Oil and gas industry comments: 25 November 2014

Chevron Phillips Chemical

Digital technologies such as social media, mobile devices and the internet are growing exponentially, connecting people from around the globe. This global connectivity is becoming a driving force behind greater transparent of corporate conduct, and is redefining what sustainability means for the petrochemical industry, according to Peter L. Cella, president and CEO of Chevron Phillips Chemical Company LLC.

Cella commented in a presentation at the Gulf Petrochemicals and Chemicals Association (GPCA) Annual Forum on how sustainability has evolved over the years and how the changing expectations on transparency and corporate conduct in a digital age are impacting the industry. He said, ‘doing the right thing and communicating with greater transparency is becoming an imperative, and social media is one of those essential vehicles.’ Social media has made the transparency process much easier for businesses, and its power is astounding, and growing. User activities on Facebook, Twitter and other social media platforms lead to almost immediate action, both positive and negative. It’s this dynamic that businesses and leaders should recognise so they can provide greater transparency among their customers and stakeholders.

Cella continued to explain that customers, business partners, employees and other stakeholders want to work with transparent companies that openly display good corporate conduct. The numerous social media resources readily available allow for prompt and broad communication of strong stewardship and other positive endeavours for companies.

‘Let’s be proactive and transparent in shaping our reputation,’ said Cella. ‘Social media platforms allow us to do just that, by providing a window into our corporate conduct. They also allow us to gather rich insight and identify potential issues. Let’s use the medium to our benefit.’

Fitch Ratings

The recent final approvals and construction groundbreakings for several LNG export facilities along the Gulf Coast will make US LNG exports a reality in the near term. This week the US DOE approved Freeport LNG’s expansion and liquefaction facility. Freeport and Cameron LNG have broken ground on export facilities and Sabine Pass is in advanced construction, moving the US closer to becoming a major exporter of LNG.

DOE recently stopped reviewing non-Free Trade Agreement (FTA) export applications. Instead it will only act on applications after the review required by the National Environment Policy Act has been completed and suspended its practice of issuing conditional decisions prior to final authorisation decisions. While we believe this may quicken the pace of approvals, the actual timing and overall number of approvals remain unknown.

With Freeport LNG, Cameron LNG and Dominion’s Cove Point LNG projects underway and Cheniere set to finish construction on Sabine Pass and start exporting gas late next year, the US is moving closer to becoming a larger scale energy exporter. Whether or not this will have a meaningful impact on gas price remains unclear as the approved levels of export activity remain a small percentage of total US gas production. The emergence of US LNG exports is contributing to the energy diversification strategy in countries like Japan that have been reliant on nuclear energy. However, the additional LNG capacity from the US is not expected to dramatically affect global pricing, as the projected US volumes are insufficient to materially alter the balance of global supply and demand.

With final approvals received and construction underway at Cameron and Freeport, there are currently three LNG export projects under construction in the US, representing roughly 3.7 billion ft3/d of liquefaction capacity. Upwards of 28 billion ft3/d of capacity remains in the queue for DOE or Federal Energy Regulatory Commission approval before being able to commence construction. In our view, these approvals are critical to the success of those facilities as non-FTA countries are the majority of the potential LNG market.

Institution of Engineering and Technology

Thousands of female engineers will be trained up as part of a national mission to get Britain building again said Ed Miliband, and Michelle Richmond, from the Institution of Engineering and Technology has responded:

‘It’s great to see that Ed Miliband is making plans to tackle the engineering skills shortage. This is a very significant problem, contributing to skills shortages which damage the economy. The shocking reality is that the UK is missing out on half its potential engineering and technology workforce by failing to attract women into the industry. It also means that women are losing out on interesting and rewarding career opportunities.

‘The difficulty in attracting women into engineering is down to a combination of things: from the careers advice girls are given in schools, to schools not instilling girls with the confidence to opt for science and maths at A Level, through to employers needing to do more to make their approach to recruitment and retention more female friendly. There is no easy fix to this problem so it’s important that any future training programmes are developed in close consultation with industry, schools and colleges if we want them to make a real and lasting impact.

‘The lack of inspirational engineering role models for girls is also part of the problem so we must make sure we show the next generation that engineering is an interesting and challenging career choice, which is why initiatives like Young Woman Engineering of the Year Awards are so important.’

Edited from various press releases by Claira Lloyd

Read the article online at: https://www.hydrocarbonengineering.com/refining/25112014/oil-gas-industry-comments-25-nov/