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Central Europe's refining companies are watching the impact of US sanctions against Russian oil giants
Slovnaft - a Slovak refiner that processes a large amount of Russian crude oil and belongs to Hungary's MOL Group - said Thursday it would be analyzing the impact of U.S. sanctions against Russian oil companies on its operations. Donald Trump, the U.S. president, imposed sanctions against Russia on Wednesday for the first times in his second term. He targeted Lukoil, and Rosneft in an effort to press Moscow into a ceasefire agreement in Ukraine. This move has pushed up the price of oil and raised questions for Hungary, Slovakia and other EU countries that are the largest buyers of Russian crude oil. Potential HEADACHE for Refineries and Banks Last year, the MOL group of Hungary's oil and gas industry had problems obtaining supplies when Ukraine, through which the Druzhba pipe carrying supplies ran, sanctioned Lukoil. MOL has signed agreements to purchase the crude oil volumes affected at the Belarus-Ukraine borders to ensure that the flow of crude oil continues. MOL didn't immediately comment Thursday on the U.S. Sanctions, which are expected to come into effect in late November. Slovnaft, MOL's Slovak subsidiary, said: "As it is a brand new situation we need to first familiarise ourselves with the exact language of the new U.S. Sanctions and analyse their potential impact on our operations." Slovnaft will process 4.8 million tons of oil by 2024. Of this, 662,000 tons are non-Russian. MOL refines around 8,000,000 tons of oil in its Danube Refinery in Hungary. Slovak, Hungarian and other government offices did not respond to any questions. Vaclav Bartuska said that compliance departments in certain banks would have a headache for weeks to come. He was the former energy envoy of the Czech government and ambassador to Britain. Expect delays/cuts to deliveries of Russian oil. Iwona Wiesniewska of the Center for Eastern Studies in Warsaw estimates that around 80% (or more) of Russian production faces sanctions today, which makes it harder to find alternatives. Already, refineries are making changes in order to process more non-Russian crude oil. Wisniewska stated that "losing access to Russian oil does not mean the end of the business for the Hungarian refining plant -- but it definitely means a change in operating conditions." (Reporting from Jason Hovet in Prague, Marek Stezycki and Kuba Stzycki at Warsaw and Krisztina And Anita Komuves at Budapest. Mark Potter is the editor.
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Freeport LNG Export Plant in Texas to receive more natgas Thursday following unit outage
Freeport LNG, a U.S. liquefied gas company, had planned to receive more natural gas at its Texas export plant on Thursday. This was a sign that a liquefaction track that was shut down on Wednesday would likely be back in operation, according to data provided by financial firm LSEG, and a filing made with the state's environmental regulators. Freeport LNG is closely monitored by the global market because its operation can cause large price fluctuations. Gas prices in the United States typically fall when flows to Freeport decrease due to a lower demand for fuels from the export facility. Prices in Europe usually rise due to the drop in LNG supply available on global markets. The Freeport plant outage was a factor in the 1% decline in futures prices on Wednesday in the U.S. In Europe, prices were unchanged for reasons that are not necessarily connected to the plant. Freeport informed Texas environmental regulators on Thursday that Train 2 of its three liquefaction train was shut down due to an issue with the compressor system. Freeport officials had no comment to make on the latest power outage. LSEG reported that the amount of natural gas flowing into Freeport on Thursday was expected to reach 1.9 billion cubic feet per day. This is up from 1.2 bcfd Wednesday, and an average of 1.8 bcfd for the previous seven days. Three liquefaction plants at Freeport can convert about 2.4 billion cubic feet per day of gas to LNG. A billion cubic feet of natural gas can supply five million U.S. households for one day. Reporting by Scott DiSavino, Editing by Susan Fenton & Chizu Nomiyama
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Sources say that China's state oil companies have suspended their Russian oil purchases due to sanctions.
Multiple sources confirmed on Thursday that Chinese state oil giants had suspended their purchases of Russian oil shipped by sea after the United States imposed new sanctions against Rosneft, one of Moscow's largest oil companies, and Lukoil. Refiners in India, which is the biggest buyer of Russian crude oil by sea, will be reducing their imports of the oil from Moscow to comply with U.S. sanction imposed on the Kremlin for its invasion of Ukraine. The sharp decline in demand for oil from Russia's largest two customers will strain Moscow's oil revenue and force top importers around the world to look for alternative supplies, pushing up global prices. Sources say that PetroChina, Sinopec CNOOC, Zhenhua Oil and Sinopec are not interested in buying Russian oil on the sea, at least for the near future, due to concerns about sanctions. Four companies have not responded to comments immediately. China imports about 1.4 million barrels per day of Russian oil by sea. Most of this is purchased by independent refiners including small operators, known as teapots. Estimates for purchases by state refiners are also widely varied. Vortexa Analytics estimated that Chinese state-owned firms would buy less than 250,000 barrels per day of Russian oil in the first nine months 2025. Consultancy Energy Aspects placed it at 500,000 barrels per day. Unipec (the trading arm of Sinopec) stopped buying Russian oil last week, after Britain blacklisted Rosneft, Lukoil and shadow fleet vessels, along with Chinese entities, including a major Chinese refining company, according to two sources. Traders said that Rosneft, Lukoil and other oil companies sell their products to China via intermediaries rather than directly dealing with the buyers. Some traders stated that independent refiners would likely pause their purchases to evaluate the impact of the sanctions, but they would continue to purchase Russian oil. Before Wednesday's announcement of sanctions, the price for November-loading ESPO Crude had fallen to a premium per barrel of $1 compared to ICE Brent. This was a significant drop from previous trades made in early October, which were at a $1.70 markup. China imports about 900,000 barrels per day of Russian oil via pipeline. All of this oil is sent to PetroChina. Traders said that India and China will likely turn to alternative sources of oil, which is expected to drive up the price for non-sanctioned Middle East, African and Latin American oil.
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Union Pacific beats quarterly profit estimates on strong coal volumes
Union Pacific beat Wall Street expectations for the third quarter profit on Thursday, thanks to strong volumes of food grains and coal as well as improved pricing. After U.S. president Donald Trump signed executive order aimed at boosting coal production, there is optimism about demand for coal transportation, which benefits railroad operators like Union Pacific. Union Pacific reported that the results included merger costs of 41 million dollars, or $0.07 per diluted share. The company's shares were marginally lower in premarket trading. Union Pacific announced in July that it would acquire Norfolk Southern, a rival freight railroad company. The $85 billion acquisition will create the first coast to coast freight rail operator. Tariffs imposed by Donald Trump have led to a slowdown of the freight market and consumer markets in the United States, which has affected railroads like Union Pacific. Donald Trump, the U.S. president, responded positively to the deal. It is still subjected to regulatory approval by the Surface Transportation Board. The companies plan to submit a merger application to STB by January 31, 2019. North American railroads have struggled to meet the demands of shippers and their increasing pressure on service reliability. The third-quarter revenue from the bulk segment of its business, which includes coal and food grain shipments, increased by 7%, to $1.93billion. Intermodal shipments, or the transport of goods using two or more modes of transportation, brought in $1.5 billion of revenue, down 3%. According to LSEG data, the West Coast Railroad operator reported a quarterly profit of $3.08 per share compared to analysts' expectations of $2.99. The company reported a total operating income of $6.24 Billion, which was higher than the estimated $6.25 Billion.
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Grab invests May Mobility in the robotaxi startup as it expands into Southeast Asia
May Mobility announced on Thursday that it had secured a substantial equity investment from Singapore's ride-hailing company Grab as part of its plans to expand into Southeast Asia in the coming year. Grab will integrate the startup's autonomous driving technology into its fleet management, vehicle matching and routing systems. This deal represents a major step towards the global deployment of robotaxis, and creates a blueprint on how self-driving cabs will be managed by existing ride-hailing platforms. May Mobility has declined to reveal any further information about Grab's stake in the startup. May Mobility has now partnered with Uber for its third ride-hailing partnership. Its previous tie-ups with Lyft, to launch self driving cars in Atlanta, as well as a upcoming roll-out with Uber, in the United States, are all part of the industry. May Mobility will use GrabMaps, Grab's mapping software, to study Southeast Asian road conditions to ensure a safe deployment. GrabMaps processes data from Southeast Asian city to produce accurate hyperlocal maps which are updated in real-time. May Mobility will receive a 10 billion-yen investment in November 2023 from Japan's NTT, as part of an effort to promote autonomous driving. NTT announced that it will test self-driving taxis and buses with Toyota Motor in 2019. Grab has been selected by a Singaporean District to operate autonomous shuttle services in the area. The company is partnering with Chinese robotaxi company WeRide, and expects deployment to begin early next year. May Mobility uses Toyota Siennas modified for smaller rides, and high-capacity Italian autonomous electric minibuses Tecnobus for routes with higher density.
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Google invests in a US gas-powered plant that captures carbon dioxide for Midwest data centres
Google announced on Thursday that it had entered into the nation's first corporate agreement for the purchase of electricity from a U.S. plant that uses carbon capture and storage. The deal is to fuel the company's data centers located in the Midwest region. Big Tech's plans for expanding technologies such as generative artificial Intelligence, which require enormous amounts of electricity to operate, have clashed with the reality of a U.S. grid that is running out of supplies. In recent months, companies such as Google have made a number of announcements to fund the construction of new and expanded energy plants in the United States. Google has recently made deals to purchase electricity from advanced nuclear power plants, geothermal energy and hydropower. Google is working with PJM Interconnection - the largest U.S. grid that covers the world's biggest concentration of data centres - to accelerate the connection of power sources. Google's latest agreement to purchase power involves a 400 megawatt power plant being built in Decatur, Illinois by Low Carbon Infrastructure, a privately owned company. The plant is expected to start producing power in early 2030s using carbon capture. This involves trapping 90% of CO2 and injecting it underground. Google has not disclosed the financial terms of this deal. Michael Terrell, Google's head of Advanced Energy, explained that the concept of natural gas-fired electricity, which captures and stores carbon dioxide, had been absent from the equation. Terrell stated, "We have been focusing on developing all these new clean technologies that are available 24/7. This is a very important piece of the puzzle." It's an important technology the world needs. Broadwing will be constructed at a site currently operated by Archer Daniels Midland (agribusiness), which has been injecting underground carbon dioxide from ethanol production for the past 2017. ADM can also purchase electricity from the project, which initially will deliver electricity to grid. Google and Low Carbon Infrastructure have said that they intend to pursue CCS facilities elsewhere in the United States. However, they did not reveal specific locations or dates. The International Energy Agency (IEA) and the Intergovernmental Panel on Climate Change have promoted carbon capture and storage as a way to reduce emissions in heavy industry and power plants that use fossil fuels. Critics have however questioned the cost, scalability, and long-term efficacy of carbon capture and storage. (Reporting and editing by Marguerita Chy)
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Cessna jet maker Textron tops quarterly profit estimates on higher aircraft deliveries
Textron beat the third-quarter profit estimate on Thursday thanks to higher deliveries in its aviation segment, and continued strength at Bell Helicopter. The Bell MV-75 Valor Tiltrotor Aircraft Program with the U.S. Army continues to be a success for the company. The Bell segment's quarterly backlog increased by $1.3 billion due to the award of the prototype testing phase. Textron’s Bell unit that makes tiltrotors and military helicopters has seen a 10% increase in revenue over the last year. Lisa Atherton, the segment's head, was named to succeed Textron CEO Scott Donnelly earlier in the week. A 10% increase in revenue was also seen by the company's Aviation segment, which produces Cessna, Beechcraft, and Citation turboprops. Profits in this segment were also boosted by the robust demand for parts and services aftermarket. Textron has, however, reported a decline in revenue for its industrial segment as a result of the divestiture. According to LSEG data, the company's adjusted quarterly profit was $1.55 per share. This compares with an average analyst estimate of $1.45. The total revenue of the company rose by 5% in the third quarter to $3.60 Billion, as compared to an estimate of $3.70 Billion. Textron, based in Providence, Rhode Island, reiterated that it expects its adjusted annual profit to range from $6.20 to $6.20.20 per share. Reporting by Aatreyee dasgupta from Bengaluru, editing by Leroy Leo
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American Airlines increases its profit forecast for 2025 on the strength of premium demand and pricing gains
American Airlines increased its profit forecast for 2025 on Thursday. This was due to a robust demand for premium high-margin services, and an increase in pricing power domestically. In premarket trading, shares of the airline were up by nearly 4%. Airlines were forced to lower fares in order to fill their seats due to a slowdown in domestic travel in the first half of this year. This was largely caused by economic uncertainty resulting from President Donald Trump’s tariffs. Since then, major airlines have reduced their capacity in order to regain pricing power and protect margins. American expects a full-year adjusted per-share profit in the 65-95 cent range, as opposed to its July projection of a range between a 20 cent loss and an 80 cent profit. Premium services with high margins have also remained popular, as wealthy travelers continue to pay more for a comfortable trip. Airlines have shifted their focus to premium services after the pandemic. The U.S. airline reported a loss of $114,000,000, or 17 cents a share, for the quarter ending September. This compares to a loss of $149,000,000, or 23 cents a share, from a year earlier. Southwest, a domestic competitor, reported a surprising profit on Wednesday. This was aided by an increase in bookings. The total operating revenues of the company increased marginally to $13,69 billion.
Google invests in a US gas-powered plant that captures carbon dioxide for Midwest data centres
Google announced on Thursday that it had entered into the nation's first corporate agreement for the purchase of electricity from a U.S. plant that uses carbon capture and storage. The deal is to fuel the company's data centers located in the Midwest. Big Tech's plans for expanding technologies such as generative artificial intelligence that will require huge amounts of electricity have clashed with the reality of a U.S. grid that is running out of supplies.
In recent months, companies such as Google have made a number of announcements to fund the construction of new and expanded plants in the United States. Google has recently made deals to purchase electricity from advanced nuclear power plants, geothermal energy and hydropower. Google is working with PJM Interconnection - the largest U.S. grid that covers the world's biggest concentration of data centres - to accelerate the connection of power sources.
Google's latest agreement to purchase power involves a 400 megawatt power plant being built in Decatur, Illinois by Low Carbon Infrastructure, a privately owned company. In the early 2030s, it is anticipated that power will be produced using carbon capture. This involves trapping around 90% of CO2 emission and injecting it underground. Google has not disclosed the financial terms of this deal. Low Carbon Infrastructure stated that the project financing is expected to reach a final investment decision by the first half 2026.
Michael Terrell, Google's head of Advanced Energy, explained that the concept of natural gas-fired electricity, which captures and stores carbon dioxide, had been absent from the equation.
Terrell stated, "We have been focusing on developing all these new clean technologies that are available 24/7. This is a very important piece of the puzzle." It's an important technology the world needs. The Broadwing project is being built on an industrial site owned by Archer Daniels Midland, a company that has been injecting carbon dioxide into the ground from ethanol production.
Jonathan Wiens is the CEO of Low Carbon Infrastructure. He said, "Broadwing shows that carbon capture today can be commercially feasible." The companies say that the construction is expected to take four years, and will create 650 jobs for union workers and 100 positions in construction management and support.
The carbon sequestered on the site will be permanently stored in wells 5,000 to 7,000 feet (1 524-2 2,133 m) below ground. ADM can also purchase electricity from this operation. It will deliver power to the Midcontinent Independent System Operator (MIDSO), which covers 15 Midwest States and multiple Google data centres.
Google and Low Carbon Infrastructure have said that they intend to pursue CCS facilities elsewhere in the U.S. but they did not reveal specific locations or timeframes.
The International Energy Agency (IEA) and the Intergovernmental Panel on Climate Change have promoted carbon capture and storage as a way to reduce emissions in heavy industry and power plants that use fossil fuels. Critics have however questioned the cost, scalability, and long-term efficacy of carbon capture and storage. (Reporting and editing by Marguerita Chy)
(source: Reuters)