Croatia Eyes Solar PowerThanks to its exposure to the ...

Croatia Eyes Solar Power

Thanks to its exposure to the Mediterranean sun and the pristine Adriatic Sea, Croatia secures almost 20 percent of its gross domestic product from tourism - but in stark contrast, it has practically neglected electricity production from solar power.

The government is drafting a new strategy aimed at reducing energy imports which is likely to be completed next year.

“I set myself a target to promote solar power in that context as much as possible,” an official involved in the work, who asked not to be identified, told Reuters.

According to the International Renewable Energy Agency, Croatia, which imports nearly 40 percent of its energy needs, could develop 3,200 megawatts (MW) of solar power by 2030, but the lack of a supportive legal framework has deterred investors.

Croatia has installed power of 4,500 MW, mostly from coal and hydroelectricity. Renewable power accounts for 28 percent of production.

It has only 52 MW of installed power in solar panels, some six times less than smaller neighbor Slovenia.

There are no new preferential contracts with investors due to the lack of a legal framework to implement the 2016 renewable energy law.

In addition, last month the government had to raise electricity prices due to high subsidies for renewables.

Stjepan Talan from the Solvis company, the only producer of solar panels in Croatia, started his business in 2008 planning to sell around half of its products at home and export the rest.

“Now we export virtually everything we produce to countries like Germany, France, the Netherlands, Italy, Austria ... as there is in fact no developing local market,” he said.

Greenpeace has started a campaign to raise awareness that Croatia can make a significant leap towards energy independence by investing in green electricity from solar panels.

“Croatia has fewer solar panels than the Slovenian city of Maribor and 50 times less installed capacity than Greece, for example. It’s a shame,” said Zoran Tomic of Greenpeace Croatia.

A decade ago Croatia introduced feed-in tariffs for renewable electricity, but set low quotas for photovoltaic panels due to the technology’s relatively high cost at the time. Since then, investment costs for solar panels have dropped significantly but Croatia has failed to adopt.

“Maybe it would have been more interesting for investors to see lower price incentives, but higher quotas,” said Dubravka Brkic from the Croatian Energy Market Operator.

Edo Jerkic, an energy consultant, also said state power board HEP must be forced to ease and cheapen grid-connection procedures for producers of solar power.

Shell's Oil Trading Chief Quits

The world’s most powerful crude oil trader, Royal Dutch Shell’s head of oil trading Mike Muller, has stepped down after 29 years with the company, an internal announcement reviewed by Reuters showed.

Muller, whose desk trades more oil than any rival, has relinquished his role with immediate effect and will leave at the end of the year “to pursue interests outside of Shell”.

His departure follows the appointment of Andrew Smith as Shell’s new head of supply and trading earlier this year.

Mark Quartermain, currently head of refined products trading, has been appointed Vice President Trading and Supply Crude with effect from Dec. 1.

Under Muller, a Cambridge university graduate, Shell expanded trading aggressively, handling as much as 8 million barrels per day and often taking large position in core markets such as the North Sea, home to benchmark crude Brent.

Smith recently said trading was Shell’s “nerve centre” as it shifts millions of barrels of crude and refined products from fields to its refineries and consumers.

Though Shell does not disclose separately its revenue from supply trading, they often help offset declines in crude oil production when oil prices slump, as has been the case over the past three years, by making profits from price volatility and supply disruptions. Shell, the world’s second largest publicly-traded oil company, traded more oil than any of its top rivals such as BP or trading houses Vitol or Glencore. Shell also helped Mexico hedge its oil output for 2017 and in 2018 become the first oil major to join the program, which has usually been dominated by big Wall Street banks.

Muller’s replacement Quartermain has been responsible for driving the integration between trading, supply and commercial fuels since 2014, when Shell launched a reform of its downstream business which involved bringing trading closer to serving the wider company rather than pursuing its own profits.

Pakistan LNG Import Project Consortium Folds

A consortium behind a liquefied natural gas (LNG) import project in Pakistan, including oil giant Exxon Mobil, France’s Total and Qatar Petroleum, has been dissolved, shipping company Hoegh LNG said.

Hoegh LNG was due to supply the project’s ship-based import terminal, a floating storage and regasification unit (FSRU), where LNG brought in by tanker is converted back to gas to feed into Pakistan’s grid.

The other six members of the consortium were Japan’s Mitsubishi and Turkish developer Global Energy Infrastructure (GEI).

“The consortium has spent considerable time and resources on finding [the project’s] final form and structure. However, by mid-November it has been concluded that no agreement with GEI could be found and the consortium has consequently been dissolved,” Hoegh LNG said in a results statement.

Last month Reuters reported that Exxon Mobil pulled out of the project owing to disagreements with GEI and that Total and Mitsubishi could also quit and join a rival scheme.

The project was set to be Pakistan’s third and biggest by import capacity, starting in late 2018 or early 2019.

Pakistan plans to add its second LNG import terminal by the end of this year, but private companies have proposed building six more, largely around Port Qasim.

Hoegh LNG did not elaborate on the nature of the disagreement with GEI but industry sources with knowledge of the matter said that part of it related to project costs.

“Due to the withdrawal of the LNG sellers from the infrastructure consortium, and the delays to the original start-up date for the GEI project, Hoegh LNG is evaluating its options with respect to the FSRU contract with GEI,” it said.

The company said it is also pursuing alternative opportunities in Pakistan as an FSRU provider.

A highly developed pipeline grid, extensive industrial demand and the biggest natural gas-powered vehicle fleet in Asia behind China and Iran make Pakistan an easy fit for LNG. Official estimates show that imports could jump fivefold to 30 million tonnes per annum (mtpa) by 2022.

The consortium’s split also leaves in doubt a multibillion-dollar deal Qatar has already struck with GEI for the sale of up to 2.3 million tonnes of LNG annually over 20 years.

GEI has approached several companies about joining the scheme, including trading house Vitol.