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Last Updated: November 24, 2016
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Tighter marine fuel sulfur limits will spark changes by both refiners and vessel operators.

The sulfur content of transportation fuels has been declining for many years due to increasingly stringent regulations. In the United States, federal and state regulations limit the amount of sulfur present in motor gasoline, diesel fuel, and heating oil. New international regulations limiting sulfur in fuels for ocean-going vessels, set to take effect in 2020, have further implications for both refiners and vessel operators at a time of high uncertainty in future crude oil prices, which will be a major factor in their decisions.

Bunker fuelthe fuel typically used in large ocean-going vesselsis a mixture of petroleum-based oils. Residual oilthe long-chain hydrocarbons remaining after lighter and shorter hydrocarbon fractions such as gasoline and diesel have been separated from crude oilcurrently makes up the largest component of bunker fuel. The sulfur content of crude oil tends to be more concentrated in heavier hydrocarbon molecules, with heavier petroleum products such as residual oil having higher sulfur content than lighter ones like gasoline and diesel.

The International Maritime Organization (IMO), the 171-member state United Nations agency that sets standards for marine fuels, decided in October to move forward with a plan to reduce the maximum amount of sulfur and other pollutants present in marine fuels used on the open seas from 3.5% by weight to 0.5% by weight by 2020. This decision follows several other marine fuel regulations limiting sulfur content, such as the implementation of Emissions Control Area (ECA) requirements in coastal waters and specific sea-lanes in North America and Europe, where the maximum sulfur content of fuels was limited to 0.1% by weight starting in July 2015 (Figure 1).

Additionally, the state of California and the European Union have regulations on the sulfur content of marine fuels, and the types of fuel used when ships are at dock, waiting to dock, or are maneuvering within port. For example, a vessel approaching the port of San Francisco may have to change its fuel mix twice: once when going from the open seas higher-sulfur fuel of mostly residual oil, to an ECA compliant lower-sulfur fuel mix, and again to a marine diesel fuel compliant with California's ocean-going vessel regulations for use within ports (Figure 2).

The IMO sulfur limits that take effect in 2020 will affect the fuel used in the open seas, the largest portion of the approximately 3.9 million barrels per day of global marine fuel use, according to the International Energy Agency, presenting several challenges for both refiners and shippers.

The first challenge for refiners is to increase the supply of lower-sulfur blendstocks to the bunker fuel market. Refiners have several potential paths. One approach is to divert more low sulfur distillates into the bunker fuel market. Another option would be to use low sulfur intermediate refinery feedstocks in bunker blends. In both cases, care is required to assure that new fuels continue to meet specifications for use in marine engines.
A second challenge for refiners is what to do with the high sulfur residual oil that can no longer be blended into bunker fuel. Adding capacity to desulfurize residual oil is one option, but the economics do not currently appear to be attractive. An alternative strategy is to build or expand refinery units that take heavy hydrocarbons, such as residual oil, and upgrade them into lighter, more valuable products, but this would require large investments. In either of these cases, refineries would be faced with investments and costs that are acceptable only if there is certainty of future demand from the shipping industry.

Vessel operators also have several choices for compliance with the new IMO sulfur limits. For example, IMO regulations allow for the installation of scrubbers, which remove pollutants from ships exhaust, allowing them to continue to use higher-sulfur fuels. Some ship owners that operate primarily in coastal areas, such as cruise lines and ferries, opted to install scrubbers on their vessels as the new ECA regulations came into force. The possibility of widespread scrubber installations, which would allow for continued use of higher sulfur residual oils, could make refiners hesitant about making large investments to build refining units capable of upgrading the residual oils.

Ships also have the option of switching to new lower sulfur blends or to non-petroleum based fuels. Some newer ships and some currently being built have engines that would allow them to use liquefied natural gas (LNG) rather than petroleum-based products. However, the infrastructure to support use of LNG as a shipping fuel is currently limited in both scale and availability.
Vessel operators and shippers will also likely be faced with the higher costs as the sulfur content in marine fuels decreases and the role of distillate in the bunker fuel market increases. An example of the price difference between fuels can be observed at the refining and trading hub in Northwest Europe, known as the ARA, collectively the cities Amsterdam and Rotterdam, in the Netherlands and Antwerp, in Belgium. Prices for low sulfur gasoil, a type of distillate, in the ARA has averaged over $20 per barrel more than high sulfur fuel oil (residual oil for use as a fuel) to date in 2016. Fuel blends used to meet the new IMO regulations are likely to price somewhere in between these two fuels (Figure 3).

U.S. average regular gasoline and diesel retail prices decline
The U.S. average regular gasoline retail price dropped three cents from the previous week to $2.16 per gallon on November 21, up six cents from the same time last year. The Gulf Coast price fell six cents to $1.92 per gallon, while the West Coast, Rocky Mountain, and East Coast prices each fell five cents to $2.59 per gallon, $2.19 per gallon, and $2.17 per gallon, respectively. The Midwest price rose two cents to $2.01 per gallon.

The U.S. average diesel fuel price dropped two cents to $2.42 per gallon, down two cents from the same time last year. The Rocky Mountain price fell four cents to $2.46 per gallon, while the West Coast and Midwest prices each fell three cents to $2.73 per gallon and $2.36 per gallon, respectively. The Gulf Coast price dipped two cents to $2.30 per gallon, and the East Coast price fell a penny to $2.44 per gallon.

Propane inventories gain U.S. propane stocks increased by 1.8 million barrels last week to 102.7 million barrels as of November 18, 2016, 3.5 million barrels (3.3%) lower than a year ago. Gulf Coast and Rocky Mountain/West Coast inventories increased by 1.7 million barrels and 0.1 million barrels, respectively, while East Coast and Midwest inventories remained virtually unchanged. Propylene non-fuel-use inventories represented 4.0% of total propane inventories.

Residential heating oil price unchanged while residential propane price increases as of November 21, 2016, residential heating oil prices averaged around $2.38 per gallon, virtually unchanged from last week and less than one cent per gallon higher than last year at this time. The average wholesale heating oil price is $1.55 per gallon, nearly eight cents per gallon higher than last week and 13 cents per gallon more than a year ago.

Residential propane prices averaged nearly $2.06 per gallon, one cent per gallon more than last week and almost 11 cents per gallon more than one year ago. Wholesale propane prices averaged $0.62 per gallon, about the same price as last week but 13 cents per gallon more than last year's price.

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The Australian 590 Student Guardian Visa Process In A Nutshell

Student guardian visa subclass 590 allows you to stay in Australia as a guardian or custodian or relative of an overseas student who is pursuing an education course in Australia. With 590 student guardian visa, You can stay with your child to take care of him/her in Australia until the course complete. Your child age must below then 18th years old before applying for a student guardian visa 590. If you're a relative then you can stay with the child by submitting written permission of a child’s caretakers like a guardian or grandparents. If your child is older then eighteen years then to apply for visa subclass 590 you need to show that you have special emergency circumstances. You can apply for a 590 student guardian visa outside from Australia and acquire enrollment in alternative courses up to three months with a 590 visa. You will be authorized to take care more then one child if you have. You can do the other study or coach just for 3 months with this Student Guardian Visa Subclass 590

Step By Step Process About 590 Visa

1.Before Applying for Visa

Meet Eligibility Criteria

    • You must be a parent or grandparents or relative of a non-Australian child who is below 18th of age.

    • If you want to apply from inside of Australia then you need to hold a substantive visa except for domestic worker, temporary work visa, transit visa, visitor visa, etc.

    • If your another child who is below 18th and not coming to Australia with you then you need to give evidence that you have made welfare arrangement for the child.

    • You have to account for your all healthcare expenses so make sure that medical insurance can only reduce your expenses.

    • Your past immigration history must be credible like you must not have any visa cancellation history.

    • Your intention should be genuine at the time of applying for student guardian visa 590 and it should be not against Australian culture and policies.

    • If your family members are also applying with you then they also need to meet health policies of the Australian government

    • Only a parent or grandparents or custodian or step parents of an overseas student visa 500 holder can apply for this student guardian visa subclass 590.

    • If parents are not present due to any reason for looking after the visa subclass 500 holder student then any relative can apply for this 590 student guardian visa. 

    • You must be a guardian of an international student who must be below 18th of age except for exceptional circumstances.

    • You have to give assurance to immigration authorities that you will be able to provide welfare.

    • Your age must be above 21 years old before going to apply for a student guardian visa 590.

    • You have to pay back any type of debt to the Australian government if you have.

    • If you have another child aged 6 years old then you can bring him/her to Australia but if your child if older then 6           years then you need to show emergency condition to bring him/her to Australia.

  Collect Documents

    •Provide character certificate and other national identities.

    •Submit bank documents and salary slips to prove that you will be enough capable to give welfare to the student.

    •Provide guardianship documents to prove your credibility to that child.

    •Translate your non-English documents into English.

    •Submit legal student guardianship form.

    •Provide dependent under 6 documents if you bring your child who is under 6 years of age.

2. Processing Time And Cost Of This Visa

Visa subclass 590 cost starts from AUD 560. This visa 590 may proceed in 2 to 4 months. But in case you forget to submit any documents then you processing time of visa can be increased. Your visa application processing time can be increased if you provide incomplete information.

3. Apply For The Visa

You need to apply online for the 590 student guardian visa 6 weeks before the student’s course starts. At the time applying for the visa, you have to prove that you are genuine and legal applicant by submitting legal documents. If you submit illegal information to immigration authorities then they have the authority to cancel your visa application immediately. You and your relative which is listed in visa application will not able to get a visa for the next 10 years in case of any fraud by you. You should contact an experienced Immigration Agent Adelaide.

4. Conditions After You Have Applied For The Visa

    • You are not allowed to do any type of work in Australia.

    • You can study only for 3 months.

    • With visa subclass 590 you can’t apply for another visa

    • At the time of leaving Australia, you must have brought the student to your country.

    • If you have another child who is below 6th years of age then you can bring him/her to Australia.

Get The Direction To Migration Agent Adelaide - ISA Migrations and Education Consultants.



August, 21 2019
TODAY IN ENERGY: The U.S. leads global petroleum and natural gas production with record growth in 2018

U.S. petroleum and natural gas production increased by 16% and by 12%, respectively, in 2018, and these totals combined established a new production record. The United States surpassed Russia in 2011 to become the world's largest producer of natural gas and surpassed Saudi Arabia in 2018 to become the world's largest producer of petroleum. Last year’s increase in the United States was one of the largest absolute petroleum and natural gas production increases from a single country in history.

For the United States and Russia, petroleum and natural gas production is almost evenly split; Saudi Arabia's production heavily favors petroleum. Petroleum production is composed of several types of liquid fuels, including crude oil and lease condensate, natural gas plant liquids (NGPLs), and bitumen. The United States produced 28.7 quadrillion British thermal units (quads) of petroleum in 2018, which was composed of 80% crude oil and condensate and 20% NGPLs.

estimated petroleum and natural gas production in selected countries

Source: U.S. Energy Information Administration, based on International Energy Statistics
Note: Petroleum includes crude oil, condensate, and natural gas plant liquids.

U.S. crude oil production increased by 17% in 2018, setting a new record of nearly 11.0 million barrels per day (b/d), equivalent to 22.8 quadrillion British thermal units (Btu) in energy terms. Production in the Permian region of western Texas and eastern New Mexico contributed to most of the growth in U.S. crude oil production. The United States also produced 4.3 million b/d of NGPLs in 2018, equivalent to 5.8 quadrillion Btu. U.S. NGPL production has more than doubled since 2008, when the market for NGPLs began to expand.

U.S. dry natural gas production increased by 12% in 2018 to 28.5 billion cubic feet per day (Bcf/d), or 31.5 quadrillion Btu, reaching a new record high for the second year in a row. Ongoing growth in liquefied natural gas export capacity and the expanded ability to reach new markets have supported increases in U.S. natural gas production.

Russia’s crude oil and natural gas production also reached record levels in 2018, encouraged by increasing global demand. Russia exports most of the crude oil that it produces to European countries and to China. Since 2016, nearly 60% of Russia’s crude oil exports have gone to European member countries in the Organization for Economic Cooperation and Development (OECD). Russia’s crude oil is also an important source of supply to China and neighboring countries.

Russia’s natural gas production increased by 7% in 2018, which exceeded the growth in exports. The Yamal liquefied natural gas (LNG) export facility, which loaded its first cargo in December 2017, can liquefy more than 16 million tons of natural gas annually and accounts for almost all of the recent growth in Russia’s LNG exports. Since 2000, more than 80% of Russia’s natural gas exports have been sent to Europe.

Saudi Arabia’s annual average crude oil production increased slightly in 2018, but it remained lower than in 2016, when Saudi Arabia’s crude oil output reached a record high. Saudi Arabia’s crude oil production reached an all-time monthly high in November 2018 before the December 2018 agreement by the Organization of the Petroleum Exporting Countries (OPEC) to extend production cuts.

In addition to exporting and refining crude oil, Saudi Arabia consumes crude oil directly for electricity generation, which makes Saudi Arabian crude oil consumption highest in the summer when electricity demand for space cooling is relatively high. Since 2016, Saudi Arabia’s direct crude oil burn for electric power generation has decreased for a number of reasons, including demand reductions from a partial withdraw of power subsidies, greater use of residual fuel oil, and increased availability of domestic natural gas.

Crude oil exports account for about 60% of Saudi Arabia’s total economic output. China, along with Japan, South Korea, Taiwan, and the United States remain critical markets for Saudi Arabia’s petroleum exports.

August, 21 2019
Your Weekly Update: 12 - 16 August 2019

Market Watch 

Headline crude prices for the week beginning 12 August 2019 – Brent: US$58/b; WTI: US$54/b

  • Saudi Arabia’s overtures to further stabilise prices was met with a largely positive response by the market, allowing crude prices to claw back some ground after being hammered by demand concerns
  • Saudi officials reportedly called other members in the OPEC and OPEC+ producer clubs to discuss options on how to stem the recent rout in prices, with an anonymous official quoted as saying that it ‘would not tolerate continued price weakness’
  • Reports suggest that Saudi Arabia plans to keep its oil exports at below 7 mmb/d in September according to sales allocations, which was seen as a stabilising factor in crude price trends
  • This came after crude prices fell as the US-China trade war entered a new front, causing weakness in the Chinese Yuan, although President Trump has floated the idea of delaying the new round of tariffs beyond the current implementation timeline of September 1
  • Crude had also fallen in response to a slide in American crude oil stockpiles and a receding level of tensions in the Persian Gulf
  • In a new report, the International Energy Agency said that the outlook for global oil demand is ‘fragile’ on signs of an economic slowdown; there is also concern that China will target US crude if the US moves ahead with its tariff plan
  • The US active rig count lost another 8 rigs – 6 oil and 2 gas – the sixth consecutive weekly loss that brought the total number of active rigs to 934
  • Demand fears will continue to haunt the market, which will not be offset so easily of Saudi-led efforts to limit production; as a result, crude prices will trade rangebound with a negative slant in the US$56-58/b range for Brent and US$52-54/b for WTI


Headlines of the week

Upstream

  • Nearly all Anadarko shareholders have approved the Occidental Petroleum deal, completing the controversial takeover bid despite investor Carl Icahn’s attempts to derail the purchase
  • Crude oil inventories in Western Canada have fallen by 2.75 million barrels m-o-m to its lowest level since November 2017, as the production limits in Alberta appear to be doing their job in limiting a supply glut while output curbs are slowly being loosened on the arrival of more rail and pipeline capacity
  • Mid-sized Colorado players PDC Energy and SRC Energy – both active in the Denver-Julesburg Basin – are reportedly in discussion to merge their operations
  • Pemex has been granted approval by the National Hydrocarbon Commission to invest US$10 billion over 25 years to develop onshore and offshore exploration opportunities in Mexico
  • Qatar Investment Authority has acquired a ‘significant stake’ in major Permian player Oryx Midstream Services from Stonepeak Infrastructure Partners for some US$550 million, as foreign investment in the basin increases
  • PDVSA and CNPC’s Venezuelan joint venture Sinovensa has announced plans to expand blending capacity – lightening up extra-heavy Orinoco crude to medium-grade Merey – from a current 110,000 b/d to 165,000 b/d
  • BHP has approved an additional US$283 million in funding for the Ruby oil and gas project in Trinidad and Tobago, with first production expected in 2021
  • CNPC, ONGC Videsh and Petronas have reportedly walked away from their onshore acreage in Sudan, blaming unpaid oil dues on production from onshore Blocks 2A and 4 that have already reached more than US$500 million

Midstream/Downstream

  • Expected completion of Nigeria’s huge planned 650 kb/d Dangote refinery has been delayed to the end of 2020, with issues importing steel and equipment cited
  • Saudi Aramco’s US refining arm Motiva announced plans to shut several key units at its 607 kb/d Port Arthur facility in Texas for a 2-month planned maintenance, affecting its 325 kb/d CDU and the naphtha processing plant
  • ADNOC has purchased a 10% stake in global terminal operator VTTI, expanding its terminalling capacity in Asia, Africa and Europe
  • A little-known Chinese contractor Wison Engineering Services has reportedly agreed to refurbish Venezuela’s main refineries in a barter deal for oil produced, in a bid for Venezuela to evade the current US sanctions on its crude exports
  • Swiss downstream player Varo Energy will increase its stake in the 229 kb/d Bayernoil complex in Germany to 55% after purchasing BP’s 10% stake
  • India has raised the projected cost estimate of its giant planned refinery in Maharashtra – a joint venture between Indian state oil firms with Saudi Aramco and ADNOC – to US$60 billion, after farmer protests forced a relocation

Natural Gas/LNG

  • The government of Australia’s New South Wales has given its backing to South Korea’s Epik and its plan to build a new LNG import terminal in Newcastle
  • Kosmos Energy is proposing to build two new LNG facilities to tap into deepwater gas resources offshore Mauritania and Senegal under development
  • In the middle of the Pacific, the French territory of New Caledonia has started work on its Centrale Pays Project, a floating LNG terminal with an accompanying 200-megawatt power plant, with Nouvelle-Caledonia Energie seeking a 15-year LNG sales contract for roughly 200,000 tons per year
August, 16 2019