Venture Global & Shell agree to increase LNG purchase to 2 MMtpy

MOSCOW (MRC) – Venture Global LNG, Inc. announced that its subsidiary, Venture Global Calcasieu Pass, LLC (Venture Global Calcasieu Pass), has agreed with Shell NA LNG LLC (Shell) to increase their existing sales and purchase agreement (“SPA”), under which Shell will now purchase 2 MMtpy of liquefied natural gas (LNG) from Venture Global Calcasieu Pass’s LNG export facility under development in Cameron Parish, Louisiana, as per Hydrocarbonprocessing.

Shell’s commitment, together with an SPA previously executed by Venture Global Calcasieu Pass with Edison S.p.A., brings the facility’s total committed capacity under binding, twenty-year FOB contracts to 3 MMtpy.

Mike Sabel and Bob Pender, co-CEOs of Venture Global LNG, jointly announced that “Shell’s additional purchase is a huge milestone, we believe a breakout event, and a significant validation of our best in class approach on our path to commencement of construction later this year. We are delighted that we continue to execute and achieve our development targets as we implement our strategy, alongside world-class partners, to become one of the lowest cost producers of LNG to the world’s most important energy customers."

Venture Global LNG is developing both the 10 MMtpy Venture Global Calcasieu Pass facility on an approximately 1,000-acre site located at the intersection of the Calcasieu Ship Channel and the Gulf of Mexico and the 20 MMtpy Venture Global Plaquemines LNG facility in Plaquemines Parish, Louisiana on an approximately 630-acre site on the Mississippi River, approximately 30 miles south of New Orleans, Louisiana.
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MOSCOW (MRC) -- Brazil's state-run oil company Petroleo Brasileiro said that it will invest 137 million reais (USD42 million) this year in the Presidente Bernardes refinery in the industrial hub of Cubatao, about 40 kilometers (25 miles) southeast of metropolitan Sao Paulo, reported Reuters.

The money will go toward improving operation efficiency in the unit and is part of the company's overall 2018-2022 investment plans, Petrobras said in a statement.

The refinery has the capacity to process 27 million liters of petroleum per day, which is 8 percent of Brazil's overall refining output.

As MRC wrote earlier, in October 2017, Petrobras’s (Rio de Janeiro) minority stakes in Braskem and Deten Quimica was excluded from Petrobras’s divestment program, according to a government decree published in Brazil’s Official Gazette. The decree prevents Petrobras from immediately selling its minority stake in Braskem, which had been announced last year. A new decree will be required to release the stock sale.

Headquartered in Rio de Janeiro, Petrobras is an integrated energy firm. Petrobras' activities include exploration, exploitation and production of oil from reservoir wells, shale and other rocks as well as refining, processing, trade and transport of oil and oil products, natural gas and other fluid hydrocarbons, in addition to other energy-related activities.
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MOSCOW (MRC) – Koch-Glitsch and INVISTA Performance Technologies (IPT), affiliates of Koch Industries, announced an expansion of their partnership to offer the IsoA technology which allows refineries to transform low value, light paraffinic feeds into high-octane gasoline blend stock, as per Hydrocarbonprocessing.

The IsoA process technology Isomerizes and Aromatizes C5 to C7+ paraffins simultaneously boosting the octane, reducing the RVP and significantly increasing the value of these light feeds.

"Today’s market is long in these low-octane, light paraffinic streams and short in high-octane blend stock,” said Christoph Ender, Koch-Glitsch vice-president of sales and marketing. “This technology can shift that balance and generate greater value for refineries."

Commercially demonstrated in six refineries, the IsoA™ technology can deliver an 85 wt% C5+ liquid yield with a typical octane boost of 20-25 points. The process reduces sulfur content more than 90 percent, generating a product with less than 10 ppm sulfur from a feed with less than 150 ppm. While the technology aromatizes the paraffinic feed, the catalyst is optimized to minimize benzene formation — typically achieving less than 1 percent in the blend stock product.

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MOSCOW (MRC) -- Chevron Corp said it expected supply shortage in the global liquefied natural gas (LNG) market by around 2025, echoing comments made last month by top LNG trader Royal Dutch Shell, reported Reuters.

Demand for natural gas, which burns cleaner than coal and oil, has surged as countries such as China look to curb environmental pollution.

Chevron, owner of the giant Gorgon and Wheatstone LNG projects in Australia, said it expects global demand to be nearly 600 MMtpy by 2035, while supply could be just about half of that.

"China’s demand is increasing significantly - they’ve had a very active program to move off of coal in heating industrial applications, and that’s pulled on LNG," Pierre Breber, EVP -downstream at Chevron, said during the company’s analyst day, when asked about spot LNG prices.

China imported record levels of LNG in January, as the world’s second-largest economy shored up supplies ahead of the Lunar New Year celebrations

Shell in February estimated that more than USD200 billion of investments in LNG is needed to meet the boom in demand by 2030.

The global LNG market is set to continue its rapid expansion into 2020 as facilities approved for construction in the first half of the decade come on line.

However, a decline in spending in the sector since 2014 will create a supply gap from the mid-2020s unless new investments emerge, Shell said in its 2018 LNG Outlook.

As MRC wrote before, in July 2016, a USD36.8bn expansion of the Tengiz oilfield in Kazakhstan, the largest investment by private sector oil companies this decade, was given the go-ahead by Chevron of the US, bucking the trend of delays and cancellations resulting from the slump in crude prices since mid-2014. The investment will add 260,000 barrels a day of crude to production at Tengiz. That would increase the output at TCO, the Chevron-led consortium that runs the field, by 44 per cent from its average of 595,000 b/d last year. The expansion is scheduled to deliver oil from 2022.

Chevron is the second-largest US oil group by production and market capitalisation, after ExxonMobil. Chevron Phillips Chemical (part of Chevron), headquartered in The Woodlands, Texas (north of Houston), US,l is one of the world’s top producers of olefins and polyolefins and a leading supplier of aromatics, alpha olefins, styrenics, specialty chemicals, piping, and proprietary plastics. Chevron and Phillips 66 each own 50% of Chevron Phillips Chemical.
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MOSCOW (MRC) -- Motiva Enterprises' new Chief Executive Officer Brian Coffman said that no decision has been made on how to spend USD18 billion corporate parent Saudi Aramco has pledged for expansion, reported Reuters.

Aramco said in May 2017 it wanted to spend USD18 billion in the next five years and was interested in adding petrochemicalproduction capacity. The company's 603,000 barrel per day plant at Port Arthur, Texas, is the largest refinery in the United States.

"We're evaluating investment, obviously." Coffman said to reporters at the CERAWeek conference in Houston. "We're looking at our options. Investing in petrochemicals, obviously, is one of things that's on the books that we're evaluating right now."

In response to a reporter's question, Coffman said the possible impact of tariffs approved by President Donald Trump on an expansion was unknown.

"Obviously it's too early to tell that as well," he said. "We don't have the project approved."

About the coming change to ultra-low maritime fuel in 2020, Coffman said those refineries with coking capacity would benefit the most.

Cokers process residual crude, from which most maritime fuel is made. Cokers convert residual crude into fuel feedstocks or petroleum coke, a substitute for coal.

Coffman took over as president and chief executive of Motiva in late January, replacing Dan Romasko.
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