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Regional News

Pakistan LNG seeks more cargoes through emergency tender

Pakistan LNG is seeking three liquefied natural gas (LNG) cargoes through an emergency tender, its second this week, as the country grapples with gas shortages, industry sources said.

Record high spot LNG prices due to freezing temperatures in North Asia are forcing emerging economies such as Pakistan to ration gas and seek alternative fuels.
Shipping constraints and the sudden spike in spot prices mean some suppliers have not been able to meet delivery timelines.
Pakistan LNG, a government subsidiary that procures LNG from the international market, is seeking three cargoes for delivery over March 11 to 12, March 18 to 19 and March 24 to 25 in a tender that closes on Jan. 26 and is valid for the same day, two sources said.
It had issued an emergency tender earlier this week for two cargoes to be delivered in February, after at least one supplier was unable to deliver a scheduled cargo.
Pakistan's energy ministry said in a statement on Friday it has arranged one LNG cargo for February delivery.
The ministry said the price of the February cargo was about 22% lower than the price an earlier bidder had offered, and later withdrawn, for the same cargo. It did not specify the name of the seller.
Sources however said the cargo was awarded to Qatar Petroleum Trading, which had placed the lowest offer at a percentage of the Brent crude oil futures price, known as a slope rate, of 16.33%, for delivery over Feb. 25 to 26, the sources said.
Commodity trader Vitol had placed the lowest offer for a cargo to be delivered over Feb. 21 to 22 at a slope rate of 19.55%. That cargo, however, was not awarded, they said. The reason was not immediately clear.
With spot prices falling as temperatures get warmer, prices for cargoes to be delivered in March are expected to be lower, traders said, which could be encouraging more buying.
Source: Zawya
Iraq cuts crude oil supplies for most Indian refiners in 2021

Iraq has reduced annual supplies of Basra crude oil to several Indian refiners by up to 20% for 2021, industry sources said, in a rare move by OPEC's second-largest producer which is trying to meet its obligations under the group's production deal.

Iraq was the top oil supplier to India in 2020 and a reduction in long-term Basra crude supplies could erode Baghdad's market share in the world's third largest oil importer and consumer.
Iraq's Oil Marketing Company (SOMO) has reduced the 2021 Basra term volumes to several Indian refiners by between 10% and 20%, the sources said.
SOMO did not immediately respond to a Reuters request for comment.
"We never expected Iraq to cut volumes. We may have to look for alternatives like tapping the spot markets," said a source at one of the Indian refiners.
"This is happening at a time when we are preparing to increase run rates as fuel demand is recovering."
SOMO told Indian refiners that it had reduced annual contracts for all Asian buyers to compensate for higher volumes produced in the previous year, one of the sources said.
Iraq has been striving to meet its output target under an agreement between the Organization of Petroleum Exporting Countries and allies, including Russia, to limit production and support global oil prices. Baghdad is heavily reliant on oil revenues to support the country's economy.
Iraqi Oil Minister Ihsan Abdul Jabbar said earlier in January that it will stay committed to OPEC decisions and compensate for its overproduction.
India on Tuesday complained that recent output cuts by some OPEC countries had created uncertainty for customers and led to a surge in global oil prices.
The changes in term supply volumes come as Iraq launched its new sour crude grade Basra Medium in January by splitting existing Basra Light crude production into two grades to improve the quality of its oil. SOMO also exports a third grade Basra Heavy.
The sources said SOMO cut term supplies to Indian Oil Corp, the country's top refiner and its biggest Indian client, by 10% to about 350,000 barrels per day (bpd) for all three Basra crude grades, while the volume for Mangalore Refinery and Petrochemicals Ltd fell by 17% to 50,000 bpd.
SOMO is planning to cut the oil contract of Bharat Petroleum by about a quarter from last year's 100,000 bpd, the sources said, adding that discussions with BPCL were still ongoing as the Indian company's annual contract begins from April.
Hindustan Petroleum, which buys Basra Light oil, has asked SOMO to reduce its term supplies to about 50,000 bpd in 2021, down from about 80,000 bpd in 2020.
Iraq has agreed to HPCL's request for lower supplies, while the companies are in talks about additional supply of Basra Medium grade, they said.
The annual oil contract for Reliance Industries, operator of the world's largest refining complex, has also been changed. Reliance will get 33,000 bpd of Basra Medium grade instead of 66,000 bpd of Basra Light, the sources said.
The Indian refiners did not respond to Reuters' requests for comment.
The supply cuts to India followed a $2.5 billion oil prepayment deal between SOMO and Chinese state oil trader Zhenhua Oil Corp for 48 million barrels of Basra crude.
Source: Zawya
Iraqs dominance over Indian crude market to be tested if Iran returns

Iraq's crude exports to India grew nearly double-digits last year, helping it retain the title of India's top oil supplier in 2020, but it may struggle to attain similar growth in 2021 if the newly appointed US President Joe Biden resurrects the nuclear deal with Tehran, which could potentially see the return of Iranian crude, analysts told S&P Global Platts.

With 2020 being the first year when Iranian crude inflows into India dropped to zero, that gave Iraq an opportunity to grab a market share of as high as 25%, with shipments of about 50.17 million mt in 2020, up from 45.88 million mt in 2019, shipping data showed.
"Competitive pricing was an important factor to make Iraq the top supplier of crude to India. But Iraq's share in 2021 could go lower as there is a likelihood of some crude coming back from Iran due to the potential easing of US sanctions from the new Biden administration," said Lim Jit Yang, adviser for oil markets at S&P Global Platts Analytics.
Iranian oil exports have been severely hit since former President Donald Trump pulled the US out of the nuclear pact in May 2018. Biden's team has indicated it would seek to reinstate the agreement -- known as the Joint Comprehensive Plan of Action -- as soon as practical, though this will depend on how open Iranian officials are to a renegotiated deal.
S&P Global Platts Analytics forecasts that Iranian crude supply could grow by 500,000 b/d between June and December, assuming a new agreement is forged by late 2021 and that the Biden administration is not as stringent about policing sanctions enforcement than the Trump administration. In a best-case scenario, growth of up to 1 million b/d is possible by December, Platts Analytics estimates.
The potential return of Iran
According to shipping data, Iran supplied 795,000 b/d of crude to India in 2017, 470,000 b/d in 2018, while it dropped to 90,000 b/d in 2019.
"Indian refiners are very used to Iranian crude. They will be happy to go back to buy crude from Iran if the gates open up," said one official at a refiner. "That will make the competition stronger for suppliers like Iraq."
While private refiners like Nayara have remained active buyers of Basrah Light and Basrah Heavy in the spot market in 2020, state refiners have also shipping in cargoes from the Middle Eastern supplier, though their volumes contracted as oil demand recovers.
Saudi Arabia was the second-largest supplier in 2020, but its volumes declined almost 11% from 2019 to 35.91 million mt last year, customs data showed.
Traders and analysts expect volumes from Saudi Arabia to remain tight in 2021. Saudi Arabia in early January made surprise announcement of an extra 1 million b/d production cut. It plans to hold its February and March crude production to 8.119 million b/d, well below its quota of 9.119 million b/d, to help bring down oil inventories that had bloated because of the pandemic.
"Saudi Arabia's share of the Indian market could see a decline with its pledge to cut production, with other exporters standing to gain," Lim added.
Both state and private refiners in India have a natural inclination towards medium and heavy sour crudes from the Middle East because of the ability of the country's complex refineries to process those grades.
Freight plays a significant role in Indian refiners' crude purchasing. They prefer flexible short-haul crudes -- for example around say 4-5 days shipment period from the Middle East, compared to about 30 days for Columbia and 40-45 days for Venezuela.
UAE, US see robust volume growth
"Iraq retained the top spot while we see growth in exports from UAE. Some of the big suppliers offer a more extended credit period. Suppliers such as ADNOC intend to invest and store crude in Indian strategic petroleum reserves, which is helping volumes to grow," said Senthil Kumaran, head of South Asia oil at Facts Global Energy.
UAE was the third-largest supplier of crude to India in 2020, with volumes growing close to 30% on the year to 21.35 million mt in 2020, customs data showed.
To attract foreign investments for Phase 2 expansion of the SPR facilities, the Indian government has recently allowed re-export of crude from the caverns. India has been also actively securing small stakes in overseas upstream assets.
Other than the Middle East, US crude imports by India in 2020 were at 12.69 million mt, up nearly 29% from a year earlier, helping the country move up to fifth position from sixth in 2019, customs data showed.
According to the latest data from the US Census Bureau, US exported 430,00 b/d of crude to India in November, rendering it the top destination of US crude for the month.
Analysts expect India's overall crude imports to rise in 2021 as refiners boost runs to meet a rebound in oil demand after a sharp contraction in 2020.
FGE expects India's crude imports to average around 4.4 million b/d in 2021, up about 9% from 2020 levels.
Source: SP Global
India Unhappy With OPEC+ Oil Production Cuts

India, one of the world’s top oil consumers, has slammed OPEC for creating confusion with its latest decisions regarding oil supply, with many importers seeing their expectations of higher volumes disappointed.
In December, OPEC+ had agreed to start raising oil production by half a million barrels daily from this month. However, at the January meeting, the partners decided to roll over the current production level instead of adding another half a million bpd in February.
This coincided with Saudi Arabia’s unilateral decision to cut an additional 1 million bpd from its output. According to India’s oil minister Dharmendra Pradhan, as quoted by Bloomberg, this is a policy contradiction that has created confusion for oil importers.
In response, the secretary-general of OPEC, Mohammed Barkindo, assured Pradhan decisions were being made with consumers in mind.
This is not the first time India’s interests are at odds with the interests of its main supplier of crude oil. The Asian economy needs lower prices and greater volumes of oil, while OPEC needs higher prices and will adjust volumes to get them.
There is also the so-called Asian premium that Middle Eastern producers impose on their clients from the continent, which has also prompted complaints from Pradhan on numerous occasions.
Although their interests diverge, OPEC and India need each other: the Asian powerhouse is, together with China, the biggest driver of future oil demand growth. Besides, competition is intensifying with the U.S. joining the oil export scene, so India can pick from more sources as long as the price is right.
The subcontinent last year saw its oil demand drop for the first time in two decades because of the pandemic. However, by the end of the year, demand was already in recovery mode, led by greater fuel demand for people opting for personal transportation over public transit. With rising demand comes the rising need for imports, and now that India is not getting them because of OPEC’s price agenda, the discord could deepen.
Source: Oil Price
Indias December Oil Imports Jump To Highest Level In Three Years

Crude oil imports in the world’s third-largest oil importer and consumer, India, surged in December 2020 to their highest in almost three years, Reuters reported on Tuesday, citing data from trade sources, as India’s fuel demand hit the highest in 11 months.

India’s crude oil imports jumped by 29 percent in December 2020 compared to November and by 11.6 percent compared to December 2019, to more than 5 million barrels per day (bpd), according to the data obtained by Reuters.
At the same time, provisional data from India’s Petroleum Ministry showed earlier this month that fuel demand in India posted its fourth consecutive monthly rise in December, to the highest since February 2020.
Fuel consumption was still 2 percent below the levels seen before the pandemic, but the rebound in economic activity and transportation resulted in four straight months of rising fuel demand in India.
India turned from the worst-performing demand market in July into one of the fastest-growing fuel demand markets in November, lending support to oil prices together with strong demand in China and progress with vaccine development and rollout.
India’s fuel demand has been boosted by one of the effects of COVID-19 on customer preferences—people avoid public transportation and prefer the comfort and relative isolation from other people in their own vehicles. This additionally boosts demand for gasoline and diesel for private vehicles.
Indian Oil Corporation (IOC) increased crude oil throughput of its refineries to 100 percent in November 2020, as consumption of all petroleum products has almost reached pre-Covid levels, the country’s biggest refiner and fuel retailer said in December.
Despite the fourth-quarter rebound in fuel consumption, India’s crude oil demand for the whole of 2020 fell for the first time in more than 20 years because of the Covid-19 pandemic.
According to Reuters estimates, India’s annual crude oil imports averaged 4.04 million bpd in 2020, the lowest in five years.
Source: Oil Price
Saudi Aramco faces tough 2021 as rivals race for oil capacity

Saudi Aramco may be forced to play catch-up in 2021 as rival state-controlled oil companies closely aligned to OPEC policy in the Middle East race to add new production capacity and win back market share despite deep pandemic-induced output cuts.

Aramco began 2020 with a chunky capital expenditure budget of between $35 billion and $40 billion, but this figure was progressively lowered throughout the year as the demand shock caused by the global pandemic forced the kingdom into severe production cuts along with OPEC, Russia and other allies.
By the third quarter, Aramco's capex had been halved to $20 billion. Its pledge to maintain a hefty $75 billion dividend to shareholders -- while many IOCs have slashed theirs -- is an albatross, as well.
However, the company remains focused on lifting Saudi Arabia's maximum spare capacity from 12 million b/d to 13 million b/d, sources said, and therefore the capex cuts will not be exacted on projects aimed at increasing production.
"The $10 billion capex cuts will likely be deployed among projects in development, where their development is delayed. It's not going to impact production or any of the pipelines," said one Saudi-based analyst, who asked not to be named due to the sensitive nature of his position.
Aramco's tighter spending has resulted in several international contractor companies working on pipeline and offshore projects not getting paid for several months, three sources told S&P Global Platts. The payments are set to be delayed further, with Aramco not intending to make any payments to these companies until 2021, a source added.
"The offshore sector is suffering from this. The reasons cited are cutting back on production expansion plans, to align spending with cash flow and dividend commitments," said a second source. "It's unlikely that the contractors will be paid in full. We expect some resolution, albeit in Aramco's favor."
Aramco did not respond to a request for comment.
Keeping up with neighbors
The company's retrenchment stands in contrast with the kingdom's close neighbors and OPEC partners in the Gulf.
State-run ADNOC in the UAE, which has about a third of Aramco's production capability, approved in November a mammoth $122 billion capex program through to 2025 as Abu Dhabi pushes to raise capacity by about 25% to 5 million b/d. Although capex has been cut in Kuwait, its smaller state-run producer will still spend more per barrel on projects than Aramco.
On the one hand Aramco's fiscal discipline looks prudent. Oil prices spent most of 2020 in the doldrums well below $50/b and, under the OPEC+ supply accord, the kingdom was forced to keep output below 9 million b/d for much of the year, leaving it with some 3 million b/d of unused spare capacity.
Saudi Arabia's quota under the deal has eased to 9.119 million b/d for the first quarter of 2021, but lingering concern over the uncertain global economic outlook prompted energy minister Prince Abdulaziz bin Salman to announce Jan. 5 that the kingdom would unilaterally cut an additional 1 million b/d below that for February and March.
Aramco subsequently informed its key customers in Asia that term allocations of crude would be slashed 10-15% for February-loading barrels, market sources told S&P Global Platts.
Work slowdown
Aramco – which has listed a small proportion of its shares on the Saudi stock exchange -- started 2020 with the strategy of expanding and not standing still.
Prince Abdulaziz had directed the company's engineers in March to increase its spare to 13 million b/d as the kingdom prepared to fight a poorly timed price war against Russia, which appeared on the brink of ending its alliance with OPEC for fear of losing market share to US shale.
The Dharan-based oil company -- which is larger than BP, Shell and Exxon Mobil combined -- may still be planning to increase capacity in 2021, but work on vital upstream projects has slowed, sources have told Platts.
The slowdowns in work have mainly focused on costlier extraction schemes, one source said.
These include the $15 billion Marjan offshore field development, as well as peripheral offshore fields, and difficult onshore assets.
Further work programs on fields such as Khursaniyah, and legacy assets like Khurais and Abqaiq that need workovers and rehabilitation, are being delayed, the source said, whereas at Aramco's low-cost giant fields such as Ghawar -- the world's largest -- production is increasing.
"There are areas outside Ghawar that are being relied on in times of trouble because drilling there is so cost effective," said a source with knowledge of the kingdom's projects. "There isn't a place in Ghawar that doesn't have a drill, it is very dense. They're beating the hell out of it."
Source: SP Global
Pakistan LNG seeks Feb cargoes again after supplier unable to deliver

Pakistan LNG is seeking two liquefied natural gas (LNG) cargoes for delivery in February, after at least one supplier was unable to deliver a scheduled cargo, two industry sources told Reuters.

Pakistan LNG, a government subsidiary that procures LNG from the international market, is seeking the cargoes for delivery over Feb. 15-16 and Feb. 23-24, one of the sources said.
The tender closes on Thursday, a second source said.
Pakistan LNG said on Saturday that a supplier, who had submitted the lowest offer in a buy tender that the company closed in late December, was unable to deliver a spot cargo of LNG in February.
Pakistan LNG said in its Saturday statement that suppliers had declined to make a delivery through the December tender, probably because of recent supply shortages causing spot Asian LNG prices to spike to a record high.
That tender, which closed on Dec. 28 and was valid until Jan. 11, allowed suppliers to withdraw offers within the validity period but they would forfeit a $300,000 bond, the first source said.
Source: Hellenic Shipping
India oil demand seen recovering in 2H 2021

India's oil demand may recover to pre-pandemic levels by the second half of this year, if there are no new major lockdowns in the country, Shelly Abraham, general manager of crude trading at state-controlled refiner Bharat Petroleum has said.

Indian demand for major oil products, such as gasoline and diesel, has rebounded from low levels seen in April 2020, although jet fuel demand remains weak.

"We saw in April 2020, at the peak of Covid-19 demand destruction, Indian diesel demand went down by almost 55pc year on year, gasoline demand fell by around 60pc and jet fuel demand fell by a whopping 90pc. But from that very low level, demand has picked up a lot over the past eight to nine months," Abraham told Argus in an interview.

"In December, India's demand for gasoline increased by about 9pc and diesel demand was down by only 2.7pc year on year, so it is almost back to normal. Indian jet fuel demand in December was still 40pc lower year on year but this is a global issue and it is expected to take some time for jet fuel demand globally to recover."

"The vaccine rollout or another potential lockdown will be the two key factors that could have an impact on the normalisation of demand, positively or negatively. But if the current situation prevails, we believe total Indian oil demand should fully recover by the second half of 2021," Abraham said.

India's demand is on the slow path to recovery, with diesel demand in the first half of January still down compared with the first half of December. Indian demand for diesel in December declined by 3pc from a year earlier, to 1.73mn b/d from 1.78mn b/d according to the oil ministry, although gasoline use rose by 9pc to 736,000 b/d from 674,000 b/d a year earlier.

India posted its first ever yearly contraction in overall fuel demand in 2020, down by 11pc because of Covid-19 lockdowns that stalled the Indian economy.

Source: Argus
Total buys stake in Indias Adani Green Energ

Total has agreed to buy a 20pc stake in Indian renewables firm Adani Green Energy — a leading global solar power company — as the major continues its energy transition push.

Total said that, combined with an agreement to buy a 50pc interest in Adani Green Energy's 2.35GW portfolio of operating solar assets announced previously, the total investment amounts to $2.5bn. Total said in February 2020 it was set to pay about $500mn for the 50pc stake in the portfolio. The deal will give Total a seat on the renewables firm's board of directors.

The Adani group — Adani Green Energy's parent company — is a diversified conglomerate with interests in power generation, coal mining and trading, ports, aerospace, agriculture and gas distribution. The firm has been expanding its focus on the renewable energy space in recent years.

Adani Green Energy's market capitalisation, which has increased sharply over the past year, is around $20bn. The firm is targeting 25GW of renewable power generation by 2025.

"The investment in [Adani Green Energy] is another step in the strategic alliance between Adani group and Total, which covers investments in LNG terminals, gas utility business, and renewable assets across India," Total said today.

Total said investing in Adani Green Energy, which it described as the largest global solar developer, will be key to hit its objective of "reaching 35GW of gross production capacity from renewable sources by 2025 and adding 10GW per year afterwards."

Total's gross power generation capacity worldwide was around 12GW at the end of 2020, including close to 7GW of renewable energy. "Given the size of the market, India is the right place to put into action our energy transition strategy based on two pillars — renewables and natural gas," Total chief executive Patrick Pouyanne said.

Total has set an ambition to become a net zero company by 2050. As part of the strategy, Total said it is building "a portfolio of activities in renewables and electricity that could account for up to 40pc of its sales by 2050".

Total said at its September strategy presentation it will raise investment on renewables and electricity from $1.5bn/yr in 2015-20 to over $2bn/yr in 2021-25 and more than $3bn/yr in 2026-30.

Total became last week the first oil major to quit the American Petroleum Institute (API) because it disagrees with the influential industry association's position on climate change.

Source: Argus

Saudi crude allocations tighten for European buyers

Saudi Arabia has reduced crude allocations for some of its term buyers in northwest Europe and the Mediterranean next month as it prepares for a deep cut in production.

One regional refiner said its allocation of February-loading Saudi crude has been cut to zero, and two others reported a partial reduction. One term buyer said its allocation is in line with the volumes it requested, while two others said they nominated no Saudi crude for February in response to higher-than-expected official formula prices.

Market participants had expected state-controlled Saudi Aramco to reduce its official February formula crude prices by as much as $1.50/bl for customers in northwest Europe and the Mediterranean, given the decline in spot trade of Russian Urals. But the company ended up trimming by just 50-70¢/bl following Riyadh's surprise decision to cut output by an extra 1mn b/d in February-March.

Aramco could be left with just 5.7mn b/d for export in February and March if Saudi Arabia's domestic crude consumption is similar to year-earlier levels and assuming there are no significant changes in inventories. This would mark a sharp decline compared with the 7.41mn b/d exported from onshore Saudi crude terminals, excluding the Neutral Zone, in February-March 2020, according to Argus tracking data.

Market participants said last week that some buyers in Asia-Pacific have had their February term allocations of Saudi crude trimmed by 5-15pc compared with their requested volumes. These cuts will largely affect the Arab Light and Arab Medium grades.

Source: Argus
Libyas NOC to reduce 200,000 b/d of Waha Oil output

Output from Libya's Waha Oil will decline by 200,000 b/d as the company carries out maintenance across the pipeline linking the Samah and Dahra fields to the Es Sider crude oil terminal.

The maintenance works are scheduled to start today, for an estimated two weeks, according to state-controlled parent company NOC, which hopes to reduce that to a seven to 10-day period.

NOC attributed the current need to reduce production to weak funding, noting the frail state of its oil infrastructure. Repairs at NOC pipelines and tanks were obstructed throughout the January-October period of last year because of blockades at onshore eastern ports and western crude fields.

Waha Oil output can exceed 300,000 b/d and feeds into Libya's flagship Es Sider crude grade, whose exports were already set to decline by nearly 23pc on the month to 200,000 b/d in January, according to the latest preliminary loading programmes.

The subsidiary targets 44,000 b/d of increases this year through developmental drilling, well maintenance and the restart of closed-off wells.

The gradual September-October lifting of oil blockades allowed Libyan production to surge in the fourth quarter, with Argus estimating monthly average output at 1.24mn b/d in December.

Source: Argus
Kuwait plans Mina al-Ahmadi refinery shutdown in March

Kuwait's state-owned refiner KNPC has scheduled a turnaround at its 346,000 b/d Mina al-Ahmadi refinery starting in March.

The turnaround will shut down a 200,000 b/d crude distillation unit (CDU) and unspecified units at the Mina al-Ahmadi refinery in mid-March and will likely last for 45 days.

Production of middle distillates will likely be affected during the maintenance, said traders.

The turnaround comes as KNPC works to complete its $16bn Clean Fuels Project (CFP), which involves integrating the Mina Abdullah refinery with the Mina al-Ahmadi refinery, and raising their combined crude processing capacity to 800,000 b/d. Work at Mina al-Ahmadi was completed in April last year, reducing its refining capacity to 346,000 b/d from 440,000 b/d previously.

KNPC has recently commissioned a 23,500 b/d naphtha treatment unit at its Mina Abdullah refinery. The commissioning of the new 264,000 b/d CDU had helped raise Mina Abdullah's capacity to its post-CFP capacity of 454,000 b/d from 265,000 b/d previously.

KNPC sources said they expect all remaining units at Mina Abdullah to be commissioned by the end of the first quarter in 2021.

Source: Argus
Iraqi oil minister says Saudi output cut helps stabilize market

Iraqi oil minister Ihsan Abdul Jabbar told state TV in an interview that Saudi Arabia’s voluntary output cut of 1 million bpd helps stabilize the market, and he expected steady oil prices that should reach around $57 per barrel in the first quarter.

Oil minister said Iraq is in “heavy talks” with OPEC and allied oil producers to allow Iraq to postpone compensating for earlier overproduction.

“OPEC members and allies were understanding to Iraq’s situation and its financial crisis,” oil minister said in an interview with state TV.

Abdul Jabbar said requesting delaying compensation of overproduction doesn’t not mean Iraq would evade complying with its commitment to OPEC+ cut deal and will abide by cutting its production to preserve market stability.

Non-commitment of Iraqi Kurdistan to its share of the production cut is the main reason of reaching a recent low compliance of 79% of pledged cuts under the OPEC+ deal, said Ihsan Abdul Jabbar.

“We reached an initial agreement with Kurdish region to cut their production by 20 percent or around 80,000 barrels per day but they didn’t commit and kept production at 430,000 barrels,” said oil minister.

OPEC+ cut supply by a record 9.7 million bpd last year and is pumping an extra 500,000 bpd in January under a plan to unwind the curbs gradually. Most producers will hold steady in February and Saudi Arabia is cutting output by 1 million bpd next month and March.

Source: Hellenic Shipping
Japan, Adnoc to co-operate on fuel ammonia technology

Japan has agreed with Abu Dhabi's state-owned Adnoc to co-operate in developing ammonia fuel and carbon recycling technology, as part of efforts to build a supply chain and secure stable supplies in the run-up to a decarbonised society by 2050.

Japan's trade and industry ministry (Meti) and Adnoc yesterday signed a co-operation deal aimed to accelerate joint efforts in development of commercially feasible technology in fuel ammonia and carbon recycling. Meti and Adnoc are planning to explore business opportunities in these areas.

The signing took place during a virtual meeting held between Meti minister Hiroshi Kajiyama and Adnoc chief executive Sultan al-Jaber, also the UAE's minister of industry and advanced technology. Kajiyama also pledged to continue strengthening bilateral ties with the UAE through resource diplomacy, including fuel ammonia and hydrogen.

The UAE is Japan's second-largest crude supplier source after Saudi Arabia and accounts for around 30pc of its total oil imports.

Japan is planning to expand ammonia use for power generation under its 2050 decarbonisation strategy. Meti has a plan to start testing co-firing of ammonia at a commercial coal-fired power generation unit during the April 2021-March 2022 fiscal year, aiming to achieve a 20pc co-firing rate. The co-firing rate is targeted to be further expanded towards 2050, while the government will also look to develop ammonia-fired gas turbine technology.

Japanese firms and state energy agency Jogmec last month launched a feasibility study to develop an ammonia supply chain in Russia's Siberia. Japan last year imported the world's first shipment of blue ammonia from Saudi Arabia, produced from natural gas, under a joint project between state-controlled Saudi Aramco, its petrochemicals affiliate Sabic and Japanese energy think-tank IEEJ.

Source: Argus
Iraqs Wataniya readies bitumen unit start-up
Iraq-based Wataniya Bitumen and Oil Refinery plans to start up its new bitumen unit and begin exports from this year's first quarter.

The refinery, located next to the 70,000 b/d Samawa refinery in southern Iraq, will produce around 500,000 t/yr of bitumen. The plant is expected to start producing about 40,000-45,000 t/month of bitumen from the end of February or in March this year, Wataniya said.

Wataniya's bitumen plant was designed and licensed by Austrian technology firm Porner. The refinery includes a 300 t/d cut-back bitumen unit that blends kerosine and bitumen 80/100 as its feedstock. It also has plans to build a 900,000 t/yr vacuum distillation unit and related utilities and upstream facilities to support the new bitumen blowing unit. But no further details were available.

The producer is also planning to export directly from the plant using the Umm Al Qasr port. There are plans to offer bitumen to India and other Asia-Pacific buyers. Bitumen exports are expected to be sold in bulk, steel drums, jumbo bags or flexitanks.

There have been limited exports in the past from southern Iraq, with the majority of bitumen production located in north Iraq's Erbil and Sulaymaniyah that export through Iran or Turkey.

Source: Argus