Arkema fire investigation should be wake-up call; Mexico may compromise on NAFTA; Cheniere eyes LNG growth
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Post Harvey fires should be industry wake-up call-- investigators
Chemical plant fires at the Arkema facility in Crosby, Texas during Hurricane Harvey should be a warning to other industrial facilities ahead of the next hurricane season, according to an investigation by the U.S. Chemical Safety Board (USCB).
Organic peroxides at the Arkema plant in Crosby, Texas, caught fire during the storm when the plant flooded and lost power. The USCB said other chemical facilities should reconsider their own worst-case scenarios.
“Plan and plan again,” said the board’s chairperson Vanessa Allen Sutherland. “Don’t be lulled into a false sense of safety by thinking it can’t or won’t happen here.”
The USCP said there are “major lessons” to be learned from the Arkema fires, lessons the board hopes to share in a final report on the incident by next June.
Mexico may be willing to compromise with US on NAFTA agreements
The Mexican Economy Minister said Mexico is willing to review the North American Free Trade Agreement (NAFTA) every five years, accepting part of a U.S. proposal, while insisting that there must not be any clause that would lead to automatic termination of the deal, according to Bloomberg reports.
The Mexican counter-offer comes after U.S. President Donald Trump’s administration proposed a sunset clause, under which NAFTA would end after five years unless the parties can agree to extend it.
Guajardo told Mexico’s Radio Formula that the clause is unnecessary because the nations already have the ability to withdraw by giving six months’ notice.
The fifth round of NAFTA talks began in Mexico City in mid-November with Guajardo, U.S. Trade Representative Robert Lighthizer and Canadian Foreign Minister Chrystia Freeland announcing they would skip the talks for the first time and leave discussions to their negotiating teams. They held “substantial” discussions at an Asia-Pacific Economic Cooperation gathering in Vietnam earlier in the month, according to a joint statement.
This round of talks is scheduled to run through November 21.
Cheniere Energy earnings surge on LNG volumes
Cheniere Energy has beaten analysts' earnings estimate by a wide margin and its revenues have grown considerably on the back of a surge in liquefied natural gas (LNG) volumes.
The company is expected to continue growing as it brings other LNG trains online and benefits from strong demand in Asian markets, according to analysts.
Cheniere Energy is underway with the construction of three liquefied natural gas (LNG) trains at its facilities in Corpus Christi, Texas, and Sabine Pass in Louisiana and is already planning for more.
The first four trains at the Sabine Pass facility have been completed, with a fifth under construction. At the company's site in Corpus Christi, two trains are under construction, and Train 3 has all necessary regulatory approvals in place.
Cheniere has more than $35 billion in active projects, according to Industrial Information Resources.
Brent-WTI crude oil spread widens on transportation issues --EIA
The U.S. Energy Information Administration forecasts in its November Short Term Energy Outlook (STEO) that the price difference between West Texas Intermediate (WTI) crude oil priced at Cushing, Oklahoma, and Brent, the global crude oil price benchmark, to remain at $6 per barrel (bbl) through the first quarter of 2018 before narrowing to $4/bbl during the second half of 2018.
WTI averaged $2/b lower than Brent through the first eight months of 2017 and averaged $6/bbl lower than Brent in September and October. The forecast Brent-WTI price spread in the November STEO is about $1/bbl wider than was forecast in last month’s STEO.
The wider forecast spread reflects continuing price developments that likely resulted from transportation constraints in moving domestically produced crude oil from Cushing, Oklahoma, and from the Permian basin in Texas to the U.S. Gulf Coast. Although many other factors can affect WTI, Brent, or both crude oil prices at any given time, near-term changes in the Brent-WTI price spread will generally be derived from either changes in pipeline capacity or U.S. crude oil production, the EIA reported.
As U.S. crude oil production has increased, particularly in regions such as the Permian basin, so has the need for more transportation infrastructure to accommodate it. However, the rate of production growth and the scale and timing of when additional pipeline capacity is brought online are not always aligned. EIA estimates that, without pipeline constraints, moving crude oil from Cushing to the U.S. Gulf Coast typically costs $3.50/b, but it has become more expensive as transportation constraints have developed.
The transportation constraints between inland domestic crude oil production and the Gulf Coast have resulted in relatively high levels of crude oil inventories in Cushing. Total commercial U.S. crude oil inventories declined by 25 million barrels from the last week of July to the week ending November 3, but inventories in Cushing increased by 8.8 million barrels. The inventory builds at Cushing have pushed its inventories 51% higher than the five-year average, while inventories for the United States as a whole and in the Gulf Coast region are only 15% and 10% higher than their respective five-year averages.