Tag Archives: HOIL

Business

Storm cuts U.S. oil, gas, power output, sending prices higher

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Dec 23 (Reuters) – Frigid cold and blowing winds on Friday knocked out power and cut energy production across the United States, driving up heating and electricity prices as people prepared for holiday celebrations.

Winter Storm Elliott brought sub-freezing temperatures and extreme weather alerts to about two-thirds of the United States, with cold and snow in some areas to linger through the Christmas holiday.

More than 1.5 million homes and businesses lost power, oil refineries in Texas cut gasoline and diesel production on equipment failures, and heating and power prices surged on the losses. Oil and gas output from North Dakota to Texas suffered freeze-ins, cutting supplies.

Some 1.5 million barrels of daily refining capacity along the U.S. Gulf Coast was shut due to the bitterly cold temperatures. The production losses are not expected to last, but they have lifted fuel prices.

Knocked out were TotalEnergies (TTEF.PA), Motiva Enterprises (MOTIV.UL) and Marathon Petroleum (MPC.N) facilities outside Houston. Cold weather also disrupted Exxon Mobil (XOM.N), LyondellBasell (LYB.N) and Valero Energy (VLO.N) plants in Texas that produce gasoline, diesel and jet fuel.

Sempra Infrastructure’s Cameron LNG plant in Louisiana said weather disrupted its production of liquefied natural gas without providing details. Crews at the 12 million tonne-per-year facility were trying to restore output, it said.

Freeze-ins – in which ice crystals halt oil and gas production – this week trimmed production in North Dakota’s oilfields by 300,000 to 350,000 barrels per day, or a third of normal. In Texas’s Permian oilfield, the freeze led to more gas being withdrawn than was injected, said El Paso Natural Gas operator Kinder Morgan Inc. (KMI.N).

U.S. benchmark oil prices on Friday jumped 2.4% to $79.56, and next-day gas in west Texas jumped 22% to around $9 per million British thermal units , the highest since the state’s 2021 deep freeze.

Power prices on Texas’s grid also spiked to $3,700 per megawatt hour, prompting generators to add more power to the grid before prices fell back as thermal and solar supplies came online.

New England’s bulk power supplier said it expected to have enough to supply demand, but elsewhere strong winds led to outages largely in the Southeast and Midwest; North Carolina counted more than 187,000 without power.

“Crews are restoring power but high winds are making repairs challenging at most of the 4,600 outage locations,” Duke Energy spokesman Jeff Brooks wrote on Twitter.

Heating oil and natural gas futures rose sharply in response to the cold. U.S. heating oil futures gained 4.3% while natural gas futures rose 2.5%.

In New England, gas for Friday at the Algonquin hub soared 361% to a near 11-month high of $30 mmBtu.

About half of the power generated in New England comes from gas-fired plants, but on the coldest days, power generators shift to burn more oil. According to grid operator New England ISO, power companies’ generation mix was at 17% from oil-fired plants as of midday Friday.

Gas output dropped about 6.5 billion cubic feet per day (bcfd) over the past four days to a preliminary nine-month low of 92.4 bcfd on Friday as wells froze in Texas, Oklahoma, North Dakota, Pennsylvania and elsewhere.

That is the biggest drop in output since the February 2021 freeze knocked out power for millions in Texas.

One billion cubic feet is enough gas to supply about 5 million U.S. homes for a day.

Reporting by Erwin Seba and Scott DiSavino; additional reporting by Arathy Somasekhar and Laila Kearney; editing by Jonathan Oatis, Kirsten Donovan, Aurora Ellis and Leslie Adler

Our Standards: The Thomson Reuters Trust Principles.

Scott Disavino

Thomson Reuters

Covers the North American power and natural gas markets.

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Business

Keystone pipeline shut after 14,000-barrel oil spill in Kansas

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Dec 8 (Reuters) – Canada’s TC Energy shut its Keystone pipeline in the United States after more than 14,000 barrels of crude oil spilled into a creek in Kansas, making it one of the largest crude spills in the United States in nearly a decade.

The cause of the leak, which occurred in Kansas about 20 miles (32 km) south of a key junction in Steele City, Nebraska, is unknown. It is the third spill of several thousand barrels of crude on the pipeline since it first opened in 2010.

The 622,000 barrel-per-day Keystone line is a critical artery shipping heavy Canadian crude from Alberta to refiners in the U.S. Midwest and the Gulf Coast. It is unclear how long the closure will last.

There have been no effects on drinking water wells or the public, the U.S Environmental Protection Agency said in a statement, though surface water of Mill Creek was affected.

Kellan Ashford, spokesperson for EPA Region 7, which includes Kansas, said the cause of the leak was still unclear on Thursday evening.

TC had mobilised around 100 people to respond to the spill, while the EPA had dispatched two coordinators, Ashford said. Washington County Emergency Management and Kansas’s Department of Health and Safety were also on the scene.

Keystone shut the line at about 8 p.m. CT Wednesday (0200 GMT Thursday) after alarms went off and system pressure dropped, TC (TRP.TO) said in a release. It said booms were being used to contain the spill.

LARGEST ONSHORE SPILL IN YEARS

According to U.S. Pipeline and Hazardous Materials Safety Administration (PHMSA) data, this would be the largest crude oil leak since a Tesoro pipeline leaked more than 20,000 barrels of oil in North Dakota in October 2013.

PHMSA is also investigating the leak, which occurred near Washington, Kansas, a town of about 1,000 people.

There have been seven Keystone spills since it became operational in June 2010, according to PHMSA data. The largest were in December 2017, when more than 6,600 barrels spilled in South Dakota, and in November 2019, when more than 4,500 barrels spilled in North Dakota, according to PHMSA figures.

“It is troubling to see so many failures and so much oil spilled from any pipeline, but it is especially troubling from such a relatively new pipeline,” said Bill Caram, executive director of the nonprofit Pipeline Safety Trust, in a statement.

LENGTH OF SHUTDOWN UNCLEAR

TC declared force majeure over the outage, according to a source with direct knowledge, referring to unexpected external circumstances that prevent a party to a contract from meeting its obligations. TC did not respond to a request for comment.

Two Keystone shippers said TC had not yet notified them how long the pipeline may be shut.

Keystone’s shutdown will hamper deliveries of Canadian crude both to the U.S. storage hub in Cushing, Oklahoma and to the Gulf, where it is processed by refiners or exported.

The shutdown is expected to increase the discount on Western Canada Select (WCS) heavy oil from Alberta to U.S. crude , which was already high due to lackluster demand for heavy, sour Canadian oil.

WCS for December delivery traded at $33.50 a barrel below WTI, compared with Wednesday’s settle of $27.50 a barrel below the benchmark, according to one broker.

“It’s really a worst-case scenario if this outage is long-lasting,” said Rory Johnston, founder of energy newsletter Commodity Context, noting that if the price falls further, shippers may opt to move crude by rail.

Steele City is roughly the junction where Keystone splits, with one segment moving crude to Illinois refineries and the other carrying oil south to Oklahoma and the Gulf Coast.

If the spill is located south of the junction, TC may be able to quickly restart the segment to Illinois, RBC analyst Robert Kwan said in a note.

Past shutdowns have generally lasted about two weeks, but this could last longer as it involves a water body, Kwan said.

TC shares ended down 0.1% in Toronto.

Reporting by Arpan Varghese, Brijesh Patel and Deep Vakil in Bengaluru, Rod Nickel, Nia Williams and Arathy Somasekhar; Editing by Josie Kao and Stephen Coates

Our Standards: The Thomson Reuters Trust Principles.

Rod Nickel

Thomson Reuters

Covers energy, agriculture and politics in Western Canada with the energy transition a key area of focus. Has done short reporting stints in Afghanistan, Pakistan, France and Brazil and covered Hurricane Michael in Florida, Tropical Storm Nate in New Orleans and the 2016 Alberta wildfires and the campaign trails of political leaders during two Canadian election campaigns.

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Business

World is in its ‘first truly global energy crisis’ – IEA’s Birol

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SINGAPORE, Oct 25 (Reuters) – Tightening markets for liquefied natural gas (LNG) worldwide and major oil producers cutting supply have put the world in the middle of “the first truly global energy crisis”, the head of the International Energy Agency (IEA) said on Tuesday.

Rising imports of LNG to Europe amid the Ukraine crisis and a potential rebound in Chinese appetite for the fuel will tighten the market as only 20 billion cubic meters of new LNG capacity will come to market next year, IEA Executive Director Fatih Birol said during the Singapore International Energy Week.

At the same time the recent decision by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, to cut 2 million barrels per day (bpd) of output is a “risky” decision as the IEA sees global oil demand growth of close to 2 million bpd this year, Birol said.

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“(It is) especially risky as several economies around the world are on the brink of a recession, if that we are talking about the global recession…I found this decision really unfortunate,” he said.

Soaring global prices across a number of energy sources, including oil, natural gas and coal, are hammering consumers at the same time they are already dealing with rising food and services inflation. The high prices and possibility of rationing are potentially hazardous to European consumers as they prepare to enter the Northern Hemisphere winter.

Europe may make it through this winter, though somewhat battered, if the weather remains mild, Birol said.

“Unless we will have an extremely cold and long winter, unless there will be any surprises in terms of what we have seen, for example Nordstream pipeline explosion, Europe should go through this winter with some economic and social bruises,” he added.

For oil, consumption is expected to grow by 1.7 million bpd in 2023 so the world will still need Russian oil to meet demand, Birol said.

G7 nations have proposed a mechanism that would allow emerging nations to buy Russian oil but at lower prices to cap Moscow’s revenues in the wake of the Ukraine war.

Birol said the scheme still has many details to iron out and will require the buy-in of major oil importing nations.

A U.S. Treasury official told Reuters last week that it is not unreasonable to believe that up to 80% to 90% of Russian oil will continue to flow outside the price cap mechanism if Moscow seeks to flout it.

“I think this is good because the world still needs Russian oil to flow into the market for now. An 80%-90% is good and encouraging level in order to meet the demand,” Birol said.

While there is still a huge volume of strategic oil reserves that can be tapped during a supply disruption, another release is not currently on the agenda, he added.

ENERGY SECURITY DRIVES RENEWABLES GROWTH

The energy crisis could be a turning point for accelerating clean sources and for forming a sustainable and secured energy system, Birol said.

“Energy security is the number one driver (of the energy transition),” said Birol, as countries see energy technologies and renewables as a solution.

The IEA has revised up the forecast of renewable power capacity growth in 2022 to a 20% year-on-year increase from 8% previously, with close to 400 gigawatts of renewable capacity being added this year.

Many countries in Europe and elsewhere are accelerating the installation of renewable capacity by cutting the permitting and licensing processes to replace the Russian gas, Birol said.

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Reporting by Florence Tan, Muyu Xu and Emily Chow; Editing by Jacqueline Wong and Christian Schmollinger

Our Standards: The Thomson Reuters Trust Principles.

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World

Russian refinery says it was struck by drones from direction of Ukraine

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  • Fire broke out on Wednesday morning
  • Blaze has been put out
  • Russia investigating attacks on its oil installations
  • This content was produced in Russia, where the law restricts coverage of Russian military operations in Ukraine

MOSCOW, June 22 (Reuters) – Two drones flying from the direction of Ukraine hit a major Russian oil refinery near the border on Wednesday, the plant said, sending a ball of flame and black smoke billowing into the sky and prompting the plant to suspend production.

Russian regions bordering Ukraine have reported numerous attacks and shelling after Moscow sent its troops into its former Soviet neighbour on Feb. 24 for what it calls a “special military operation”.

The Novoshakhtinsk oil refinery in Russia’s Rostov region said the first drone struck at 8.40 a.m. (0540 GMT) hitting acrude distillation unit, triggering a blast and ball of fire.

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The second strike at 0623 GMT was aimed at crude oil reservoirs at the refinery, the largest supplier of oil products in southern Russia, but caused no fire, the plant said. No one was injured.

“As a result of terrorist actions from the Western border of the Rostov region, two unmanned aerial vehicles struck at the technological facilities of Novoshakhtinsk,” the plant said.

“Staff have been evacuated and technological equipment has been stopped to assess the damage.”

Rostov’s regional governor, Vasily Golubev, said the oil refinery suspended operations. He said fragments of two drones had been found at the refinery.

Social media footage showed a drone flying towards the refinery, located just 8 km (5 miles) from the border with Ukraine, before a large ball of flame rose up, prompting exclamations from those near the camera.

The refinery has an annual capacity of up to 7.5 million tonnes, and started operations in 2009.

Russia’s energy ministry said the fire had not affected gasoline and diesel supplies to consumers in southern Russia.

Russia is also investigating the cause of a large fire that erupted at an oil storage facility in the city of Bryansk, 154 km (96 miles) northeast of the border with Ukraine, in late April.

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Reporting by Reuters; editing by Jason Neely, Guy Faulconbridge and Nick Macfie

Our Standards: The Thomson Reuters Trust Principles.

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US

Biden bans Russia oil imports to U.S., warns U.S. gasoline prices will rise further

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U.S. President Joe Biden announces actions against Russia for its war in Ukraine, during remarks in the Roosevelt Room at the White House in Washington, U.S., March 8, 2022. REUTERS/Kevin Lamarque

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WASHINGTON, March 8 (Reuters) – U.S. President Joe Biden announced a ban on Russian oil and other energy imports on Tuesday in retaliation for the invasion of Ukraine, underscoring strong bipartisan support for a move that he acknowledged would drive up U.S. energy prices.

“We’re banning all imports of Russian oil and gas energy,” Biden told reporters at the White House. “That means Russian oil will no longer be acceptable in U.S. ports and the American people will deal another powerful blow to (Russian President Vladimir) Putin’s war machine.”

Oil prices jumped on the news, with Benchmark Brent crude LCOc1 for May climbing by 5.4% to $129.91 a barrel by 1345 GMT. read more

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Biden has been working with allies in Europe, who are far more dependent on Russian oil, to isolate Russia’s energy-heavy economy and Putin. Britain announced shortly before Biden’s remarks that it would phase out the import of Russian oil and oil products by the end of 2022. read more

Biden said sanctions imposed by the United States and its allies had already caused the Russian economy to “crater”. He said the latest moves had been made in close consultation with allies and partners around the world.

Russia exports between 4 and 5 million bbls of crude a day and about 8,500 billion cubic feet of natural gas annually.

The United States imported more than 20.4 million barrels of crude and refined products a month on average from Russia in 2021, about 8% of U.S. liquid fuel imports, according to the Energy Information Administration, and the ban is expected to send already high gasoline prices and inflation soaring. The United States also imports a negligible amount of coal from Russia.

Biden predicted prices would rise further as a result of “Putin’s war,” but pledged to do all he could to minimize the impact on the American people. He also warned U.S. gas companies against exploiting the situation to engage in profiteering or price gouging.

Reuters Graphics

U.S. Senator Chris Coons said the administration was coordinating with European allies “and making sure that we’ve done the groundwork to understand how to effectively implement a ban on Russian energy.”

“We are going to see increased gas prices here in the United States. In Europe, they will see dramatic increases in prices. That’s the cost of standing up for freedom and standing alongside the Ukrainian people, but it’s going to cost us,” Coons told CNN.

The White House had been coordinating with U.S. congressional leaders working on fast-tracking bipartisan legislation to ban Russian imports, but the ban of Russian imports would make any such bill moot.

Republican lawmakers took to social media to welcome the decision, while criticizing Biden’s green energy policies, and calling for the administration to support more oil and gas production at home.

U.S. Representative Susan Wild said Americans need to realize the larger sacrifice needed. “Obviously nobody wants to pay more for gas,” Wild, a Democrat on the House of Representatives Foreign Affairs Committee, said on MSNBC.

In announcing that it is phasing out imports of Russian oil and oil products by the end of 2022, Britain said it is giving the market and businesses more than enough time to find alternatives to the imports, which make up 8% of demand.

“The government will also work with companies through a new Taskforce on Oil to support them to make use of this period in finding alternative supplies,” British Business and Energy Secretary Kwasi Kwarteng said.

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Reporting by Trevor Hunnicutt, Steve Holland, Jeff Mason and Andrea Shalal; Editing by Heather Timmons and Alistair Bell

Our Standards: The Thomson Reuters Trust Principles.

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