Venezuelan natural gas cooperation could lead to increased LNG and petrochemical exports

Venezuela is close to approving a license for Shell and the National Gas Company of Trinidad and Tobago to develop a promising offshore natural gas field and export its production to the Caribbean country, said Hydrocarbonprocessing.

The license could set in motion a long-running effort by Trinidad to boost its gas processing and petrochemical exports, while providing Venezuela with a much-needed extra source of cash. The two countries aim to speed cross-border energy development since the U.S. in January issued a two-year authorization allowing the field's development.

Venezuela, which holds Latin America's biggest gas reserves, and neighboring Trinidad, the region's largest LNG exporter, would complement each other's needs to produce and export gas. Both nations are discussing a 25-yr exploration and production license for the Dragon field, which holds up to 4.2 Tcf of gas and lies in Venezuelan waters near the maritime border between the two countries.

Some terms are still to be settled, but if all goes well a deal could be signed in coming days, the people said. Shell would operate the project with a 70% stake and Trinidad's NGC would hold the remaining 30% under proposed terms, the people said.

Venezuela's state-run oil firm PDVSA, which discovered Dragon's reserves and paid for existing infrastructure, would not have a stake in the project, but Venezuela would receive cash or a portion of gas production as royalties. In 2013, PDVSA finished testing gas output at Dragon, but the field has never been commercially active due to the company's lack of capital and, more recently, U.S sanctions.

The U.S. last month temporarily eased sanctions on Venezuela and amended the authorization for Dragon, allowing Caracas to receive proceeds from gas sales. Since then, negotiations have moved faster, a third person said. Trinidad's Energy Minister Stuart Young in early October said the parties had begun price negotiations for Dragon's gas.

Shell declined immediate comment. NGC referred questions on the talks to Trinidad's energy ministry. The ministry, PDVSA, and Venezuela's oil ministry did not reply to requests for comment.

We remind, Russia has lifted restrictions on gasoline exports, the energy ministry said on Friday, after scrapping most restrictions on exports of diesel last month, saying there was a surplus of supply while wholesale prices had declined. It said it could reimpose export bans if necessary, adding that stocks of gasoline had risen to around 2 million metric tons.

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GS Caltex Singapore Pte Ltd said on Monday it has sold its first cargo of biofuel-blended marine gasoil to Maersk Oil Trading (MOT) at the world's largest bunker hub Singapore as it seeks to expand into lower carbon fuels, said Hydrocarbonprocessing.

The sale by the Singapore-based trading arm of South Korea's second-largest refiner is part of GS Caltex's plans by to expand its biofuels supply chain overseas. More of such biofuel bunkering trials are taking place at key global maritime hubs this year as the shipping industry tests new and cleaner fuels in a bid to reduce emissions.

GS Caltex said it delivered 1,000 metric tons of marine gasoil blended with 24% of Used Cooking Oil Methyl Ester (UCOME) to MOT's bunker barge on an ex-wharf basis on Nov. 8. MOT has since delivered the fuel, also known as B24 or bio-MGO, to its container ships at Tanjung Pelapas in Malaysia, it added.

GS Caltex leased 10,000 m3 of biofuel storage tanks at Jurong Port Universal Terminal earlier this year to facilitate the blending of bio-MGO, the company said. UCOME was blended with 0.1% MGO to produce the biofuel for ships, it added.

The UCOME, sourced from Malaysia, is certified by the International Sustainability and Carbon Certification (ISCC), GS Caltex said, while gasoil components are sourced from its refinery in South Korea and other Asian countries and blended at the terminal.

GS Caltex is the top MGO seller in Singapore with sales volumes averaging at 120,000 tpm (tons per month) this year, accounting for more than 40% of MGO ex-wharf sales at the hub, the company said. MGO is used to fuel ships calling at Emissions Control Areas (ECAs) in Europe and the United States which have stricter sulphur-emission limits.

The company is looking to ramp up its supply of bio-blended MGO, which remains a rare blend for bunkering in Singapore as most trials so far have involved marine fuel blends derived from mixing biofuel with fuel oil instead of gasoil.

Singapore's total sales for biofuel-blended marine fuels have exceeded 300,000 tons in 2023 so far, more than double from 2022's total volume, data from the Singapore Maritime and Port Authority showed. The data has yet to record any sale of bio-MGO bunker in Singapore.

We remind, Russia has lifted restrictions on gasoline exports, the energy ministry said on Friday, after scrapping most restrictions on exports of diesel last month, saying there was a surplus of supply while wholesale prices had declined. It said it could reimpose export bans if necessary, adding that stocks of gasoline had risen to around 2 million metric tons.

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Exxon Mobil is set to make a significant investment of up to $15 B in Indonesia for a green petrochemical refinery and carbon capture storage facility, as announced by President Joko Widodo, said Hydrocarbonprocessing.

The projects, designed to substantially reduce Indonesia's carbon emissions, were discussed during a meeting between Jokowi and Exxon Mobil's chairman.

Jokowi expressed appreciation for the cooperation and underscored the importance of Exxon's CCS facility, anticipated to be the largest in Southeast Asia, and the advanced nature of the petrochemical complex.

Additionally, Jokowi invited Exxon Mobil to participate in developing Indonesia's renewable energy and green infrastructure, including the ambitious Nusantara capital project.

Indonesia plans to cover 80 percent of the estimated $33 B Nusantara project cost through public-private partnerships, with the remaining 20 percent from the state budget. The United States ranks as the fifth-largest foreign investor in Indonesia, with a total investment of $2.4 B in the first nine months of 2023.

We remind, ExxonMobil is planning to invest up to $15bn in a greenfield petrochemical project as well as new carbon capture and storage (CCS) facilities in Indonesia. The Indonesian government earlier this week signed an agreement with ExxonMobil to study the possibility of the petrochemical project which would include polymer production units.

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A planned overhaul of the gasoline-producing fluidic catalytic cracker at TotalEnergies’ 238,000 bpd Port Arthur, Texas refinery is expected to continue into late November, said people familiar with plant operations to Reuters.

The 76,000-bpd gasoline-producing fluidic catalytic cracker-2 was shut on Aug. 23 for a planned overhaul.

"We do not comment on our operations at the Port Arthur platform," said TotalEnergies spokesperson Marie Maitre on Tuesday.

FCCs use a fine powder catalyst to convert gas oil into gasoline.

We remind, TotalEnergies has reported net income of $6.67bn (€6.33bn) in the third quarter of 2023, a marginal 1% increase compared with $6.62bn in the same period a year ago, said the company. In the July–September quarter of 2023, the French oil and gas company reported $54.41bn in revenue from sales, a 16% decline from $64.92bn in Q3 2022.

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Marathon Petroleum Corp said on Sunday one person was injured and 20 facility workers were evacuated due to a fire at its Martinez refinery in California which firefighters had extinguished, said Hydrocarbnprocessing.

"A fire was reported on a stack at a renewable diesel manufacturing company. The fire has been suppressed but the fire department will remain on scene to watch for spot fires," the company said in a filing with the state regulator early on Sunday.

Marathon Petroleum responders extinguished the fire at the company’s Martinez renewable fuels facility, and one employee was injured and transported to a medical facility, the company told Reuters in an emailed response. Fenceline air monitoring indicated no off-site impact, Marathon said.

Contra Costa Health (CCH) Services issued a public health advisory and said its crew members were "responding to reports of a fire at Martinez Renewable Fuels (Marathon Refinery) that may affect surrounding areas" on X, formerly known as Twitter.

The incident was classified by CCH as a Level 1 Alert, meaning it was an event "lasting longer than 20 minutes or with odors."

We remind, Marathon Petroleum’s third-quarter net income fell 26.7% year on year to $3.28bn as revenues fell at a faster pace than costs and expenses. The refining and marketing margin fell to $26.16/barrel, from $30.21/barrel in Q3 2022. Refining capacity utilisation was 94%, compared with 98% in Q3 2022. The refining throughput was 3.0m bbl/day, unchanged from Q3 2022.

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