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Asian HSFO flips into contango on lack of summer demand

  • Market: Natural gas, Oil products
  • 09/06/23

Singapore 180cst high-sulphur fuel oil (HSFO) markets have flipped into contango mainly as typical South Asian summer utility demand has failed to materialise, market participants said.

The front-forward month timespread flipped from a $0.25/t backwardation on 6 June to a contango of -$1/t on 7 June and remained there on 8 June, according to Argus' assessments. This was the first time in over three months that markets were in contango, having last been there at -$1.25/t on 14 February. The current contango is slightly deeper than the -$0.65/t average in June 2022 compared to the $0.15/t backwardation in June 2021.

Singapore 180cst HSFO margins also weakened to -$9.66/bl against Dubai crude values on 8 June, much lower than averages between -$2.67/bl to -$5.99/bl during the second quarters of 2019-2022.

180cst HSFO markets weakened because of a lack of usual demand from major buyers Pakistan and Bangladesh to meet cooling needs in summer, owing to availability of alternative fuel LNG as well as financing issues, traders said. Fuel oil demand for industrial needs in Pakistan has also fallen as a result of an economic slowdown and inflation-related issues, a source close to Pakistan's state-owned marketer PSO said. PSO has not bought fuel oil since October 2022.

Just 43,200t of HSFO is projected to arrive in Bangladesh in June so far, and zero in Pakistan and Sri Lanka, the lowest monthly arrivals on record to those countries since at least June 2020, according to data from oil analytics firm Vortexa.

Pakistan has also offered rare fuel oil cargoes from its 100,000 b/d Pak-Arab refinery (Parco) and Pakistan Refinery (PRL) since late last year, because of high domestic inventories — and some volumes have arrived in Singapore, according to Vortexa data, likely adding to weakness in markets.

Pakistan and Bangladesh are also not importing much LNG for summer as they have sufficient domestic gas supplies, market participants said. Credit issues have also deterred Pakistan from importing LNG.

LNG market participants are waiting to see if Bangladesh's state-controlled Rupantarita Prakritik Gas (RPGCL) will award its latest tenders issued this week seeking two cargoes for delivery over 10-11 July and 23-24 July. The tenders will close on 11 June.

While LNG prices have fallen significantly — with the Argus-assessed price for deliveries to India and the Middle East for first-half July being at over two-year lows of $8.385/mn Btu on 8 June — the two south Asian countries could be counting on the potential for prices to ease further before firming up their summer demand.


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21/02/25

Uruguay eyes oil, gas E&P within energy transition

Uruguay eyes oil, gas E&P within energy transition

Montevideo, 21 February (Argus) — Uruguay's state-run Ancap has hopes for an offshore oil or gas discovery, even as the country gears up for its second energy transition. Uruguay has had only three exploratory wells drilled in its history, two in 1976 and one in 2017, and they all came up dry. Companies have completed 13,000 km² of 2D and 41,000 km² of 3D seismic testing this century. Today, its seven offshore blocks have contracts, plans are underway for a new round of seismic testing and one company, US-based APA, wants to spud an exploratory well in its wholly operated block 6 in late 2026 or early 2027. "For the first time in history, we have contracts in place for all the blocks and there is a great deal of interest that resources can be found" in Uruguay, Santiago Ferro, Ancap's energy transition manager, told Argus . A public hearing on seismic testing was held 13 February and the environment ministry is reviewing proposals for permits. Ferro said seismic testing will only be done in areas lacking data. "We want to take advantage of existing information and complement it with new data to encourage drilling," he said. The plan is for approximately 5,000 km² (1,930 mi²) of new seismic testing on two areas — block 1, operated by Chevron and UK-based Challenger Energy Group, and block 4, operated by Shell and APA. The work will likely happen in the final quarter of this year. Ancap's plans will unfold under the new left-wing government of president-elect Yamandu Orsi, who takes office on 1 March. The Oris administration is committed to deepening Uruguay's energy transition. It already has one of the greenest power grids, with 99pc of power coming from renewables, and the Orsi government wants to guarantee electrification of the transportation sector. He will arrive at his inauguration in an elective vehicle as a sign of the government's commitment. The administration wants to decarbonize transportation in 10 years, which will require incentives for vehicles and investment in additional renewable power, principally solar energy. It has not taken a public stand on oil and gas exploration or what it would do if recoverable resources were discovered. By Lucien Chauvin Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Atoba to offtake SAF from Haffner Energy in France


21/02/25
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21/02/25

Atoba to offtake SAF from Haffner Energy in France

London, 21 February (Argus) — French renewable fuel producer Haffner Energy announced a new sustainable aviation fuel (SAF) long-term offtake agreement with SAF aggregator Atoba Energy. The two companies will also collaborate on SAF production, although Haffner is yet to disclose further details of the partnership. Atoba will offtake "a good proportion" of SAF from Haffner's 60,000 t/yr production facility at Paris-Vatry airport, Haffner global chief marketing officer Marcella Franchi told Argus . "[The partnership with Atoba] will facilitate the financing of our SAF projects, starting with Paris-Vatry", chief executive Philippe Haffner said. The Paris-Vatry project is a collaboration between the French firm and production pathway developer LanzaJet. The plant, which is due to begin operations in 2028, will use an alcohol-to-jet production pathway. To meet EU SAF regulations, the feedstock will be advanced, drawn from Annex 9 list A of the EU Renewable Energy Directive (RED II). The ATJ pathway will convert syngas, produced from the feedstock's initial treatment, into ethanol, which will then be turned into SAF using LanzaJet's processes. Last year, Haffner revealed it is creating a SAF spin-off entity called SAF Zero. Haffner will license its SAF production technology to the entity and "aims to remain a shareholder" in SAF Zero. The latter will license Haffner's technology for an upfront fee and royalty agreement. In addition, Haffner has undisclosed SAF projects for biogenic SAF and e-SAF in the US, Europe, Africa and Asia-Pacific. EU-wide SAF mandates kicked in at 2pc this year, rising to 6pc by 2030. By Evelina Lungu Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Oil, biofuel lobbies unite for ‘robust’ RFS: Update


20/02/25
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20/02/25

Oil, biofuel lobbies unite for ‘robust’ RFS: Update

Updates with comments from trade groups, details throughout. New York, 20 February (Argus) — Oil and biofuel groups, at loggerheads years ago over the federal Renewable Fuel Standard (RFS), have united around a call for US regulators to set "robust" biofuel blend mandates for future years. A diverse coalition of 11 trade associations — including the American Petroleum Institute, Clean Fuels Alliance America, farm groups, and fuel marketers — said in a Wednesday letter to the Environmental Protection Agency (EPA) that the RFS is a way to "advance liquid fuels" and "ensure consumers have a choice of how they fuel their vehicles". They want EPA, which is behind schedule on setting volume mandates for 2026, to set multiyear standards that better reflect recent growth in feedstock availability and production capacity than past RFS regulations. "We're trying to send a signal to the administration: hey, we're in more agreement than we used to be," American Petroleum Institute vice president of downstream policy Will Hupman told Argus . "We want to work constructively with you on this. We understand we're going to need all energy sources and supplies." The letter reflects the increasingly aligning interests of groups that formerly split over biofuels. Many oil companies that opposed the RFS in its early years have since invested heavily in fuels like renewable diesel, making strong government biofuel mandates crucial for their businesses, too. And producers of petroleum and biofuel products alike fear that rising electric vehicle adoption, aided by policies during the administration of President Joe Biden, could curb liquid fuel demand. It is unclear how durable any coalition of oil, biofuel, and farm groups will prove, especially for more divisive issues like RFS exemptions for small refineries. The oil industry is not united either, since small merchant refiners with less ability to blend biofuels have generally been more hostile to the RFS than larger integrated companies. The American Fuel and Petrochemical Manufacturers, which did not sign the letter, said that it looks forward "to engaging with EPA and other stakeholders to set realistic and achievable RFS standards anchored in the law". Still, the letter reflects some attempt among the signatories to downplay disagreements that surfaced around past RFS rules, signaling to President Donald Trump's administration that it need not delay program updates. The groups say they support, for instance, "strong, steady volumes" of not just biomass-based diesel and advanced biofuels but conventional biofuels too. While refiners can meet conventional obligations by blending excess amounts of lower-carbon fuels from other program categories, oil interests have previously criticized EPA for setting conventional requirements above expected corn ethanol consumption. The prior US administration set a plan for proposing new RFS volumes next month and finalizing them by the end of 2025 , though it is unclear whether Trump officials plan to meet that timeline. Two biofuel groups have sued EPA over its delays setting new mandates, a process which in the past has resulted in the government and industry coming to a negotiated agreement around a new timeline. Under the RFS program, EPA sets annual mandates for blending different types of biofuels into the conventional fuel supply. Refiners comply by blending biofuels themselves or buying credits from those who do. By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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US cites 'energy emergency' to expedite water permits


20/02/25
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20/02/25

US cites 'energy emergency' to expedite water permits

Washington, 20 February (Argus) — President Donald Trump's administration is citing an "energy emergency" as the basis to fast-track nearly 700 water permits, including those tied to a tunnel for Enbridge's Line 5 pipeline, LNG infrastructure projects, solar farms and electric transmission lines. Trump declared a national energy emergency on his first day in office, unlocking permitting powers that are typically used in response to natural disasters. The US Army Corps of Engineers has subsequently reclassified hundreds of permit applications for review under expedited emergency procedures, in a move that environmentalists say they plan to challenge in court based on violations of the Clean Water Act and Endangered Species Act. "The Trump administration is planning to skirt legally-required review processes in order to fast-track permits for dirty energy projects under the guise of an energy ‘emergency'", Sierra Club policy director Mahyar Sorour said. The Corps is responsible for issuing water permits for projects that cross streams, rivers, wetlands and other water bodies. Issuing permits sometimes requires the agency to prepare a detailed environmental review that is open to comment and can take years to finish. The water permits classified for emergency treatment include a repair project for Sabine Pass LNG in Louisiana, dredging for Elba Island LNG in Georgia, temporary construction related to Port Arthur LNG in Texas, solar projects in dozens of states, and pipeline projects ExxonMobil is pursuing in Texas. Enbridge delayed construction of a protective tunnel for its Line 5 pipeline to 2026 because of water permitting delays . But environmentalists say the administration cannot cite an energy emergency — which they say does not exist — as justification to bypass permitting rules prescribed by the US Congress. The Corps has also provided emergency treatment to projects with no apparent connection to energy production, such as a housing project in southern California and a gold mine in Idaho, according to an online database. The Corps did not respond to detailed questions but said it was "in the process of reviewing active permit applications relative to the executive order." Congress is continuing to lay groundwork for a bipartisan permitting bill that supporters say could make it faster and cheaper to build pipelines, power plants, electric transmission lines, renewable energy projects and transportation infrastructure. But Democratic leaders are threatening to vote against such a bill so long as Trump continues to "pause" billions of dollars in funding for clean energy projects provided by the Inflation Reduction Act and other laws. "Until the administration shows it will honor its oath to faithfully and impartially execute the laws, we can have zero confidence that any legislative compromise on permitting reform will be executed lawfully," US senator Sheldon Whitehouse (D-Rhode Island) said at a permitting hearing on 19 February. Oil industry and renewable groups are continuing to push for a comprehensive permitting bill, which they say would bring down project costs and help the US meet surging electricity demand from data centers and manufacturers. Permitting changes are "needed for all technologies, and they are needed to meet our energy demand in the future," Business Council for Sustainable Energy president Lisa Jacobson said. "You can't walk away from those facts or that imperative." By Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Rare SK-PL gas flows as Polish demand surges


20/02/25
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20/02/25

Rare SK-PL gas flows as Polish demand surges

London, 20 February (Argus) — Gas has flowed from Slovakia to Poland over the past two days, a rare occurrence since the commissioning of the pipeline, as demand in the latter surged on the back of plunging temperatures. More than 13GWh flowed to Poland from Slovakia at the Vyrava interconnection point on 18 February, and nearly 23GWh on 19 February, transmission system data show. These were the first receipts in either direction at Vyrava since 22 April 2024, as the pipeline has been little-utilised since its commissioning in November 2022 . In addition, there was nearly 40GWh of inflows from Lithuania, the highest for any day since 3 December. This helped boost Polish net imports to 669GWh on 19 February, the highest for any day since 31 December. Stronger imports have been needed as a result of higher domestic consumption caused by plunging temperatures. Overnight lows in Warsaw began to dip below the long-term average on 8 February, but gas demand did not start to significantly increase until 10 February, when minimum temperatures in the capital dropped to minus 7.7°C. Polish high-calorie consumption has since jumped to 903 GWh/d on 10-19 February from 782 GWh/d earlier in the month and 768 GWh/d in January. Demand peaked at 949GWh on 17 February, the highest for any day since 10 January 2024, and not far from the all-time high of 1TWh on 18 January 2021. On 17 February, overnight lows in Warsaw dropped to minus 14.3°C, by far the lowest for any day this winter. In addition to imports from Slovakia and Lithuania in recent days, there were net inflows from Germany at Mallnow of 55 GWh/d on 15-17 February, which is also rare given the expensive nature of these receipts. Because the Yamal-Europe pipeline is not yet fully integrated into the national transmission system, importers have to pay a double tariff to bring gas in at Mallnow and then out into the domestic grid, making imports through this route particularly expensive and uncompetitive in most cases. That said, these flows halted again on 18-19 February. Poland also imported at maximum capacity from the Baltic Pipe each day over 15-19 February, while LNG sendout from Swinoujscie surged to 257 GWh/d out of a maximum capacity of 264 GWh/d on 18-19 February after the arrival of a Qatari cargo a day earlier ( see February imports graph ). Strong imports from almost all directions have been driven by large premiums on the Polish prompt compared with neighbouring markets, with the day-ahead price on the Polish TGE exchange holding €4.23/MWh higher than Argus' Slovak day-ahead market on 1-19 February, and a larger €5.45/MWh and €6.32/MWh to the Czech and German markets, respectively ( see price graph ). Despite the cold snap, Polish firms still exported 25 GWh/d toward Ukraine since 8 February, with flows rising as high as 45GWh on 19 February. Ukraine has been importing heavily from all directions as cold weather has driven storage withdrawals to near their maximum and attacks on production infrastructure have reduced domestic output. Tightness to continue in short term The weather is expected to remain particularly cold over the next three days, likely continuing to bolster demand, but from 24 February onward it is forecast to turn much milder. Minimum temperatures in Warsaw were most recently forecast to reach minus 7°C on 20 February and as low as minus 9°C a day later, before climbing to minus 6°C on 23-24 February. These are all well below the 10-year average for the period of minus 4°C. And along with the continued cold weather, upcoming unplanned maintenance at Swinoujscie will take around 61 GWh/d of the terminal's regasification capacity off line on the 23 February-12 March gas days, further tightening the market. However, from 24 February onward minimum temperatures in Warsaw are forecast to increase significantly to around minus 1°C, and rise above freezing the next day. Overnight lows are then expected to hold above the 10-year average on each day from 24 February-6 March, which should curb heating demand, bringing consumption down and in turn requiring lower imports. By Brendan A'Hearn Polish February net imports GWh Polish day-ahead prices vs neighbouring countries €/MWh Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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