Chevron sells more domestic gas to Alcoa in Australia
Chevron has signed an agreement to supply a further 37PJ (962mn m³) of gas sourced from the three LNG projects located offshore Western Australia (WA) to US aluminium group Alcoa's alumina refineries in the southwest part of the state, adding to an existing contract with Alcoa for 64PJ of gas.
The Chevron gas supply contract is one of three sales and purchase (SPA) agreements that Alcoa has signed with gas producers. Alcoa has signed three new gas SPAs, which together will supply 198PJ of gas to its WA alumina refineries, starting from 2024.
The agreements with Chevron, ExxonMobil and Australian independent Warrego Energy, coupled with existing gas contracts, will supply Alcoa's three refining operations in WA over a 10-year period, Alcoa said. The Alcoa gas deals follow the agreements signed in December 2018.
The gas from Chevron will be sourced from the three LNG projects in WA in which the US major has an interest, including the 15.6mn t/yr Gorgon LNG facility, the 8.9mn t/yr Wheatstone LNG venture and its sixth share in the 16.3mn t/yr North West Shelf (NWS) LNG plant operated by Australian independent Woodside Petroleum.
Warrego signed a binding gas sales agreement (GSA) with Alcoa for the long-term supply of a total of 155PJ of natural gas from the West Erregulla onshore gas field in WA, Warrego said.
The agreement will start on 1 January 2024, subject to a positive final investment decision (FID) by Warrego expected in the first half of 2021, it said. The size and term of the GSA with Alcoa is such that Warrego does not need to secure additional GSAs to support the FID, it said. This foundation contract with Alcoa will underpin gas-processing development and provide the foundation for Warrego to plan additional phases of development, the firm said.
The West Erregulla field is jointly owned by Warrego and Australian independent Strike Energy. The field has been earmarked to provide backfill gas to the NWS LNG venture. ExxonMobil's largest gas interest in WA is its 25pc stake in the Gorgon LNG venture.
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FeCr quarterly benchmark not fit for Asia: Jindal
FeCr quarterly benchmark not fit for Asia: Jindal
Mumbai, 12 September (Argus) — The ferrochrome industry has entered a new era after the quarterly benchmark system ended in June 2024 and the industry is seeking a new pricing mechanism to replace the benchmark system that had been criticised for many years . Argus spoke with Indian producer Jindal Stainless' managing director Abhyuday Jindal about what the future pricing mechanism should look like and the challenges Indian stainless steelmakers face from lower-priced Chinese imports and increased volatility in raw material costs. How are you pricing ferrochrome without a quarterly benchmark, and what future pricing mechanisms do you foresee? Even during the regime of quarterly benchmark prices, countries such as India and China were not influenced by this benchmark. Instead, they set ferro chrome prices based on realistic demand and supply. They negotiated prices close to the actual consumption. Even European consumers had been buying chrome at discounted levels than the benchmark levels because it was unrealistic. In the future, we expect the Asian model based on realistic demand and supply will continue to succeed. How has cheaper Chinese stainless steel imports impacted the margins of domestic steelmakers? Imports from China have posed a long-standing challenge to the industry. While other major stainless steel producing nations have imposed duties on Chinese imports, India has yet to take similar actions. As one of the largest and fastest-growing markets for stainless steel, India becomes a key target for dumped and subsidised imports. Continuous dumping from China puts immense pressure on MSMEs and disrupts the local manufacturing ecosystem. Additionally, it creates an uneven playing field for domestic manufacturers, often forcing many to shift from manufacturing to trading. What is the outlook for ferrochrome prices and how will this affect production costs and demand? Recently, raw material prices for stainless steel had been volatile owing to availability concerns of raw material ore. Nickel, one of the major input materials, has displayed unpredictability on the London Metals Exchange (LME) in the range of $15,000-21,000/t and now currently is around $16,000/t. Some of this volatility was driven by Ni ore prices in Indonesia. Similarly, chrome ore shortages are impacting ferrochrome availability and prices. In India, the majority of chrome ore resources are available from only two companies, of which only one has been consistent with supplies. This is the reason why we have had to resort to imports for meeting chrome requirements. By Deepika Singh Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Australia’s Victoria seeks further gas storage capacity
Australia’s Victoria seeks further gas storage capacity
Singapore, 12 September (Argus) — The state Labor government of Victoria will introduce laws to allow offshore gas storage projects in its waters as it grapples with a predicted supply deficit because of declining Bass strait production. Victoria, which is Australia's largest user of household and commercial gas, will allow gas to be stored in empty gas reservoirs offshore in a bid to boost supply security, Victorian energy minister Lily D'Ambrosio said on 11 September. But the state's waters extend three nautical miles offshore, meaning the laws will not cover most of the state's depleted fields in the Otway and Gippsland basins which lie in federally administered zones. Victoria's largest storage is the 26PJ (694.3mn m³) onshore Iona facility in the state's west, owned by domestic gas storage firm Lochard Energy which plans to expand its capacity by 3PJ . But further capacity is needed to help bridge seasonal gaps, with the new laws possibly advancing privately-owned GB Energy's Golden Beach gas project, which could add 12.5PJ of storage to the grid. The Gippsland basin joint venture (GBJV) and Kipper Unit JV which feed the three Longford gas plants in the state's east have historically supplied about 60pc of southern states' gas, but operator Exxon plans to close one of the plants in July-October , cutting the 1.15 PJ/d facility's capacity to 700 TJ/d and further to 420 TJ/d later this decade. GBJV operated just 50 producing wells and six gas platforms in the 2024 southern hemisphere winter, with Exxon expecting a 70pc reduction in the number of wells from 2010 levels by next winter. The Australian Energy Market Operator's (Aemo) 2024 Victorian Gas Planning Report (VGPR) update confirmed the need for greater supply in Victoria, as declining demand would not offset the loss of supply from the GBJV. Peak southern state winter demand exceeds 2 PJ/d, but at full capacity, pipelines linking Queensland state's coal-bed methane fields to the southern states can meet only 20pc of such demand. Coal and gas-dependent Victoria this year approved its first nearshore gas project in a decade as the government softens its anti-gas stance. LNG import plans The possibility of LNG imports is firming in Victoria, with Australian refiner Viva Energy announcing public consultation has begun on its supplementary environmental effects statement (EES) for a planned floating storage and regasification unit, adjacent to its 120,000 b/d Geelong refinery. The Geelong LNG terminal would have the capacity to supply more than half of Victoria's current gas demand, Viva said on 12 September. The terminal's surplus gas could also flow into the connected southern states of South Australia, New South Wales and Tasmania. A public hearing into the proposal, which could see the import of 45 cargoes/yr, is expected to be held in December before an independent committee reports to the state's planning minister next year. Subject to a final investment decision, works could commence in 2026 to deliver first gas for winter 2028, Viva said, aligning with Aemo's expected shortfall of 50PJ in that year. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Francine spurs more US Gulf oil shut-ins: Update 2
Francine spurs more US Gulf oil shut-ins: Update 2
Update with BSEE production data. New York, 11 September (Argus) — US energy producers curtailed nearly 39pc of offshore Gulf of Mexico oil production as Hurricane Francine bore down on the Louisiana coastline today. About 674,833 b/d of offshore oil output was off line as of 12:30pm ET, according to the Bureau of Safety and Environmental Enforcement (BSEE). Around 907mn cf/d of natural gas production, or 49pc of the region's output, was also off line. Operators evacuated workers from 171 platforms. Companies including Chevron, ExxonMobil and Shell relocated offshore workers and suspending some drilling operations ahead of the hurricane. Ports along the hurricane's path announced traffic restrictions in advance, with some setting out plans to close until it passes, including the port of New Orleans. Francine was last about 60 miles south-southwest of Morgan City, Louisiana, according to a 4pm ET update from the National Hurricane Center. Maximum sustained winds were reported at 90mph. The hurricane is set to make landfall in Louisiana by this evening before moving north across Mississippi on Thursday. Rapid weakening is forecast and Francine is expected to be a post-tropical system on Thursday. With the hurricane's track locked in on Louisiana, the port of Houston reopened to all vessel traffic at 1pm ET Wednesday, a ship agent said, after closing Tuesday afternoon. The Gulf of Mexico accounts for around 15pc of total US crude output and 5pc of US natural gas production. By Stephen Cunningham and Tray Swanson Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
S Korean plate sales into EU revive AD probe talks
S Korean plate sales into EU revive AD probe talks
London, 11 September (Argus) — A recent spree of South Korean hot-rolled plate (HRP) sales into Europe have revived talks around the possibility of a dumping probe. Over the first six months of 2024 South Korean plate arrivals into Europe rose by a third compared with the same period last year to 330,000t. Last week, South Korea offered S275 grades at €540-550/t cfr south EU concluding a string of deals in the process, likely at the figures indicated above. These prices have put local producers under pressure to reduce their own offers despite significant cost pressures. When comparing southern European prices to South Korean imports an arbitrage of about €90/t is available on domestic offers. At the time of writing, local prices in Italy for S275 grades have settled at €650-680/t ex-works. One mill source told Argus it has already filed a complaint to the relevant authorities over dumping activity from Asia. "It makes sense to investigate India and Indonesia, combined with Korea. These are the three most aggressive sources right now," the same market participant said. This investigation follows protectionist trends and should include South Korea, Indonesia and India, one trader added. Similar views were echoed in Italy, where two sources commented any investigation should begin promptly, given the damage imports have caused. A probe launched by the EU would likely put UK authorities under pressure to enact a similar measure. "The UK has to act in the same way as EU. Korean prices cannot continue," one mill agent said. Aggressive importation, especially from Asia, has also hampered cash-strapped Liberty Steel's re-rolling facility in Scotland. Sources close to the company told Argus the reroller remains off the market, and has furloughed part of its workforce. "Structural challenges in the UK steel industry, including consistently high energy costs and cut-price imports from countries such as South Korea with less stringent environmental standards, means Liberty Steel UK has for some time been operating some plants intermittently with agreed short-time working arrangements," Liberty said. UK Steel, which represents UK steelmakers, noted "concern" about "underpriced" Korean plate imports, though it said it has not submitted a petition as of yet. By Carlo Da Cas Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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