Chinese govt. terminates major refinery project
The Chinese government’s decision to cancel a 400 mbd (thousand barrels per day) refinery project in Taizhou will have “far-reaching consequences” for the Asia-Pacific refining industry’s future growth potential, according to an analyst with research and consulting firm GlobalData.
Jeffrey Kerr, GlobalData’s managing analyst for Downstream Oil & Gas, believes that the government’s decision to cancel the project, which was to cost Royal Dutch Shell, Qatar Petroleum and China National Petroleum Corp. (CNPC) upwards of $13 billion to develop, has led to a high level of uncertainty surrounding the fate of many future projects in the region.
“If this refinery, along with all other currently-proposed projects, was completed successfully, Chinese refining capacity could have been expected to climb from its current level of 10.51 mmbd (million barrels per day) to 13.66 mmbd by the end of 2020, before reaching 14.1 mmbd in 2025,” Kerr says.
“However, the cancellation of this significant project has raised some doubts over the development of other refineries that are set to come on-stream in the region between 2016 and 2025. For instance, industry heavyweights Kuwait Petroleum, ExxonMobil, Petroleos de Venezuela and Total are all involved in joint venture refinery projects that are planned to come on-stream over the next few years – but it now remains to be seen whether these investments are now at risk.”
The analyst believes that China’s new 400 mbd refinery project was “doomed almost from the beginning” due to pressures from local officials, opposition from some members of the Chinese government and reports that Royal Dutch Shell, Qatar Petroleum and CNPC were having difficulties in securing the land upon which the new refinery was to be built.
An on-going corruption probe into CNPC by the Chinese government could also have been a reason for its decision to pull the project – the magnitude of which Kerr believes should send a chill down the spine of CNPC’s joint venture partners.
“Overall, the cancellation of this refinery seems to be a herald for the end of Asia-Pacific’s refining construction boom, and a sign that the region’s refining industry may have reached a tipping point in total capacity,” Kerr says.
Hydrostor receives $4m funding for A-CAES facility in Canada
Hydrostor has received $4m funding to develop a 300-500MW Advanced Compressed Air Energy Storage (A-CAES) facility in Canada.
The funding will be used to complete essential engineering and planning, and enable Hydrostor to plan construction.
The project will be modeled on Hydrostor’s commercially operating Goderich storage facility, providing up to 12 hours of energy storage.
Hydrostor’s A-CAES system supports Canada’s green economic transition by designing, building, and operating emissions-free energy storage facilities, and employing people, suppliers, and technologies from the oil and gas sector.
The Honorable Seamus O’Regan, Jr. Minister of Natural Resources, said: “Investing in clean technology will lower emissions and increase our competitiveness. This is how we get to net zero by 2050.”
A-CAES has the potential to lower greenhouse gas emissions by enabling the transition to a cleaner and more flexible electricity grid. Specifically, the low-impact and cost-effective technology will reduce the use of fossil fuels and will provide reliable and bankable energy storage solutions for utilities and regulators, while integrating renewable energy for sustainable growth.
Curtis VanWalleghem, Hydrostor’s Chief Executive Officer, said: “We are grateful for the federal government’s support of our long duration energy storage solution that is critical to enabling the clean energy transition. This made-in-Canada solution, with the support of NRCan and Sustainable Development Technology Canada, is ready to be widely deployed within Canada and globally to lower electricity rates and decarbonize the electricity sector."
The Rosamond A-CAES 500MW Project is under advanced development and targeting a 2024 launch. It is designed to turn California’s growing solar and wind resources into on-demand peak capacity while allowing for closure of fossil fuel generating stations.
Hydrostor closed US$37 million (C$49 million) in growth financing in September 2019.