Qatar Petroleum primed to boost LNG capacity with new train

MOSCOW (MRC) – Qatar Petroleum primed to boost LNG capacity with new train, said Hydrocarbonprocessing.

"Since announcing the lifting of its North Field moratorium, Qatar has gradually scaled up its development plans," said Giles Farrer, research director, global gas and LNG supply at international natural resources consultancy Wood Mackenzie, said.

"Its motivations for this latest move are likely to be informed by a number of considerations. "Firstly, costs. With worldwide activity in the oil and gas industry still low, now is a good time in the cost cycle to invest in a new project. And there are likely to be economies of scale from developing a bigger project, particularly in light of the promising appraisal results at the North Field, mentioned by Qatar Petroleum in its announcement today. These economies of scale will make what is already the most competitive new LNG project worldwide even cheaper."

Mr Farrer added: “Our estimate of capex for the three megatrains previously announced was around USD24 billion, encompassing both the upstream and liquefaction components of the project. Qatar could probably add an additional train without significant additions to capex.

"However, making sure megaprojects are delivered on time and on budget will be a huge undertaking."

"Another consideration is market share," he said. "Since Qatar announced its initial plan, the market environment has improved. Forecasts of future oil prices are higher and forecasts of future LNG demand have grown stronger, particularly in Europe and China. Having already taken the decision to compete for LNG market share, Qatar is doubling down, making sure that it will be fully able to benefit from LNG market upside.

"Further, one of Qatar’s major competitors for new supply development - US LNG - is currently engaged in a tariff war with China, the world’s largest growth market for LNG. Qatar could see this as an opportunity. It has recently signed a contract doubling the volumes that it will sell to PetroChina and is likely to be looking at further opportunities to supply the Chinese market."

Mr Farrer said: "As we have previously noted, by front-loading development of its huge hydrocarbon reserves now, Qatar is also responding to the growing pace of decarbonization, which represents a threat to long-term demand for oil and gas.
MRC

MOSCOW (MRC) -- US crude oil stockpiles rose last week as refineries sharply reduced output for seasonal maintenance, while gasoline stocks increased and distillate inventories fell, reported OilandGasInvestor with reference to the Energy Information Administration.

After five consecutive weeks of drawdowns to the lowest levels since February 2015, crude inventories rose 1.9 million barrels to 396 million barrels in the week to Sept. 21. The build was unexpected as analysts forecast a decrease of 1.3 million barrels.

Refinery crude runs fell by 901,000 barrels per day, EIA data showed. Refinery utilization rates fell by 5 percentage points to 90.4 percent, the lowest since May, driven by seasonal declines in Midwest and East Coast refining activity.

"The drop in refinery runs was pretty substantial, which shows maintenance season is kicking into high-gear. The drop in distillates is very supportive because that is the soft spot that people are focused on," said Phil Flynn, an analyst at Price Futures Group in Chicago.

Oil prices held relatively steady following the data. US crude oil futures were down 35 cents to UISD71.93 a barrel, while Brent dropped 27 cents to USD81.60 a barrel. The two benchmarks have been on the rise of late due to swifter-than-expected declines in Iranian exports and notable declines in U.S. crude inventories.

Distillate stockpiles, which include diesel and heating oil, fell 2.2 million barrels, versus expectations for a 752,000-barrel increase, the EIA data showed.

In response to the data showing the drawdown in diesel and heating oil stocks, distillate cracks, an indication of refining margins, rose 1 percent to USD15 a barrel.

Net US crude imports fell last week by 495,000 bpd.

Crude stocks at the Cushing, Oklahoma, delivery hub rose by 461,000 barrels, EIA said.

Gasoline stocks rose by 1.5 million barrels, compared with analyst expectations in a Reuters poll for a 788,000-barrel gain.
MRC

MOSCOW (MRC) - Mexican state-run oil company Pemex expects to begin importing light crude oil, likely from the United States, in late October and at least until the current administration of President Enrique Pena Nieto leaves office on Nov. 30, said Reuters.

"A hundred thousand barrels (per day) more or less is what we’re going to import to process and incorporate into our refineries, mostly at Salina Cruz," Pemex CEO Carlos Trevino said in an interview with Reuters on the sidelines of the Mexican Petroleum Congress in Acapulco.

Salina Cruz, like Pemex’s other five refineries, has recently been producing far below capacity due to accidents and operational problems, as well as Pemex’s focus on maximizing the value of its oil even if that means refining less domestically.

"We’re going to mix it with Mexican crude, with some of our mix to be able to process at the levels we want to get back to in refining. We should be around 800,000 barrels (per day of refining) by the end of the year," he added.

Mexico’s refining network can process up to 1.6 million bpd of crude. It has been working this year at around 40 percent. Trevino said he expects oil auctions scheduled for February, which include the selection of key partners for Pemex, will take place as planned.

"I think there is total certainty" that Mexico’s oil regulator, the National Hydrocarbons Commission (CNH), will carry out the auctions.

Mexican President-elect Andres Manuel Lopez Obrador has said that oil auctions are suspended until contracts already awarded over the past few years have been reviewed.

Pemex, whose oil production and refining volumes have continued declining this year amid the depletion of some of its main oilfields, will not meet its crude output target of 1.95 million barrels per day in 2018.

"We’re not going to meet the goal," Trevino said. He expects another year of production decline in 2019, even though Pemex had originally planned to stabilize output by then.
MRC

MOSCOW (MRC) -- McDermott International, Inc.announced that it has been awarded a sizeable technology contract for Map Ta Phut Olefins Co., Ltd.'s (MOC) petrochemical plant in Rayong Province, Thailand. MOC is a joint venture company of SCG Chemicals Company Limited, which is a wholly owned subsidiary of SCG, and the Dow Chemical Company, said the company.

McDermott will provide the basic engineering and license of Lummus' olefins technology and will design and supply the proprietary SRT® III heater for the MOC Debottleneck Project, a parallel gas cracker added to increase plant capacity which will utilize Lummus' side cracker technology, including a low pressure chilling train and enhanced binary refrigeration.

"We have worked with Map Ta Phut Olefins since their first project in 2005," said Daniel M. McCarthy, Executive Vice President of McDermott's Lummus Technology business. "This additional capacity will be realized by using our unique side cracker technology, which permits the cost effective expansion of a liquid feed plant that has already reached its maximum capacity using conventional technology."

McDermott's Lummus Technology is a leading licensor of proprietary petrochemicals, refining, gasification and gas processing technologies, and a supplier of proprietary catalysts and related engineering. With a heritage spanning more than 100 years, encompassing approximately 3,100 patents and patent applications, Lummus Technology provides one of the industry's most diversified technology portfolios to the hydrocarbon processing sector.

Portions of this award were booked in prior quarters. The heater supply will be reflected in McDermott's third quarter 2018 backlog.
MRC

MOSCOW (MRC) -- Saudi’s Aramco Trading Company (ATC) expects to increase its oil trading volume to 6 million barrels per day (bpd) in 2020, 50 percent higher than current levels, reported Reuters with reference to the company’s top official.

"Currently, we’re at 4 million barrels per day and with expansion think our target is 6 million barrels per day," President and Chief Executive Ibrahim Al-Buainain said at the Asia Pacific Petroleum Conference (APPEC).
About 50 percent of the 2.5 million bpd of oil products it trades currently are hedged, he said.

The company is also looking at building its capacity in trading liquefied natural gas (LNG), using its Singapore office as a trading hub, Buainain said.

ATC plans to set up its European office in either Geneva or London and also aims to have an office in Fujairah to manage oil storage, he said.

In Singapore, Buainain said he expects the company’s office to grow to 30 to 40 people within the next two years.

ATC also expected to benefit from a switch by ships to cleaner fuels in 2020 as mandated by the International Maritime Organization.

"The second-hand effect of the IMO is the oversupply of high-sulfur fuel oil (HSFO) which in our case is a positive because we are net short on fuel oil and that will help us in meeting our requirements (for HSFO) in power generation," Buainain said.

Buainain has headed the trading arm of Saudi Aramco since 2016.

ATC was set up in 2012 to market refined products, base oils and bulk petrochemicals. It started trading non-Saudi crude oil and refined products from its overseas refineries in the past years as the world’s largest oil exporter seeks to optimize profits.

As MRC wrote before, Saudi Aramco and France's Total are considering building a mixed-feed cracker and derivatives in Jubail, near their joint refining complex. The cracker is expected to have a capacity of 1.5 MMtpy.

Saudi Aramco is an integrated oil and chemicals company, a global leader in hydrocarbon production, refining processes and distribution, as well as one of the largest global oil exporters. It manages proven reserves of crude oil and condensate estimated at 261.1bn barrels, and produces 9.54 million bbl daily. Headquartered in Dhahran, Saudi Arabia, the company employs over 61,000 staff in 77 countries.
MRC