TMX oil specs inappropriate: Valero, Chevron
Crude quality specifications on the Trans Mountain Expansion (TMX) pipeline in western Canada are not narrow enough and may prevent buyers in California from taking crude shipped on the recently commissioned system, according to two US refiners.
The 590,000 b/d TMX pipeline was placed into service on 1 May, a welcome addition for both producers in Alberta and refiners on the Pacific rim, but the upper limits allowed for crude on the line relating to vapor pressure and Total Acid Number (TAN) are problematic, Chevron and Valero said in letters to the Canada Energy Regulator (CER) on 10 May.
The specifications, as set out by Trans Mountain's rules and regulations, were already in place for the original 300,000 b/d crude pipeline, or Line 1, which also carries refined products that require a higher vapor pressure. TMX, or Line 2, will primarily cater to heavy crude shippers.
But the vapor pressure limit of 103 kPa at 37.8°C on the new line is nearly 40pc higher than tanks allow, according to Valero.
"High vapor pressure crude oil simply cannot be accepted in United States internal floating roof tanks," wrote Valero. The current limits are "wholly inappropriate" and will result in crude being transported through TMX that is not suitable for the west coast market.
Chevron concurred that the specifications exceed the limit for storage tanks at its own California refineries in Richmond and El Segundo.
"Failure to amend the TAN specification and vapor limits for TMPL may prevent Chevron from purchasing or processing crude from [Trans Mountain] for our California refineries," the company wrote.
The letters were in support of a 12 April complaint by Canadian Natural Resources (CNRL) to the CER, requesting the regulator intervene. Fellow oil sands producers Suncor, Imperial Oil, MEG Energy and ConocoPhillips also wrote in support, as did industry groups Explorers and Producers Association of Canada (EPAC) and Western States Petroleum Association (WSPA).
Current rules state crudes must have a TAN of less than 1.3mg KOH/g to be considered a Low TAN Dilbit, but that is "inappropriately high," according to CNRL, and should be brought down to the same 1.1mg KOH/g threshold set by other export pipelines.
Cenovus and Plains Midstream wrote that the CER did not need to intervene as this was a commercial matter.
"This is effectively a commercial dispute that should be dealt with between the sophisticated commercial entities involved," said Plains.
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Hurricane Francine sets sights on Louisiana coast
Hurricane Francine sets sights on Louisiana coast
New York, 11 September (Argus) — Hurricane Francine, which has already shut in almost a quarter of the Gulf of Mexico's oil output, is set to strengthen before making landfall in Louisiana on Wednesday evening. Francine was about 195 miles southwest of Morgan City, Louisiana, according to an 8am ET advisory from the National Hurricane Center, with maximum sustained winds of 90 mph. The hurricane is expected to become a category 2 storm, with winds between 96-110mph, and will bring 5-10 foot storm surge to coastal areas from Vermillion Bay to Port Fourchon, Louisiana. After landfall, the center is expected to move northward across Mississippi on Thursday and Thursday night bringing heavy rains. 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 . About 412,070 b/d of offshore oil output was off line by midday on Tuesday, according to the Bureau of Safety and Environmental Enforcement (BSEE), as offshore operators including Chevron, Shell and ExxonMobil evacuated workers and curbed operations as a precaution. About 494mn cf/d of natural gas production, or 26pc of the region's output, was also off line. The Gulf of Mexico accounts for around 15pc of total US crude output and 5pc of US natural gas production. By Stephen Cunningham Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
No change to oil use soon, transition just began: Appec
No change to oil use soon, transition just began: Appec
Singapore, 11 September (Argus) — Fossil fuel use is not going to change much in the next few years as the energy transition is just beginning, delegates said at the S&P Global Commodity Insights Appec conference in Singapore this week. About 84-85pc of our energy is fossil fuel and that number has remained unchanged for the last 30 years, trading firm Gunvor chairman Torbjorn Tornqvist said. "If I look around, what I see today, is not going to be much different [in 2030]." "The oil industry is being blamed for everything in this respect — the solution seems to be just stop drilling," Tornqvist said. "Clearly, that is not the way." US private equity fund Carlyle's chief strategy officer of energy pathways Jeff Currie thinks the world is "not even in chapter one" of the energy transition story. "We're still, I think as Torbjorn says, at 84pc fossil fuels — that means we're in the introduction. We're not even in chapter one. We got a long way to go." The problem seems to be the "unrealistic targets" that countries and companies have set for themselves in their quest to move away from fossil fuels and lower emissions. "Or you put the target, but you don't put the resources to achieve those targets," Tornqvist said. "It doesn't matter how much we want it. The cost of the energy transition is not fully understood, and it needs to be communicated." But there are ways to go about this. "Solar power is, I think, actually extremely cheap," Tornqvist said. "So there are solutions. The problem is it's not big enough." Another issue is that the transition away from fossil fuels is being largely driven by subsidies, Currie added. "Looking at all the politics and elections everywhere in the world, it's more driven by subsidies — more carrots and less sticks." Southeast Asian countries like Singapore and Thailand have turned to carbon taxes to get producers and consumers to factor in the cost of carbon when making decisions — but the question is whether they should be set higher to be effective. "That would be optimal, but it's unlikely to happen," Currie said. "I think market-based solutions are becoming a thing of the past these days." The pace of renewables growth in Asia is an issue, meaning oil may need to be around for longer. "I strongly believe even in 2050, oil products will take a very important and critical role in the society, especially for Japan," Japanese refiner Taiyo Oil's president and chief executive Takahiro Yamamoto said. "We have very limited renewable energy in our country at this moment." Yamamoto is not worried about oil demand falling even as Japan's population continues to shrink because of the number of refineries that have shut down in the country, threatening oil product supply including transport fuels like conventional jet fuel. "So many refineries have been shut down in the past 10 years. I'm very anxious about how we can keep this supply ability as a country," Yamamoto said. "That's my concern, rather than the shortage of demand or consumption decreasing." But delegates agree it is going to take a while to get to net zero and not everyone is going to get there at the same time. "I think it's a race that will take from now [a] minimum of 10 years," said Kuwait's state-owned KPC managing director of international marketing Shaikh Khaled Ahmad Al Sabah. Not everyone can afford it in some countries, he added. "It needs a lot more investment. It will have a lot of cost. Economics is a big, strong factor in this one." By Reena Nathan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Harris, Trump clash as polls hang in balance
Harris, Trump clash as polls hang in balance
Washington, 11 September (Argus) — Former president Donald Trump and vice president Kamala Harris brawled, often in personal terms, in their first presidential debate on Tuesday, with Trump branding Harris a "Marxist" and Harris saying world leaders know they can manipulate Trump with flattery. With polls indicating an even match between Trump and Harris across the six or seven battleground states that will determine the election outcome, Tuesday's debate — likely the only one they will have — presented a breakout opportunity for the two candidates. While President Joe Biden was unable to stand up to Trump's attacks in their match-up in June — in a debate performance that eventually led to his withdrawing from the race — Harris, a former prosecutor, frequently had Trump on the defensive, casting her 78-year-old opponent as confused and extreme. The debate, held in the crucial swing state of Pennsylvania, started off on a calm note as Harris walked up to Trump to introduce herself — the two politicians were meeting face to face for the first time. Harris touted her plan to extend child tax credits and provide tax deductions for small businesses. Harris cast Trump's plan to impose tariffs of up to 20pc on all imported goods as essentially a national sales tax that would hurt the middle class. Trump argued that his plan would not represent a tax on US consumers because "other countries are going to finally pay us back for all that we've done". But the debate quickly deteriorated, as Trump called Harris a "Marxist", suggested that immigrants moving to the US hunt dogs and cats for personal consumption and asserted that Harris would ban hydraulic fracturing (fracking) on her first day in office. "I have not banned fracking as vice president of the US, and in fact, I was the tie breaking vote on the Inflation Reduction Act (IRA) which opened new leases for fracking," Harris said. When Harris was running for the Democratic nomination in 2019, she said there was "no question I'm in favor of banning fracking", only to abandon that position when running this year. The IRA, the landmark climate legislation that Congress approved in 2022, included a compromise provision demanded by the Republican lawmakers that set aside more areas for leasing in the Gulf of Mexico. Trump appeared to give the Democratic administration credit for keeping the US oil industry intact. "They started getting rid of it, and the prices were going up the roof. They immediately let these guys go where they were." But he contended that US oil output would have been "four-five times" than it is now if he had been re-elected in 2020. US crude output fell sharply in Trump's last year in office as the Covid-19 pandemic devastated demand. Oil output reached a record high of 12.9mn b/d last year and is projected to grow again this year, according to the Energy Information Administration. "If she won the election, the day after that election, they'll go back to destroying our country, and oil will be dead," Trump said. "Fossil fuel will be dead. We'll go back to windmills, and we'll go back to solar." Foreign policy issues presented another area of personal attacks for the candidates. "World leaders are laughing at Donald Trump," Harris said. Trump countered by citing praise for his leadership from Hungary's prime minister Viktor Orban, a controversial leader who frequently clashes with EU leaders over their support for Ukraine. Trump repeatedly refused to say whether he wanted Ukraine to win its war with Russia, merely saying that the war should end. And he argued it would not have started if he had been in office. "If Donald Trump were president, [Russian president Vladimir] Putin would be sitting in Kyiv right now," Harris said. "You adore strongmen instead of caring about democracy." Trump frequently attacked Biden during the debate, prompting Harris to say: "It's important to remind the former president, you're not running against Joe Biden, you're running against me." An average of national polls aggregated by the Washington Post shows Harris with a 2 percentage point lead over Trump this week — a result that pollsters interpret as a statistical dead heat, as the winner is determined in the Electoral College, not in the nationwide voting. It will take some time for the outcome of Tuesday's debate to become apparent in the polls. Harris and Trump have not agreed to hold another debate. Trump's vice presidential pick, Ohio senator JD Vance and Harris' running partner, Minnesota governor Tim Walz, are scheduled to hold a televised debate on 1 October. By Haik Gugarats Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Francine shuts in 24pc of US Gulf oil output: Update
Francine shuts in 24pc of US Gulf oil output: Update
Includes production shut-in figures, port status updates and spot crude price information. New York, 10 September (Argus) — US offshore operators shut in 24pc of Gulf of Mexico oil production ahead of tropical storm Francine, which is expected to gain hurricane status later today and hit Louisiana Wednesday. About 412,070 b/d of offshore oil output was off line as of 12:30pm ET due to storm preparations, according to the Bureau of Safety and Environmental Enforcement (BSEE). About 494mn cf/d of natural gas production, or 26pc of the region's output, was also off line. Operators evacuated workers from 130 platforms. The storm was about 380 miles southwest of Morgan City, Louisiana, packing maximum sustained winds of 65mph, according to a 2pm ET advisory from the National Hurricane Center. It is expected to continue to move across the northwestern Gulf of Mexico tonight and make landfall in Louisiana on Wednesday evening. The storm will track through an offshore region that accounts for about 15pc of US crude output and 5pc of US natural gas production. Ports closing ahead of storm Ports along the storm's path are restricting inbound and outbound traffic ahead of the storm, with many planning to close in the next day. Lightering operations were paused off of Galveston, Texas, starting Monday night due to high seas, and the Louisiana Offshore Oil Port export/import facility said it was following its inclement weather plans, which includes shutting down ahead of a storm like Francine. The port of Houston closed to both inbound and outbound vessel traffic at 1pm ET Tuesday due to worsening weather conditions from Francine, a ship agent said. The US Coast Guard's captain of the port expected port condition Zulu, where gale force winds are anticipated within 12 hours and port operations are suspended, to be in place by 7pm ET Tuesday. In Louisiana, terminal operations at the port of New Orleans will be closed Wednesday , with operators expected to resume on Thursday. Operations at the New Orleans Public Belt, which connects major railroads to the port, will continue Tuesday before closing Wednesday and are expected to resume on Thursday. Offshore crude flows curtailed Chevron initiated shut-in procedures for its Anchor and Tahiti platforms, 190 miles south of New Orleans, and began transporting all personnel from the facilities. Production from its other operated platforms in the Gulf of Mexico remained at normal levels. Non-essential staff were also being removed from the Big Foot and Jack/St. Malo platforms, around 225 miles and 280 south of New Orleans, respectively. Crude from Tahiti is transported to the Boxer platform, from where it can move along pipelines that feed into multiple streams — Mars, medium sour grades Poseidon and Southern Green Canyon (SGC) — as well as lighter sour grades Eugene Island and Bonito. Production from the recently-started Anchor platform feeds into the Amberjack pipeline, which carries crude into the Mars stream. Mars has been heard trading at 70-90¢/bl discounts to the US benchmark in Cushing, Oklahoma, on Tuesday, rising over the day from a volume-weighted average discount of 96¢/bl on Monday. Francine's path over Louisiana means it has the potential to weigh more on refinery demand there than on offshore crude production. ExxonMobil said all staff had been transported off the Hoover platform, located about 200 miles south of Houston, and operations shut-in, while Shell said it was shutting in production at its nearby Perdido platform after earlier pausing drilling operations from the facility. Hoover and Perdido both feed into ExxonMobil's Hoover Offshore Oil Pipeline System (HOOPS), that delivers the HOOPS Blend to the Texas Gulf coast. HOOPS Blend is a medium sour crude that is not actively traded in the spot market. Competing Texas-delivered medium sour SGC was discussed at a 70¢/bl discount to the US benchmark today, which is where it traded in the prior session when narrowed its discount by about 35¢/bl from ahead of the weekend. So far, no major problems are expected at BP's offshore facilities in the region. Non-essential personnel have been evacuated from Shell's Enchilada/Salsa and Auger assets, located about 120 miles south of Vermillion Bay, Louisiana. By Stephen Cunningham, Tray Swanson and Amanda Smith Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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