TPT January 2018

G LOBA L MARKE T P L AC E

Resources Corp, a petroleum pipeline encircling the suburbs of Philadelphia will be converted to the transport of natural gas solely. As reported by Andrew Maykuth, who covers energy news for the Philadelphia Inquirer , Talen is selling its Interstate Energy Co pipeline to Adelphia Gateway, a subsidiary of New Jersey Resources. The 84-mile underground pipeline now delivers either oil or natural gas to two Talen power plants in Pennsylvania. Adelphia Gateway plans to convert the 50-mile Philadelphia- area stretch of the pipeline, which now transports oil in a northerly direction, to carry gas from Pennsylvania’s Marcellus Shale fields southward across three counties. (“An Oil Pipeline Encircling Philadelphia Gets a New Life Delivering Shale Gas,” 3 November) Connecting with a Texas Eastern natural gas pipeline at an existing interchange, the 18" diameter southern pipeline will deliver up to 250,000 cubic feet of gas a day, providing a substantial new source of gas to the region. Adelphia on 2 November launched a solicitation for bids from potential customers. Talen’s Interstate Energy Co pipeline was built in the 1970s to deliver oil from Sunoco’s former Marcus Hook refinery to power plants owned by Pennsylvania Power & Light Co. It was partly converted to natural gas in 1996. Mr Maykuth noted that, with the refinery’s closure and oil’s fall from favour as a fuel source for electricity generation, “The [Adelphia Gateway] pipeline becomes the latest piece of energy infrastructure converted to accommodate new gas production” from the Marcellus Formation. The sale, which requires approval from the Federal Energy Regulatory Commission and the Pennsylvania Public Utility Commission, is expected to take about a year to close. Steel With one conspicuous exception the steelmakers of Japan are enjoying the benefits of a strong tide running in their favour “Japan’s steelmakers are in the midst of the best market conditions in at least three years as steel prices rise with construction in full swing for the 2020 Olympics in Tokyo and automakers boosting production.” Reporting from Tokyo for Reuters, Yuka Obayashi noted that the Japan Iron and Steel Federation has estimated the Olympics-related projects would boost steel demand by 2 to 3 million metric tons. The Japanese steelmakers are getting

engines; and a team to be assembled to design a full-scale commercial-grade gas power plant with carbon capture and storage, including industrial CO 2 sequestration capability. In November 2016, London-based OGCI – comprised of BP, Shell, Saudi Aramco, Total, Eni, Statoil, Repsol, CNPC, Pemex and Reliance Industries – said it would allocate $1bn for fighting climate change over the ensuing ten years. Its fund for this purpose, Climate Investments, was pledged to focus on carbon capture, utilisation and storage (CCUS); reducing methane emissions and transport emissions; and improving energy efficiency. In a joint statement announcing the first three OGCI selections, the ten CEOs of Big Oil who lead it said: “Our aim is to work towards near-zero methane emissions from the gas value chain. We are also committed to ensure natural gas continues to deliver a clear climate and clean air benefit compared to coal.” As reported by energy and environment blogger Jeff Mosier in the Dallas News , US energy giants Exxon Mobil and Chevron beat the “Hurricane Harvey blues” to report a 50 per cent jump in profits during the July-September quarter of last year. Texas-based Exxon, which temporarily shut down refineries and chemical plants along the Gulf Coast during the hurricane in late August, beat Wall Street analyst expectations to report $3.97bn in third-quarter profits – up from $2.65bn during the same period of 2016. That more than covered the $160mn in damage and losses caused by Harvey. As noted by Mr Mosier, Exxon’s performance closely tracked that of California-based Chevron, which reported profits of $2bn during the quarter. To account for the improbably positive results, Mr Mosier noted that American oil companies responding to the 2014 oil price crash implemented cost-cutting measures, including lay-offs and project cancellations. The subsequent lower operating costs would help the two biggest US producers to boost their profits in the third quarter of 2017. (“How Exxon Shut Down Refineries During Hurricane Harvey and Still Made a Profit,” 27 October) A Bloomberg survey of analysts further concluded that large refiners were expected to benefit from a post-storm surge in gasoline prices. An oil pipeline is to be adapted to deliver Marcellus Shale natural gas to the Philadelphia suburbs Under a $189mn deal announced on 2 November between Talen Energy Corp (Allentown, Pennsylvania) and New Jersey Seriously set back by a hurricane? Not Exxon and Chevron

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JANUARY 2018