Malaysia legalisation drive to boost palm oil workforce
Malaysia's plantation industry can start to employ undocumented migrant workers already in the country once the government moves to legalise their status from 16 November, according to home affairs minister Hamzah Zainudin.
Many producers agree the proposal may ease the labour shortage likely to have suppressed palm oil output since the government froze overseas hiring in June. But the programme may have limited impact on the palm oil industry as many targeted migrants are already working illegally in the plantation sector, said the secretary of Malaysia's estate owners' association Kam Sang Kok.
The World Bank estimated between 1.23mn-1.46mn undocumented migrants worked in Malaysia in 2017 without assessing the breakdown by sector. Documented foreigners make up 80-85pc of the plantation workforce, or 265,000 people, according to data from the Malaysian palm oil board.
The government aims to help sectors that are struggling to attract local employees amid restrictions to combat Covid-19 with its "undocumented migrant recalibration plan", Zainudin said. The proposal should also generate around 95mn ringgit ($23mn) in government revenue, he added.
Malaysia's immigration and labour departments will jointly run the programme until 30 June next year, which will allow employers in the plantation, agriculture, construction and manufacturing sectors to hire previously undocumented workers, under certain yet unspecified conditions.
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ExxonMobil exits, Vitol enters California RD project
ExxonMobil exits, Vitol enters California RD project
New York, 26 June (Argus) — A company hoping to construct a 15,000 b/d renewable diesel refinery in Bakersfield, California, this year has settled a dispute with ExxonMobil and inked a new offtake deal with Swiss commodity trader Vitol, providing a reprieve for a project that has been financially stressed. Global Clean Energy Holdings will pay ExxonMobil $18.2mn as a one-time settlement and cancel all 125,000 shares of Global Class C preferred stock that the US oil major had owned, according to a regulatory filing on Wednesday. Two ExxonMobil employees have exited the Global Clean Energy board. The two companies will also ask the Delaware Court of Chancery to dismiss a complaint brought by ExxonMobil that alleged wrongdoing. ExxonMobil had previously moved to cancel an offtake agreement to purchase much of the plant's expected output, citing various production delays, and asked the Delaware court to compel the release of Global internal files. A Global subsidiary has entered into a new agreement with Vitol, in which the trading firm will be the "exclusive supplier of renewable feedstocks" to the Bakersfield plant and "exclusive offtaker" of all renewable diesel and naphtha produced by the facility and its associated environmental attributes, according to the filing. The two companies also entered into a revolving credit agreement, which provides Global with a working capital loan of $75mn. Global Clean Energy has said it wants the facility's primary feedstock to be camelina oil, which would be more able to capitalize on low-carbon fuel incentives because it comes from a cover crop. But the company said in an April regulatory filing that it expects to use only a "minimal amount" of camelina oil in 2024 and 2025. The filing on Wednesday also lists soybean oil, canola oil, and various waste feedstocks, such as used cooking oil, as potential feedstocks Vitol could supply. The agreement with Vitol provides fresh hope for the long-delayed Bakersfield project, one of a handful of renewable fuels facilities that have set plans to come online in California. Global Clean Energy as recently as last month warned there was "substantial doubt" about its ability to survive, given its debt obligations and the uncertain timing for completing its facility. Vitol can terminate the supply and offtake agreement, which is otherwise set to last for three years and can be extended for two more, if the project is not producing at least 5,000 b/d of renewable diesel by 31 October this year. Global Clean Energy declined to provide more details on its construction timeline today but said in a regulatory filing last month that it planned to commence "the start-up phase" of the project this month and begin initial commercial operations during the third quarter. The facility, if completed, could face additional headwinds. Declining prices over the last year for federal renewable identification numbers (RINs) and California low-carbon fuel standard credits have depressed margins for renewable diesel producers. And the growth of biorefineries in the state — including Phillips 66's Rodeo facility that the company said Wednesday is running at full capacity — could mean steep competition for feedstocks. By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Phillips 66 completes Rodeo renewables conversion
Phillips 66 completes Rodeo renewables conversion
Houston, 26 June (Argus) — Phillips 66's Rodeo, California, refinery has completed a multi-year, billion-dollar conversion to process only renewable feedstocks, increasing throughput rates to 50,000 b/d. The 128-year-old Rodeo plant stopped processing crude in February , taking up to 115,000 b/d of oil refining capacity offline as it transitioned to producing renewable diesel (RD) and, eventually, sustainable aviation fuel (SAF). The plant initially bought and refined pre-treated feedstocks while building its own 40,000 b/d pre-treatment unit (PTU), whose two 20,000 b/d trains will prepare raw feeds such as used cooking oil, fats, greases and vegetable oil for Rodeo's three renewable diesel units (RDUs) before the end of this month. "The pre-treatment area will run at max rates as soon as it's commissioned," and refine harder-to-process feedstocks later in the year, Rodeo refinery manager Jolie Rhinehart told Argus on site at the plant earlier this month. "Our units will be able to process the lowest carbon intensity (CI) feedstocks, something that's called brown grease." There is also a financial incentive to process lower CI feeds. "That's how you really make money in these assets," Phillips 66 chief executive Mark Lashier told investors at the JP Morgan Energy Power & Renewables conference earlier this month. While optimizing feedstocks may help boost profits at the plant, Low Carbon Fuel Standard (LCFS) credits — which provide much of the financial incentive for renewable fuel conversions — are in the doldrums. A robust supply of low-carbon fuels such as RD to west coast markets has outstripped demand in recent years, helping drive down LCFS credit prices to nine-year lows earlier this month. But the unbalanced market has not led Phillips 66 to alter its strategy. Ample demand for renewable fuels There will be "ample" demand for Rodeo's refined products in the short-term, Rhinehart told Argus . "One thing that is stronger than ever is demand for liquid transportation fuels in the state of California." She plans to run the Rodeo plant like Phillip 66's other crude refineries, altering throughputs according to the cost and availability of feedstocks and the price that it can sell finished product. "We're not going to run if we're not making money," Rhinehart said. Still, the company has signaled its intention to run high rates. "We see good economic incentives to run and run full [at Rodeo]," Lashier told conference attendees, noting that while LCFS credits are "compressed," feedstock costs are also lower than the company anticipated. Another part of the profitability equation Phillips 66 does have control over is the infrastructure to distribute RD, selling Rodeo's product alongside conventional fuels at its "76" brand gas stations across the west coast. The company owns a products pipeline that connects Rodeo to a Phillips 66 marine and truck rack terminal on the San Francisco Bay, just south of Chevron's 245,000 b/d Richmond refinery ( See map). "We're very confident in our ability to place all those [renewable product] barrels locally," Rhinehart said. "And if there's demand outside of the region, we will surely supply that if the market supports it." Rodeo has so far supplied RD to California, Washington and Oregon and the Canadian province of British Columbia. Like a conventional crude refinery, the Rodeo complex will also periodically reduce throughputs for maintenance. Rhinehart expects a catalyst change for one of its reactors every year-and-a-half and a full catalyst change for all reactors every three years. Although Rodeo is up and running, permitting difficulties could preclude any future expansion of the plant. Rhinehart has a "substantial" list of projects she would like to progress, potentially including green hydrogen, but worries whether the company could make it through the permitting process. This was a concern also voiced by Phillips 66's executive vice president of emerging energy and sustainability Zhanna Golodryga in an interview with Argus at the company's Houston headquarters earlier this month. "We probably could have brought Rodeo online sooner if we didn't have to wait for some permits," she said in reference to a back-and-forth with Contra Costa County late last year over Rodeo's environmental impact review. Golodryga is eyeing the Gulf coast for Phillips 66's next low carbon energy hub, believing that Texas is the energy transitions Silicon Valley. By Nathan Risser Phillips 66's west coast refining assets Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Japan’s MUFG Bank to fund US-based SAF firm LanzaJet
Japan’s MUFG Bank to fund US-based SAF firm LanzaJet
Osaka, 26 June (Argus) — Japanese megabank MUFG Bank plans to finance US sustainable aviation fuel (SAF) firm LanzaJet, as it expects global SAF demand to rise given the aviation sector's efforts to decarbonise. MUFG said on 26 June that it will provide over ¥1bn ($6.3mn) to promote LanzaJet's alcohol-to-jet (AtJ) technology, scale up SAF production plants and develop a supply chain of its feedstocks. The companies on 21 June signed an agreement, through which MUFG may secure up to a 5pc stake in the US firm. MUFG is looking to take advantage of expected rises in SAF demand and relevant financial support needs. The company has forecast global funding requirements for SAF businesses to reach ¥1 trillion by 2030. LanzaJet in January opened its first SAF facility in the US state of Georgia, which produces 9mn USG/yr (652 b/d) through its AtJ technology using sugarcane-based ethanol. The low-carbon aviation fuel could reduce greenhouse gas emissions by 80pc relative to conventional jet fuel. MUFG plans to create new SAF projects in Japan through the latest deal, by leveraging on LanzaJet's AtJ process. The country's SAF demand is forecast to increase to around 1.72mn kl in 2030, comprising 880,000kl for domestic flights and 840,000kl for international flights. Tokyo will mandate that SAF has to account for at least 10pc of domestic airlines' jet fuel consumption by 2030. Japanese trading house Mitsu, one of LanzaJet's founding investors, and refiner Cosmo Oil are planning to produce SAF through the LanzaJet's AtJ technology . The companies are targeting production of 220,000kl of SAF and 20,000kl of biodiesel, which is a by-product of SAF, by the April 2027-March 2028 fiscal year. By Motoko Hasegawa Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Neutral outlook supports Australia’s NSW winter crops
Neutral outlook supports Australia’s NSW winter crops
Sydney, 26 June (Argus) — Australian forecasts predicting New South Wales' (NSW) 2024-25 winter crop production to be the fifth largest since records began in 1989-90 are being supported by recent rainfall and a continuing neutral winter outlook. NSW's winter crop in 2024-25 (June-July) is forecast to increase by 36pc from 2023-24 to 15.02mn t, according to the Australian Bureau of Agricultural and Resource Economics and Sciences (Abares). It projects wheat yields in 2024-25 to rise by 27pc from 2023-24 to 2.72 t/hectare with favourable soil moisture levels and a neutral winter rainfall outlook that did not predict below average rainfall in most of NSW's cropping regions. Rainfall in June and the continuation of a three-month neutral rainfall outlook lends support to the above average yield projections. The chance of exceeding median rainfall in state's northern cropping regions is about 50pc, according to the Bureau of Meteorology's (BoM) July-September rainfall forecast issued on 20 June. The BoM did not change its El Nino–Southern Oscillation (Enso) outlook from a La Nina Watch on 25 June, indicating a La Nina or neutral Enso weather event is equally likely to develop later in 2024. The south of NSW could be an exception with its drier weather and in the southerly state of Victoria, leading to a more challenging cropping environment. May rainfall deciles in western Victoria were below and very much below average. The upcoming NSW harvest is unlikely to exert abnormal pressure on logistics and grain storage networks. GrainCorp, the largest bulk handler on the east coast, received approximately 16mn t of grain when NSW winter crop output peaked at 20.33mn t in the 2020-21 season. GrainCorp has a storage capacity exceeding 20mn t, which can accommodate almost 75pc of the combined winter crop of Queensland, NSW and Victoria calculated at Abares' 2024-25 output projections. It is too early in the season for GrainCorp to determine if it will need to significantly increase its casual workforce, which can reach up to 3,000 staff for some harvests. By Edward Dunlop NSW rainfall 1-25 June (mm) Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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