Page 16 - NorthAmOil Week 20

NorthAmOil PROJECTS & COMPANIES NorthAmOil
Shell, Pieridae to try licence transfers again
ALBERTA
These assets in the Alberta Foothills are expected to provide
the anchor production for Pieridae’s planned Goldboro LNG terminal.
SHELL Canada – a division of Royal Dutch Shell – and Pieridae Energy are set to engage in a sec- ond attempt to transfer licences after the first was blocked by the Alberta Energy Regulator (AER).
The regulator said in its May 14 decision that Pieridae’s attempt to buy the assets – which include sour gas wells, pipelines and other facil- ities – from Shell went against the intent of envi- ronmental laws. Indeed, this was seen as a test case of the AER’s position on clean-up costs for energy facilities as it tries to avoid having these costs fall on the taxpayer. The AER noted in its decision that the deal would have split the lia- bility for cleaning up the sites, and argued that responsibility for clean-up should remain with Shell.
Pieridae attempted to sound an upbeat note on the way forward in a May 15 statement that led with the phrase: “Pieridae is confident a solu- tion will be found.”
Pieridae’s CEO, Alfred Sorensen, said that both his company and Shell were evaluating their options and would continue to seek clarity from the AER on how to proceed.
“The decision has nothing to do with Pieri- dae’s financial position nor its ability to clean up certain assets,” he said. “The issue for denial was the fact that there is no precedent for splitting a licence or no ability under the current legislation to do so. This issue only applies to the Waterton and Jumping Pound gas plants.”
Shell Canada’s president, Michael Crothers, said separately that Shell stood by its plans for the assets. The terms of the sale would have left Shell responsible for existing contamina- tion at the assets and Pieridae liable for future problems.
These assets in the Alberta Foothills are expected to provide the anchor production for Pieridae’s planned Goldboro LNG terminal in Nova Scotia. The licences in question cover 284 wells, 66 facilities and 82 pipelines.
Pieridae delayed a final investment decision (FID) on Goldboro in April on deteriorating market conditions. Meanwhile, the transaction with Shell has closed and Pieridae is the owner and operator of the assets despite the regulatory hurdle it has now run into.™
South African oil storage capacity draws interest from US companies
US-SOUTH AFRICA
Between March 1
and April 31, tankers carrying nearly 6mn barrels of US-produced oil departed from the US Gulf Coast and headed to South Africa.
US crude oil producers are reportedly show- ing strong interest in storage capacity in South Africa.
Between March 1 and April 31, tankers car- rying nearly 6mn barrels of US-produced oil departed from the US Gulf Coast (USGC) and headed to South Africa. The US Census Bureau has released data showing that 2.14mn barrels of US-produced crude was exported to South Africa in the month of March. And according to preliminary vessel-tracking data compiled by Argus Media, at least five ships carrying 3.74mn barrels of crude left the USGC in the month of April and were slated to off-load at a new tank farm in the Saldanha Bay Industrial Develop- ment Zone (SBIDZ).
These shipments mark the first large-scale movement of crude from the US to South Africa. US government data show that only three tank- ers plied this route before March 2020 – one car- rying a 500,000-barrel cargo in July 2017, one carrying a 320,000-barrel cargo in July 2019 and one carrying a 320,000-barrel cargo in October 2019.
The Saldanha Bay storage facility is operated by a South African company, Oiltanking MOGS
Saldanha. The depot already has four working tanks, each with a capacity of 1.1mn barrels, and hopes to bring five more online in the third quarter of this year. It may eventually have a total of 12 tanks with a combined capacity of 13.2mn barrels.
US companies are probably taking more interest in the Saldanha Bay depot because they do not have access to adequate storage capacity closer to home. The spread of the coronavirus (COVID-19) pandemic has led to sharp declines in energy demand, and US storage facilities have not been able to accommodate all of the pro- ducers and traders that are saddled with excess supplies of oil.
But there may be another factor at work. According to Argus Media, the new storage auctions that Matrix Global Holdings has developed for Oiltanking MOGS Saldanha may have drawn US firms to South Africa. Matrix has yet to reveal details of the outcome of these auctions, but Argus noted that the company’s previous auctions for capacity in the sour crude oil caverns of the Louisiana Offshore Oil Port (LOOP) and in facilities at Cushing, Oklahoma, have been quite successful.™
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w w w . N E W S B A S E . c o m Week 20 21•May•2020