Welcome to this week’s edition of The Buzz, a weekly feature where Kallanish Energy editors select the quartet of stories this past week we feel were the most important – and have the chance to make the biggest impact on the oil and gas — and energy industry as a whole.
Oil supply likely to meet demand in 2020: Iea: The International Energy Agency (Iea) said global crude oil supply in 2020 will be enough to meet any level of demand.
This will limit oil prices surges, assuming no major geopolitical events occur, according to June’s Oil Market Report (Omr).
The second part of 2019 and all of 2020 are expected to see economic improvement, with global GDP (Gross Domestic Product) growth of 3.4%, if trade disputes are resolved.
As a consequence, global oil demand growth would increase from 1.2 million barrels per day (Mmbpd) this year, to 1.4 Mmbpd in 2020. There will be enough supply to satisfy this growth, according to the report, as non-Opec supply growth in 2020 will reach 2.3 Mmbpd.
The U.S. will be the largest player in 2019, contributing 90% of annual supply growth of 1.9 Mmbpd.
Xom, Sabic to build Texas cracker, petrochemical complex: ExxonMobil and Sabic have announced plans to build the world’s largest ethane cracker and a petrochemical complex in South Texas.
The nearly $10 billion project will be located near Corpus Christi in San Patricio County, close to low-cost shale gas. It will include an ethane steam cracker capable of producing 1.8 million metric tons of ethylene per year, two polyethylene units and a monoethylene glycol unit.
Construction will begin in the third quarter of 2019, and startup is anticipated by 2022, the companies said. The project is part of ExxonMobil’s Growing the Gulf initiative which calls for creating 45,000 jobs across the region, while spending $20 billion over 10 years.
China may build 30 nuclear plants costing $1T: China may build 30 nuclear plants costing $1 trillion in the countries involved in the “Belt and Road” plan, by 2030.
The initiative envisions the creation of a “21st century silk road” with overland corridors and maritime shipping lanes from Asia to Europe and Africa, across 71 countries.
Several have officially pledged support. They account for half of the global population and a quarter of the world’s Gross Domestic Product.
Trudeau government again approves Trans Mountain line: Canadian Prime Minister Justin Trudeau’s federal government has approved the long-delayed expansion of the Trans Mountain oil pipeline in western Canada.
But construction on the divisive pipeline from Alberta to British Columbia is likely still weeks or months away, even after the Liberal Party cabinet approved the C$9.3 billion ($6.95 billion) expansion.
Trudeau said building the project will ensure Canada is not dependent on selling its natural resources to one customer: the U.S., which now buys 99% of Canada’s crude oil.
The pipeline battle has pitted British Columbia against Alberta. British Columbia wants to block oil shipments from Alberta and that legal fight continues.
Last year, Kinder Morgan Canada sold the existing pipeline for C$4.5 billion ($3.36 billion) to the Canadian government after running into strong opposition to the expansion project.
The pipeline expansion would run 715 miles from Edmonton, Alberta, to Burnaby, British Columbia, near Vancouver. The current oil pipeline transports about 300,000 barrels per day. The new line will be built parallel to the existing line for crude and refined oil. The expansion would nearly triple capacity to 890,000 Bpd of crude from Alberta’s oil sands.
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