Indonesia’s Pertamina seeks UCO for SAF output

Spanish Market: Biofuels, Electricity, Emissions
19/12/24

Indonesia's state-owned refiner Pertamina is seeking around 500t of used cooking oil (UCO) for trial production of co-processed sustainable aviation fuel (SAF) at its Cilacap refinery in the first quarter of 2025, sources close to the company said.

The refiner is seeking UCO with better specifications from domestic Indonesian suppliers, said traders and sellers. The UCO will likely have a maximum of 2pc free fatty acid (FFA) content — compared with Argus-assessed maximum 5pc FFA Indonesian UCO — as well as low metals and chlorides content, said a trader, although this could not be confirmed with Pertamina.

Earlier in December, Pertamina's refining and petrochemical subholding company, Kilang Pertamina Internasional (KPI), signed an initial agreement with Indonesian UCO supplier, PT Gapura Mas Lestari. Gapura will be supplying UCO to Pertamina in 2027, sources from both companies said.

Indonesia's co-ordinating Ministry for Maritime Affairs and Investment had announced in September that international flights departing the country will be required to use 1pc SAF in their fuel mix in 2027. This will rise to 2.5pc by 2030, 12.5pc by 2040, 30pc by 2050, and 50pc by 2060.

Pertamina's "green refinery" at its 348,000 b/d Cilacap plant aims to process 6,000 b/d of UCO to produce hydrotreated vegetable oil (HVO) and SAF, when its second phase comes on line, targeted to be in 2026. Cilacap is eventually expected to produce around 300,000 kilolitres of HVO and SAF annually.

Pertamina said Cilacap's HVO will be used as a blending component in diesel fuel with better quality, compared with traditional fatty acid methyl ester biodiesel. The firm added that its HVO is also designed to meet stringent market standards in countries like those in Europe and North America. Its SAF will meet Indonesia's demand, which is likely to rise after the country released its national roadmap for SAF development in September.

Cilacap currently produces HVO, but from refined, bleached and deodorized palm oil, and SAF from refined, bleached and deodorized palm kernel oil, a product of palm kernel oil processing.

By Sarah Giam

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19/12/24

Reliability drives New Zealand power mix: Minister

Sydney, 19 December (Argus) — New Zealand's conservative coalition government wants to ensure reliable generation, whether that is from coal, oil, gas, or geothermal resources, the country's resources minister Shane Jones told Argus this week. Jones was also clear about the need to draw a distinction between "the expectations on [a] small, open trading nation like [New Zealand] not to use coal and the major hope[s] and needs of the average New Zealander for affordable power, reliable power." "If [reliable power] comes from coal, that's the mix and the menu for the future," he added. Jones argued that existing renewable power sources cannot exclusively provide for New Zealand's energy needs. He instead suggested that his government is interested in promoting alternative power sources such as oil, gas and geothermal, through investments and policy changes. New Zealand's coal-fired power generation surged between July-September, according to the New Zealand's Ministry of Business Innovation and Employment (MBIE). Coal rose to 8pc of total generation from 3pc a year earlier, following a drop in hydroelectric power production. The country burned 363,513t of coal over those months, more than tripling its use for power generation purposes compared to the same period last year. Oil, gas Jones has taken steps to boost the country's oil sector since taking office in late 2023, following the coalition's victory over the centre-left Labour party. The minister introduced the Crown Minerals Amendment Bill in June, a piece of legislation that he described as being "aimed at increasing investor confidence in petroleum exploration and development." Jones told Argus that under the previous government, "people who may have been willing to [make] investment[s] and bring patient capital concluded that New Zealand was no longer available as a destination for oil and gas and this has resulted in a diminution in [oil] investment." The Crown Minerals Amendment Bill will overturn a 2018 ban on offshore oil exploration, which was introduced while Jones was serving in the previous Labour-led coalition government. New Zealand's oil sector increased its annual well spending from NZ$110mn ($63.2mn) in 2018 to NZ$403mn, in the years following the ban in 2018. The total number of active oil permits in the country has plunged from 56 to 37 over the same period, MBIE data show. New Zealand likely houses at least 223.5bn m³ of undiscovered, offshore gas reserves; 249mn bl of undiscovered, offshore oil reserves; and 177mn bl of undiscovered, offshore NGL reserves, mostly scattered around the North Island, according to US Geological Survey (USGS) estimates in 2022. The country's discovered, recoverable reserves are at between 38.3mn-52.7mn bl of oil; 29.4bn-39.8bn m³ of gas; and between 1.2mn–1.4mn t of LPG as of 1 January 2024, according to the MBIE. Besides restarting oil exploration, the Crown Minerals Amendment Bill also seeks to change permitting processes to drive capital into the sector. Permits are currently allocated through a competitive tender process, Jones told Argus this week. The government wants "the flexibility to use alternative processes to match investor interest in the most efficient and effective way by allowing the option of using non-tender methods." MBIE has indicated that the government may start using ‘priority in time' tenders, which allocates permits to the first eligible projects that apply for them, once the bill passes. But the Crown Minerals Amendment Bill does not specify how the government will manage non-competitive tenders. The government is also not using the Crown Minerals Amendment Bill to "specifically intervene in coal mining operations" in New Zealand, Jones said. But coal demand will fall "in the event that [the government is] able to expand the supply of indigenous gas," he noted. Geothermal The government's energy strategy also appears to involve doubling down on domestic geothermal generation, which is New Zealand's second most common source of power. Geothermal generators produced 2,363GWh of power between July-September, accounting for 20.5pc of total generation, in line with historical averages, according to MBIE data. New Zealand's government seems to be trying to push that share up. The government in early December decided to allocate up to NZ$60mn of public infrastructure funding to research for deep, geothermal energy production. The work will focus on drilling geothermal wells up to 6km deep, nearly twice the depth of standard wells. Jones told Argus that New Zealand officials are currently in Japan, discussing supercritical geothermal generation opportunities with engineers and scientists. By Avinash Govind Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Western Australia's near-term gas supply rises: Aemo

19/12/24

Western Australia's near-term gas supply rises: Aemo

Sydney, 19 December (Argus) — The short term supply outlook for Western Australia's (WA) gas market has improved, but gaps in the next decade need to be addressed, according to an Aemo annual report. The near-term gas supply is stronger than last year's outlook, with supply now forecast to exceed consumption through to 2027 on increased flows from LNG projects and declining near-term consumption, according to the 2024 Western Australia Gas Statement of Opportunities (GSOO) paper from the Australian Energy Market Operator (Aemo). Ample gas supply is expected because of increased flows from Wheatstone and Pluto LNG projects and new supply including forecast volumes from 2026 onwards from Woodside's Scarborough project and Strike's 87 TJ/d (2.3mn m³/d) West Erregulla plant . But demand is weak on the back of the shutdown of several nickel mines for maintenance in 2024 and the closure of the 2.2mn t/yr Kwinana alumina refinery announced in January. Aemo's 10-year outlook to 2035 now forecasts surplus gas until 2028, when some gas users will reopen projects. It also forecasts a less steep shortfall in the 2030s, with 2033 supply now 13pc below demand, down from the 27pc decrease in the 2023 GSOO. New gas supply will still be needed as WA plans to close its state-owned fleet of coal-fired power stations, but increasing renewable generation will shift gas usage in the power grid to a firming capacity, with gas-fired power demand tipped to increase in the early 2030s but stabilise at present levels of about 190 TJ/d by 2040. But uncertainty remains about the future of coal in the WA grid. The 416MW Bluewaters coal-fired plant, owned by Japanese firms Kansai Electric and Sumitomo, is expected to retire by 2030-31 but may be forced to close earlier because its supplier, the 2mn t/yr Griffin coal mine , cannot guarantee deliveries beyond October 2026. This will increase gas demand. The WA state government reversed a blanket ban on exporting onshore gas as LNG in September after a parliamentary inquiry into the state's domestic gas policy prompted by concerns from major gas users such as fertilizer manufacturers and metals refiners. Developers are now permitted to export 20pc of production as LNG until 2031 to boost upstream investment in the prospective Perth basin. By Tom Major WA gas supply and demand 2024-34 (TJ/d) 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Potential gas supply 1,143 1,190 1,121 1,207 1,192 1,412 1,335 1,301 1,214 1,173 1,144 Gas demand 1,119 1,069 1,082 1,154 1,354 1,342 1,357 1,378 1,371 1,343 1,336 Difference (% ± of demand) 2 11 4 5 -12 5 -2 -6 -12 -13 -14 Source: Aemo Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

US Army Corps proposes new Illinois River lock

18/12/24

US Army Corps proposes new Illinois River lock

Houston, 18 December (Argus) — The US Army Corps of Engineers (Corps) has proposed a new lock to replace the LaGrange Lock and Dam (L&D) near Beardstown, Illinois, as part of the Navigation and Ecosystem Sustainability Program (NESP). The project would be the first new lock for NESP, a program that invests in infrastructure along the Mississippi and Illinois rivers. The new 1,200ft proposed LaGrange Lock would allow for passage of more barges in a single lockage, instead of having to split the tow in two with the current 600ft LaGrange Lock. At the moment, most tows trying to pass through the LaGrange lock experience multiple hour delays. The new LaGrange lock would have an estimated cost of $20mn, with a construction timeline of five years. The project area would be located on the west bank of the Illinois River near the 85-year old LaGrange L&D, encompassing 425 acres. Real estate acquisition, design plans and contractors are already in place, said the Corps. The current LaGrange lock would remain in operation and become an auxiliary chamber. The Corps opened the upcoming project to public comments on 11 December and will close on 3 January. NESP has four other projects along the Mississippi River. Another full lock construction project is anticipated for Lock and Dam 25. By Meghan Yoyotte Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Alabama lock expected to reopen late April

18/12/24

Alabama lock expected to reopen late April

Houston, 18 December (Argus) — The main chamber of the Wilson Lock in Alabama along the Tennessee River is tentatively scheduled to reopen in four months, according to the US Army Corps of Engineers (Corps). The Corps expects to finish phase two of dewatering repairs on the lock on 20 April, after which navigation can resume through the main chamber of the lock. The timeline for reopening may shift depending on final assessments, the Corps said. Delays at the lock average around 12 days through the auxiliary chamber, according to the Lock Status Report by the Corps. Delays at the lock should wane during year-end holidays but pick up as spring approaches, barge carriers said. The main chamber of the Wilson Lock will have been closed for nearly seven months by the April reopening after closing on 25 September . By Meghan Yoyotte Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

UK government underlines its commitment to net zero

18/12/24

UK government underlines its commitment to net zero

London, 18 December (Argus) — The UK government has re-emphasised its commitment to the country's legally binding target of net zero emissions by 2050, and says it is acting either fully or partially on all recent recommendations from the independent advisory Climate Change Committee (CCC). The CCC in July found that "urgent action" was needed if the UK was to hit its climate goals — but it was based on the previous Conservative administration's policy. The current Labour government had taken power just two weeks previously. "The inheritance of this government was that we were not on course to rise to the climate challenge or seize the opportunities of action", the government said this week. It set out in detail its action so far on a variety of issues — including renewable power, sustainable transport, domestic heating and biodiversity — as well as future plans. The government will in 2025 publish an update on its plans for "fully delivering" the fourth, fifth and sixth carbon budgets, it said. Carbon budgets are legally binding and place a restriction on UK greenhouse gas (GHG) emissions over a five-year period. Carbon budgets 4-6 cover the timeframe 2023-37. It will also set the seventh carbon budget — which covers the period 2038-42 — by June 2026, alongside a strategy "setting out the next phase of our pathway to net zero". The UK has cut GHG emissions by 53pc between 1990 and 2023, provisional data show. It met its first three carbon budgets, which collectively covered 2008-2022. The government has taken several steps since winning the July election, including lifting the de facto onshore wind ban, approving renewables projects and awarding the first permit for carbon transport and storage . It has also slightly watered down its pledge of "clean power" by 2030, to 95pc from 100pc, although it also provided clarity around reaching the target in an action plan released last week. And UK prime minister Keir Starmer last month unveiled an ambitious GHG reduction goal at the UN Cop 29 climate summit. The UK has a headline goal of cutting GHGs by 81pc by 2035, from 1990 levels, and will set out its plan to achieve that "in the coming months", the government said this week. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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