Why No Major Oil Company Is Rushing To Drill Pakistan's Huge Oil Reserves

By Alex Kimani - Sep 15, 2024

• Pakistan has discovered potentially massive oil and gas reserves, but experts caution that exploitation will take years and significant investment.
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• Security concerns and high costs are deterring international oil companies from pursuing exploration in Pakistan, leaving China as the most likely partner for future development.
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• Despite the discovery, Pakistan continues to face an energy crisis, with Iran reportedly smuggling fuel into the country, further complicating the situation.

A long exploration effort has led to the reportedly massive discovery of oil and gas reserves in Pakistan’s territorial waters, a cache so large that it is said it could change the economic trajectory of the beleaguered country. But no one is rushing to drill in Pakistan, and experts are concerned about jumping the gun. 

According to DawnNewsTV, the three-year survey was undertaken to verify the presence of the oil and gas reserves. “If this is a gas reserve, it can replace LNG imports and if these are oil reserves, we can substitute imported oil,’’ former Ogra (Oil and Gas Regulatory Authority) member Muhammad Arif told DawnTv. 

However, Arif has cautioned that it would take years before the country could be able to exploit its newfound fossil fuel resources, adding that exploration alone required a hefty investment of around $5 billion and it might take four to five years to extract reserves from an offshore location.

Pakistan covers 29% of gas, 85% of oil, 50% of liquefied petroleum gas (LPG), and 20% of coal requirements through imports, according to the Economic Times. Pakistan's total energy import bill in 2023 clocked in at $17.5 billion, a figure projected to rise to $31 billion in seven years, as per an Express Tribune report. The new discovery is no doubt a big boon for the struggling economy. 

Since 2021, Pakistan has been hit with mounting debt and skyrocketing inflation, with inflation hitting nearly 30%. Meanwhile, the economy only expanded 2.4% in 2023, missing the 3.5% target. This has forced the country to rely heavily on foreign aid, which is often elusive. In January this year, Pakistan sought $30 billion for gas production to cut its fuel import bill.

According to Pakistan’s Energy Minister Mohammad Ali, Pakistan has 235 trillion cubic feet (tcf) of gas reserves, and an investment of $25 billion to $30 billion would be enough to extract 10% of those reserves over the next decade to reverse the current declining gas production and replace the import of energy.

The persistently high inflation could push Pakistan over the edge, "There is no precedent in Pakistan’s history of such a long and intense spell of inflation gripping the country," columnist Khurram Husain has written in Dawn.

A Game-Changer? Maybe.

Although Pakistan's hydrocarbon resources are yet to be quantified, some estimates suggest that this discovery constitutes the fourth-largest oil and gas reserves in the world. This could be a potential game-changer in the region’s energy flows. 

Back in July,  S&P Global Commodity Insights reported that four largely unexplored sedimentary basins in India could hold up to 22 billion barrels of oil. In effect,  lesser-known Category-II and III basins namely Mahanadi, Andaman Sea, Bengal, and Kerala-Konkan contain more oil than the Permian Basin which has already produced 14 billion of its 34 billion barrels of recoverable oil reserves. 

Rahul Chauhan, an upstream analyst at Commodity Insights, emphasized the potential of India’s unexplored Oil & Gas sector, "ONGC and Oil India hold acreages in the Andaman waters under the Open Acreage Licensing Program (OALP) and have planned a few significant projects. However, India still awaits the entry of an international oil company with deepwater and ultra-deepwater exploration expertise to participate in current and upcoming OALP bidding rounds and explore these frontier regions," he has declared.

Currently, only 10% of India’s 3.36 million sq km wide sedimentary basin is under exploration. However, Petroleum Minister Hardeep Singh Puri says that that figure will jump to 16% in 2024 following the award of blocks under the Open Acreage Licensing Policy (OALP) rounds. So far, OALP has resulted in the award of 144 blocks covering about 244,007 sq km.  Under OALP, India allows upstream exploration companies to carve out areas for oil and gas exploration and put in an expression of interest for any area throughout the year. The interests are accumulated thrice a year following which they are put on auction. According to Puri, India’s Exploration and Production (E&P) activities in the oil and gas sector offer investment opportunities worth $100 billion by 2030.

So why is no one rushing to Pakistan to drill? 

Shell announced it was selling its Pakistan business stake to Saudi Aramco in June last year, and an auction for 18 oil and gas blocks at the same time last year got a muted response from international bidders, at best. No international companies even bid on 15 of the blocks, according to The Nation. 

In July, the country’s Petroleum Minister, Musadik Malik, told a parliamentary committee that no international companies were interested in offshore oil and gas exploration in Pakistan,and those in the country largely had the exit door in view. 

It comes down to security, and risk versus reward with Malik explaining to the committee that the cost of security is a major deal-breaker because “in areas where companies search for oil and gas, they have to spend a significant amount to maintain security for their employees and assets”. And security is provided by Pakistan, which has not been up to the task. 

In March this year, five Chinese engineers were killed in a suicide attack in Pakistan’s northest, when a vehicle rigged with explosives rammed into a bus transporting staff from Islamabad to the giant Dasu dam project in the Khyber Pakhtunkhwa province. The project is part of the $62-billion China-Pakistan Economic Corridor (CPEC). This incident sparked a series of temporary shut-downs across other projects, as well. 

Earlier that same month, insurgents attacked Chinese assets in Pakistan’s southwest, storming the Gwadar Port Authority complex, which is run by China. The attacks were perpetrated by the Balochistan Liberation Army (BLA), separatists fighting for an independent Balochistan, as reported by the Lowy Institute. 

Essentially, what this means is that it will be China or bust for Pakistan, as state-owned or state-controlled Chinese explorers have a vastly different appetite for risk. And these massive reserves are not likely to get out of the ground without Aramco showing more desire or the Chinese stepping in, for which discussions are already underway, according to Malik. 

In the meantime, Iran is said to be smuggling a billion dollars in fuel into Pakistan every year, as the country’s oil and gas crisis emboldens the black market trade. 

By Alex Kimani for Oilprice.com

UN panel issues guidelines for mining centered on human rights, sustainability

Staff Writer | September 12, 2024 | 

Artisanal miners in Sierra Leone. ( Credit: Pact/ Jorden de Haan.)

A panel of experts convened by the United Nations has issued a set of recommendations and guidelines for governments and mining companies to ensure that human rights, justice and equity are safeguarded during the global pursuit for energy transition minerals.


The panel’s report – Resourcing the energy transition: principles to guide critical energy transition minerals towards equity and justice – identifies ways to ground the renewables revolution in justice and equity, so that it spurs sustainable development, respects people, protects the environment and powers prosperity in resource-rich developing countries, the UN stated in a press release.

UN Secretary-General António Guterres, who helped establish the panel in April, said the report serves as “a how-to guide to help generate prosperity and equality alongside clean power,” noting that it makes recommendations on critical minerals at a crucial time, with their demand expected to almost triple by 2030.

“This report identifies ways to ground the renewables revolution in justice and equity, so that it spurs sustainable development, respects people, protects the environment, and powers prosperity in resource-rich developing countries,” Guterres stated.

The panel’s recommendations range from establishing a high-level expert advisory group housed within the UN to facilitate multistakeholder policy dialogue and coordination on economic issues in mineral value chains, to a global traceability, transparency and accountability framework, to creating a fund to address legacy issues as a result of derelict, ownerless or abandoned mines.

They also include empowering artisanal and small-scale miners to become agents of transformation to foster development, environmental stewardship and human rights, to strengthening material efficiency and circularity.

The recommendations recognize the central role of the Secretary-General and the UN as an honest broker and convener of diverse interests on a complex and challenging set of issues critical to the energy transition and achieving the goals of the Paris Agreement, the UN said in its press release.

As next steps, the Secretary General has asked the co-chairs and panel to socialize the report and its recommendations with member states and other stakeholders ahead of COP29 conference held later this year.

To access the report, the list of panel members, and more, please visit: www.un.org/en/climatechange/critical-minerals.

MYANMAR

Column: Tin supply chain tightens after key mine’s long absence

Reuters | September 13, 2024 | 

Man Maw tin mine. Credit: International Tin Association

It’s been just over a year since the Man Maw tin mine in Myanmar, one of the world’s largest sources of the strategic metal, halted production.


While high raw material and refined tin stocks have so far insulated the market from the full impact, that’s starting to change.

When the Wa authorities, an autonomous ethnic group controlling most of Myanmar’s tin resources, ordered a total suspension of all mining and processing activities in August 2023, most expected the supply hit to last only a few months.

Other smaller mines in Wa territory have since been allowed to reopen. Authorities have also permitted the export of above-ground tin stocks from Man Maw but production remains suspended.

While tin concentrates continue to flow across the border to feed China’s smelters, volumes have fallen sharply in recent months, highlighting the lack of activity at the biggest mine.

Dark producer

The Wa State mines are a statistical black hole in global tin supply data. There are no official production statistics and output can only be inferred from the amount of raw material passing through Chinese customs.

The International Tin Association estimates Myanmar produced around 40,000 metric tons of contained tin in 2022, with Man Maw accounting for around 70% of that.

That makes the Wa State the world’s third largest tin producer after China and Indonesia, with Man Maw itself representing 7-8% of global mine supply.

The Wa authorities said the suspension of activities was needed to allow an audit of the tin sector, which has grown exponentially from what began as informal artisanal operations at the start of the last decade.

In this respect the Wa State is no different from any other resource-rich country looking to take tighter control of their assets.

What’s unclear is why the audit has taken so long.

China tin concentrates imports by origin country

Reduced flows

The impact of the year-long closure is becoming increasingly visible in China’s import flows.

China imported 100,000 tons of Myanmar tin concentrates in the 10 months after the start of the audit in August 2023, compared with 173,000 tons in the prior 10-month period.

Trade flows between the two countries slowed to just 11,300 tons in the second quarter of this year from 43,600 tons in the first quarter, suggesting a depletion of above-surface stocks.

Chinese producers have had only limited success in finding alternative sources with increased imports from Australia, Bolivia and Nigeria not enough to plug the gap.

Total tin raw material imports fell by 26% year-on-year in the first seven months of 2024, LSEG data shows.

Chinese smelters have begun adjusting maintenance schedules and tweaking production plans to compensate.

Yunnan Tin, the world’s largest refined tin producer, shut its Geiju smelter for 45 days of maintenance at the end of August.

Others in the provinces of Yunnan and Jiangxi have been reducing output due to a shortage of feed, according to local data provider Shanghai Metals Market.

Tin stocks on the LME and ShFE

Stock slide

The suspension of tin mining was flagged by the Wa authorities in April 2023, allowing China’s tin sector to build up stocks.

Imports of refined tin accelerated over the fourth quarter of 2023 and Shanghai Futures Exchange stocks rose to an all-time high of 17,818 tons in May.

Registered exchange inventory has been sliding ever since and stands at 9,499 tons. Given domestic production is being constrained by growing raw material shortages, the downtrend is likely to continue for the next few months at least.

LME tin stocks have fallen by 39% to 4,725 tons since the start of the year, although as of the end of July there were another 2,207 tons of shadow stocks sitting in LME warehouses.

The Western supply chain has been more affected by slower Indonesian shipments than by the Man Maw situation. Indonesian exports fell by 44% year-on-year to 24,600 tons in the January-August period due to early-year permitting delays.

LME metals relative performance in 2024

Risk premium

The tin market has been lucky with the timing of Man Maw’s suspension.

Half of global usage is in the form of solder for circuit-boards, meaning demand is highly sensitive to electronic goods sales.

Semi-conductor sales, a useful proxy for tin solder demand, are only now emerging from a prolonged two-year slump, which helps explain why global tin stocks were so high in the first half of 2024.

Tin has still outperformed every other LME-traded metal by some margin. LME three-month tin was trading at $31,770 per ton on Friday, up by 25% from the start of January. The next strongest performer, copper, has year-to-date gains of just 8%.

It’s clear that the tin price contains a Man Maw risk premium and will continue to do so until the Wa authorities permit a return to normal operations.

Only the Wa leadership knows when that will be and they may be focused on other matters.

Although the United Wa State Army is not directly involved in the ongoing civil war raging across Myanmar, Man Maw may not be top of the priority list.

(The opinions expressed here are those of the author, Andy Home, a columnist for Reuters.)

(Editing by Alexander Smith)

Brazil says it has nearly cleared gold miners from Amazon Yanomami reservation

Reuters | September 14, 2024 | 

Illegal gold mining in the Yanomami traditional territory. (Image by the Brazilian Air Force).

Brazil has almost squashed the illegal gold rush that led thousands of wildcat miners into the Yanomami reservation in the Amazon rainforest and caused a humanitarian crisis of disease and malnutrition, the man in charge of operations said.


The Yanomami, South America’s largest Indigenous group living in isolation, have returned to a normal way of life, cultivating crops and hunting game, Nilton Tubino told Reuters in an interview on Friday.

Tubino runs the government office set up by President Luiz Inacio Lula da Silva to coordinate action by police and military forces, environmental agents and health workers on the reservation the size of Portugal in the remote Amazon, where 27,000 Yanomami live.

“We are seeing many of them bathing in the rivers and out hunting again, and clearings being planted for food,” he said.

In hundreds of operations since March, army and navy troops, backed up by environmental and Indigenous protection agencies, have destroyed mining camps and gold prospects.

They have dynamited 42 clandestine airstrips used by the miners in the rainforest, set fire to 18 aircraft, seized 92,000 liters of diesel, sunk 45 dredging barges, destroyed 700 pumps, and dismantled 90 Starlink dishes that allowed the miners to warn each other about enforcement teams, Tubino said. A radar has been set up in the reservation to monitor clandestine planes.

Tubino said deaths from malaria brought by the miners were down, and malnutrition had been controlled with government food parcels. The government has reopened medical outposts and is planning to build a hospital in Surucucu, a remote village near the border with Venezuela.

A Reuters photographer in Surucucu earlier this month saw evidence of illegal miners inside the reservation still, but with the situation improved from last year.

Junior Hekurari, head of the Yanomami health council Condisi, said the government had evicted the miners and overcome the health crisis, but that the mining had affected their ability to obtain food, with river waters polluted by mercury.

“The waters are poisoned and there are no fish,” he said. “Our people believe the earth has been contaminated and that is why the crops are not growing.”

Shortly after taking office, Lula launched a massive enforcement operation in February 2023 to evict some 25,000 gold miners from the Yanomami territory. With backing from the armed forces, the government action succeeded in expelling 80% of the miners.

But once the military withdrew, miners started to return, joining others who had hidden in the forest.

Tubino said the number of miners remaining is unknown, but this year’s operations had significantly reduced their presence and eliminated more than half the gold prospecting areas.

Work is still needed to shut down the supply line that keeps the miners in business, from fuel and food to the buying of their gold nuggets, Tubino added.

(By Amanda Perobelli, Anthony Boadle and Ricardo Brito; Editing by Rosalba O’Brien)

Britain’s approval of new coal mine unlawful, court rules

Reuters | September 13, 2024 | 

The mine would extract coking coal from under the Irish Sea to be used in steel production. (Image courtesy of West Cumbria Mining.)

Britain’s approval of its first new deep coal mine in decades was unlawful, London’s High Court ruled on Friday following a legal challenge brought by environmental campaigners.


Friends of the Earth and South Lakeland Action on Climate Change challenged the previous Conservative government’s 2022 approval of a coking coal mine in northwest England.

Britain dropped its defence of the legal challenges after a Supreme Court ruling earlier this year said planning authorities must consider the impact of burning, not just extracting, fossil fuels when deciding whether to approve projects.

Friday’s ruling is the first case to be decided since the Supreme Court decision, Friends of the Earth senior lawyer Niall Toru said.

“That the ruling today has gone against the mining company could have ramifications internationally, as there are cases abroad where challenges are being made against fossil fuel projects on a very similar basis,” Toru added.

Developer West Cumbria Mining fought the case and said the project – which planned to extract coking coal for manufacturing steel, rather than to generate electricity – would be “a unique ‘net zero’ mine”.

West Cumbria Mining’s lawyer James Strachan said in court filings that the development would not cause a net increase in greenhouse gas emissions, as the use of coking coal extracted from the mine is driven by demand for steel.

Judge David Holgate, however, said in a written ruling on Friday that “the assumption that the proposed mine would not produce a net increase in greenhouse gas emissions, or would be a net zero mine, is legally flawed”.

A spokesperson for West Cumbria Mining said the company “will consider the implications of the High Court judgment and has no comment to make at this time”.

(By Sam Tobin; Editing by Kylie MacLellan and William Maclean)

Nickel flowing to Europe shows Indonesia’s grip on global supply

Bloomberg News | September 13, 2024 | 

Nickel smelter in Sorowako, Indonesia. Credit: Marcelo Coelho, courtesy of Vale

European makers of stainless steel are turning to Indonesia for nickel as the country’s booming output forces plants in other countries to shutter.


Exports to Europe of Indonesian nickel pig iron — an ingredient for stainless steel used primarily by Chinese producers — to Europe have surged to 87,485 tons this year from just 1,006 tons in 2023, according to Indonesian government data. The Netherlands, Italy and the UK have taken the shipments, the data show.



The swelling exports reflect Indonesia’s growing dominance of the nickel market, with its output now accounting for more than half of the world’s total. European mills typically use ferronickel, a higher-purity alloy than nickel pig iron, but many plants that make it have shut down due to competition from Indonesia.

Those include plants in New Caledonia and the Dominican Republic, which were formerly significant exporters of ferronickel to Europe. Meanwhile, imports from Russia, formerly a major supplier of purer forms of nickel also used for stainless steel, have been curtailed since the invasion of Ukraine in 2022.

That’s a headache for European stainless-steel producers trying to source the metal without sacrificing their green credentials. Indonesia’s nickel industry has been criticized for its association with environmental destruction, lax safety standards, and high carbon intensity, which has deterred some companies from buying it.

Producers shipping nickel products from Indonesia to Europe include Gunbuster Nickel Industry, owned by China’s ailing Jiangsu Delong Nickel Industry Co., and local firm PT Trimegah Bangun Persada, better known as Harita Nickel, according to people familiar with the matter.

Lukito Gozali, head of investor relations at Harita Nickel, said the firm was always open to the opportunities to work with customers globally. A spokesperson for Gunbuster Nickel Industry didn’t respond to an emailed request for comment.

China’s economic woes could also be undermining demand for the metal and driving shipments to Europe as producers are forced to diversify. Asia’s largest economy has long bought the lion’s share of Indonesia’s nickel, but consumption of stainless steel there is flagging due to its struggling property and industrial sectors.

(By Eddie Spence)

Vale sees 10% of its iron ore production coming from tailings by 2030

MAKE IT 100% RECYCLED TAILINGS

Reuters | September 12, 2024 |

October 2017 aerial image of the area affected by the tailings dam failure in Mariana, Minas Gerais, Brazil. (Photo by Vinícius Mendonça, courtesy of Brazilian Institute of Environment and Renewable Natural Resources (IBAMA).)

Brazilian miner Vale expects that by 2030 some 10% of its iron ore output will come from the reuse of mine waste known as tailings, an executive told Reuters, reducing the amount of potentially dangerous material still stored in dams.


In 2024, the mining giant expects to recover about 7 million metric tons of iron ore through its “circular mining” program, Vale’s executive vice president of technical affairs, Rafael Bittar, said in an interview on Wednesday.

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He did not provide specific projections for how much iron ore will be produced from tailings and waste by 2030, but the expected increase in Vale’s overall production implies the volume will likely jump in coming years.


The firm, one of the world’s largest iron ore producers, on Wednesday revised its 2024 outlook upwards and now expects to produce up to 330 million tons this year. From 2030 onwards, it sees annual output of more than 360 million tons.

“This program aims to reuse waste that is already in our dams,” Bittar said on the sidelines of a mining conference. “This is a reality and it will come very strongly (for the industry), so we anticipated it and designed this program.”

Vale’s initiative to reduce its tailing volumes gained ground after the fatal collapse of two dams in Mariana and Brumadinho in 2015 and 2019, respectively, which jointly killed hundreds and caused severe environmental damages.

Part of Vale’s tailings are stored in dams. Since the disasters, the firm has been working to eliminate all its upstream dams, which are seen as riskier.

Last year alone, Vale generated 48.5 million tons of iron ore tailings.

(By Marta Nogueira; Editing by Elaine Hardcastle)

CHILE

Codelco reaches early contract agreement with El Teniente unions

Reuters | September 11, 2024 | 

Workers at Codelco’s El Teniente mine in central Chile. Image courtesy of Codelco.

Chile’s state copper miner Codelco said on Wednesday it reached early contract agreements with unions at its major El Teniente complex, as well as the Ministro Hales division.


Union negotiations at Chilean copper mines are being closely watched by analysts and investors since a strike last month at BHP’s Escondida, the world’s largest copper mine, which resulted in an improved bonus for workers.

The agreements at El Teniente, one of Codelco’s biggest units, encompassed talks with five unions, representing nearly 3,150 workers. The new contract will take effect Nov. 1 and last through 2027.

Andres Music, general manager of El Teniente, said the deal will introduce new labor practices that are poised to increase the company’s productivity.

“Codelco appreciates the climate of dialogue and understanding in which the negotiations were carried out,” the company said in a statement, noting that it sought to balance business variables and safety with incentives and benefits for workers.

At Ministro Hales, a smaller division that produced 126,000 metric tons of copper last year, the new three-year contract will take effect in December.

Codelco did not detail the specific terms for either mine site.

(By Fabian Andres Cambero and Daina Beth Solomon; Editing by Sarah Morland and Alistair Bell)

 

MAIB: Cook Had 18 Shots of Whiskey Before Fatal Gangway Accident

Pelican of London's gangway arrangement (MAIB)

Published Sep 12, 2024 9:34 PM by The Maritime Executive

 

 

Heavy drinking and a poorly-rigged gangway led to the death of a crewmember aboard the tall ship Pelican of London last year, according to a new after-accident report from the UK Marine Accident Investigation Branch. 

In late September 2023, the Pelican of London pulled into Bristol's Sharpness shipyard for a drydocking period. The ship's cook departed for training and shore leave, and on September 28, a volunteer joined the ship to provide relief coverage. The relief cook - a 64-year-old professional seafarer - joined his shipmates at a local bar after hours several times. Other crewmembers observed that he drank several double whiskies per night on Sept. 30 and October 1. 

On October 2, his fifth night aboard, the relief cook joined shipmates at the bar again. MAIB determined that he had at least nine double whiskies (18 shots) in less than three hours, and he was the last person to leave the bar at about 2250 hours that night. 

The relief cook walked back to the ship alone, arriving at 2307. CCTV footage showed him coming up the gangway and then stepping over onto the bulwark ladder to descend onto the main deck. Before he could board, however, he toppled off the top of the aft side of the gangway and into the flooded dock. The chief engineer heard the noise and ran up on deck, arriving within seven seconds. He heard a noise under the gangway but saw nothing, so he went back to bed, unaware that the relief cook had gone over the side. The cook's absence was only noticed at breakfast the next morning, and after a review of the port's CCTV footage, the police were called to search the dock. 

The body was retrieved from the water at about 1400 hours, and postmortem testing found a blood alcohol content of 0.19% - roughly equivalent to eight beers for an average male. MAIB concluded that he likely experienced cold water shock and swim failure, and rapidly drowned after entering the water.

Inspectors found that the guard rope between the gangway stanchion and the main deck was weighed down by an electrical cable, leaving a large gap. The safety net below was rigged to slope away from the gangway, creating a "chute" towards the water. There was no gangway watch posted, nor were there any written procedures for rigging the gangway. (When asked, many crewmembers said that the net was there to catch any parcels dropped while using the gangway - not to save personnel.)

"The inadequate fencing and inappropriately rigged safety net exposed all gangway users to serious hazard as they traversed the gangway," concluded MAIB. "Having rigged the gangway as it was normally rigged, poor practice was passed on over time without question and without a true understanding of the purpose of either the guard ropes or the safety net."

Pelican of London had an SMS manual, and it advised crewmembers that alcohol "should be enjoyed in moderation" and recommended "not to drink for several hours prior to a duty period." The relief cook had had so much to drink that he would probably have been at nearly twice the legal blood-alcohol limit by 0730 the next morning, when he was expected to start duty.

"The policies did not provide crew and trainees with clear guidance on drug and alcohol consumption while ashore nor how others might intervene effectively," found MAIB. "There were early indications of a problem with the relief cook’s alcohol consumption, but this did not result in an effective intervention."

On MAIB's recommendation, the vessel operator undertook extensive changes to its drug and alcohol policy, briefing materials, rigging standards and emergency-response protocols.  

 

Ireland Partners With EIB for Development of Offshore Wind Ports

File imag

Published Sep 15, 2024 6:28 PM by The Maritime Executive

 

The European Investment Bank (EIB) has teamed up with the Irish government to support development of port infrastructure for offshore wind projects. Through a cooperation agreement signed last week, EIB will partner with the Irish Department of Transport to assess capacity and demand for wind port infrastructure.

Ireland is opening up its vast coastline for offshore wind projects, and the Irish government wants to install around 5 GW of offshore wind by 2030. The long-term goal is reaching 37 GW by 2050, which would require $33 billion in investment for offshore renewable energy projects in Irish waters.

However, Ireland currently do not have port facilities with the capacity required to support large-scale offshore wind projects. Under the EIB agreement, the goal is to provide project-level advisory to five ports, which could be upgraded into energy hubs. When developed, these ports will facilitate the development, construction and long-term operation and maintenance of offshore wind projects. In addition, EIB and the Department of Transport will assess both the expected costs for the infrastructure upgrade and the most viable financing strategies.

“Ireland’s offshore wind potential is immense, and we are addressing the critical infrastructure needs at our ports. This cooperation with EIB is a vital step towards ensuring that our ports can support the ambitious offshore wind projects for our sustainable energy future,” said Eamon Ryan, the Irish Minister for the Environment, Climate and Transport.

In 2023, Ireland held its first offshore wind auction (ORESS 1), and four projects were selected with a combined capacity around 3.1 GW. These include the 1.3 GW Codling Wind Park, the 824 MW Dublin Array, the 500 GW North Irish Sea Array and the 450 MW Sceirde Rocks project.

The first round of the phase two auction (ORESS 2.1) is scheduled for later this year. It will deliver around 900 MW capacity, primarily for projects focusing on the south coast of Ireland.