Monday, July 01, 2024

Shares in China rare earth producers rise after new regulations

Reuters | July 1, 2024

The giant mine in Bayan Obo, Inner Mongolia near Baotou City, produces the bulk of the world’s rare earths and does so as a byproduct of iron ore mining. | Source: NASA

Shares in China’s largest rare earth producers rose on Monday after Beijing announced regulations aimed at protecting supplies of the strategic minerals in the interest of national security, a move some in the market said could potentially tighten supply.

The regulations, issued on Saturday by China’s State Council, or cabinet, take effect from Oct. 1 and stipulate that rare earth resources – a group of 17 minerals used in products from magnets in electric vehicles to consumer electronics – belong to the state.

Shares in China Northern Rare Earth Group High-Tech, China Rare Earth Resources and Technology, Rising Nonferrous Metals Share and Shenghe Resources Holding jumped by 4.8%, 4.1%, 1.8% and 0.5%, respectively.

The regulations follow draft rules in early 2021, with changes including the removal of earlier language saying that companies engaged in rare earth smelting and separation could use imported supplies on top of allocated supply quotas.

“We believe there might be a further control over the smelting and separation of the imported ore,” Sinolink Securities wrote in a note.

China is the world’s dominant producer of rare earths and has taken various measures to tighten management of the industry even as Western countries try to reshape supply chains to ease dependence on Chinese supply.

Some industry players said they were seeking further clarity on the new regulations.

“What we have got so far is that it might not impact the international business much for the moment, but it’s hard to tell whether it will be the case in the future,” said an overseas rare earth buyer, declining to be named as he is not authorised to speak to media.

“It feels like there might be a trend that exports will need some specific licence, but the wording itself does not make this clear enough,” said an analyst on condition of anonymity due to the sensitivity of the matter.

Another analyst, also declining to be named, said the new regulations mean it is likely that, unlike in 2023, China will refrain from issuing a third batch of supply quota this year.

Ge Honglin, chairman of the China Nonferrous Metals Industry Association, said the regulations would reduce industry demand for non-renewable resources, extend the life of mines, and reduce environmental harm.

(Reporting by Beijing newsroom and Tony Munroe; Editing by Jan Harvey)

Hedge funds are hoarding cobalt amid battery metal slump

Bloomberg News | July 1, 2024 |

View of the Metalkol cobalt and copper tailings reprocessing project.

Credit: Eurasian Resources Group

Hedge funds including Anchorage Capital Advisors and Squarepoint Capital LLP have been building positions in cobalt by buying up physical material, as tumbling spot prices and a more liquid futures market create new trading opportunities in the battery metal.

Cobalt is a relatively tiny and specialized market compared with commodities like copper or oil, and prices have dropped to the lowest in more than seven years as the market is flooded with production from the Democratic Republic of Congo and Indonesia.

The hedge funds’ moves are the latest sign of financial players getting involved in physical metal trades, as money flows back into commodities while oversupplied metal markets create opportunities to make a profit by buying at cheap spot prices.

It’s also reviving memories from almost a decade ago, when funds including Pala Investments took advantage of weak cobalt prices to buy up piles of metal in a bet on the nascent energy transition. (The bet paid off, as prices soared over the next couple of years.)

At the time, the absence of a liquid futures market meant that buying real-world cobalt was one of the only ways available to bet on rising prices.

Today, the situation looks a little different. Cobalt futures trading has taken off on CME Group’s Comex exchange, creating a way for traders to hedge their physical positions in the newly liquid futures market.

The ballooning surplus has also led to a widening gap between depressed spot prices and higher-priced futures on the Comex, with contracts for delivery in a year’s time having traded as much as 20% higher than spot prices.

The wide discount between spot and futures prices creates opportunities for “cash-and-carry” trades, — if spot prices surge, owners of physical metal would be able to sell their cobalt at a big profit, and even if they don’t, they can lock in a return by selling futures.

Squarepoint has been buying cobalt metal from traders, according to people familiar with the matter, while Anchorage has been buying both cobalt metal and cobalt hydroxide — an intermediate product in the production of cobalt sulphate that goes into EV batteries. Anchorage has also been active in trading on CME, said some of the people, who asked not to be identified as the information is private.

Representatives for Anchorage and Squarepoint declined to comment.

While cash-and-carry trades are commonplace in larger commodities like aluminum and copper, there is an added layer of risk and complexity for traders looking to capture the spread in the cobalt market because the CME contracts are cash settled. That means the funds can’t deliver their cobalt to the exchange when they are ready close out the trade, and would have to find a buyer for the metal in a small and illiquid physical market.

That might not be easy, given that the market is already awash with excess metal. Surging supply and weaker-than-expected sales in the EV sector have contributed to a record surplus in the market this year, and many in the industry are pessimistic about the prospects for a rebound. The rise in popularity of lithium-iron phosphate batteries, which don’t require cobalt, also poses a threat to demand.

One cause for optimism has come from China’s strategic stockpiling agency, which has been mopping up surplus inventories in record volumes this year, in a trend that underscores the metal’s strategic value both in electric vehicles and defense. The US has also made inquiries about buying metal from traders in the past, and is seeking to reinvigorate its own stockpiling program.

Last time around, Pala and other funds sold their cobalt to a listed company called Cobalt 27, which built up the largest private stockpile of the metal and saw its value soar as prices took off, before crashing as new supplies from Congo flooded the market.

(By Yvonne Yue Li, Mark Burton, Jack Farchy and Archie Hunter)

Lake Resources to cut more than 50% of global workforce

Reuters | June 30, 2024

Kachi lithium brine project. Photo by Lake Resources.

Australia’s Lake Resources said on Monday it will slash more than 50% of its global headcount, including six members of the company’s executive team, to cut costs and maximize the value of its flagship Kachi project in Argentina.

Last week, the lithium developer said that it is laying off staff and selling assets as prices for the metal crucial in the production of electric vehicle batteries have fallen, due to Chinese oversupply and concerns that the EV industry is not growing as fast as expected.

Earlier in March, it said it would reduce global headcount by nearly 50% across its non-core operational and administrative workforce.

The company also said that it is managing an ongoing process for the potential sale of its non-core assets and lithium tenements in Jujuy and Catamarca provinces in Argentina.

It added that the cost reductions are expected to reduce consumption through the second half of 2024.

(By Archishma Iyer; Editing by Christian Schmollinger)

Tata Steel workers in UK suspend strike action in favour of talks

Reuters | July 1, 2024 |

Credit: Tata Steel

Tata Steel workers in Britain suspended a planned all-out strike and overtime ban on Monday, following a warning from the company that it would bring forward the planned closure of its two blast furnaces in the country if the walkouts went ahead.

Workers at the Port Talbot and Llanwern sites in Wales, represented by the Unite union, are locked in a dispute with India-owned Tata Steel over its decision to close the blast furnaces and cut up to 2,800 jobs.

Around 1,500 workers at the sites, who had already begun an overtime ban on June 17, were also due to start an indefinite strike from July 8.

But the union said it had paused industrial action after confirmation from the company that it was prepared to enter talks about “future investment for its operations and not just redundancies”.

“This is a significant development in the battle to protect jobs and the long-term future of steel making in South Wales,” Unite General Secretary Sharon Graham said.

“It is essential that these talks progress swiftly and in good faith with the focus on fresh investment and ensuring the long-term continuation of steel making in South Wales.”

A spokesperson for the company, which had also threatened legal action challenging the validity of Unite’s strike ballot, welcomed the union’s move to suspend strikes.

“Given we can now be confident of ensuring appropriate resourcing of activities to operate safely, we will halt preparations for the early cessation of operations on Blast Furnace 4 and the wider heavy end in Port Talbot,” they said.

The resumption of talks will “focus on the future investments and aspirations for the business, and not on a renegotiation of our existing plan for the heavy-end closure or the enhanced employment support terms”, the spokesperson added.

The company, which employs over 8,000 people in Britain, has previously said that its steelmaking assets were near the end of their life, operationally unstable and causing unsustainable losses of 1 million pounds ($1.26 million) a day.

($1 = 0.7915 pounds)

(Reporting by William James and Muvija M, Editing by Kylie MacLellan and Sharon Singleton)

NIGERIA

Fire Breaks Out at Africa's Biggest Refinery

Dangote fire — Bystander image via social media

The Dangote Refinery, the newest and largest facility of its kind in Africa, reports that it sustained a "minor fire" on Wednesday. Video from the scene showed smoke and flame billowing from one corner of the plant, but the operator said in a statement that the blaze had no impact.

"We have swiftly contained a minor fire incident at our effluent treatment plant," said communications officer Anthony Chiejina in a statement. "There is no cause for alarm as the refinery is operating and there is no recorded injury or body harm [sic] to any of our staff on duty."

The long-delayed refinery project began production in January and is in a commissioning and ramp-up phase. It is a $20 billion endeavor, bankrolled by Africa's richest man, Aliko Dangote. When completed and fully online, the 650,000 bpd complex will be the biggest refinery in Africa and Europe.

It will rectify one of Nigeria's economic quandaries: though the nation has a wealth of oil and gas, it has historically had to export all of its production and import all of its refined products, since it has lacks efficient domestic refining capacity. Its four publicly-owned refineries have an "abysmal" performance record, with an average capacity utilization of just 15 percent, according to a study by Lizabetha Agbakahi of the University of Dundee. Since an estimated $3-5 billion of national oil revenue is lost to theft and corruption every year, the state financing available to invest in refining infrastructure is less abundant than it might seem from Nigeria's massive oil sales figures.

The privately-held Dangote refinery is big enough to supply all of Nigeria's domestic fuel needs, and should have enough capacity left over to export refined products to foreign markets. This will help reduce the cost of fuel for Nigerian citizens, who have seen prices skyrocket over the past year thanks to the cancelation of government subsidies. One hurdle: upstream oil producers in Nigeria have refused to sell crude to the new refinery, according to Dangote and the Crude Oil Refineries Association of Nigeria (CORAN). The refiners want to buy and sell using the local currency, the naira, so as to avoid the dollar shortage in cash-poor Nigeria. The Nigerian legislature recently enacted a law requiring domestic oil producers to sell their crude to domestic refiners first, though legal experts question whether the rule will be enforceable.

"I think that law was specifically put there by legislators not to starve the refineries. But what we have seen is a huge and still resistance by the producers of crude in Nigeria. They will rather prefer to export crude abroad to selling to local refineries," CORAN chairman Momoh Oyarekhua told Channels Television.

August Offshore Wind Lease Sale Scheduled for Two Central Atlantic Areas

offshore wind farm — Next U.S. offshore wind auctions are scheduled for August for two Central Atlantic sites (file photo)

The Department of the Interior announced today it would hold an offshore wind energy lease sale in the Central Atlantic. The areas are to be auctioned on August 14, 2024, by the Bureau of Ocean Energy Management with an indication that they could provide power for up to 2.2 million homes. It is the latest in a series of accelerated steps by the Biden Administration to move forward with its agenda for clean energy.

“We are taking action to jumpstart America’s offshore wind energy industry and using American innovation to deliver reliable, affordable power to homes and businesses, while also addressing the climate crisis,” said Secretary Deb Haaland.

The Bureau of Ocean Energy Management anticipates strong interest in the auction noting that 17 companies qualified to participate in the August sale. Among the companies are Avangrid, BP, Corio, Equinor, RWE, Shell New Energies, TotalEnergies, Virginia Electric and Power Company, and multiple sole purpose entities that are likely development partnerships.

The region has already been opened up for development by Dominion Energy which began offshore work this spring on its Coastal Virginia Offshore Wind project. Due for completion in 2026, it is slated for a capacity of 2.6 GW, making it the largest offshore wind farm so far approved for the U.S. Dominion Energy has indicated its interest in additional projects.

Draft map of the region from December 2023 showing the position of the proposed leases (BOEM)

The Final Sale Notice for the auctions will be published in the Federal Register on Monday, July 1. It features two areas that combined have the capacity for approximately 6.3 GW according to the Department of the Interior.

One of the areas to be included in the August auction is offshore the Commonwealth of Virginia. The lease area consists of 101,443 acres and is approximately 26 nautical miles from Delaware Bay. The second area consists of 176,505 acres and is approximately 35 nautical miles from the mouth of the Chesapeake Bay. BOEM highlights that it partnered with the National Oceanic and Atmospheric Administration’s National Centers for Coastal Ocean Science to develop a comprehensive, ecosystem-based ocean planning model that assisted in the selection of the final lease areas.

BOEM included several lease stipulations and bidding credit provisions in the auction process. Bidders will be able to earn credits if they commit to supporting workforce training programs, establish or contribute to a fisheries compensatory mitigation fund, or if it make every reasonable effort to enter into a project labor agreement covering the construction stage of any project for the lease areas

The Department of the Interior reports that it has approved the nation’s first eight commercial-scale offshore wind energy projects in federal waters. BOEM also held four offshore wind lease sales, including offshore New York, New Jersey, and the Carolinas, and the first-ever sales offshore the Pacific and Gulf of Mexico coasts. The Department recently announced a schedule of up to 12 additional lease sales through 2028 and agreed with Maryland to evaluate additional areas that could become additional wind energy areas in the Central Atlantic region.

Bulker Encounters Swarm of Unmanned Boats off Yemen

In a concerning new development for the security of merchant shipping in the Red Sea, a bulker has reported an encounter with a large swarm of suspicious small craft off the coast of Mokha, Yemen - some of which appeared to be unmanned.

For at least the last seven years, Yemen's Houthi rebels have been developing unmanned waterborne improvised explosive devices (WBIEDs), with help from the military forces of Iran. The Houthis have used these bomb boats with varying degrees of success, first against Saudi maritime interests and more recently against international merchant shipping. A thinly-disguised "fishing boat" struck and disabled the bulker Tutor in the Red Sea on June 12, killing one crewmember and flooding the engine room. The group returned with another bomb boat to inflict further damage, and Tutor ultimately sank (after additional Houthi intervention). The group also claimed a strike on the bulker Seajoy on June 27.

In these previous encounters, Houthi remotely-controlled bomb boats have attacked one by one. On Sunday, the bulker Summer Lady informed UK Maritime Trade Operations (UKMTO) that she had been approached by a flotilla of suspicious small craft, composed of a mixture of "fast boats and smaller kayak-type boats." Multiple vessels in the group appeared to be uncrewed, a sign of potential suicide-drone capability.

The master of Summer Lady reported that these suspicious watercraft remained near the vessel for an hour before departing the area. The bulker was unharmed, and it headed for its next port of call.

Later in the day, U.S. Central Command announced that American forces destroyed three unmanned surface vessels in the Red Sea. CENTCOM's announcement did not specify whether these unmanned boats were related to the Summer Lady encounter, but said that the targets "presented an imminent threat to U.S. and coalition forces, and merchant vessels in the region."

On Sunday, a Houthi spokesman released a video showing the first glimpse of the group's operating tactics for remotely-controlled boats, below. In the demonstration, a manned speedboat with crewmembers maneuvers aggressively between a series of buoys (time marker 1:30). At a predetermined location, the operators jump off the stern, and the boat continues to maneuver on its "own," with remote guidance.

Houthis Continue Attacks, Including Five Missiles at One Ship

naval escort — HNLMS Karel Doorman protecting merchant ships (EUNAVFOR Aspides)

The Houthis are asserting a broad array of attacks conducted on a range of ships in both the Mediterranean and the Red Sea, including a barrage at one vessel and targeting a Maersk vessel. Spokesperson Yahya Saree asserted all the attacks were for support of Israel or calling in Israeli ports while saying that Maersk, is “one of the most supportive companies” for Israel.

Most of the attacks were uncorroborated by the U.S. or UK, which monitor the activities as part of their defense operations.

The UK Maritime Trade Organizations however did receive one report from an unnamed vessel in the Red Sea. The master reported that five missiles landed near the vessel while they were in a position 150 nautical miles northwest of Hodeidah, Yemen. Despite the missiles landing in close proximity to the vessel, the report said there was no damage or injuries and the ship was proceeding.

The Houthis claimed attacks on two vessels in the Red Sea in their latest announcement. One the Delonix, a 20,600 dwt product carrier registered in Liberia they called an “American ship.” The ship is managed by Merman Maritime of Greece and bound from the Suez Canal to China. The other vessel in the Red Sea was identified as a bulk carrier Ioannes, which the Houthis said was targeted “by a number of uncrewed surface boats.”

The other two ships that were identified today were both in the Mediterranean near the northern entrance to the Suez Canal. The Johannes Maersk is a smaller, 3,000 TEU container ship registered in Denmark. The other vessel is the Waler (7,279 dwt), a Turkish-owned and managed product tanker. The vessel registered in Panama shows it is traveling from Turkey to the Suez, but the Houthis contended it was “on its way to the port of Haifa.”

Although they have now asserted multiple attacks on vessels in the Mediterranean, none have been confirmed. They claimed today to have fired cruise missiles at the two vessels in the Mediterranean.

During today’s rally, the leader of the Houthis reiterated the threat against shipping and specifically singled out the announcement that the U.S. would be sending a replacement aircraft carrier (USS Theodore Roosevelt) to the region. He said they were not afraid and the carrier would become an immediate target when it entered the zone.

Today’s reported barrage came after several other reports of possible ships being targeted this week but overall less reports from the U.S. and UK. In the past 48 hours, CENTCOM said it destroyed one aerial drone and took out another radar site as it continues to attempt to diminish the capabilities of the Houthis. Late on Friday, CENTCOM added that U.S. forces had destroyed seven aerial drones and one ground control station vehicle. EUNAVFOR Aspides also highlighted that the Dutch HNLMS Karel Doorman and Italian Virginio Fasan were both actively patrolling and protecting merchant ships in the area.

At the same time, there are unconfirmed media reports that while Saudi Arabia’s Defense Minister Khaled bin Salman was meeting with Chinese officials this week he asked for their support with the Houthis. Reported suggested the Saudis might be seeking Chinese help to halt the attacks on ships heading to and departing from Saudi ports.

Houthis Hit Another Merchant Ship With a Bomb Boat

Location of the bomb boat attack (courtesy UKMTO)

Another commercial vessel has been hit by one or more Houthi suicide drones in the Red Sea, according to the Royal Navy's UK Maritime Trade Operations (UKMTO) office and multiple maritime security consultancies.

According to UKMTO, a vessel transiting the Red Sea was attacked by a waterborne improvised explosive device at 0645 GMT on Thursday morning. The incident occurred about 80 nautical miles southwest of Hodeidah, Yemen, an area of high activity for malicious Houthi operations.

The vessel and the crew were reported to be safe, and the ship is under way to its next port of call. Western military forces are investigating the circumstances of the attack.

In a statement, Houthi spokesman Yahya Saree identified the target vessel as the Greek-owned, Malta-flagged Panamax bulker Seajoy. He said that Houthi forces targeted the ship with multiple missiles, drones and an uncrewed surface boat, leading to a "direct and accurate hit." He claimed that the vessel was targeted because it called at a port in Israel, a violation of the Yemeni group's attempted embargo on Israeli maritime commerce.

Seajoy's last received AIS position was in the Strait of Malacca on June 12, headed westbound. Her last declared destination was Durban, South Africa, and her AIS record shows no signs of a port call in Israel in the last 12 months, according to data from Pole Star.

Houthi WBIEDs - remotely-controlled bomb boats - are a potent threat to shipping in the Red Sea. A similar device, carefully disguised as a small fishing vessel, struck and sank the bulker Tutor earlier this month. One crewmember was killed in the attack, and the rest of the crew abandoned ship. A crewmember on the bridge captured a video of the drone boat as it approached, as well as the aftermath of the explosion (below).

Last weekend, U.S. forces identified and destroyed three WBIEDs in the Red Sea, suggesting a higher pace of activity for this class of Houthi devices than previously seen.

Salvors Decontaminate and Refloat Well-Known Cruise Ship Aurora

Aurora refloated at her berth on Little Potato Slough, June 18 (USCG)

Contractors working for the U.S. Coast Guard have decontaminated and refloated the derelict former cruise ship Aurora, which sank at her berth on May 22, releasing pollutants into the San Joaquin River Delta.

Aurora was a classic "pocket" cruise ship built after WWII by Blohm & Voss, and was originally used for brief trips out of Hamburg. She went on to a long and varied career in the Aegean, North Sea, Eastern Pacific, and the U.S. West Coast, and had a brief brush with fame with an appearance in a James Bond film. She ended her seagoing service during the energy crisis of the late 1970s and entered layup on the U.S. West Coast. As the years went by, she was passed from owner to owner, each with plans to use her as a floating venue or private vessel. She never resumed fully operational status, either as a seagoing vessel or as a permanently moored installation. Her most recent known owner intended to turn her into a museum ship, with volunteer help; she was sold yet again shortly before her sinking, according to the Coast Guard.

Aurora, seen here as the Wappen von Hamburg in 1958 (Oxfordian Kissuth / CC BY SA 3.0)

When Aurora began to go down by the stern on May 22, California's emergency services office received a report that the ship was sinking and discharging pollutants. First responders deployed a boom around the vessel as it gradually settled to rest on the bottom, and the Coast Guard set up a unified command to address the risk of further pollution. The command hired Global Diving and Salvage to carry out the cleanup and refloat the ship. Over the span of several weeks, Global Diving removed more than 21,000 gallons of oily water, 3,200 gallons of hazardous waste, and more than 100 cubic yards of debris from within the vessel. They also dewatered and successfully refloated the ship.

Image courtesy USCG

The Coast Guard has declared the response complete, now that all petroleum products and pollutants have been removed, and it has disbanded the unified command. While agencies consider the various options for removing the ship from its current berth, the City of Stockton has hired a contractor to keep bilge pumps on the vessel running in order to prevent it from sinking again. The containment boom will remain in place as a precautionary measure.

Greek Prosecutors Charge Kazakh Oligarchs Over Megayacht Fire Scandal

The yacht Persefoni I off Hydra as the fire blazes (Greek Wildland Firefighters)

Greek prosecutors have brought criminal charges against eight Kazakh charter yacht passengers for "moral complicity in arson" in connection with a disastrous wildfire earlier this month.

On June 21, a fire broke out on the island of Hydra, a popular vacation destination south of Athens. The blaze spread overnight and burned about 300 acres of the island's only pine forest, prompting a local outcry.

According to prosecutors, the blaze on Hydra was sparked by passengers or crew from the 175-foot superyacht Persefoni I. Another vessel was moored nearby at the time of the incident, and the captain told Greek outlet Aftodioikisi that he saw the Persefoni I's inflatable tender boat on shore as the hillside blazed. The personnel on the beach appeared to be collecting objects, he said, and then the tender returned to the yacht. There were crewmembers in turnout gear on the Persefoni's bow, the captain said, and there were signs of firefighting chemicals on the water near shore.

After departing the scene, the Persefoni transited to the marina at Vouliagmeni, just south of Athens. The Hellenic Coast Guard and fire safety officials met the vessel at the dock, and they took verbal statements from some of those on board, according to Aftodioikisi. The eight Kazakh nationals who chartered the yacht denied involvement in the fire, and they asked to disembark and leave so that they would make their departure flight on time.

Greece's Directorate of Internal Affairs has launched an investigation into the coast guard's decision to release the charter passengers when they arrived at the marina, even before examining the scene of the incident on Hydra for evidence. Last week, long after the fire started, investigators returned to the scene to look for clues - and they found traces from expended pyrotechnic devices on the beach. The evidence will be examined for DNA traces and fingerprints. The authorities' current working theory is that a small number of individuals from the yacht (possibly young) went ashore using the tender, then lit flares on the beach, according to local outlet Eirinika.

Though the passengers were released, 13 of the yacht's crewmembers were taken into custody and charged on suspicion of arson. The vessel itself was arrested. The captain and the chief mate are being held pending trial, while the rest of the crew has been released on bail.

In a statement last week, the master of Persefoni I denied that anyone on board had involvement in the fire. "No use of flares, sparklers or fireworks of any kind was ever made by anyone on or off the yacht. In a relevant check, all the naval flares were found intact. The witness of a passing boat explicitly mentions in his testimony that he never spoke of fireworks being launched from the yacht Persefoni I," he said.

According to the Organized Crime and Corruption Reporting Project (OCCRP), the passengers allegedly had ties to the business empire of Kazakhstan's long-ruling former president, Nursultan Nazarbayev. OCCRP obtained the passenger manifest, which included an executive from Nazarbayev's circle, Daniyar Abulgazin; his wife, Aidan Suleimenova; their son; and Suleimenova's assistant. The others included Umut Shayakhmetova, head of Kazakhstan's largest bank; her husband Beimbet Shayakhmetov, a former oil executive; and their daughter.

Flight tracking data shows that Abulgazin's private jet departed Athens the day after the fire and flew directly to Kazakhstan's capital, according to OCCRP.

In a statement issued on Sunday, Abulgazin denied any involvement in starting the wildfire, and he emphasized that the group's departure for Kazakhstan on June 22 was on a preplanned flight.

"Neither I nor my guests carried out any actions that could lead to a fire. We strictly followed the fire safety rules established on the yacht. Neither I nor my guests asked the crew of the yacht or any other third parties to take any actions that could lead to a fire," said Abulgazin. "We will cooperate with the Greek authorities in their ongoing investigation. In light of the ongoing investigation, it would be inappropriate to comment or speculate further at this time.”

Gas Company Seeks to Excavate H2 Storage Caverns Under Portland Port

The small commercial port of Portland was once a major Royal Navy base, and it may soon be a major H2 storage site (Portland Port file image)

A British energy company plans to dig a massive salt cavern under a former naval base in order to provide a buffer for utilities and other consumers, and it expects to win fast-track approval and government support for the project. If constructed, the one-billion-cubic-meter storage facility under Portland Port would be twice as large as all other salt cavern complexes in the UK combined - and another one billion cubic meters of capacity is in the planning for a second phase of development.

Salt caverns are ideal for storing hydrogen because they are airtight and relatively easy to excavate. The presence of salt means that the formation is solidly enclosed and has no water infiltration, because water would have dissolved out the highly soluble salt layer. By the same token, the developer can create caverns in the salt layer by drilling a well, injecting water, and dissolving out salt until the desired size and shape of the cavity is reached. In this case, the caverns would be about 300 feet wide, with about twice the volume of St. Paul's Cathedral in London.

The location at Portland Port is ideal, according to UKOG subsidiary UKEn. It is close to the Solent Cluster of industrial sites, near to the Hinkley Point nuclear plant, and well-situated to take advantage of a new source of offshore wind power off Portland Bill. It is also nearer to London than any other geological storage facility.

UKEn says that it would have enough space to provide about one fifth of the UK's 2035 hydrogen storage needs, plus enough space to serve as a hydrogen battery for smoothing the ups and downs in the renewable power supply.

One of its core suppliers would be a planned natural gas-to-hydrogen plant at the Bacton Energy Hub, sponsored by Sumitomo. This plant will use carbon capture and storage technology to manage most of the CO2 it creates when splitting methane into H2 and carbon dioxide, and it plans to send much of its production to the Portland Port salt caverns for distribution.

When first announced in 2022, the facility was pitched as a "hydrogen-ready" storage site for natural gas, and was to be developed in tandem with a new LNG import facility within the port.

Portland Port has hundreds of years of history as a commercial and naval seaport. It was a major Royal Navy base up until 1995, and it has become an important port for agricultural interests, cruise lines and offshore operators.

LA REVUE GAUCHE - Left Comment