In December, the European Union granted 101.4 million euro ($126.1 million) to support the construction of the offshore LNG terminal on Krk island. It is designated an EU Project of Common Interest. Additionally, the Croatian government has declared the project of strategic importance to the region. This is significant as it gives the project priority and pushes for early completion.
The development of the offshore LNG terminal supports the key objectives of the Energy Union as it will promote further integration of the internal energy market and enhance security of supply. The terminal is set to secure the energy needs of the region and reduce dependence on Russian gas by securing new supplies for Central and South-Eastern countries.
Miguel Arias Cañete, EU Commissioner for Climate Action and Energy stated that “this investment will not only allow for the supply of natural gas to Croatia and Hungary; it will also increase the diversification of energy sources of Central and South-Eastern Europe and give an economic lift to the region.”
LNG Croatia, the company developing the import terminal on Krk island, intends to implement the project in two phases. Firstly, the construction of a floating terminal followed by a land-based terminal. Yet Gasfin, a private provider of mid-scale LNG infrastructure, has stated that it can bypass the two-phase development and immediately begin work on an onshore production site. This pause in development has left everyone asking what will happen next.
The project is critical for the whole Central & Eastern European region. The two project leads are set the clarify their positions at the CEE Gas conference in Zagreb, in March. This is a unique opportunity to get insight into these fundamental developments.
Attend the CEE Gas Conference in Zagreb this March to see the debate between the heads of both Gasfin and LNG Croatia.
About CEE Gas
With over 30 years of European and global gas market partnership expertise, dmg :: energy events hosts Central & Eastern European Gas Conference (CEE Gas) in Zagreb, Croatia on 7 - 8 March 2018. The event launched in 2017 and was hugely successful; creating the most senior gathering of natural Gas and LNG leaders ever seen in the region.
Bringing together all key stakeholders including gas suppliers, TSOs, regulators, government members, commercial executives and industry consultants, CEE Gas will provide an unrivalled platform for the strategic roadmap to a diverse and secure natural gas future for the region.
On the 7-8 March 2018 the Central & Eastern European Gas Conference will return to Zagreb. Building on the success of the 2017 event, CEE Gas 2018 will once again bring together business, government and regulatory leaders from across the CEE region, Western Europe and the rest of the world.
CEE Gas 2018 will focus on these key challenges:
Energy Supply - Deliver affordable power while still hitting national COP-21 targets
Market Liberalisation - Implement a fully liberalised and market driven energy landscape across each country in the region
Infrastructure Construction and Development - Understand how to accurately measure project economics and implement construction across multiple jurisdictions
Market Integration - Create a liquid gas and power market across CEE and the rest of the EU
HIGH PROFILE SPEAKERS INCLUDE:
If you would like to know more about the conference or are interested in interviewing any of the speakers, please feel free to contact me.
For more information please see: http://www.theceegas.com/
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Headline crude prices for the week beginning 15 October 2018 – Brent: US$81/b; WTI: US$71/b
Headlines of the week
Less than two weeks ago, the VLCC Navarin arrived at Tanjung Pengerang, at the southern end of Peninsular Malaysia. It was carrying two million barrels of crude oil, split equally between Saudi Arab Medium and Iraqi Basra Light grades.
The RAPID refinery in Johor. An equal joint partnership between Malaysia’s Petronas and Saudi Aramco whose 300 kb/d mega refinery is nearing completion. Once questioned for its economic viability, RAPID is now scheduled to start up in early 2019, entering a market that is still booming and in demand of the higher quality, Euro IV and Euro V level fuels RAPID will produce.
Beyond fuel products, RAPID will also have massive petrochemical capacity. Meant to come on online at a later date, RAPID will have a collective capacity of some 7.7 million tons per annum of differentiated and specialty chemicals, including 3 mtpa of propylene. To be completed in stages, Petronas nonetheless projects that it will add some 3.3 million tons of petrochemicals to the Asia market by the end of next year. That’s blockbuster numbers, and it will elevate Petronas’ stature in downstream, bringing more international appeal to a refining network previously focused mainly on Malaysia. For its partner Saudi Aramco, RAPID is part of a multi-pronged strategy of investing mega refineries in key parts of the world, to diversify its business and ensure demand for its crude flows as it edges towards an IPO.
RAPID won’t be alone. Vietnam’s second refinery – the 200 kb/d Nghi Son – has finally started up this year after multiple delays. And in the same timeframe as RAPID, the Zhejiang refinery by Rongsheng Petro Chemical and the Dalian refinery by Hengli Petrochemical in China are both due to start up. At 400 kb/d each, that could add 1.1 mmb/d of new refining capacity in Asia within 1H19. And there’s more coming. Hengli’s Pulau Muara Besar project in Brunei is also aiming for a 2019 start, potentially adding another 175 kb/d of capacity. And just like RAPID, each of these new or recent projects has substantial petrochemical capacity planned.
That’s okay for now, since demand remains strong. But the danger is that this could all unravel. With American sanctions on Iran due to kick in November, even existing refineries are fleeing from contributing to Tehran in favour of other crude grades. The new refineries will be entering a tight market that could become even tighter. RAPID can rely on Saudi Arabia and Nghi Son can depend on Kuwait, both the Chinese projects are having to scramble to find alternate supplies for their designed diet of heavy sour crude. This race to find supplies has already sent Brent prices to four-year highs, and most in the industry are already predicting that crude oil prices will rise to US$100/b by the year’s end. At prices like this, demand destruction begins and the current massive growth – fuelled by cheap oil prices – could come to an end. The market can rapidly change again, and by the end of this decade, Asia could be swirling with far more oil products that it can handle.
Upcoming and recent Asia refineries:
Headline crude prices for the week beginning 8 October 2018 – Brent: US$84/b; WTI: US$74/b
Headlines of the week