Magellan Processing receives EPA permit for Corpus Christi splitter

http://www.tankstoragemag.com/industry_news.php?item_id=8649

The US Environmental Protection Agency (EPA) has issued a final greenhouse gas (GHG) Prevention of Significant Deterioration (PSD) construction permit to Magellan Processing, a subsidiary of Magellan Midstream Partners, to build a new condensate splitter plant at the company's existing terminal.

The facility is in Nueces County, in Corpus Christi, Texas.

Magellan will construct a 100,000 bpd natural gas condensate splitter at the Corpus Christi facility.

The project includes two natural gas-fired hot oil heaters, two natural gas-fired fractionator heaters, storage tanks, and other associated equipment.

The company estimates capital costs for the project at around $400-450 million (€320-€360 million).

The project will create around 500 construction jobs and 105 long-term jobs. In June 2010, EPA finalised national GHG regulations, which specify that beginning on 2 January, 2011, projects that substantially increase GHG emissions require an air permit.

Since then, projects in Texas that increase GHG emissions have required an air permit from the EPA. In Texas alone, EPA has received 86 GHG permit applications from businesses since 2011.

Texas is No. 1 in the country for receiving EPA-issued GHG permits – with over 61 permits being issued by EPA. On 31 October, 2014, EPA announced both its approval of the state air plan and the withdrawal of the federal air plan making the Texas Commission on Environmental Quality (TCEQ) the primary GHG permitting authority in Texas.

The approval became effective upon publication in the Federal Register on 10 November.

This action eliminates the need for businesses to seek air permits from two separate regulatory agencies in Texas and moves the permitting program to TCEQ.

EPA and TCEQ will continue to work closely with pending permit applicants during the transition period and ensure no unnecessary project delays result from this action. Read the EPA press release here.

- See more at: http://www.tankstoragemag.com/industry_news.php?item_id=8649#sthash.TxyE8A1m.dpuf

Crashing crude may blow a $1.6 trillion hole in the global oil sector, annually

http://www.marketwatch.com/story/crashing-crude-may-blow-a-16-trillion-hole-in-the-global-oil-sector-annually-2014-12-14

NEW YORK (MarketWatch)—Talk about an oil spill. The spectacular unhinging of crude oil prices over the past six months is weighing mightily on the U.S. stock market.

And while it may be too early to abandon all hope that the market will stage a year-end Santa rally, it appears that if Father Christmas comes, there’s a good chance his sleigh will be driven by polar bears, instead of gift-laden reindeer.

Wall Street’s gift: a major stock correction.

Indeed, the Dow Jones Industrial Average DJIA, +0.00%  already endured a bludgeoning, registered its worst percentage decline since Nov. 25, 2011, down 677.96 points, or 3,78%. It was also the worst week for the S&P 500 SPX, -0.70% on a percentage basis since May 18, 2012. The S&P 500 was down 73. 04 points and 3.52% on the week.

But all that carnage is nothing compared to what may be in store for the oil sector as crude oil tumbles to new gut-wrenching lows on an almost daily basis. On the New York Mercantile exchange light, sweet crude oil for January delivery settled at $57.81 on Friday, its lowest settlement since May 15, 2009.

Moreover, the largest energy exchange traded fund, the energy SPDR XLE, +1.19% is off by 14% over the past month and has lost a quarter of its value since mid-June.

The real damage, however, is yet to come. By some estimates the wreckage, particularly for the oil-services companies, may add up to a stunning $1.6 trillion annual loss, at oil’s current $57 low, predicts Eric Lascelles, RBC Global Asset Management chief economist.

Since it’s a zero-sum game, that translates into a big windfall for everyone else outside of oil players.

In his calculation, Lascelles includes the cumulative decline in oil prices since July and current supply estimates of 93 million barrels a day. It’s a fairly simplistic tally, but it gets the point across that the energy sector is facing a serious oil leak. Here’s a look at a graphic illustrating the zero-sum, wealth redistribution playing out as oil craters:

RBC Global Asset Management/MarketWatch

It’s important to note that Lascelles believes that the downdraft in oil is largely a positive. The economist also believes that oil sector’s pain will be confined mostly to the energy sector.

Asia Tankers-VLCC rates to stay firm after Mideast climbs to near 5-yr high

http://www.hellenicshippingnews.com/asia-tankers-vlcc-rates-to-stay-firm-after-mideast-climbs-to-near-5-yr-high/

Rates for very large crude carriers (VLCCs) on key Asian routes are likely to hold firm next week but are unlikely to continue the surge seen earlier this week, brokers said.

Freight rates from the Middle East to Japan soared to their highest level since Feb. 2011, buoyed by a raft of fixtures by Shell, brokers and Reuters chartering data showed.

Average VLCC earnings on the Middle East-Japan route this year are at the highest level since 2010, said Ralph Leszczynski, head of research at Italian shipbroker Banchero Costa.

“Average earnings on the Middle East-Asia route so far in 2014 are $22,000 per day, against $32,000 per day in 2010. But this is still way better than the last three years,” he told Reuters on Friday

“I expect the VLCC market to stay pretty firm for fixtures in the first 10 days of next month. I see rates holding the line around 68-73 on the Worldscale measure,” a Singapore-based VLCC broker said on Friday.

Rates soared after Shell fixed three VLCC Middle East cargoes at around W73, equivalent to $81,500 per day, and around nine points higher than the prevailing charter rate for the route.

“Rates have edged up considerably and we are now seeing this year’s final cargoes in the Middle East being concluded and rates could possibly add further,” said Norwegian ship broker Fearnley in a weekly note on Wednesday.

Rates from West Africa to China climbed, helped by fixtures from Unipec and Shell, Reuters chartering data showed.

At least one charterer resisted owners’ attempts to push the market significantly higher with Taiwan’s Chinese Petroleum Corp (CPC) rejecting offers of W80 for a VLCC charter from the Middle East to Taiwan this week, the broker said.

Around 125 VLCC charters from the Middle East to Asia had been concluded for December loading. But charterers could hold back January cargoes to take some heat out of the market, the broker added.

VLCC rates for the benchmark route from the Middle East to Japan climbed to W73 on Thursday compared with W60 a week earlier.

Rates for West Africa to China rose to W66 on Thursday, against W59 last week, the highest since January.

In other trades, rates for 80,000-tonne Aframax tankers from Southeast Asia to East Coast Australia dropped to around W111 on Thursday, from W114 last Thursday, continuing a steady fall that stated on Nov. 25.

Clean tanker rates from Singapore to Japan slipped to W119 on Thursday, down from W119.50 a week earlier.

“The market is fairly okay. Rates are steady,” said a Singapore-based clean tanker broker on Friday.
Source: Reuters (Reporting By Keith Wallis; Editing by Anupama Dwivedi)

Nigerian oil workers go on strike

Fuel was sold on the black market during a previous strike

http://www.bbc.com/news/business-30479898

Nigeria's two main oil workers' unions have begun a nationwide strike, threatening to hurt the output of Africa's largest oil producer.

BBC reporters say long queues have formed at many petrol stations.

The unions, Pengassan and Nupeng, said the strike would continue until the government addressed its concerns.

These include the adoption of the delayed Petroleum Industry Bill, aimed at overhauling the sector and maintenance work on oil refineries.

The unions frequently go on strike or threaten to strike.

This time, the two unions were initially demanding the reinstatement of representatives who had been dismissed by oil companies, but now their list of complaints has grown.

They are now protesting that the government has allowed Nigeria's oil refineries to fall into disrepair and that the poor state of the country's roads is hindering the transport of oil.

They are also asking for the price of petrol to be reduced and oil theft to be stopped.

"We've commenced the strike. It will affect oil production, since all operations are on strike," Pengassan chief Babatunde Oke told Reuters.

However, an oil executive said the strike was not expected to affect output, because it would require the co-operation of large numbers of workers at production sites who would be unwilling to go that far.

"It's very difficult to shut them down, and once they do, it would take them a week to get them back up. They never do it. That's the last thing anyone wants," an oil executive told Reuters.

The BBC's Will Ross in Lagos said most of the unions' demands seemed "unrealistic, especially with an election looming".

"The refineries are not suddenly going to be fixed because of this strike. Some oil industry watchers suggest the unions are simply trying to force the government to pay them off and get a hefty Christmas present," he added.

A strike in September had little impact on oil production.

Many Nigerians, whether Christian or Muslim, travel home over the Christmas and New Year holidays and so they are stocking up on fuel now, in case of shortages in the next couple of weeks, analysts say.

OPEC Cuts 2015 Crude Demand Forecast to 12 Year Low

Crude oil prices hit 5 year low

http://www.eagletribune.com/news/crude-oil-prices-hit-year-low/article_6f641ca5-ae69-564f-bd7c-6cd74dc78fb5.html

NEW YORK (AP) — The price of oil took another dive Wednesday, plunging to five-year lows amid mounting evidence that global supplies are far outstripping demand.

The U.S. Energy Department reported a surprise increase in domestic oil inventories and OPEC projected that demand for its crude would sink next year to levels not seen in more than a decade.

Benchmark U.S. crude slumped 4.5 percent, or $2.88, to close at $60.94 a barrel on Wednesday. Prices have not been that low since July of 2009. U.S crude prices have fallen 17 percent in two weeks and are now 43 percent below the $107.26 that a barrel fetched at its peak this year.

Brent crude, an international benchmark used to price oil used in many U.S. refineries, fell $1.95 to close at $64.24 in London.

Energy analyst and trader Stephen Schork said in an interview that he expects that the combination of weak economic news out of Asia and growing global supplies will push oil down further, to below $60, by the end of the week. "It's the proverbial 'trying to catch a falling dagger' and I'm not going to try to catch it," he said.

OPEC said Wednesday that it expects demand for its crude to fall to 28.9 million barrels per day next year, 400,000 barrels per day less than in 2014. The cartel's official production target is 30 million barrels a day, which would mean far more oil on the world market than is being consumed.

Also on Wednesday, the Energy Department reported a surprise increase in U.S. crude supplies of 1.5 million barrels last week. Analysts were expecting a decline of 2.2 million barrels. Gasoline stocks also increased more than expected.

Falling oil prices are making for sharply lower prices of gasoline, diesel, jet fuel and heating oil, giving consumers, shippers and airlines a lift.

Economists say lower gasoline prices act like a tax cut, leaving more money in consumers' pockets to spend on other things. The national average price of gasoline fell Wednesday to $2.64, according to AAA, saving drivers $1.05 per gallon compared to what they were paying in late June.

Market sell-off deepens, Dow plunges 268 points

Photograph by Brendan McDermid — Reuters

It was the third-straight day of declines for the Dow and S&P 500.

http://fortune.com/2014/12/10/market-selloff-dow-268/

The dreary start to the week for U.S. stocks continued Wednesday as the market had its worst day in two months while oil prices continued their slide.

The Dow Jones Industrial Average fell for the third straight day, plummeting 268 points, or 1.5%, to 17,533. The blue-chip index has now fallen more than 425 points this week after coming tantalizingly close to the 18,000-point milestone on Friday afternoon. The index, which crossed the 17,000-point mark for the first time in July, is down 2.3% for the week.

It was also the third-straight day of losses for the S&P 500, which dropped 33 points, or 1.6%, on Wednesday. Meanwhile, the Nasdaq composite, which actually posted a gain on Tuesday, fell 82 points, or 1.7%, on Wednesday. The indices are down 2.4% and 2% for the week, respectively.

Falling oil prices battered the markets.Crude oil hit a five-year low after the Organization of Petroleum Exporting Countries (OPEC) cut its projection for the amount of oil it will need to produce in 2015 thanks to global oversupply. OPEC said it expects to need to produce only 29.8 million barrels of oil per day next year, which is 300,000 fewer barrels than previously thought. As a result, the price of Brent crude oil slipped 3.5% on Wednesday, to $64.50 per barrel, while West Texas Intermediate crude fell 4%, to $61.21.

In addition to the price of oil, the market has taken a hit on concerns over sluggish global economies, particularly in Asia and Europe. Tuesday saw a massive sell-off in China as well as a historic decline by the Athens stock exchange after the Greek government’s decision to hold an early vote in its presidential elections.

It has been a turbulent fall for the U.S. market, which experienced a broad sell-off in early October that briefly erased all of the year’s gains. But, a steady rebound through November and early December, which included a string of record finishes for the Dow Jones and S&P 500, pushed the market to record levels coming into this week.