U.S. energy secretary says it could take years to refill oil reserve

It could take years for the United States to refill the Strategic Petroleum Reserve, the energy secretary told lawmakers on Thursday, after sales directed by President Joe Biden last year pushed the stockpile to its lowest level since 1983, said Hydrocarbonprocessing.

"This year, it will be difficult for us to take advantage of this low price," Energy Secretary Jennifer Granholm told U.S. representatives in a congressional hearing. "But we will continue to look for that low price into the future because we intend to be able to save the taxpayer dollars." Biden administration officials have said they want to refill the reserve, after last year's historic sale of 180 million barrels, when the oil price consistently is around $70 a barrel. Oil from that sale sold at about $94 per barrel.

The price for benchmark West Texas Intermediate crude futures has fallen to around $70 per barrel this week on worries about the economy amid crises at several banks. Granholm said at the hearing the administration wants to buy oil back at under USD72 a barrel.

The Department of Energy said last month it was implementing a three-part strategy to refill the reserve in the long term, including repurchases with about USD4.5 billion in revenues from previous sales, returns of more than 25 million barrels of oil from previous exchanges, and working with Congress to avoid "unnecessary sales unrelated to supply disruptions." The department succeeded last year in persuading Congress to cancel sales it had mandated of about 140 million barrels that had been set to take place from fiscal year 2024 to fiscal year 2027.

Still, the DOE is moving forward with a sale of 26 million barrels from the SPR that was mandated by Congress in earlier years to help fund the federal budget. The oil will be delivered from April 1 to June 20. Granholm said that sale and maintenance at two of the reserve's four sites will make it difficult to buy back oil this year.

Bryan Mound in Texas and Bayou Choctaw in Louisiana were both undergoing planned "life extension" work, the department said later.

We remind, a recent study investigated reliability-related downtime and slowdown events for olefin plants. These events were calculated as percent of the plant’s proven capability to produce ethylene.1 The causes for lost production were ranked from the highest to the lowest percent of production lost. The trends in production losses from 1999 through 2011, showing total loss production measured in seven biennial studies, are discussed in this article to determine if these losses are increasing or decreasing over time. This article also identifies the main root causes resulting in the highest ethylene production losses as a percent of full capability.

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The United States announced further sanctions against Myanmar, targeting the supply of jet fuel to Myanmar's military following air strikes in civilian populated areas, the U.S. Treasury Department said, said Hydrocarbonprocessing.

The Treasury in a statement said it imposed sanctions on two people and six entities connected to Myanmar's military that Washington accused of enabling its continuing atrocities, including through the import, storage and distribution of jet fuel to the military.

Since a junta seized power in February 2021, Myanmar has been plunged into chaos, with a resistance movement fighting the military on multiple fronts following a bloody crackdown on opponents. The Treasury said the military has continued to commit atrocities and violence against the people of Myanmar since the coup and said it has increasingly relied on air strikes in civilian populated areas, citing an air strike on the village of Let Yet Kone in central Burma that impacted a school and one in the northern state of Kachin that killed as many as 80 people.

"Burma’s military regime continues to inflict pain and suffering on its own people," the Treasury's Under Secretary for Terrorism and Financial Intelligence, Brian Nelson, said in the statement, using the Southeast Asian nation's former name. "The United States remains steadfast in its commitment to the people of Burma and will continue to deny the military the materiel it uses to commit these atrocities."

Myanmar's embassy in Washington did not immediately respond to a request for comment. The Treasury targeted Myanmar military aviation fuel suppliers on Friday, imposing sanctions on Myanmar-based Asia Sun Group, Asia Sun Trading Co. Ltd and Cargo Link Petroleum Logistics Co. Ltd.

Also targeted were individuals and entities the Treasury said were associated with or have provided equipment to Myanmar's military, including a close associate of the military regime leader and the associate's companies, Star Sapphire Group of Companies and Star Sapphire Trading Company Limited.

The Treasury on Friday also issued an alert on the sanctions risks associated with the provision of jet fuel to Myanmar's military. The United States and other Western countries have already announced a series of sanctions targeting junta members, the military government's agencies, and military-run companies, seeking to curb their ability to raise money.

A U.N. report published this month found that violence had intensified in northwestern and southeastern Myanmar due to the military's "indiscriminate air strikes and artillery shelling, mass burnings of villages to displace civilian populations, and denial of humanitarian access". The junta has previously said it is carrying out a legitimate campaign against what it calls terrorists and denied atrocities have taken place.

We remind, Bharat Petroleum Corp has chosen Chevron Lummus Global’s (CLG) ISOFINISHING technology for a catalytic processing unit at its Mumbai refinery, said the company. Once complete, the 200,000 tonne/year facility would be the first catalytic process unit to manufacture de-aromatised solvents and white oil in India, CLG said in a brief statement on Wednesday. Production from the new unit would replace imports of these specialty products, it added.

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Colombia's Ecopetrol must focus on growing its oil and gas production to fund the transition towards renewables, said Saul Kattan, the chairman of the majority state-run energy company, said Hydrocarbonprocessing.

Colombia could be a world leader in production of renewables like wind and green hydrogen, Kattan told Reuters late on Wednesday, but the company, the largest in the country, should still work to boost its output in fossil fuels.

"I'd make a very big effort so that oil production reaches or gets close to one million barrels per day," said Kattan, an economist who was appointed to the chairman's role last year, stressing that gas output must also increase to guarantee energy sovereignty and fund the transition. Ecopetrol's oil and gas production was around 720,100 barrels of oil equivalent per day (boed) in the fourth quarter of last year.

The company is whittling down a list of six potential candidates to replace CEO Felipe Bayon, who will stand down at the end of this month, to a shortlist of three, Kattan said. Kattan did not reveal the names any of the candidates and was not sure a successor would be named before Bayon stands down. "We're trying. I don't know if we'll make it, but we'll at least be close," he said.

Kattan dismissed the suggestion the company could import gas from Venezuela, agreeing with Bayon's comments to Reuters this month that infrastructure in that country either does not exist or has deteriorated too much to be used.

Bayon has championed two pilot projects to test the viability of fracking, a controversial topic in Colombia, but Kattan said developing the industry was unnecessary. "We have so many other opportunities - why would we get into fracking? There's no need," he said.

A green hydrogen pilot project launched last year at Ecopetrol's refinery in Cartagena is going well and there is talk of bigger projects, Kattan said. "I'd like to build a large industry around green hydrogen which generates added value for the country," he said. "That's my big bet on the topic."

We remind, Honeywell has been selected by Ecopetrol S.A. (Ecopetrol), the largest company in Colombia and one of the main diversified energy companies on the American continent, to develop a prefeed engineering study for an Advanced Solvent Carbon Capture (ASCC) modular demonstration unit, which will be used to evaluate carbon dioxide (CO2) capture from Ecopetrol fluid catalytic cracking units (FCCUs).

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Investors managing more than USD4 T in assets have told European chemical companies they must set out a path to move away from fossil fuels, saying that the sector's role in greenhouse gas emissions has been overlooked, said Hydrocarbonprocessing.

Legal and General Investment Management, Amundi and EFG Asset Management are among 15 investors to have written to Europe's 13 biggest chemical companies including BASF, LyondellBasell Industries and Yara in a joint statement published this week. "Europe's chemical companies need to know that action on decarbonization isn’t optional," said Vincent Kaufmann, CEO at Ethos Foundation, one of the investors.

"The progress we have seen over the past 18 months, with some companies setting increasingly ambitious targets and transition plans, indicates that sustained investor engagement is important and effective." Penny Fowler, Head of Corporate Climate Campaigns at ShareAction, the responsible investment NGO that has coordinated the investor statement, said the chemical industry's reliance on fossil fuels was "often overlooked as a major contributor to global warming."

Norway's Yara said in an emailed statement that its ambition was to become climate neutral by 2050. "We have set ambitious targets for further reductions ... and take part in developing the Sectoral Decarbonization Approach for the chemical industry to align our climate targets with the goals of the Paris Agreement," Yara's VP Sustainability Governance Bernhard Stormyr said.

BASF and LynondellBassell did not immediately respond to requests for comment. Some chemical companies have been raising their climate-related pledges. For example, in December LyondellBasell increased its greenhouse gas reduction target for direct and indirect emissions from purchased energy and established a target to cut all other indirect emissions by 2030.

In its statement, the investors said the chemicals firms should establish credible decarbonization plans that include efforts to electrify chemical production processes and switching to greener energy sources. Other recommendations include chemical firms changing the raw materials used in chemical production processes to emissions-neutral materials instead of fossil fuels and eliminating woody biomass as an energy source.

We remind, Germany's transport minister on Friday said he was optimistic a dispute between Berlin and Brussels over the future of combustion engine cars running on e-fuels was close to resolution, though some questions still needed clarifying. Berlin has been in talks with the European Commission over the past weeks about allowing registrations of cars running on synthetic fuels beyond the 2035 deadline for sales of CO2-emitting cars, agreed by European Union countries last year. A vote on the ban got delayed early this month by Germany's last-minute objections.

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Saudi Aramco said its joint venture (JV) in China plans to start the construction of a major integrated refinery and petrochemical complex in the northeast of the country, said Middleeastbusiness.

The venture, Huajin Aramco Petrochemical Company (HAPCO), is developing the complex that will combine a 300,000 barrels per day (bpd) refinery and a petrochemical plant with an annual production capacity of 1.65 million metric tons of ethylene and two million metric tons of paraxylene.

Aramco holds a 30 per cent shareholding in HAPCO while China’s NORINCO Group owns a 51 per cent stake and the other 19 per cent is owned by Panjin Xincheng Industrial Group.

Construction is due to start in the second quarter of 2023 after the project secures the required administrative approvals. It is expected to be fully operational by 2026.

Saudi Aramco will supply up to 210,000 bpd of crude oil feedstock to the complex, which is being built in the city of Panjin, in China’s Liaoning province.

“This important project will support China’s growing demand for fuel and chemical products. It also represents a major milestone in our ongoing downstream expansion strategy in China and the wider region, which is an increasingly significant driver of global petrochemical demand,” said Mohammed Y Al Qahtani, Aramco executive vice president of downstream.

We remind, Aramco, one of the world’s leading integrated energy and chemicals companies, and Linde Engineering, a global leader in the production and processing of gases, announced that they have signed an agreement to jointly develop a new ammonia cracking technology.

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