Ben van Beurden has marked five years as chief executive of Royal Dutch Shell by giving a “wide-ranging interview” on climate change, his leadership style and “Shell’s biggest financial transformation” — an interview given to, erm, Royal Dutch Shell’s website. But rest assured, the oil group’s in-house journalists weren’t letting their boss off lightly. The transcript published yesterday features such hard-hitting questions as: “Who do you turn to for advice and support?” (answer: his wife, Stacey); “What are you most proud of when you look back at 2018?”; and “Why is trust so important for Shell?” A real zinger, that one.
Shell buys out Total’s 26% stake in Hazira LNG and Port
Shell Gas, a subsidiary of Royal Dutch Shell plc, acquired 26% equity interest in the Hazira LNG and Port from Total, to complete the acquisition. We did not disclose the financial consideration for the deal.
“The move allows Shell to build an integrated gas value chain: supply from its global LNG portfolio, regasification at the Hazira facility, and downstream customer sales. It further enables Shell to contribute towards India’s long-term need for more and cleaner energy solutions,” Shell said in the statement.
In August 2018, Shell had announced its plans to buy Total’s stake in Hazira LNG and Port, which includes Hazira LNG that operates a regasification terminal and Hazira Port. Hazira LNG and Port was a joint venture between Shell Gas B.V and Total Gaz Electricité Holdings France, where the former initially owned 74%.“Fifteen years ago, Shell invested in the Hazira project – the single largest foreign direct investment for India in the energy sector at the time. I am very proud that as a 100% shareholder, we will now be able to utilize this great infrastructureNSE 4.98 % asset to its full potential and help provide much-needed gas to serve the growing energy needs of India,” said Ajay Shah, Vice President Shell Energy Asia.
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Merkel coalition lawmakers become more critical of Nord Stream
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Mood shift may place pressure on government to shift stance
Support in German Chancellor Angela Merkel’s coalition for a major new Russian gas pipeline is slipping as frustration with the Kremlin’s brinkmanship grows and pressure from U.S. President Donald Trump starts to bite.
Nord Stream 2, an $11 billion project that will double the natural gas supply under the Baltic Sea to Germany, faces growing skepticism among German officials who had previously defended it against criticism from Trump and some European Union allies, according to senior lawmakers. The shift could translate into pressure on Merkel’s government to back down on the controversial pipeline and possibly delay its implementation.
Social Democratic lawmaker Nils Schmid, whose party has been a reliable supporter of the project, said too many decision-makers in Berlin had been slow to factor in Nord Stream’s geopolitical significance. It will reduce the volume of gas pumped through Ukraine as Russia attempts to stifle its neighbor’s economy by depriving it of lucrative transit fees.
“The debate in Germany has become more critical,” Schmid, the junior coalition party’s point man on foreign policy, said in an interview, adding that the project shouldn’t go forward until Russia and Ukraine reach a transit accord. “It would have been better to take this political dimension into account.”
Russia’s ‘Captive’
The 1,200-kilometer (750-mile) undersea pipeline — being constructed by Russia’s Gazprom PJSC to bolster German supplies as Norwegian, Dutch and domestic sources dry up — has been pilloried by some of the country’s allies, who say it bolsters Europe’s reliance on Russian energy and bypasses key partners such as Ukraine. Trump has blastedthe project as holding Germany “captive” to Russia.
The ground is shifting, with an ever more fraught relationship with Russian President Vladimir Putin, particularly since the November seizure of two dozen Ukrainian sailors near the Sea of Azov. Merkel, who has sparred with Putin since the 2014 annexation of Crimea from Ukraine, is demanding the release of the naval personnel.
The Azov incident in the Kerch Strait has soured prospects that Merkel’s diplomacy can scale back the conflict in eastern Ukraine, according Juergen Hardt, a lawmaker in Merkel’s Christian Democratic Union who speaks on foreign affairs.
Unfulfilled Hopes
“The events on the Kerch Strait at least showed me that these are unfulfilled hopes,” Hardt said in an interview. “Russia, in my view, isn’t moving a millimeter from its objectives.”
Hardt said Germany’s governing parties need to find consensus with the European Commission on energy diversification and reliance on Russian gas. He also questioned the economic viability of Nord Stream, poking holes in the government’s previous defense of the project.
Merkel shifted her position on Nord Stream last April, acknowledging the political dimensions of the pipeline and departing from her previous insistence that it was solely a business venture by private investors. The project must not weaken Ukraine by disrupting its gas transmission system, she said at the time.
Richard Grenell, the U.S. ambassador to Germany, welcomed the more skeptical view in Berlin, saying the pipeline project undermines the EU’s energy and security objectives.
Russian Influence
“There is not only Russian gas coming through the pipeline, but also Russian influence,” Grenell said in a statement to Bloomberg News. “Now is not the time to reward Moscow.”
The U.S. administration has indicated that sanctions on the pipeline are imminent. Trump brought tensions over Nord Stream into full view at last July’s NATO summit, raising the issue as he attacked Merkel over Germany’s slack defense spending.
U.S. restrictions would potentially hit companies in Austria, France, Germany and the Netherlands. Royal Dutch Shell Plc, BASF SE’s Wintershall unit, Uniper SE, OMV AG and Engie SA are Gazprom’s partners in the project. The Russian gas giant reported a record 201 billion cubic meters of gas exports to Europe in 2018 and plans to maintain those volumes into 2020.
Simmering Tensions
Schmid maintained that the project, which would double the 55 billion cubic meters of natural gas flowing through the original Nord Stream pipeline that opened in 2011, isn’t in danger. He also defended SPD support, particularly in Germany’s east where, the pipeline makes landfall. But simmering geopolitical tensions are having an effect in Germany.
“Something has changed,” Peter Beyer, the German government’s coordinator for trans-Atlantic relations, said in an interview. He attributed the mood shift on Nord Stream as much to concern about leaving EU allies out in the cold as with Russia’s recent maneuvers. Merkel’s government may have to adjust to the demands of those taking a harder line on Nord Stream, he said.
— With assistance by Brian Parkin
Shell’s Pulau Bukom industrial site in western Singapore. (Photo: AFP)
(Updated: )
SINGAPORE: Oil giant Shell has been fined S$400,000 for a fire which broke out at a petroleum refinery on Pulau Bukom in 2015, said the Ministry of Manpower (MOM) on Tuesday (Jan 8).
The fire left six workers injured, including two with critical injuries after they suffered 50 per cent and 70 per cent burns.
On Aug 21, 2015, two groups of workers were simultaneously conducting maintenance and project works on a crude distillation unit at the refinery, said the ministry.
The first group was carrying out hot works on a scaffold. This included the use of a blow-cutting torch from an oxy-acetylene cylinder to cut and dismantle existing pipes.
The other group was carrying out cold works along a hydrocarbon solvent line on the ground. This involved removing a joint connection to a valve as well as connecting a hose to the valve to drain out residual flammable hydrocarbons inside the pipeline into a nearby pit.
“When one of the workers opened the valve to start the draining process, flammable vapours from the draining of hydrocarbons came into contact with the sparks from the hot works,” said MOM.
The fire broke out despite the worker immediately closing the valve after he was alerted, said the ministry.
“SYSTEMIC FAILURE”
The fire was contained and extinguished within 30 minutes by the Bukom Emergency Response Team, MOM said.
“Investigations revealed that there was a systemic failure in Shell’s oversight to check for compatibility of different work activities carried out within the same vicinity at the same time,” it said.
The hot and cold works carried out by the two groups in the same vicinity were not coordinated. This caused the flammable vapours from the cold works to be ignited by sparks from the hot works.
Shell was charged for failing to implement adequate control measures to ensure compatibility of works were carried out at the refinery.
MOM’s director of the major hazards department Go Heng Huat said the refinery, which is a major hazard installation, must properly manage safety and risk control measures.
“The lives of workers and the public could have been put at risk because adequate control measures were not properly implemented,” said Mr Go.
“Even though there was no loss of life in this case, the potential for more severe consequences was evident.”
The Pulau Bukom site, Shell’s largest wholly owned plant, has a 500,000 barrels per day refinery and a steam cracker that produces more than 900,000 tonnes of ethylene a year.
In September 2011, a blaze at the refinery took 100 firefighters nearly two days to put out and forced the oil giant to shut the plant. One firefighter had a superficial injury and five others had heat exhaustion and pulled muscles, the Singapore Civil Defence Force said then.
On December 2017, another fire broke out at Shell’s Pulau Bukom facility. No injuries were reported in this incident.
Fluidsdoc: Jan. 7, 2019 4:31 AM ET
Summary
- Shell has taken a positive FID on a massive 14 mpta LNG project in Western Canada.
- Several companies have abandoned this effort due to opposition and low gas prices.
- We review the scenario ahead of Shell going forward.
Introduction
Shell (RDS.A, RDS.B) has the strongest position in LNG of any Super Major oil company. On the whole, we think this is a perfect direction in which to take a legacy oil company like Shell. The energy mix that runs the world is changing, and strong companies must adapt to stay strong. We’ve have written about this in a number of articles. These are set to free status so you can go into more depth on Shell. For the most part, we think Shell is doing that.
Shell A Deepwater And LNG Powerhouse, Part 1
Shell A Deepwater And LNG Powerhouse, Part 2
The Kitimat FID has us scratching our heads a bit, however. Not the least of these reasons is its location in Kitimat, British Columbia, Canada. A region known not only for its natural beauty, but also for its general hostility to anything hydrocarbon. Already a few major projects have been canceled due to fierce opposition in the Provincial and National governments. Low gas Canadian gas prices due to burgeoning supply, also played a role in these cancellations.
Petronas in 2017 canceled their $36 bn project. They later bought a 25% stakein the Shell project we are discussing now.
CNOOC canceled their $20 bn project for the same reasons, weak gas prices and opposition.
Earlier this year Exxon Mobil, (XOM) canceled their multibillion-dollar Canada project after a multi-year environmental review that didn’t seem to be going anywhere. XOM has plenty of places to spend their LNGmoney, and doesn’t particularly care for the limelight that comes with environmental protests.
So when, in the face of all this negativity, Shell greenlights an LNG project in the same general vicinity… questions are bound to arise as to just what they’re smokin’ in the boardroom in the Hague.
Let’s be clear. We like Shell and continue to think it’s a great investment. We like LNG and companies that stand to profit from drilling, producing, and exporting this resource. We just have our doubts about Kitimat.
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