Dana Petroleum terminates sale of Western Isles FPSO

Energy News Beat

EuropeOffshore

Aberdeen-headquartered oil player Dana Petroleum has terminated the agreement with NEO Energy for the acquisition of the Western Isles FPSO.

Jersey Oil & Gas, NEO Energy’s partner in the Buchan Horst joint venture, said in a statement that the termination comes after the agreement reached its longstop date at the end of February 2025.

It added that the joint venture’s ability to recommit to the acquisition of the FPSO was linked to the satisfactory conclusion of the ongoing fiscal and regulatory consultations and completion of the required pre-handover works on the vessel.

The JV slowed down its progress on the project after the UK government revealed plans for a consultation on new environmental guidance for oil and gas firms. This became necessary after a UK Supreme Court ruling required regulators to consider the impact of Scope 3 emissions in environmental impact assessments for new projects.

“The fiscal consultation was kicked off yesterday and encouragingly, while the details are yet to be fleshed out, it was apparent that the government has heard many of the concerns of the industry,” Andrew Benitz, CEO of Jersey Oil & Gas

The sale agreement for the FPSO was signed back in 2023 when NEO Energy said it would be taking full control of the unit. At the time of the deal, the company owned a 23% stake in the FPSO. The rest is owned by Dana Petroleum. It was supposed to be deployed to the Greater Buchan Area where the start-up was initially expected for 2026.

Following decommissioning from the Western Isles project, the FPSO arrived at Orkney Harbours in late July last year for wet storage.

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Taiwan boosts LNG imports in February

Energy News Beat

Taiwan’s imports of liquefied natural gas (LNG) rose last month compared to February 2024, according to customs data.

Preliminary data from the Directorate General of Customs shows that the country received 1.80 million tonnes of LNG in February.

This is up by 34.8 percent year-on-year compared to 1.33 million mt in 2024.

February LNG imports also rose compared to 1.48 million tonnes of LNG in January, which marked a 14.9 percent year-on-year decrease.

Taiwan paid $993.6 million for LNG imports in February, up from $689.9 million during the same month last year.

The data shows that most of the February LNG supplies came from Qatar (795,884 t) and Australia (452,639 t).

Qatari volumes rose compared to 418,422 t in February 2024, while Australian volumes also increased compared to 336,578 t in February 2024.

Other LNG suppliers to Taiwan last month include Papua New Guinea (154,961 t), Oman (142,773 t), Indonesia (135,165 t), US (60,479 t), and UAE (60,478 t).

During the full year 2024, Taiwan received 21.50 million tonnes of LNG, up by 7.1 percent compared to 2023.

Last year, Taiwan paid $11.92 billion for LNG imports, down from $12.35 billion in 2023.

Taiwan currently imports LNG via two terminals operated by state-owned CPC.

CPC operates the Yung-An LNG terminal with a capacity of 10.5 mtpa and the Taichung LNG import terminal with a capacity of 6 mtpa.

The firm is also expanding its Taichung LNG terminal.

In addition, CPC is also working on the Guantang LNG terminal and the Zhouji LNG terminal.

In December last year, CPC also received the environmental approval for the intercontinental LNG terminal, or the seventh terminal.

 

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Rare capesize scrapping set to proceed

Energy News Beat

Lila Global has arranged to scrap a 25-year-old capesize vessel, making it the second reported cape to head to the breakers this year. In January, NYK Bulkship Korea scrapped the 27-year-old Lady Cedros, beached at Alang, India. 

After Russia attacked Ukraine, buyers rescued a string of vintage ships from demolition, vessels sold at record prices, often to owners registering them to single-ship brass plaque firms, and many continued transporting coal from Russia. 

One such ship is the 172,571 dwt Winnie, formerly Winning Integrity. Reports indicated that buyers had scrapped the vessel in August 2022, but it reappeared after Winning sold it to Lila Global, the shipowning arm of GMS, a cash buyer for recycled ships. Now, it is finally set for retirement. The ship is registered with Stark Maritime, a small two-ship operation, according to Equasis. Stark also has a second capesize under its name, Lila Dalian, a 2002-built vessel that belongs to the Lila Global fleet. 

Winnie is now waiting for scrapping outside a recycling yard in Chittagong, Bangladesh. It travelled from China and was in Murmansk as recently as November. 

Overall, the ship recycling sector has been very sluggish in the opening weeks of 2025. “Ship recycling sales have slowed to such an extent that most yards are now either concentrating on recycling their recent deliveries, all while tier-2 recyclers lie dormant in wait to snag a new low-priced deal, helping demand stay afloat even if prices remain  slippery,” GMS noted in its most recent weekly report. 

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MOL spends $1.7bn buying Dutch tank terminal operator

Energy News Beat

Japanese shipowner Mitsui OSK Lines (MOL) is buying LBC Tank Terminals, one of the world’s largest independent tank terminal operators primarily handling and storing chemicals in Europe and the US. The acquisition of the Dutch firm will cost $1.72bn with the closing of the transaction subject to obtaining permits and approvals from the relevant authorities.

LBC operates seven terminals in Antwerp, Rotterdam, Houston, Freeport and Baton Rouge with a total storage capacity of approximately 3m cu m, berth facilities, pipelines and loading facilities for rail and truck transport.

Following the 2019 acquisition of Nordic Tankers and last year’s purchase of Fairfield Chemical Carriers, MOL now operates one of the largest chemical tanker fleets in the world. 

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Houthis warn attacks on merchant ships could resume tomorrow

Energy News Beat

The Houthis in Yemen issued an ultimatum to Israel on Friday, repeating it yesterday. Unless Israel resumes shipments of humanitarian aid into Gaza by Tuesday, the Houthis will resume attacks on ships. 

“If the Israeli enemy continues after the first four days to prevent the entry of aid into the Gaza Strip … then we will resume our naval operations against the Israeli enemy,” Houthi leader Abdul-Malik al-Houthi warned in a televised address on Friday.

The Israeli government announced on March 2 that it had suspended all humanitarian aid to Gaza after Hamas rejected the ceasefire extension proposed by US Middle East envoy Steve Witkoff.

After more than 100 ships were attacked from late 2023 and throughout last year, the Houthis have ceased its campaign against merchant shipping this year, in line with the tentative peace deal struck between Israel and Hamas. 

British maritime security specialist Ambrey is advising merchant shipping to check their affiliation with the Houthi target profile, and to reassess the risk to voyages through the Red Sea, and the Gulf of Aden. 

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Deep sea cargo fleet moving at record low speeds

Energy News Beat

EnvironmentOperations

Ocean-going merchant ships are moving slower than ever.

Average speeds across the deep sea cargo fleet in the first quarter this year are at a new low, according to data from Clarksons Research.

Certain sectors that have been struggling commercially in the opening months of the year are going especially sedately across the world.

In the LNG space, for instance, a sector that has suffered its worst rates in history this year, speeds have dropped 2% versus the 2024 average to 14.6 knots this year, while bulk carriers have slowed 1.7% compared to last year to move at just 10.7 knots, while product tankers are moving 1.7% slower at 11.2 knots – all record slow speeds.

A 10% speed reduction can lower the emissions of an individual ship’s journey by almost 20%

As well as cutting speed to soak up capacity in a tough rates environment, owners have been slowing down to meet green goals and comply with regulations such as the Carbon Intensity Indicator.

“By far the most effective way to reduce ship climate impacts is to slow ships down. A 10% speed reduction can lower the emissions of an individual ship’s journey by almost 20%,” John Maggs from the Clean Shipping Coalition stated in an article for Splash last month.

“Vessel speeds have been on a long- term downwards trajectory, with speeds now down by ~20-30% since 2008 in most shipping sectors,” Clarksons pointed out in its most recent weekly report.

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A blank spot in cadet training?

Energy News Beat

Andrew Craig-Bennett calls for new requirements before going to sea.

The need to recruit cadets is constant and many, but certainly not all, ship managers and ship owners have cadet recruitment and training programmes.

I hear rather often from friends at sea that they are concerned about the education that their cadets have received before they start their training. It would seem obvious that a good grasp of mathematics, physics and chemistry is needed, because seafaring in each of its specialisations is within the ‘STEM’ (science, engineering, technology, mathematics) group of subjects.

Much of cadet training is built on a knowledge of these subjects, but in reality many cadets are weak in maths, physics and chemistry.

We have been much too lax about this. We have assumed that basic exam passes in English language, mathematics, physics and chemistry, mean what they say, and we have built cadet training in the classroom in shore establishments on these, without really checking that cadet recruits know their way around the ideas and are comfortable with them.

Unfortunately it is easy for a cadet to conceal a weakness in, say, physics, and multiple choice questions such as are commonly used tend to facilitate this.

All is well until a junior officer actually has to know about the black art of ship stability in real time.

A cadet may be weak in chemistry, but again, the weakness does not disclose itself until he or she is confronted with, say, a fire in a container, or in a hold, or has to decide if an enclosed space is safe to enter.

These are real dangers. Yes, the IMO model courses are good, but they assume a level of school knowledge that may not be there.

The frequency with which this comes up in conversations makes me think that this isn’t confined to any particular nationality; it certainly isn’t universal but it is common.

I don’t mean the sort of mistakes that cadets have always made because they are unfamiliar with ships and the sea. I used to share an office with a man who as a first trip cadet had been asked by the Mate, hydrometer in hand, in the Suez Canal, to bring him a bucket of water, and came back with a bucket of fresh water. He went on to have a perfectly good career. It’s probably some time since a cadet was sent to ask the boatswain for some green oil for the starboard lamp, or to ask the chief engineer for the key to the keelson. I mean dangerous blank spots in knowledge.

As a young man I handled a Lloyds Form salvage of a pocket container ship which had sailed on a very inadequate GM and as she burned fuel…Some years after that I had to deal with a coal carrying ship where before starting to weld on a hatch cover the Mate had tested for gas in the wrong place. A man died. Much more recently on a big container ship I wanted to enter an enclosed space and the Mate came back with the wrong meter. We can all of us think of similar cases that have happened to us. These are all cases of people simply not understanding basic science – “school” science.

I think we can take it that the teaching of sciences in the schools that our cadets go to is not going to get better in less than geological time. So we, as an industry, have to do something.

Medical schools at universities sometimes offer a pre-med course to students who are promising but who lack a good enough grounding in basic science. |Typically, this lasts a year, during which time the students weak spots are found and the blank spots filled in.

Maybe our industry should do the same, with mathematics, physics, chemistry and basic IT skills. Time for a new IMO model course and a new requirement before going to sea.

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Xingtong books chemical tankers at Taizhou Kouan

Energy News Beat

Chinese chemical tanker player Xingtong Shipping has contracted four stainless steel newbuilds at Taizhou Kouan Shipbuilding.

The Shanghai-listed company said its subsidiaries are paying $91.5m in total, excluding tax, for two 13,000 dwt and two 13,800 dwt vessels.

Set up in 1997, Xingtong controls a fleet of 45 vessels comprising chemical and product tankers and LPG carriers, of which 14 are deployed on international trades.

Deliveries to Singapore and Hong Kong divisions are scheduled from July 2026 through to January 2027.

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Chris Wright Moves to Refill The Strategic Petroleum Reserve

Energy News Beat

Many people are curious about the Trump administration’s plans to refill the Strategic Petroleum Reserve (SPR) that was so callously abused by whomever was making decisions in the Biden administration, which drew this national security tool down to depleted levels not seen in more than 40 years.

Created in the early ‘70s by congress and President Richard Nixon as a security response to the first Arab Oil Embargo, the SPR is intended for use during war time and other national emergencies to ensure against the collapse of the economy and that the U.S. military has fuel to power America’s war machine. It was not intended to be cut by 40% to influence a mid-term election, as whomever was in control of the Biden autopen which signed the pretend President’s name to every executive order, bill, and pardon issued during his administration decided to do.

A widespread perception exists in the public that refilling the SPR is like waving a magic wand and getting congress to appropriate billions of dollars to fund it. But the reality is that there is a whole, complex process involved after funding is secured. That process involves advance public notice, taking multiple bids for each tranche of crude to be purchased, and then properly injecting the oil back into half-filled salt caverns, some of which may have seen their integrity damaged by sitting unfilled for so long.

It is also a process that involves immense volumes of crude. Total capacity of the SPR today is 797 million barrels of oil, which equates to roughly 33 days of total U.S. consumption, but about 4 months of U.S. crude imports. The Biden people, desperate to mitigate losses in the 2022 midterm elections, chose to draw the reserve down to just 340 million barrels. Despite repeated promises over the last two years to rapidly refill the Reserve, it currently holds just 395 million barrels.

The refilling process is overseen by the Department of Energy, and Secretary Chris Wright announced the administration’s plans for executing this process this past week.

Here is an excerpt from the story at Reuters:

U.S. Energy Secretary Chris Wright estimates it would take $20 billion and years to accomplish President Donald Trump’s goal of refilling the Strategic Petroleum Reserve to its maximum capacity, the Energy Department said on Friday.

President Donald Trump said on his first day in office he wants to fill the reserve up to the top as part of a policy to support oil and gas.

Former President Joe Biden’s administration sold nearly 300 million barrels from the reserve including a 180-million-barrel sale in 2022 after Russia invaded Ukraine. The sales pushed the SPR to the lowest level in 40 years.

“The Energy Department has not made any budget requests to Congress at this time,” a department spokesperson said.

It will take years to refill the reserve, the spokesperson said, and a request that size to Congress is not something the department would do immediately in one request given the other budget concerns of the department, which also manages the nation’s arsenal of nuclear weapons.

Wright had told Bloomberg News in an interview he was seeking $20 billion which would restore holdings “just close to the top.”

 

[End]

It’s important to note that these caverns can only maintain integrity through a handful of inflows and outflows before their ability to contain the crude begins to break down. So, this practice of using the SPR for crass political purposes by past presidents and several different congresses really needs to end.

It’s great to see Sec. Wright and President Trump following through on this effort to bolster this crucial national security asset. Once they get the thing refilled, this era of stupidly using the SPR as a political football needs to be brought to a full and permanent stop.

Please follow David Blackmon on his Substack: https://blackmon.substack.com/

 

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Sanctions Are Tangling, Not Stopping, China’s Iran Oil Trade

Energy News BeatDark Fleet tankers sit side-by-side preparing for oil to be transferred between them in the sea east of Malaysia - Bloomberg

ENB Pub note: Interesting from Bloomberg. Also, we need to look at how much oil California potentially still imports from Iran. The official list of imported oil in California is: “According to the California Energy Commission, in 2020 (the most recent detailed foreign source data available), the state imported approximately 60% of its crude oil, with major suppliers including Saudi Arabia (28.9%), Ecuador (22.3%), Iraq (15.9%), and Colombia (9.8%). Iran is not listed among these sources due to the sanctions.” However, there are records of ship-to-ship transfers that Iraq and Iran have helped. So, California being an energy importer from several sanctioned countries is not a good thing and is a massive point of hypocrisy. Importing 60% of a state’s oil is despicable. – just saying


Successive rounds of sanctions on companies and tankers said to be aiding Tehran are finally slowing the flow of Iranian oil to China, as costs rise and more traders are compelled to engage in risky efforts to circumvent US measures.

In recent weeks, shipments have been disrupted by a spate of seller defaults, according to executives at Chinese private refineries, the buyers of most of Tehran’s cargoes. While they said no specific reason was provided, they blamed logistical challenges and higher expenses snarling the supply chain.

Some Iranian tankers have been sanctioned en route to their destination, the executives said, adding to the disarray. They asked not to identified as the discussions are private.

Trade with China, by far its largest oil buyer, has long been a financial lifeline for Tehran, and one that Washington has increasingly been focused on severing. After the latest rounds of sanctions on tankers, owners, brokers and traders, the US blacklist now covers more than two-thirds of the approximately 150 vessels that handled the shipments of Iranian crude in 2024, according to data analytics firm Kpler.

China does not recognize unilateral sanctions and has repeatedly defended its right to trade with Iran. But the realities of the vast US financial system mean ports and shipping companies with links outside the mainland are reluctant to risk dealing with sanctioned entities and vessels, especially as US President Donald Trump promises tougher enforcement.

Earlier this year, Shandong Port Group — which serves a province that is a hub for private refiners — urged operators to reject blacklisted tankers.

The cost of working around Washington’s curbs is hefty and rising. The chartering rate for a non-sanctioned supertanker willing to move Iranian oil from Malaysia to China was pegged at between $5 million to $6 million earlier this month — a level that traders say is a record high and an increase of as much as 50% from last year.

The use of smaller tankers — less cost-effective than more typical large alternatives — has spiked, based on Kpler data. In February, a ship-to-ship oil transfer off Malaysia was conducted between an Iran oil-laden supertanker and three Aframax-size vessels, an unusually slow and expensive move.

Shipping analysts have also pointed to an increasingly limited number of available vessels, as the US blacklist grows in size. That’s a significant hurdle, given the trade leans heavily on transfers at sea and requires a large number of ships.

Deep discounts

Middlemen and traders typically offer Iranian oil to buyers at a fixed differential to a global pricing benchmark, such as Brent futures. This price includes the cargo’s value as well as add-on costs of booking tankers — typically two or more are needed for this route — STS transfers, insurance and port fees.

Sudden spikes in any of these costs, or indeed the failure to secure vessels or delay, can erase traders’ profit and the deal’s viability. A higher price, meanwhile, reduces the attraction for China’s cost-sensitive buyers. Last week, offers for Iranian crude for China delivery were on the rise, with the discount on Iranian oil narrowing to $0.50 to $1 a barrel against Brent futures, traders said. That compares to a discount of $1 to $1.50 a week earlier

Big jumps in freight rates are a headache for sellers as the expense is tough to pass on, said Mia Geng, a Singapore-based oil analyst with FGE Group. “Faced with the prospect of shipment delays, Chinese buyers will be looking for deep discounts, which would eat into the profits of sellers and middlemen.”

But increased friction in the trade does not mean that China’s purchases from Iran will slow dramatically — much less cease.

The trade has been thriving since 2018 when US sanctions on Tehran were reinstated, and has proven to be adaptable. Last month, flows surged to a four-month high, partly due to a backlog of delayed cargoes from the prior month.

Sanctions are an imperfect tool, said Ja Ian Chong, associate professor of political science at the National University of Singapore.

“While they’re sometimes described as a way to seal off a certain trade or nation, the point is always to raise the cost of operating to an extent that it forces a change in behavior,” he said. “There will always be some leakage under any form of sanctions.”

In the waters off Malaysia, the most significant mustering point for the shadow fleet anywhere in the world and a hub for the Iranian crude trade, more ship-to-ship transfers have been happening entirely in the dark, meaning all transponders are turned off.

Up to seven transfers were observed on a single day last month, according to satellite images. Analysts said most of them were totally “dark”, indicating shippers are taking more precautions as Washington points to increased enforcement.

To date, tactics like these have been enough to muddy the origin of cargo, far from prying eyes. US President Donald Trump, though, has signaled he intends to apply “maximum pressure” on Iran. For that, Washington could tighten up the application of secondary sanctions on those dealing with Tehran, a move that would cool trade further, and could even attempt enforcement at sea.

A Reuters report last week, citing several US officials, said the Trump administration was considering a plan to stop and inspect Iranian oil tankers, a move that’s sure to deter or spook some operators and brokers in the China trade — even if it is unclear whether US forces and willing allies would have the capacity to carry this out.

Financial institutions working with private Chinese refiners who import Iranian oil may come under fresh scrutiny, or Washington could choose to pressure countries such as India and the United Arab Emirates, where key shipowners and dark fleet operators are based, according to Anoop Singh, Oil Brokerage Ltd.’s global head of shipping research.

So far, the US has aimed at ships and owners, and the market has created workarounds, said Singh. “However, there are more critical parts of the network to target, from banks to governments to flag states and insurers — and regulatory avenues to explore.”

— With assistance from Weilun Soon – Bloomberg

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