LNG Canada and its prime contractor, JGC Fluor BC LNG JV, announced the launch of YOUR PLACE, a province-wide workforce development program aimed at attracting, recruiting, training, supporting and employing women to work in the construction trades on the LNG Canada Project.
Crude-oil-to-chemicals technology could boost per-barrel profits for refiners and petrochemical producers: IHS Markit
A revolutionary new chemical process technology, called crude oil-to-chemicals (COTC), could more than double the profitability derived from a barrel of crude oil, according to a new, independent economic assessment from IHS Markit.
Currently, global, integrated refining/petrochemical companies typically earn about $8.50 per barrel of refined crude oil*, but by leveraging the new COTC process technology (based on a Saudi Aramco Technologies COTC design**) in a world-scale refining and chemical facility***, owners could increase their plant net margins to approximately $17 per barrel, according to findings published in the IHS Markit Process Economics Program scenario analysis: Crude Oil to Chemicals and Oxidative Coupling of Methane: Potential for Synergy?
"This innovative new COTC-process technology is still in its infancy, but, according to our independent analysis, if commercially proven and built to world-scale, it has the potential to more than double the value refiners can unlock from a barrel of oil," said Don Bari, vice president of chemical technology at IHS Markit, and an author of the report along with Michael Arné, executive director, emerging technologies research, at IHS Markit. "This process is both transformative in terms of its potential, and timely, as refiners face declining future demand for gasoline and fuel production due to carbon emission mandates, greater vehicle fuel efficiency, and an increasing penetration of electric vehicles," Bari said.
Global chemicals demand is growing at a significantly higher rate than fuel demand, Bari said, so the desire to produce higher-value chemicals from lower-value feedstocks like crude and ethane is driving tremendous interest in these disruptive technologies. One of the most significantly disruptive technologies or categories of technologies being developed, based on their sheer volume, is crude oil-to-chemicals, Bari said. These projects fuse a refinery and petrochemical plant together in a fundamentally new way.
"This goes well beyond the state-of-the-art refinery petrochemical integration by implementing new reconfigured unit operations into a refinery," Bari said. "The objective is to shift the product slate derived from a barrel of oil to a range of 60% to 80% chemical production and non-fuel products, up from the traditional range of 10% to 15% or so, in order to significantly increase the value of crude oil reserves and provide demand security in Aramco's case. This transformative COTC technology goes beyond even the most "highly" integrated sites today that are pushing 30% to 40% chemicals production with traditional approaches," Bari said.
Bari said the IHS Markit chemical process research team was motivated to embark on a deeper analysis of the economic potential of the COTC technology following the 2018 announcement by Siluria Technologies (a technology provider that produces olefins directly from natural gas) that it had joined forces with Saudi Aramco Technologies: Siluria Technologies and Saudi Aramco Technologies Company join forces to maximize chemical production.
In the IHS Markit announcement discussing the two technologies following the 2018 Siluria announcement, Bari said the Siluria Technologies process, which produces olefins directly from natural gas through oxidative coupling (chemistry) of methane (OCM), is expected to further allow Saudi Aramco's future crude oil-to-chemicals facilities to create more value by converting very low-value off-gases (largely methane) into higher-value olefins products, which improves carbon efficiency and increases the volume of the barrel of oil directed to valuable fundamental petrochemicals.
"One of the reasons these crude oil to chemicals technologies are of such great interest is because they are potentially so disruptive to the industry's current processes and capabilities," Arné said. "This is due, largely, to the scale involved and what it will deliver in terms of volumes. In time, COTC could literally disrupt the global chemical balance. For that reason, everyone in the industry is interested in this technology—energy producers, refiners, chemical producers, technology providers, and, of course, investors," Arné said.
Arné said COTC becomes even more intriguing when you consider Saudi Aramco's recent announcement that it had acquired a 70% controlling stake in SABIC (Saudi Basic Industries Company, the chemical arm of Saudi Arabia). The deal combines Saudi Aramco, by far the world's largest oil producer by volume (in 2018, it produced 13.6 million barrels per day of crude and condensate), with SABIC, the world's fifth-largest chemical company by sales (SABIC revenues in 2018 were $45.1 billion) according to IHS Chemical Week.
Ahmad Al Khowaiter, chief technology officer of Saudi Aramco has publicly stated that "maximizing the output of high-value chemicals products from our future crude-oil processing projects is one of the key objectives in our downstream technology strategy." The SABIC acquisition moves Saudi Aramco "a step closer to achieving its long-held ambition of becoming the world's leading integrated energy and chemicals producer," according to the IHS Chemical Week report on the deal, enabling the company to build on a solid platform to support Aramco's continued investment in petrochemicals—the fastest growing sector of oil demand. In addition to the SABIC deal, Aramco has committed $100 billion to invest in petrochemicals through 2030.
Aramco, Bari said, has stated it plans to drive growth by increasing its global refining capacity from the current 4.9 million barrels of oil per day to 8 million to 10 million barrels of oil per day by 2030. "If you consider that of the increased refining capacity Aramco proposes, 2 million to 3 million barrels per day will be used to produce chemicals, the potential additions to the global chemical balance are quite extraordinary to contemplate," Bari said.
In its current analysis of the COTC technologies, IHS Markit assessed just the potential economics of the Aramco COTC process because of its near-term viability at scale. The Siluria process is still too early in its development for IHS Markit to model economics, Bari said. The IHS Markit assessment, however, did take the OCM process into consideration for purposes of discussing increased yields through integration.
IHS Markit's refined products balances demonstrate the necessity for higher levels of petrochemical integration as the two largest refined products, gasoline and diesel/gasoil, reach global peak demand in the mid-2030s, but refinery-derived petrochemical feedstocks continue growing beyond 2050 even as global crude runs decline. Deeper refining/petrochemical integration - including COTC as it's proven commercially - is an essential part of IHS Markit's outlook****, particularly in certain Middle East and Asian hubs, Bari said.
"The IHS Markit COTC process concept illustrates why so many companies are interested in this technology," Bari said. "Our base case shows a 48% yield to prime olefins," Bari said. "On a third-quarter 2018 Saudi basis, the refinery margin is $17/barrel EBITDA and $12/barrel EBIT for a high performing (though small) refinery of 200,000 barrels per day, compared with $7/barrel to $10/barrel EBITDA for top-quartile Euroasia refineries."
"The results of the analysis significantly exceeded what we initially expected—it was one of those ‘wow' moments as a researcher and chemical engineer, when you have to run the numbers again to believe what your eyes are seeing," Bari said. "While the technology is still new, in my 40 years in the industry, I haven't witnessed any technology that has the potential to unlock such value and truly revolutionize the refining and chemical industries as this COTC technology. At the same time, it does so in a manner that is less carbon intensive."
According to the IHS Markit analysis, the COTC process affords the refiner/petrochemical producer sustainability gains through the reduction in the overall carbon footprint of a facility due to integration and optimization of assets, which become more efficient.
*Based on the IHS Markit Euro-Asia 3Q 2018 analysis for top-quartile producers
**IHS Markit first assessed the Saudi Aramco COTC design in its Process Economics Report 29J, "Steam Cracking of Crude Oil (March 2016).
***The process analysis presented in the latest IHS Markit Process Economics Review discussed here is consistent with some of Saudi Aramco's patents in this area, but the IHS Markit COTC process concept should be considered speculative. IHS Markit does not know whether Saudi Aramco will be using the same process configuration. Additionally, the IHS Markit Siluria OCM design basis represents a "next-generation" conceptual process with conversion that is higher than that currently understood to have been demonstrated by Siluria. The OCM process concept discussed in the IHS Markit analysis has been developed independently of Siluria.
**** IHS Markit Annual Strategic Workbook and Light/Heavy Naphtha Service
More from Industry News
Ritchie Bros., the world largest industrial auctioneer, will host one of the largest pipeline construction equipment auctions ever, selling more than 4,700 items over two days at its site in Columbus, OH. Every single item in the auction will be sold without reserve.
As electrical machinery evolves and matures at an exponential pace - alongside increasingly available power grids to supply them - the oil and gas (O&G) landscape is witnessing major change. This is a positive shift as electrification not only meets ever tougher demands for lower global emissions, but also ticks boxes for improving O&G's availability and reliability. What's more, alongside greater productivity for operators, it adds up to greater safety for plant workers and the wider public too.
The Explorers and Producers Association of Canada (EPAC) is disheartened with the federal government's rejection of the proposed Senate amendments to Bill C-69.
Canada's oil sector is missing a significant opportunity to benefit from the global commodity price and finally receive fair market value for Canadian resources, according to the Canadian Association of Petroleum Producers' (CAPP) 2019 Crude Oil Forecast, Markets and Transportation report.
The Petroleum Services Association of Canada (PSAC) is expressing extreme disappointment with the decision by the Trudeau government to not accept the full slate of amendments for Bill C-69 proposed by the Senate following lengthy consultation with Canadians.
The Government of Canada is committed to protecting the health, safety, and environment of Canadians. The Government enforces laws that protect Canada's air, water, and natural environment, and we take this responsibility very seriously.
It is now clear the federal government is ignoring the Senate and the will of Canadians, damaging the country's economic future by not accepting the package of amendments the Senate proposed to Bill C-69, the Impact Assessment Act, according to the Canadian Association of Petroleum Producers (CAPP).
A landmark gift from Pembina Pipeline Corporation is ensuring working landscapes across the Canadian Prairies also work for conservation. Its $1-million investment in Ducks Unlimited Canada's (DUC) Revolving Land Conservation Program will protect approximately 2,000 acres (809 hectares) of important wetland habitat. At the same time, communities across Alberta and Saskatchewan will benefit from a host of environmental benefits. The joint announcement was made and celebrated by Pembina and DUC at a ceremony held at one of DUC's conservation project sites located east of Camrose.
CIRCOR Industrial Valves, a leader in designing and manufacturing flow control technology, features its commitment to ONE CIRCOR, ONE Solution, an initiative to provide the right solution for each customer by effectively drawing on the technical capabilities of CIRCOR's trusted brands, like Leslie Controls, Spence, RTK, Nicholson, and more. With a broad range of products to match to requirements and the technical expertise to design optimized systems for specific customer applications, CIRCOR engineers and provides integrated critical steam solutions for process industry, oil and gas, district energy and power systems.
Newly released estimates from satellite data show global gas flaring increased by 3 percent in 2018 to 145 billion cubic meters (bcm), which is equivalent to the total annual gas consumption of Central and South America.
Pulse Oil Corp. is pleased to announce the key findings of Pulse's enhanced oil recovery ("EOR") study.
Encana Corporation has provided an update on its share buyback program and disclosed its intention to execute a substantial issuer bid (SIB) to fulfill its previously announced 2019 share buyback. In addition, the Company signed an agreement to exit China, strengthened its production outlook for the second quarter of 2019 and reiterated its original capital investment plan.
Canadian oil sands production is set to enter a period of slower annual production growth compared to previous years. Nevertheless, total production is expected to reach nearly four million barrels per day (mbd) by 2030 - nearly one million more than today, according to a new 10-year production forecast by business information provider IHS Markit.
Canada's next federal government has an opportunity to help define a strategic, long-term vision for the growth of Canada's oil and natural gas sector, one that promotes jobs and a healthy economy for all Canadians, while being part of the solution to meet growing global energy demand with responsibly developed energy, according to the Canadian Association of Petroleum Producers (CAPP).
Parliamentarians need to support Bill C-69, as it was amended by the Senate Standing Committee on Energy, the Environment and Natural Resources, according to the leaders of the Canadian Manufacturers and Exporters (CME), Canadian Association of Oilwell Drilling Contractors (CAODC), and the Canadian Association of Petroleum Producers (CAPP).
nVent Electric plc has introduced a new standardized design for its nVent RAYCHEM Mineral Insulated (MI) heating units; industry-leading equipment designed to provide superior freeze protection and process temperature maintenance for high-power, high-exposure industrial heat-tracing applications. The new heating units ensure greater operational reliability and corrosion resistance in harsh environments.
Canadian Natural Resources Limited has entered into an agreement, subject to regulatory approval, to acquire substantially all of the assets of Devon Canada Corporation , for a cash purchase price of C$3.775 billion (subject to closing adjustments), with an effective date of January 1, 2019 and a targeted closing date of June 27, 2019.
AltaGas Ltd. has celebrated the grand opening of its Ridley Island Propane Export Terminal (RIPET), located in Prince Rupert, British Columbia - the first marine export facility for propane in Canada. The facility began introducing propane feedstock in mid-April, and the first shipment departed the terminal on May 23, 2019 bound for Asia.
Capital spending shifts and increased free cash flow generation included in Husky five-year plan update
With a focus on generating increased free cash flow, the updated Husky Energy five-year plan shows reduced capital spending to achieve an annual average of $3.15 billion for 2019 - 2023 versus the previously planned 2018 - 2022 annual average of $3.5 billion. Total capital spending over the 2019 - 2023 five-year period is reduced by about $1.7 billion, with total free cash flow before dividends expected to reach $8.7 billion at a flat $60 US WTI planning price.
The Canadian Environmental Assessment Agency (the Agency) must decide whether a federal environmental assessment is required for the proposed Tilt Cove Exploration Drilling Project, located 300 kilometres southeast of St. John's, Newfoundland and Labrador.
PetroShale announces financial and operating results for first quarter 2019 and provides operational update
PetroShale Inc. has announced its results for the first quarter of 2019, including a production rate averaging 5,036 boe/d, up by 52 percent from 2018, and increased revenue from year to year.
Speaking at the closing of the AIPN 2019 International Petroleum Summit (IPS), Ryan Lance, Chairman and Chief Executive Officer of ConocoPhillips spoke about his company's "hyper focus on returns" highlighting that the "returns the energy industry has generated have been negative over the last 10 to 15 years. Investors are frustrated. We chase the cycle up only, they have to chase the cycle back down on the back side. We recognize it's a mature industry growing at 1 percent per year. There's a lot of companies, some tremendous companies ... that have dramatic growth profiles. But when they put a hundred percent of their cash flow back into the business, don't pay the shareholder a fair amount of money, they're actually destroying value in the long run.
In less than four years, the Quest carbon capture and storage (CCS) facility has captured and safely stored four million tonnes of CO2, ahead of schedule and at a lower cost than anticipated. Four million tonnes of CO2 is equal to the annual emissions from about one million cars. Quest has now stored underground the most CO2 of any onshore CCS facility in the world with dedicated geological storage.
Oil potential remains abundant beyond shale, according to Association of International Petroleum Negotiators
How does the oil and gas industry plan its future in the ever-changing operating environment? The Association of International Petroleum Negotiators (AIPN) International Petroleum Summit, held in Houston, focused on a number of themes which will help companies determine a strategy for the years ahead.
Over the past decade, uncertainty has been constant in Canada's oil and gas industry, brought on in part by unknown investment outlooks, lack of market access, and a complex regulatory process. According to PwC Canada's 2019 Energy Visions report, there are two main factors that could catalyze change for the oil and gas industry: a national energy strategy as well as further technological innovation.
Events like this happen once a year, at most. On June 27 - 28, 2019, the world's largest industrial auctioneer, Ritchie Bros., will sell more than 120 pipelayers and other pipeline construction equipment at its auction site in Columbus, OH. Every single item will be sold without minimum bids or reserve prices.
Canada's vast gasoline production and transportation infrastructure ensures flexible and reliable supply for Canadians but unique market conditions in each region drive prices at the pump, according to a new report released by the National Energy Board (NEB).
Canbriam Energy Inc. and Pacific Oil and Gas Ltd. have announced the signing of definitive documents for the acquisition by PO&G of all of the issued and outstanding shares of Canbriam for cash consideration. Canbriam's Board of Directors has provided unanimous approval of the Transaction, and all of the officers, directors and significant shareholders of Canbriam representing greater than 90 percent of the outstanding Canbriam shares have entered into support and lock-up agreements in favor of the Transaction.
Fuelled, Canada's leading energy equipment marketplace, announced an agreement with PricewaterhouseCoopers Inc., LIT, in its capacity as the court appointed Receiver of Trident Exploration. This agreement will allow Fuelled to act as the exclusive sales agent for Trident's surplus oil and gas equipment. Fuelled is representing the Receiver on the divestiture of approximately 250 pieces of production equipment located in Western Canada. "We look forward to working closely with the Receiver on this engagement while we continue to deliver an unparalleled customer experience to our online buyers" said Austin Fraser, VP of Fuelled. "Trident's equipment includes gas compression, separation, dehydration, refrigeration, MCC's and other gas processing equipment that we believe there is strong demand for from our customers domestically as well as in the US and Overseas"
The International Gas Union (IGU) released its 2019 Wholesale Gas Price Survey at Flame 2019. The survey is the eleventh to be undertaken in a series that began in 2007. The eleven surveys examine the dramatic changes in wholesale price formation mechanisms during a period of key developments in the global gas market.
Athabasca Oil Corporation has reported strong operational and financial performance in the first quarter of 2019. With its resilient business model, the Company is well positioned to generate free cash flow in 2019 and beyond.
Pfannenberg, a manufacturer of thermal management and signaling technologies, announces a new video highlighting the ease of installation of its line of PATROL signaling devices, including both audible and combined visual-audible signal models. Pfannenberg signaling devices are designed to be installed in less than a minute. Video viewers can see a direct head-to-head comparison with competitive signaling alarms that take considerably more time to install.
TC PipeLines, LP reported net income attributable to controlling interests of $93 million and distributable cash flow of $116 million for the three months ended March 31, 2019.
Baker Hughes, a GE company announced that the Baker Hughes international rig count for April 2019 was 1,062, up 23 from the 1,039 counted in March 2019, and up 84 from the 978 counted in April 2018. The international offshore rig count for April 2019 was 251, up 4 from the 247 counted in March 2019, and up 57 from the 194 counted in April 2018.
From 2016 to 2018, capital investment in Canada's upstream oil and gas industry (essentially, exploration and production) increased 15 percent compared to 41 percent in the U.S. over the same period, finds a new study released by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.
Schlumberger introduced the IriSphere look-ahead-while-drilling service at the Offshore Technology Conference. The new service provides the industry's first application of electromagnetic (EM) technology for detecting formation features ahead of the drill bit in oil and gas wells.