record-volume-of-natural-gas-in-2023/

https://finance.yahoo.com/news/column-record-exports-deplete-us-164456908.html

Pape, Gordon.  The Globe and Mail; Toronto, Ont.. 16 Apr 2024: B8.

Editor and publisher of the Internet Wealth Builder and Income Investor newsletters For income investors, equity investing has become a two-edged sword.

On the plus side, many stocks are offering their best yields in years. You can fill your portfolio with shares the likes of BCE Inc. (BCE-T; yield 9 per cent), Capital Power Corp. (CPX-T, 6.75 per cent), and Brookfield Renewable Partners LP (BEP.UN-T; also 6.75 per cent) and watch the dividends roll in.

Unfortunately, you’ll also see the bottom line wash out, as many high-yield stocks are trading near their lowest levels since before the pandemic. After two years of watching portfolio values erode, many people are fed up – and nervous.

One solution is to add some energy stocks to your list.

Many offer both strong cash flow and an attractive total return.

I know some people don’t want to encourage fossil fuel consumption by investing in energy companies. I respect that view, but not everyone shares it. If you’re willing to include conventional energy stocks in your portfolio, here are some ideas from my Income Investor recommended list. Stock prices are as of Friday’s close.

Peyto Exploration and Development Corp. (PEY-T).

This Alberta-based natural gas producer was first recommended in December, 2022, at $13.30. It is currently trading at $15.19 and pays a monthly dividend of 11 cents ($1.32 a year) to yield 8.7 per cent. The company reported earnings of $239-million ($1.62 per diluted share) in 2023.

Freehold Royalties Ltd. (FRU-T). Freehold is an oil and gas royalty company with assets mainly in Western Canada, although it is expanding in the United States. It was recommended in October, 2021, at $12.10 and is now trading at $14.51. The monthly dividend is 9 cents a share ($1.08 a year) for a yield of 7.4 per cent. The company reported funds per share from operations of $1.59 in 2023.

Canadian Natural Resources Ltd. (CNQ-T). This is one of the giants of Canada’s oil and gas industry. It was recommended in May, 2019, at $37.96 and now trades at $109.04.

So, investors who bought at the time of our original recommendation have a capital gain of 187 per cent, plus they’re receiving quarterly dividends of $1.05 ($4.20 a year). That’s a current yield of 3.85 per cent. Those who bought when CNQ was first recommended have a yield of 11.1 per cent.

Keyera Corp. (KEY-T). Keyera supplies a variety of services to the natural gas industry, including transportation, storage and marketing. It has been on our recommended list since 2004, at a split-adjusted price of $6.03. It is currently trading at $34.69. The quarterly dividend is 50 cents ($2 a year) to yield 5.8 per cent. The company reported basic net earnings per share of $1.85 in 2023 and distributable cash flow of $3.73 per share.

Gibson Energy Inc. (GEI-T). This is another mid-stream energy infrastructure company that is involved in the storage, optimization, processing, and gathering of crude oil and refined products. It was recommended in October, 2021, at $23 and is trading at close to the same level now. The dividend was increased by 5 per cent this month to 41 cents per quarter ($1.64 a year) to yield 7.15 per cent. The company reported a dividend payout ratio of 61 per cent in 2023, based on distributable cash flow of $385.8-million.

It’s important to note that these companies use different measures for calculating payout ratios. The gold standard is to measure dividends against net earnings, but few do that.

Perhaps it’s time for the regulators to take a fresh look at reporting standards so that investors could easily compare apples with apples.

Just stop oil has to be the worst protest organization that I've seen. Join me as i discuss how awful this group is.

Link to a video on my opinion of just stop oil: https://www.youtube.com/watch?v=0oczkFbxwC4

Big foil of the White House, some U.S. oil executives have reached an unlikely truce with the president's lieutenants. Once a favorite foil of the White House, some U.S. oil executives have reached an unlikely truce with the president's lieutenants

Eaton, Collin.  Wall Street Journal (Online); New York, N.Y.. 15 Apr 2024.

Heading into an election in which energy prices figure to be a key issue, President Biden and some of the country's biggest oil companies have reached a surprising detente.

The truce comes after years of acrimony : The White House routinely slammed windfall oil-and-gas profits as pump prices surged in 2022, and industry executives bemoaned Biden's campaign promise to transition the U.S. away from oil.

Lately though, top executives from Exxon Mobil, Occidental Petroleum and other producers say they have enjoyed cozier relations with the White House, spending more time discussing—and sometimes influencing—the administration's thinking on climate investments , energy policy and global oil markets with top Biden officials.

Exxon Chief Executive Darren Woods said that, unlike the administration's early days, the oil giant is now welcome at the White House table.

"If you want a game plan, you want people who have played the game," Woods said in an interview. "So, I think there's been a pragmatic approach that's been brought into the administration."

The relationship could soon be put to the test. Gasoline prices are up more than 40 cents from the start of the year and are expected to increase further in the summer driving season . If Americans are experiencing pain at the pump as the election nears, the oil industry may once again be a useful foil for Biden.

A White House spokesman didn't respond to requests for comment.

The oil-and-gas industry remains overwhelmingly in favor of Republican energy policies. Many executives are incensed that the Energy Department paused approvals for newly proposed liquefied natural-gas export projects. Last week, executives said new rules raising rates for companies to drill on federal lands would hurt the economy.

"We're dealing with a regulatory onslaught from this administration," said Mike Sommers, chief executive of the oil industry trade group American Petroleum Institute. He acknowledged the administration's rhetoric has shifted, but attributed the change to global supply shocks that followed geopolitical crises.

Shared interests

Oil-and-gas companies also have developments to cheer about. Biden has presided over record U.S. energy production and exports, and oversaw the start of several major pipelines and infrastructure projects. There is also broad support for the Inflation Reduction Act, which contains enormous tax credits for clean-energy projects, including those favored by the industry such as carbon capture and hydrogen production.

For both of the top presidential candidates this year, there is a gulf between their campaign rhetoric and the governing reality. Biden stresses his green agenda and often criticizes the industry, but his administration is relatively pragmatic on many issues, oil executives say. Whereas Trump's "drill, baby, drill" slogan is a regular part of his stump speech, his first administration was often chaotic and lacked regulatory thoroughness, which stalled some oil-and-gas projects in court. Trump has also been sharply critical of the industry-popular IRA.

Oil executives said John Podesta, Biden's point person on implementation of the IRA, is now intensely focused on bringing clean-energy projects to life and often discusses the effort with big fossil-fuel producers.

"We're seeking their help in cleaning up, globally," Podesta said last month.

Occidental CEO Vicki Hollub said she has enjoyed an open dialogue with Podesta, and Energy Secretary Jennifer Granholm. Hollub said she had always appreciated Biden's push to reduce greenhouse-gas emissions.

"We support those goals, and we want that to happen," she said. "I think the [Energy Department] has been one of the agencies that's been very open in wanting to help move things along."

Several major energy projects that stalled in court during the Trump years moved forward under Biden, such as the Dakota Access Pipeline and the Mountain Valley Pipeline. The Biden administration approved ConocoPhillips' controversial Willow project in Alaska and a Gulf Coast oil-export terminal capable of handling supertankers, only the second such facility in the region.

"No one has done more damage to the American oil-and-gas industry than Joe Biden," said Karoline Leavitt, a spokeswoman for Trump's campaign. "President Trump made America a net exporter of energy for the first time because he cut red tape and gave the industry more freedom."

Complicated politics

Fossil-fuel politics are tricky for Biden. Many in the Democratic Party seek a rapid move away from oil and gas to curb climate change, but Biden also needs to attract moderate voters in key swing states, including Pennsylvania, where fracking is an economic boon .

Biden has overseen the start of several major pipelines and infrastructure projects. PHOTO: Nate Smallwood for The Wall Street Journal

During the 2020 election, Biden said he would ban new oil-and-gas permitting on public land, and in his first year in office, Granholm urged drillers to diversify to avoid becoming the next Kodak or Blockbuster Video, whose business models became obsolete as technology evolved.

Biden has also needed American frackers to help quell rising fuel prices . In 2021 and 2022, as the U.S. emerged from the pandemic and fuel prices climbed, he asked the Federal Trade Commission to investigate oil companies' " anti-consumer behavior ," and called on U.S. producers and the Organization of the Petroleum Exporting Countries to grow production.

Communications about prices are better as oil executives said they have discussed energy supplies often with Biden's lieutenants and tried to make clear that various global market forces move prices, outside of their control.

Many of the smaller drillers who fueled the shale boom don't share the kinder view of the White House held by the likes of Exxon. Mary Landrieu, a former U.S. senator (D., La.) from a big fossil-fuel state who has worked as a lobbyist for oil-and-gas companies, said smaller companies are harder hit by costly regulations and sharp ebbs and flows in the administration's messaging about the industry.

"It's been complicated and confusing," Landrieu said. "The Biden administration has sent different signals at different times, and the signposts go in different directions."

Under Biden, antitrust enforcers are scrutinizing a recent wave of big oil-and-gas deals. Earlier this month, natural-gas frackers Chesapeake Energy and Southwestern Energy postponed the closing date of their merger following an information request from the FTC.

Lines of communication

U.S. Rep. Lizzie Fletcher, a Democrat from Houston, has helped nurture relationships between energy companies and her party. She said they are making progress in collaborating to shape the IRA and provisions around methane emissions.

"You hear the Republicans all the time saying the administration is so terrible for domestic production of oil and gas, and yet we are at a record peak of crude-oil production," Fletcher said.

After extensive meetings with fossil-fuel interests, the Securities and Exchange Commission killed a proposed requirement for oil companies to report emissions stemming from customers using their products when the agency rolled out its new climate accounting rules last month.

Exxon CEO Woods said the White House sought his advice on energy crises such as the weeklong Colonial Pipeline shutdown in 2021 and Russia's invasion of Ukraine. It also embraced Exxon's idea for a giant Gulf Coast carbon-capture hub, which Woods said helped influence the administration's thinking on what became the IRA.

Officials have learned more about what it takes to bring low-carbon projects to fruition, and the myriad stakeholders involved, said Jeff Gustavson, who leads Chevron's new energies business, which is investing in renewable fuel, hydrogen and carbon capture.

"Do the politics complicate that? Obviously. But we try to take the long-term view, and we've had constructive discussions and conversations," Gustavson said.

Benoît Morenne and Phred Dvorak contributed to this article.

Write to Collin Eaton at collin.eaton@wsj.com

Credit: By Collin Eaton

Maritime Administration (MARAD), an agency within the federal Department of Transportation.

Source: Morgan Stanley

The license enables EPD to move forward to the next steps in developing the offshore terminal capable of loading 2 MMBPD of crude oil (the U.S. currently exports ~4 MMBPD). Since the original application for a deepwater port license was submitted in January 2019, MARAD and the U.S. Coast Guard have led a four-year environmental review of the project that also included reviews by more than a dozen federal governmental agencies (including the USACE and EPA) as well as reviews and approvals by the State of Texas. With four deepwater export projects now under development (there is only one currently operational deepwater crude oil terminal with a single-point mooring (SPM) in the U.S. – the Louisiana Offshore Oil Port), EPD now has a clear advantage as the only fully permitted of the projects (the other competing projects are ET's Blue Marlin, Sentinel Midstream’s Texas GulfLink, and Phillips 66/Trafigura’s Bluewater). SPOT received a Record of Decision from MARAD in November 2022, 46 months after its initial application. When EPD received the ROD, it came with eight conditions that SPOT needed to meet prior to getting its license, including operating and decommissioning guarantees, public outreach, wetland restoration and approvals. The project will now move forward with commercialization efforts in order to reach a final investment decision, likely requiring significant term commitments to proceed (perhaps limiting potential customers to a more narrow group of companies).

Project details. The SPOT fixed offshore platform would be located ~30 nautical miles off the Brazoria County, TX coast in 115-feet of water and will be manned 24 hours per day. The deepwater port marine terminal is designed to load VLCCs and other crude oil tankers up to a rate of 85,000 barrels per hour. In addition, dual 36"-diameter, bidirectional pipelines would be built that connect to EPD's new 4.8mm bbls Oyster Creek crude oil terminal in Brazoria County that would be constructed ~10 miles inland. SPOT would offer access to more than 40 distinct grades of crude oil (including Midland WTI) through a direct connection to EPD's 9mm bbls Houston ECHO terminal and extensive connectivity to EPD as well as third-party infrastructure. RBN noted that quality assurance appears to be a focus for the project. To that point, the HOU Futures contract for physical delivery at MEH and ECHO establishes a consistent quality standard and price transparency in the Houston market. This high-quality standard has given the market confidence that WTI in EPD's system meets the Platts spec, allowing Midland WTI into the Brent Complex. Since Midland WTI was made deliverable into the Brent Complex last year, EPD has loaded more than 250 tankers and has reported that all have met the spec.

Project benefits. SPOT is expected to reduce operational risks, including accidents and spills associated with reverse lightering, an unregulated process in which crude oil is offloaded from multiple smaller ships onto a larger vessel in federal waters off the U.S. Gulf Coast. At full capacity, SPOT would eliminate more than 900 ship-to-ship transfers in federal waters annually. With reduced reverse lightering and the facility's vapor combustion capabilities, SPOT is expected to decrease crude vapor emissions by -95% and lower total GHGs by -65%. The platform would also serve as a reef, supporting marine life. Operating safety and control features of the project will include autonomous shutdown valves, HIPPs, fire and gas detection, emergency shutdown and safety controls, and process control systems. SPOT would also have service vessels, which would relieve customers of traditional port fees (e.g., pilot fees, wharfage fees, tug fees, etc.) and ensure safety of the vessel before, during and after cargo-loading operations.

Exhibit 20: U.S. Gulf Coast Offshore Crude Oil Terminals📷Source: RBN EnergyExhibit 21: Sea Port Oil Terminal (SPOT) and Associated EPD/Third-Party Infrastructure📷

https://preview.redd.it/j3olgsm7fnuc1.png?width=900&format=png&auto=webp&s=7be96f8a5f118eb2e74a7240f772ab40cbed2dac

https://preview.redd.it/b0p4bbeafnuc1.png?width=900&format=png&auto=webp&s=2cadc5062db393f257582882d548b34e068a3ebf

📷Provided by Dow Jones Apr 15, 2024 9:04am

By Dominic Chopping

Equinor will pay $500 million in cash to EQT Corp. after the companies agreed to swap some onshore U.S. shale gas assets.

The Norwegian energy major will swap its stake in the Marcellus and Utica shale formations in Ohio for EQT's 40% stake in the Northern Marcellus shale formation in Pennsylvania, it said Monday.

Equinor will make the cash payment to EQT to balance the overall transaction, with its new assets contributing to growing cash flows, reducing carbon dioxide emissions intensity in its international portfolio and positioning it to leverage an expected positive development in the U.S. gas market.

To cover pre-existing gas sales commitments, Equinor will enter into a gas buy-back agreement with EQT, it added.

"With this transaction, we continue to high-grade the U.S. portfolio and improve profitability by strengthening our gas position in the most robust part of the Appalachian Basin," said Philippe Mathieu, executive vice president for exploration and production international at Equinor.

"The proposed swap improves portfolio robustness with an expected reduction in well break-evens and upstream carbon intensity. This also means that we have now fully exited all operated positions onshore U.S."

Write to Dominic Chopping at dominic.chopping@wsj.com

(END) Dow Jones Newswires

April 15, 2024 09:04 ET (13:04 GMT)

in General Energy News 15/04/2024

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Asian spot liquefied natural gas (LNG) prices edged up this week, reaching the highest levels in three months, as they remained supported by steady demand and supply disruption concerns.

The average LNG price for May delivery into northeast Asia LNG-AS rose to $9.80 per million British thermal units (mmBtu), its highest since Jan. 12, industry sources estimated.

The average price for June delivery was estimated at $10/mmBtu.

Prices had edged higher amid heating demand in Europe, while production disruption at the Freeport LNG terminal in the U.S. also supported prices, said Samuel Good, head of LNG pricing at commodity pricing agency Argus.

While daily maximum temperature forecasts for northeast Asia are likely still too low to incentivise substantial power cooling demand in April and most of May, much of southeast Asia is set to continue experiencing hot weather, he added.

“(This is) especially in Thailand where daily maximum temperatures are set to be around 35 degrees Celsius for the next few weeks.”

The increase in Asian LNG prices is prompting suppliers with U.S.-origin LNG to consider a shift from Europe, added Masanori Odaka, a senior analyst at consultancy Rystad Energy.

“Arbitrage for US-origin LNG to Asia has been open since the first week of April 2024, meaning that suppliers of US-origin LNG will likely try to market their volume into Asia rather than Europe,” he said.

In Europe, S&P Global Commodity Insights assessed its daily North West Europe LNG Marker (NWM) price benchmark for cargoes delivered in May on an ex-ship (DES) basis at $9.044/mmBtu on April 11, a $0.19/mmBtu discount to the May gas price at the Dutch TTF hub, and its highest since Jan. 12.

Argus assessed the May delivery price at $9/mmBtu, while Spark Commodities assessed May delivery at $8.992/mmBtu.

This comes after Russian attacks on Ukrainian energy assets this week, as well as Freeport LNG’s outage which led to near zero gas flows on Thursday.

In late March, U.S. LNG company Freeport LNG said it expected two of the three liquefaction trains at the plant – Trains 1 and 2 – to remain shut until May for inspections and repairs, while Train 3 was operating.

Train 3 however experienced a trip late on April 9 that lasted into April 10, an emissions report filed to regulators showed.

Additionally, LNG imports to Italy are projected to remain relatively supported as operations resume at Rovigo and Piombino terminals after maintenance, while deeper gas maintenance in Norway over the next two weeks could potentially tighten EU gas supply and stimulate LNG demand, said Ana Subasic, natural gas and LNG analyst at data and analytics firm Kpler.

Meanwhile, on spot LNG freight, both the Atlantic and Pacific rates both fell for a third consecutive week, said Spark Commodities analyst Qasim Afghan.

The Atlantic spot rate fell to $43,750/day on Friday, while the Pacific spot rate eased to $46,750/day.

Source: Reuters (Reporting by Emily Chow; editing by David Evans)

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