Putin orders regulated prices for fuel oil, Russia's export ban stays

Russian President Vladimir Putin has ordered the government to provide state funds to ensure a smooth heating season, including the introduction of regulated prices for fuel oil supplied for household heating in some regions, as per Reuters.

Russia has been tackling shortages and high fuel prices in recent month. Fuel oil is in high demand for the Arctic and other regions, which are facing a severe winter. The document, published on the Kremlin web site, said the government will provide funds for Murmansk and other Arctic regions to prepare for the heating season of 2023/2024, and for "the introduction of price regulation for fuel oil supplied for the heating season".

Despite being one of the world's top oil producers, Russia has suffered high domestic prices and shortages of gasoline and diesel in recent months as high export prices made it advantageous for refiners to sell their products abroad.

Russia on Sept. 21 introduced a ban on fuel exports to fight high gasoline and diesel prices as well as fuel shortages during harvesting season. There is no time frame for the restrictions to be lifted. The Kremlin said on Thursday there was no deadline for lifting the ban and the restrictions would be in place for as long as needed.

Dmitry Peskov, the Kremlin spokesman, also told reporters that other measures to ensure the stability of the fuel market would be considered once the ban was lifted. "The government has already repeatedly noted... that there is no deadline here, the ban will continue as necessary. Once there is no longer a need for this, other measures will be considered," he said.

The government has been considering hiking of export duty for resellers and introduction of export quotas, similar to the measures on the sales of fertilizers. Since the ban was introduced, wholesale diesel prices on the local exchange have fallen by 21%, while gasoline prices are down 10%.

That has not yet translated into the same scale of retail prices decline, while Russian Deputy Prime Minister Alexander Novak, Putin's point man on the oil business, has said that the ban has started to yield positive results. The Federal Anti-Monopoly Service (FAS) said on Thursday that it had sent instructions to oil companies ordering them to cut oil products prices.

"In the absence of measures taken by organizations, FAS will consider them as signs of a violation of antimonopoly legislation," it said in a statement.

We remind, Russian oil producer Lukoil will lend Azeri state oil firm Socar $1.5 B as part of a broader deal that will allow Socar's 200,000-barrel-per-day Turkish STAR refinery to process Russian crude again, three industry sources familiar with the deal said on Thursday. The deal will give Lukoil another customer in close proximity to Russian ports after most European refiners stopped importing its crude to comply with European Union sanctions imposed after Moscow launched what it calls a "special military operation" in Ukraine in 2022.

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Technip Energies has been awarded Engineering, Procurement Services and Construction Management contracts by Galp for an advanced biofuels unit and a green hydrogen unit for its Sines refinery in Portugal, said Hydrocarbonprocessing.

Both projects are part of Galp’s program to reduce the carbon footprint of the refinery and its products. The Advanced Biofuels Unit, promoted by the joint venture of Galp (75%) and Mitsui (25%), will have a 270 ktpa capacity and will produce renewable diesel and sustainable aviation fuel (SAF) from bio-feedstock and waste residues and will allow Galp to avoid c. 800 ktpa of greenhouse gas emissions. For this unit, Technip Energies will work in consortium with Technoedif Engenharia, a large engineering firm in Portugal, to complete the EPsCm project.

The Green Hydrogen Unit, composed of a 100 MW electrolysis plant, will produce up to 15 ktpa of renewable hydrogen, using proton exchange membrane (PEM) electrolyzers which will be supplied by Plug Power. This unit will allow the replacement of c. 20% of the existing grey hydrogen consumption of Sines refinery and will lead to greenhouse gas emissions reduction of c. 110 ktpa.

Both units represent a gross investment estimated at €650 million and will transform the Sines refinery into one of the most important low-carbon platforms in Portugal.

Marco Villa, Chief Operating Officer of Technip Energies, commented: “The Final Investment Decision for these two important projects is a major step taken by Galp to transform the refining industry in Portugal. Technip Energies, who has been supporting Galp strategy since the early phases of those two projects, is now delighted to be selected as a partner for the execution phase of both. This investment is another example of how Technip Energies enables the decarbonization of the energy industry through collaboration, innovation and technology integration”.

We remind, LanzaJet, a leading sustainable fuels technology company and sustainable fuels producer, and Technip Energies today announced an agreement to strengthen their exclusive collaboration to support the global deployment of the LanzaJet Alcohol-to-Jet (ATJ) Process technology.

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Borouge, a leading petrochemical company that provides innovative and differentiated polyolefin solutions and Tadweer signed a Memorandum of Understanding (MoU) to explore opportunities in the management and adoption of best practices in waste management, sorting and mechanical recycling of polymers, said the company.

Tadweer, part of ADQ, is the sole custodian of waste management for the Emirate of Abu Dhabi and is committed to developing an integrated waste management sector and becoming a leader in extracting value from waste to contribute to national sustainability ambitions.

Borouge and Tadweer will explore further opportunities in polymers waste sorting for mechanical recycling and the development of a sustainable ecosystem, to secure the generation of high-quality polymer recyclates using different technologies. Furthermore, the partners will join forces to establish business development and benchmarking frameworks which unlock value added business opportunities through potential joint investments in brown and greenfield assets. The agreement reinforces Borouge and Tadweer’s leading industry positions and supports their circular economy ambitions.

Both companies will be collaborating in supporting local regulatory frameworks related to the sustainable and efficient management of polymer waste. This includes the launch of public initiatives and campaigns to boost awareness about best practices in polymer waste management and recycling.

Committed to driving circularity for a zero-waste environment, Borouge has increased the number of strategic partnerships with recycling companies and expanded its product portfolio of sustainable solutions. Today, Borouge has 18 partnerships across eight countries serving its key territories in the Middle East and Asia-Pacific, marking an important milestone in its ambitions towards realising its 2030 strategy.

Borouge is a responsible petrochemical company with a portfolio of sustainable solutions. The Company works with customers, suppliers and value chain partners to address global challenges, with a comprehensive roadmap to reduce emissions. In addition, Borouge collaborates with the Environment Agency – Abu Dhabi to combat a multitude of environmental issues related to waste management.

As part of its commitment to sustainability, Tadweer has built partnerships with leading global entities in Greece, Spain, Jordan, and more. These partnerships, which are focused on the exchange of knowledge and experience, contribute to driving a circular economy and achieving a sustainable future. Tadweer’s partners play a pivotal role in supporting the company to develop an integrated waste management system, in line with the UAE’s sustainability objectives.

We remind, Borouge PLC, a leading petrochemical company that provides innovative and differentiated polyolefin solutions, and Borealis, one of the world’s biggest polyolefin manufacturers, announced the launch of two new sustainable polymer products for the automotive industry, in line with both companies’ sustainability drive. Made from up to 70% recycled materials, these are the first sustainable products developed at Borouge’s Compounding Manufacturing Plant (CMP) located in Shanghai, China, which recently received ISO 14067 certification for carbon footprint assessment.

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Private equity firm SK Capital Partners acquired U.S. oilfield waste services firm Milestone Environmental Services from Amberjack Capital Partners for an undisclosed amount, said Reuters.

The purchase reflects the rise of greenhouse gas reduction schemes offered to oil, power and petrochemical industries and tax credits available for carbon capture and storage (CCS) projects.

Milestone sees permanent carbon storage as an extension of its oil waste disposal in top U.S. shale fields, said CEO Gabriel Rio. Carbon collection and disposal revenues could eventually match its oilfield waste revenues.

The company plans two carbon dioxide (CO2) storage projects in the Permian Basin, the top U.S. shale oilfield, where it now collects and buries drilling waste and oil-contaminated water. The first could begin injecting CO2 as soon as 2025 and store 2.5 million tons of carbon per year, he said.

Milestone will complete against Exxon Mobil (XOM.N), Occidental Petroleum (OXY.N) and Chevron (CVX.N) developing storage projects in Texas and Louisiana. Its relationships with oil and gas producers and wastewater disposal well experience can overcome worries about its size, Rio said.

"We really understand the geology and how to put waste streams back into the ground and keep them safely away from groundwater and permanently secure," Rio said.

The firm, which generates between $100 million and $300 million in revenue, accounts for a significant part of the money now spent on oil waste management in Texas's two largest shale fields, estimates Amar Gujral, managing director at LEK Consulting.

We remind, SKC Ltd., a South Korean chemicals maker, is set to invest as much as USD70 million in Halio Inc., a US smart glass technology company, to expand the energy-saving solution business. SKC said its board of directors on Tuesday decided on the investment plan with aims to foster the energy-saving solution based on smart windows as one of the company’s core eco-friendly businesses along with biodegradable materials, which reduce plastic waste.

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Houston-based e-fuel producer HIF Global and Japanese oil refiner Eneos Holdings will explore cooperating on e-fuels production and distribution, the companies said, in HIF's second such deal in the Japanese market, said Hydrocarbonprocessing.

E-fuels producers such as HIF are betting on e-gasoline as a low-carbon bridge fuel for internal combustion cars, and are also looking to develop similar e-fuels for aviation and other hard-to-electrify industries. Many global airlines, for example, are counting on such products to decarbonize their flights.

HIF intends to supply Eneos with carbon-neutral e-fuels produced in the United States, Chile and Australia, the companies said in a statement. They have not yet signed a contract. HIF Executive Director Meg Gentle told Reuters the focus of talks was for HIF-made e-gasoline, which Eneos can distribute in Japan.

Also under consideration is using HIF-produced e-methanol in Japan as marine fuel, with Eneos further processing the e-fuel at its refinery in Japan to make e?gasoline and carbon neutral aviation fuel, Gentle said. Markets around the world are shifting to electric vehicles, with some such as China making a rapid shift as governments mandate sales of EVs to cut carbon dioxide (CO2) emissions.

But existing gasoline-powered vehicles, including hybrids from companies such as Toyota and Ford, will likely be on the road for several decades to come. That requires a different solution to make transport carbon-neutral. "We need a way to decarbonize existing engines to have any chance of reaching net zero," Gentle said.

Sceptics argue, however, that e-fuels, typically made from captured CO2 emissions and hydrogen produced with renewable energy sources, are expensive and energy-intensive. Synthetic fuel does release CO2 into the atmosphere when burned, but the emissions can be equal to the CO2 captured to produce the fuel, making it carbon-neutral overall.

HIF signed an almost identical agreement with Idemitsu Kosan in April. The agreements are consistent with Tokyo's willingness to provide policy support for e-fuels, Gentle said, and part of its efforts to achieve carbon neutrality by 2050.

We remind, TotalEnergies ENEOS and PTT Global Chemical (GC) celebrated the official launching of a total capacity of 6.7 megawatt-peak (MWp) solar photovoltaic (PV) system for GC's 5 production facilities in Thailand. GC is Thailand's largest integrated petrochemical and refining business and a leading corporation in the Asia-Pacific region, with a target to reduce greenhouse gas emissions for 20 percent by 2030 on its journey towards achieving Net Zero emissions by 2050.

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