Amid unrest, Canada plans to overhaul energy project assessments

MOSCOW (MRC) - The Canadian government, which faces growing protests against major energy projects, this week will present plans to improve the way oil pipelines and mines are assessed, two well-placed sources said, said Hydrocarbonprocessing.

Three entities share responsibility for probing the environmental impact of proposed projects, a system the ruling Liberals say the public does not trust.

Ottawa is due to unveil draft legislation creating a single body to look into projects on federally regulated land, said the sources, who requested anonymity because of the sensitivity of the situation. The announcement could come as early as Tuesday.

“There will be one responsible authority,” said one source, adding that the government would stick closely to a plan it issued last June. Under that plan, the National Energy Board (NEB), which critics say is too close to the industry, would lose the power to assess resource projects.

Prime Minister Justin Trudeau says Canadians need more faith in the assessment system. He also stresses the need for Canada to get landlocked crude to its coasts to fetch better prices.

The industry has become frustrated with the current process, which critics say failed now-canceled pipeline projects such as Enbridge’s Northern Gateway and TransCanada’s Energy East. “We don’t want to have a slam dunk-kind process, but the process needs to be fair. It needs to be balanced amongst the various interests,” said Chris Bloomer, chief executive of the Canadian Energy Pipeline Association. “We need to get to clarity, because we’re not getting stuff done now.”

Green activists and aboriginal protesters, who have had success targeting pipelines, are now focused on Kinder Morgan Canada’s plan to nearly triple the capacity of its Trans Mountain pipeline from Alberta to the Pacific Coast. Trudeau’s government approved the expansion in 2016, but it is still facing permit delays.

The legislation could take effect by July 2019, one of the sources said. It would have little immediate impact as projects already under review will continue under the existing system. While industry has pushed for a two stage review, where it is first determined if a project is in the national interest, green groups are concerned that would undermine subsequent assessments.

“I‘m not overly confident we’re going to see a strong bill that restores Canadian confidence in the environmental assessment system,” said Patrick DeRochie of the Environmental Defence group. A spokeswoman for Environment Minister Catherine McKenna, who is responsible for pushing the draft legislation through parliament, declined to comment.
MRC

MOSCOW (MRC) - European refiners are threatening to cut Russian oil purchases due to worsening quality after Moscow has re-routed large volumes of crude to China, as part of its fight with OPEC and the United States for market share in fast growing Asian markets, as per Reuters.

The quality of Russia's flagship Urals oil grade has deteriorated so much that multiple buyers are reviewing how much they buy and the price they are willing to pay for it, according to traders and sources close to European refiners.

Russia has forged closer ties with energy-hungry China at a time of chilling relations with the West over Moscow's role in Ukrainian crisis and allegations of its interference in foreign elections, accusations denied by the Kremlin.

Miroslaw Kochalski, vice-president of PKN Orlen, Poland's biggest refiner, told Reuters in an interview that the changing quality of the Urals his company buys could influence future deals. "It opens room for negotiations with partners, also regarding price conditions," Kochalski said. According to the industry sources who spoke to Reuters, that position is shared by others in the industry who buy Urals crude. The Russian energy ministry and oil pipeline monopoly Transneft both acknowledge the problem of weak Urals quality.

The Urals oil that reaches customers in Europe is a blend of different sources of oil, with the mixing taking place inside Russia's pipeline system. The quality depends on the relative proportions of higher-quality and lower-quality darker oils in the mix.

Data on Urals chemical composition, obtained by Reuters from industry sources, showed the oil exported to Europe this month is near the bottom end of the quality range allowed under a standard set by Russia's state standards agency Rosstandart. The trading sources said they track the quality via documents that accompany cargos of crude pumped from Russia.

The worsening of Urals quality has dampened its price and prompted buyers to think about the possibility of reducing the volumes they buy, according to the traders and sources close to European refineries.
MRC

MOSCOW (MRC) -- Saudi Arabia wants to complete talks with strategic investors such as China, Japan and South Korea before deciding where to list shares in state oil company Saudi Aramco, reported Reuters with reference to three sources familiar with the discussions.

The decision shows the initial public offering (IPO), which could be the biggest in history, is becoming an increasingly difficult balancing act for Riyadh.

Saudi officials have said the government plans to sell up to 5 percent of Aramco shares on one or more foreign exchanges in addition to Riyadh.

U.S. President Donald Trump has urged Riyadh to list Aramco on the New York stock exchange, and British Prime Minister Theresa May has called for it to be in London. But Riyadh also has to take into account views over where the shares should be listed from the countries expected to be Aramco's biggest cornerstone investors - those who commit in advance to invest a fixed amount of money or for a fixed number of shares.

Sources close to the IPO said decisions must be taken by March if the IPO is to be carried out in October or November, and otherwise could be delayed until a year later.

"Everyone is talking about venues for the listing and why they haven't been chosen yet. Indeed, you have Trump encouraging Aramco to list in New York and May encouraging to list in London. But that is only the tip of the iceberg," said a senior Saudi source close to the IPO process. "Aramco is also holding talks with cornerstone investors, who often express their views on where Aramco should list. And hence Aramco and the Saudi government need to think how to get the best value out of all this, how to get the best strategic arrangements out of this."

Asked whether a decision on where to list Aramco would be made only when talks with strategic investors are over, Aramco told Reuters: "This is speculative and we decline to comment."

Asia has become the biggest and most important buyer of crude oil from Aramco and the giant oil firm wants to secure Asian markets for the long-term as it faces competition from suppliers such as Russia and the United States. The sources said some cornerstone investors were keen to see Aramco listed on Asian and Saudi exchanges rather than in New York or London.

"Bankers have been emphasizing to Aramco the importance of securing cornerstone investors first before moving forward with a decision on the listing. Asian cornerstone investors are most logical as that is where the oil flows to," a Gulf-based banker familiar with the IPO preparations said.

Aramco's IPO is part of a drive by the Saudi government to reduce the economy's reliance on oil and transform the kingdom.

Crown Prince Mohammed bin Salman, who unveiled the Vision 2030 reform plan in April 2016, has suggested Aramco could be valued at as much as USD2 trillion.

The IPO could raise over USD100 billion if Aramco goes ahead with plans to list 5 percent and cornerstone investors could buy a big part of it, sources told Reuters. "If the IPO is going to be done in the second half of the year, then the government really does need to have a decision... They will have to get the prospectus out by the beginning of the second quarter," said a second senior source familiar with the IPO preparations. "If you are going to do it, you might as well do it now," the source said, referring to a rise in oil prices to USD70 per barrel.

Prices have doubled from their lows of 2015-2016 as Saudi Arabia, the de facto leader of the Organization of the Petroleum Exporting Countries, and non-OPEC Russia reduced output to help prop up prices in 2017-2018.

Washington has been a longstanding political ally of Riyadh and New York offers the best liquidity of all exchanges but has stricter disclosure requirements than the London or Hong Kong exchanges.

Saudi Arabia is also considering listing Aramco shares on the local stock exchange, Tadawul, but there are concerns that this could damage the market.

The second source said international exchanges such as such as London, New York and Hong Kong were still being analysed but options also included making Hong Kong the only listing abroad, or listing on Hong Kong plus private placements with cornerstone investors.

A third industry source familiar with the IPO said Riyadh wanted a decision taken by March on where to list the shares so that Aramco could be listed on at least the local bourse by October.

A fourth industry source said the official announcement may not come until October, when Saudi Arabia is due to host a major investment conference.

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

MOSCOW (MRC) - Exxon Mobil Corp said on Friday that it expects global oil demand to drop sharply by 2040 if regulations aimed at limiting the impact of greenhouse gas emissions on climate are fully implemented, as per Hydrocarbonprocessing.

Under this scenario, Exxon projected world oil consumption will drop 0.4 percent annually to 2040 to about 78 million barrels per day (bpd). That is about 25 percent below current levels, which the U.S. Energy Information Administration puts at 98 million bpd.

The findings were contained in a report produced after Exxon's shareholders supported a climate-impact resolution last year and Exxon's board approved a plan to analyze the effects. Exxon's climate-impact report comes roughly three years after almost 200 nations met in Paris to set a goal of limiting the rise in the world's average surface temperatures. President Donald Trump has since pulled the United States out of the Paris climate accord, and it was unclear whether Paris accord policies would be fully implemented around the world.

The study added weight to arguments that laws and regulations to limit the rise in global temperatures to below 2 degrees Celsius (3.6 degrees Fahrenheit) from pre-industrial levels will succeed in curbing fossil fuel consumption.

But Exxon stopped short of laying out how efforts to limit carbon emissions could impact its business, data long sought by some shareholders. In a separate report published on Friday that did not take into account climate legislation, Exxon forecast population growth will drive oil demand higher by about 20 percent by 2040.

Exxon's study saw demand for natural gas, considered a cleaner-burning fuel than oil, growing 0.5 percent per year to about 445 billion cubic feet per day under the same scenario. Demand for power generated by solar panels, wind turbines and other renewable sources is expected to rise 4.5 percent annually through 2040 under this scenario, Exxon said.

The report followed years of pressure by investors and environmental activists urging the company to describe the potential impact of a warming climate on its operations. Last year, their climate-impact resolution was backed by 62 percent of shares voted at Exxon's annual meeting.
MRC

MOSCOW (MRC) -- Maire Tecnimont S.p.A. has announced that its main subsidiaries Tecnimont S.p.A. and KT-Kinetics Technology S.p.A. - have signed with the Client SOCAR (State Oil Company of Azerbaijan Republic) Heydar Aliyev Baku Oil Refineryan EPC contract (Engineering, Procurement and Construction)as an important part of the execution of the Modernization and Reconstruction works for the Heydar Aliyev Baku Oil Refinery, in Azerbaijan, as per Hydrocarbonprocessing.

Overall contract value equals to approximately USD 800 million.

The scope of the project entails the installation of several new grass root process units, the relevant utilities and storage with the final aim to upgrade the refinery facilities to be capable of processing 7.5 MMTPA of crude oil, while meeting quantity and quality requirements of products both to feed Azerikimya revamped petrochemical plant and to produce Euro V quality automotive transportation fuels. Among the new process units in the scope it is worth mentioning a Naphtha Splitter, a Diesel Hydrotreater Unit, an Isomerization Unit, a Hydrogen Production Unit, two PSA Units, a C4 Hydrogenation Unit, a MTBE Unit, a Sour Water Stripper Unit with Sulphur Recovery Unit.

Process technologies involved are coming from the major refining Licensors including KT-Kinetics Technology, part of Maire Tecnimont Group.

The project is expected to be completed within 41 months from the signing date.

The project is a major milestone for Maire Tecnimont Group’s Oil & Gas business since it represents a flagship award in downstream refining. Moreover, it confirms the orientation of the Group to leverage its distinctive competencies, technological know-how and synergies between its EPC contractors.

Pierroberto Folgiero, Maire Tecnimont Chief Executive Officer, commented: "After our two strategic petrochemicals projects in Azerbaijan, this contract enables Maire Tecnimont Group to consolidate the fruitful relation with SOCAR also in the refining business, supporting the strategy of integration with the petrochemical business. We are truly honored to keep on supporting such a prestigious client in the development of the Country’s hydrocarbons downstream sector."

Rovnag Abdullayev, President of SOCAR, said: "Today we made one more step toward the production of high-quality diesel, gasoline and other fuels of Euro-5 standards. Maire Tecnimont is one of the global leading companies. Cooperating with the world’s leading companies will enable us to supply high-quality fuel to Azerbaijan’s domestic market and increase the export revenues in the years ahead."

As MRC informed before, Italian Maire Technimont and Azerbaijan’s SOCAR-Polymer signed an EUR350 mln-agreement on construction of Sumgayit polypropylene (PP) plant at the Azerbaijan-Italy business meeting on 15 April, 2015.

SOCAR, which is keen on expanding operations in the retail oil products market abroad, is involved in exploring oil and gas fields, producing, processing, and transporting oil, gas, and gas condensate, marketing petroleum and petrochemical products in the domestic and international markets, and supplying natural gas to industry and the public in Azerbaijan