New Kazakhstan prime minister targets energy sector
Kazakhstan's new prime minister Alihan Smaiylov identified priorities for the energy sector at today's first meeting of his government, which was appointed in the wake of the violent unrest that swept the country last week.
He ordered development of measures for regulating the oil products market. Protests against rising prices for LPG — widely used as motor fuel in Kazakhstan — were the starting point for last week's upheaval. The government reduced LPG prices and froze prices for other motor fuels in an attempt to quell the initial protests. Smaiylov said proposals for excise taxes on gasoline producers and intermediaries should be developed within a week. And he ordered the economy ministry and other government agencies to develop proposals for reform of the Samruk-Kazyna sovereign wealth fund, which holds the state's stakes in shares in oil and gas firm Kazmunaigaz, Kazakh Railways and other companies.
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Iran oil min nominee struggles for parliament approval
Iran oil min nominee struggles for parliament approval
Dubai, 14 August (Argus) — New Iranian president Masoud Pezeshkian's nominee to lead the country's critically important oil ministry is facing an uphill battle to secure a vote of confidence in parliament, largely because of the highly polarized nature of Iranian politics. Mohsen Paknejad, an oil sector veteran with close to three decades of experience in senior leadership roles in Iran's energy sector, was named as Pezeshkian's pick for oil minister early on 11 August, alongside the new president's other cabinet nominees that included former deputy foreign minister Abbas Araqchi to head up the foreign ministry and ex-central bank governor Abdolnaser Hemmati to lead the finance ministry. The response to many of Pezeshkian's cabinet nominees has been mixed, with some of the negative reaction coming notably from those who supported the new president as the sole reformist candidate in the election. Paknejad is no exception. Since his first meeting on 12 August with members of parliament, who must ultimately ratify the president's cabinet picks, Paknejad has been facing criticism from some quarters for a perceived lack of suitable experience and for the absence of a coherent plan for his proposed tenure in the oil ministry. "The nominated ministers of oil and energy appeared at a meeting of the parliament's energy commission yesterday to answer questions… [but] neither had a plan to present," energy commission member Ramezan Ali Sangdovini said on social media platform X on 13 August. There have also been objections over Paknejad's close relationship with ex-oil minister Bijan Zanganeh, who most recently served for the whole of former president Hassan Rohani's two terms in office. Zanganeh, who has had two separate stints as oil minister and one as energy minister, has become a divisive figure in Iranian politics, praised by those who favour opening up Iran's oil industry to foreign investment but reviled by those who consider outside involvement as interference. Zanganeh has also faced allegations of corruption over a gas supply contract that Iran signed with a UAE company in 2001, allegations he vehemently denies. The contract with Crescent Petroleum was to export 1bn ft³/d (10.3bn m³/yr) of gas from Iran to the UAE but the supplies never materialized and Iran was later forced to pay damages. "Zanganeh was in and around the oil ministry for more than 15 years," says one former official at state-owned oil company NIOC. "He made many friends, but also many enemies. And not just in oil circles, but also beyond." Late addition Paknejad held his most senior positions while Zanganeh was oil minister. And it is this close relationship, as well as Zanganeh's strong and public support for Pezeshkian during his election campaign, that has prompted suggestions among some parliamentarians that Paknejad's selection was ultimately Zanganeh's doing. "In terms of political and management policies, he and Zanganeh are like two faces of the same coin," energy commission member Mohammad Kaab-Omir said on X. Others think Zanganeh's role in the nomination should not be overstated. "Was Zanganeh consulted on Paknejad? That is very likely, yes. But to say it is his pick is not accurate," the former NIOC official said. In the days leading up to Pezeshkian's cabinet nominations, Paknejad was not even in the frame, according to the Iranian press, which instead touted a host of other names as likely candidates including former NIOC managing directors Masoud Karbasian and Rokneddin Javadi, former oil minister Gholamhossein Nozari and former deputy oil minister Seyed Emad Hosseini. Nozari had been a leading contender up until late last week, but pushback from the reformist camp saw him fall by the wayside, according to former NIOC officials. Hosseini was then tipped to be the final nominee, only for a last minute change of heart by Pezeshkian. The reason for the shift away from Hosseini is unclear but it could explain why Paknejad appeared so unprepared in his preliminary meetings with members of parliament. Parliament typically has a week to study the president's cabinet picks before taking a vote of confidence. The open sessions to vote on the nominees are due to begin on 17 August. At this point, the cards look stacked against Paknejad but given the role of internal politics in the vetting process, he still has time to turn it around. By Nader Itayim Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
California pares LCFS goals to tougher targets: Update
California pares LCFS goals to tougher targets: Update
Updates trade discussion, adds links to other coverage. Houston, 13 August (Argus) — California will pursue transportation fuel carbon reduction targets in 2025 nearly twice as tough as originally proposed under final Low Carbon Fuel Standard (LCFS) rulemaking language released late Monday. The California Air Resources Board (CARB) will consider a one-time tightening of annual targets for gasoline and diesel by 9pc in 2025, compared with the usual 1.25pc annual reduction and a 5pc stepdown first proposed in December 2023. Staff maintained a 30pc reduction target for 2030, compared to the current 20pc target. Final rulemaking language introduced a new 20pc/yr cap on a company's credit generation from soybean- and canola-oil-based biodiesel or renewable diesel to begin in 2028. The updated rule also dropped proposals to require carbon reductions from jet fuel in addition to gasoline and diesel, a controversial proposal aligned with governor Gavin Newsom's (D) ambitions for lower-carbon air travel but which participants warned would not achieve its targets. The new proposal immediately jolted a lethargic credit market that earlier this year slumped to the lowest spot price in nearly a decade under the weight of growing credit supplies. Current quarter trade raced higher by $12.50 — 26pc — in rare after-hours activity less than two hours after CARB staff published the latest documents. Trade continued up to $65/t in the first half of Tuesday's session before retreating in later hours back below $60/t. Public comment on the proposals will continue to 27 August ahead of a planned 8 November public hearing and potential board vote. The program changes could be in place by the end of the first quarter of 2025, according to staff. LCFS programs require yearly reductions to transportation fuel carbon intensity. Higher-carbon fuels that exceed these annual limits incur deficits that suppliers must offset with credits generated from the distribution to the market of approved, lower-carbon alternatives. Surging use of renewable diesel and outsized credit generation from renewable natural gas have overwhelmed deficit generation to create a glut of credits available for future compliance. LCFS credits do not expire, and 26.1mn metric tonnes of credits — higher by 16pc than all the new deficits generated in 2023 — were available for future compliance by the end of March. Credits fell in May to trade at $40/t, the lowest level for current quarter credits since June 2015. California late last year formally proposed tougher annual targets, off-ramps for certain fuels and other changes to North America's largest and oldest LCFS program. Staff had initially targeted March to put ideas including a one-time, 5pc reduction to targets in 2025 and automatic mechanisms to match targets to credit and deficit generation before the board for formal approval, but they delayed that meeting after receiving hundreds of distinct comments on the original proposal. Staff shifted the 2025 target to at least 7pc after an April workshop discussion and another record-breaking quarter of increases in credits available for future compliance. The 9pc recommendation followed the continued growth of credit supplies in recent quarters. Previous modeling estimated that such a target could draw down the credit bank by 8.2mn t in its first year. Uncertainty over how fuel suppliers and consumers would respond to that target led staff to leave in place the proposed 30pc target by 2030. An outright cap on credits generated from soybean- or canola-oil derived biomass-based diesels augments initially proposed "guard rails" on crop-based credit generation through verification. The change would send a stronger market signal preferring waste-based feedstocks for diesel fuels that California expects to replace with zero-emission alternatives, staff said. And staff dropped a proposed obligation on jet fuel used in intrastate flights, estimated to make up 10pc of California's jet fuel consumption. Participants had warned the measure would stoke more credit purchases than renewable jet fuel buying, due to the structure of the aviation fuel market . By Elliott Blackburn Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
African bitumen buyers hit by container rate hikes
African bitumen buyers hit by container rate hikes
London, 13 August (Argus) — Another big jump in container shipping rates has driven up the cost of importing bitumen to sub-Saharan Africa in recent weeks, hitting buyers that rely on packaged supplies, especially road contractors in east Africa that depend on drummed bitumen from the Middle East for paving projects. The latest surge in rates — which in many cases have shot up by at least 50pc on voyages to east, west and southern Africa compared with prevailing levels up until mid-July — is underpinned by a growing shortage of container ships globally. This has been triggered by longer east-west journey times as vessels sail around the Cape of Good Hope to avoid the risk of being attacked by Yemen's Houthi rebels in the Red Sea, a trend that shows no sign of abating. Suppliers of drummed bitumen from Iran and other Middle East exporters point to worsening delays and shortages in container shipping services at storage and trans-shipment hubs in the region, such as Jebel Ali in the UAE. The longer voyages caused by the Red Sea boycott have meant increased bunker fuel consumption and more containers on the water. International shipping lines have raised their rates for voyages from Jebel Ali to Mombasa in Kenya to $3,800/20ft container — equivalent to $190/t based on the typical number and size of bitumen drums in each container — from $2,700/container ($135/t) in mid-July. Rates to Dar es Salaam in Tanzania have jumped to $4,200/container ($210/t) from $2,800/container ($140/t) over the same period. Rates for drummed supplies shipped direct to Mombasa and Dar es Salaam by the Iranian state-owned IRISL fleet have held steady in recent months at around $1,000/container ($50/t) and $1,100/container ($55/t), respectively. Argus' latest assessment of Bandar Abbas/Jebel Ali freight rates for drummed bitumen shipments to Mombasa and Dar es Salaam is around $110/t and $125/t, respectively, up from $90-95/t in the week ending 19 July and $45/t in early December last year before the first wave of Houthi-related rate hikes . First Covid, now this Bitumen charterers say the container shipping problems have echoes of the jump in shipping rates during the Covid era. Bandar Abbas/Jebel Ali drummed bitumen rates to Mombasa and Dar es Salaam doubled from $55-60/t in May 2020 to peak at around $110/t in September 2022 before dropping back to $40-45/t in August last year ahead of the renewed spike. Market participants also point to a large increase in international container shipping rates from the Mideast Gulf to other sub-Saharan African destinations. Rates to Matadi in the Democratic Republic of Congo have reached $6,450/container ($320-325/t) this month, compared with $3,700/container ($185/t) in June. Rates to Durban in South Africa were last week indicated around $3,200/container ($160/t), up from $2,700/container ($135/t) in June, while rates to Namibian ports recently jumped to $7,000/container ($350/t) from $4,000/container ($200/t). West African markets such as Nigeria, Ghana, Cameroon and Senegal — as well as South Africa, which also supplies trucks into neighbouring southern African markets — are far less dependent than their east African counterparts on containerised flows, whether in drums, bitutainers or bags, as they are equipped with terminals that receive cargoes on heated bitumen tankers. Exporters of containerised bitumen from the Mideast Gulf or Pakistan are now finding it even more difficult to compete with bulk cargo values. Nigerian bulk tanker cargo import prices stood at $616/t on a cfr basis last week. This compares with around $600/t for Mideast drummed bitumen delivered to Apapa in Lagos. Drummed bitumen carries significant additional handling costs and other expenditure on delivery, with the solid bitumen having to be melted in specialised units before it can be supplied for road projects. By Keyvan Hedvat Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
California narrows LCFS goals to tougher targets
California narrows LCFS goals to tougher targets
Houston, 13 August (Argus) — California will pursue transportation fuel carbon reduction targets in 2025 nearly twice as tough as originally proposed under final Low Carbon Fuel Standard (LCFS) rulemaking language released late Monday. The California Air Resources Board (CARB) will consider a one-time tightening of annual targets for gasoline and diesel by 9pc in 2025, compared with the usual 1.25pc annual reduction and a 5pc stepdown first proposed in December 2023. Final rulemaking language introduced a new 20pc/yr cap on a company's credit generation from soybean- and canola-oil-based biodiesel or renewable diesel to begin in 2028. The updated rule also dropped proposals to require carbon reductions from jet fuel in addition to gasoline and diesel, a controversial proposal aligned with governor Gavin Newsom's (D) ambitions for lower-carbon air travel but which participants warned would not achieve its targets. The new proposal immediately jolted a lethargic credit market that earlier this year slumped to the lowest spot price in nearly a decade under the weight of growing credit supplies. Current quarter trade raced higher by $12.50 — 26pc — in rare after-hours activity less than two hours after CARB staff published the latest documents. Public comment on the proposals will continue to 27 August ahead of a planned 8 November public hearing and potential board vote. The program changes could be in place by the end of the first quarter of 2025, according to staff. LCFS programs require yearly reductions to transportation fuel carbon intensity. Higher-carbon fuels that exceed these annual limits incur deficits that suppliers must offset with credits generated from the distribution to the market of approved, lower-carbon alternatives. Surging use of renewable diesel and outsized credit generation from renewable natural gas have overwhelmed deficit generation to create a glut of credits available for future compliance. LCFS credits do not expire, and 26.1mn metric tonnes of credits — higher by 16pc than all the new deficits generated in 2023 — were available for future compliance by the end of March. Credits fell in May to trade at $40/t, the lowest level for current quarter credits since June 2015. California late last year formally proposed tougher annual targets, off-ramps for certain fuels and other changes to North America's largest and oldest LCFS program. Staff had initially targeted March to put ideas including a one-time, 5pc reduction to targets in 2025 and automatic mechanisms to match targets to credit and deficit generation before the board for formal approval, but they delayed that meeting after receiving hundreds of distinct comments on the original proposal. Staff shifted the 2025 target to at least 7pc after an April workshop discussion and another record-breaking quarter of increases in credits available for future compliance. The 9pc recommendation followed the continued growth of credit supplies in recent quarters. Previous modeling estimated that such a target could draw down the credit bank by 8.2mn t in its first year. Uncertainty over how fuel suppliers and consumers would respond to that target led staff to leave in place the proposed 30pc target by 2030. An outright cap on credits generated from soybean- or canola-oil derived biomass-based diesels replaced initially proposed lighter "guard rails" on crop-based credit generation. The change would send a stronger market signal preferring waste-based feedstocks for diesel fuels that California expects to replace with zero-emission alternatives. And staff dropped a proposed obligation on jet fuel used in intrastate flights, estimated to make up 10pc of California's jet fuel consumption. Participants had warned the measure would stoke more credit purchases than renewable jet fuel buying, due to the structure of the aviation fuel market . By Elliott Blackburn Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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