January Oil and Gas News

Here’s a quick roundup of news stories from the last few weeks.

US Becomes a Net Gas Exporter for the First Time in 60 Years

Significant for the energy markets in Europe is news that the US is now a net exporter of gas for the first time, aided by LNG exports and buoyed by the gas they extract from fracking.

US Refiners Are Riding High With Strong Margins

After suffering in recent years with the downturn in value of refined oil products, it’s good to hear that refining is back in the black.

I notice that part of the credit is given to Trump and his tax reforms.

Oil at $70 Proves Too Hot to Handle for Some European Refineries

In contrast to the previous article it seems refiners in Europe are suffering.

India’s Reliance Declares 30pct Higher Refinery Capacity at Export Plant

Over in India, the World’s largest refinery increases capacity again.

“The new capacity is the equivalent of 704,000 bpd of crude processing.”

Wow – that’s proper massive!

Saudi’s Refined Oil Exports Offset Crude Curbs

This is an interesting side-story to the oil supply paradox as countries seek to increase revenue by exporting more oil which, in turn, causes prices to fall.

“The share of Saudi Arabia’s exports of refined oil products steadily rose throughout 2017, offsetting a drop in overseas crude oil sales as the kingdom complied with a global supply pact, the International Energy Agency said on Friday.”

So, as Saudi Arabia agrees to cut crude oil supply to maintain oil prices, they increase the supply of refined products to maintain revenues. This is something few other countries can do as refineries all almost all privately owned.

It also indicates Aramco’s strategy to move towards final products rather than relying on crude exports. Interesting.

50 South East Asian Fields ‘Likely’ to be Approved for Development to 2020

Over in the far east, as demand for energy grows they are looking to expand oil and gas production.

A large amount of LNG is already exported from the region. I visited the Malaysia LNG site in Bintulu a few years ago for some troubleshooting.

History of Aramco

Jubail Power

Recently World Oil published a potted history of Aramco from one oil well to world’s most valuable company which is quite an interesting read.

Saudi Arabia’s state oil producer is in a league of its own. The world’s most valuable company, which supplies about one in every nine barrels of crude produced and runs refineries from the U.S. Gulf coast to the South China Sea, is preparing for an initial public offering to raise about $100 billion as soon as 2017.

One barrel in every nine – that’s an amazing statistic.

As I’ve mentioned before, I’ve worked on many projects for Aramco – in fact I’m currently working on the pre-FEED phase of my tenth Aramco job. I’ve also had the opportunity to travel to Saudi Arabia on several occasions.

Aramco continues to diversify

gas ring

Saudi Aramco – Saudi Arabia’s national oil company (I have worked on their projects on 9 occasions since 2001) are in the news at the moment as they look to diversify and spread their investments across the World.

Two recent articles in Downstream Today outline such plans.

In the first Thai PTT and Saudi Aramco in Joint Vietnam Petrochemical Project, they are joining forces with the Thai energy company PTT (for whom I have also worked on a project) to submit plans for a $22bn 400,000 bpd Refinery and PetChem facility to be built in Vietnam.

In the second story Catalytic Processes Could Yield Alternatives to Refineries, Ethane Crackers a California-based company claims that it has found a commercially viable technique to directly convert natural gas into liquid fuels or petrochemical building blocks.

This is significant for two reasons – firstly transporting gas long distances is difficult and expensive, liquefied natural gas (LNG) facilities are costly and technically complex as are the ships that transport the fuel at -161 deg C.  Any process that can convert gas to liquid fuels more easily will be of real interest.

The second reason is that much of the gas, once re-vapourised is used as a Petrochemical feedstock anyway.  So if this process can make liquefaction easier, cheaper and provide the PetChem building blocks at the same time it could be a real money spinner.

The company in question, Siluria, announced that it raised more than $30 million in a financing led by Saudi Aramco Energy Ventures (SAEV) – the venture investment arm of Saudi Aramco.

This indicates the level of diversity – in processes, products and locations that Aramco are looking at.

Interesting times.