Turkish lira tanks as Ankara-exposed stocks tumble

Turkish lira tanks as Ankara-exposed stocks tumble
The currency fell to as low as 8.47 against the dollar compared to 7.22 on Friday. (AFP)
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Updated 22 March 2021

Turkish lira tanks as Ankara-exposed stocks tumble

Turkish lira tanks as Ankara-exposed stocks tumble
  • Erdogan abruptly ousted latest bank chief Agbal on Saturday
  • New bank chief an outspoken critic of tight policy

DUBAI: The Turkish lira crashed by nearly 15 percent Monday after the sacking of the country’s central bank chief rattled global markets.
The currency fell to as low as 8.47 against the dollar compared to 7.22 on Friday.

The currency recovered slightly later in the session to 8.09.

President Recep Tayyip Erdogan's abrupt dismissal of the reformist governor Naci Agbal sent shock waves across markets and triggered fresh worries for millions of Turks concerned about their savings.

The governor was replaced by former ruling party lawmaker Sahap Kavcioglu over the weekend.
A presidential decree on Friday did not explain why Agbal had been removed, but it comes a day after the bank hiked interest rates more than two percentage points to 19 percent in a bid to fight inflation.
“We now see the possibility of an inter-meeting interest rate cut under the new governor, alongside the potential for accelerated capital outflows,” said Abu Dhabi Commercial Bank chief economist Monica Malik, in a note to investors on Monday.
The Borsa Istanbul suspended trading twice when automatic circuit breakers kicked in amid a huge sell-off nearing 8 percent.
Yields on Turkish bonds also rose to record highs.
The fallout was felt across global currency and equities markets. The dollar gained as investors sought safety in the greenback while at the same time some companies with exposure to Ankara had their share price hammered.
Shares in Spain’s BBVA, which makes around 14 percent of its profits in Turkey through its Turkish unit Garanti, plunged as much as 7.7 percent.
The MSCI emerging market currency index was down about 0.1 percent, with high-yielding currencies including the South African rand and the Mexican peso easing about 0.8 percent and 1.4 percent, respectively.
“It may well be that interest rate hikes are once again permitted by Erdogan in a phase of crisis-like lira depreciation but the recent developments should have shown currency traders that even then a sustainable monetary policy regime change is not to be expected,” said Ulrich Leuchtmann, head of FX at Commerzbank.
“The calming effect of interest rate hikes has probably been largely destroyed.”

(With agencies)


Dubai hotel room rates highest in three months

Dubai hotel room rates highest in three months
Updated 10 min 29 sec ago

Dubai hotel room rates highest in three months

Dubai hotel room rates highest in three months
  • The average daily rate was 576 dirhams ($157) for the month
  • Daily occupancy remained in the 50 percent range throughout the April Ramadan period

DUBAI: Hotel room rates in Dubai hit a three-month high in April according to the latest data from STR.
The average daily rate was 576 dirhams ($157) for the month, according to preliminary data, which was the highest since January.
Occupancy stood at 59.7 percent, slightly lower than in March where the rate was at 60.5 percent, the research company said.
Revenue per available room, a key performance measure calculated by multiplying a hotel’s average daily room rate by its occupancy rate, was at 343.94 dirhams, only slightly higher than 329.84 dirhams month-on-month.
Daily occupancy remained in the 50 percent range throughout the April Ramadan period, STR said.
The holy month of Ramadan typically sees UAE residents checking in at hotels for staycations, which has been a major selling point for the industry since international travel was curtailed by the COVID-19 pandemic.
The UAE has been investing in key tourism and health policies to allow the hotel industry to gradually recover, including one of the world’s fastest inoculation drives.


Saudi customs chiefs urge travelers to declare goods worth more than $800

Saudi customs chiefs urge travelers to declare goods worth more than $800
Updated 12 May 2021

Saudi customs chiefs urge travelers to declare goods worth more than $800

Saudi customs chiefs urge travelers to declare goods worth more than $800
  • The requirement is part of the common customs law system for the GCC countries

RIYADH: The Zakat, Tax and Customs Authority has called on travelers coming to Saudi Arabia to declare purchases or gifts worth more than SR3,000 ($800) or its equivalent in foreign currencies.
The requirement is part of the common customs law system for the GCC countries, Al Watan reported.
The Authority also called on travelers coming to or departing from the Kingdom to declare currencies, jewelry, or valuable materials worth SR60,000 or more or the equivalent in foreign currencies, or any goods prohibited or restricted in the Kingdom, including cigarette and tobacco products.
The process can be completed electronically through the “Travelers’ Declaration” application or the website of the Zakat, Tax and Customs Authority (http://www.customs.gov.sa).
It warned that fines would be imposed on declaration dodgers.
Travelers are liable to pay 25 percent of the value of seized items in fines, rising to 50 percent of the value for repeat offenders where there is no suspicion that the seizures are related to a crime or a money-laundering offense.

 


Too cold to handle? Race is on to pioneer shipping of hydrogen

Too cold to handle? Race is on to pioneer shipping of hydrogen
Updated 12 May 2021

Too cold to handle? Race is on to pioneer shipping of hydrogen

Too cold to handle? Race is on to pioneer shipping of hydrogen
  • There are at least three projects developing pilot ships that will be ready to test transporting the fuel in Europe and Asia within the next three years

LONDON: Hydrogen is touted as an inevitable green fuel of the future. Tell that to the people who’ll have to ship it across the globe at hyper-cold temperatures close to those in outer space.
Yet that is exactly what designers are attempting to do.
In the biggest technological challenge for merchant shipping in decades, companies are beginning to develop a new generation of vessels that can deliver hydrogen to heavy industry, betting plants worldwide will convert to the fuel and propel the transition to a lower-carbon economy.
There are at least three projects developing pilot ships that will be ready to test transporting the fuel in Europe and Asia within the next three years, the companies involved told Reuters.
The major challenge is to keep the hydrogen chilled at minus 253 degrees Celsius — only 20 degrees above absolute zero, the coldest possible temperature — so it stays in liquid form, while avoiding the risk that parts of a vessel could crack.
That’s almost 100 degrees Celsius colder than temperatures needed to transport liquefied natural gas (LNG), which required its own shipping revolution about 60 years ago.
Japan’s Kawasaki Heavy Industries has already built the world’s first ship to transport hydrogen, Suiso Frontier. It told Reuters the prototype vessel was undergoing sea trials, with a demonstration maiden voyage of some 9,000 km from Australia to Japan expected in coming months.
“There is the next phase of the project already running to build a commercial-scale hydrogen carrier by the mid-2020s, with an aim to go commercial in 2030,” said Motohiko Nishimura, Kawasaki’s vice executive officer.
The 1,250 cubic-meter tank to hold the hydrogen is double-shelled and vacuum-insulated to help maintain the temperature.
Kawasaki’s prototype, a relatively modest 116 meters long and 8,000 gross tons, will run on diesel on its maiden voyage but the company aims to use hydrogen to power future, larger commercial vessels, Nishimura said.
SUPER-STRENGTH STEEL
In South Korea, one of the world’s major shipbuilding hubs, another project is in the works.
Korea Shipbuilding & Offshore Engineering is the first company in the country working on building a commercial liquefied hydrogen carrier, a company spokesperson said.
To tackle the hyper-cold challenge, the company said it was working with a steelmaker to develop high-strength steel and new welding technology, along with enhanced insulation, to contain the hydrogen and mitigate the risks of pipes or tanks cracking.
On the other side of the world, in Norway, efforts are also underway to build a hydrogen supply chain on the west coast of the country, with one group looking to pilot a test ship that could transport hydrogen to planned filling stations, which would be able to service ships as well as trucks and buses.
Norwegian shipping company Wilhelmsen Group is working on the latter project with partners to build a “roll-on/roll-off” ship that will be able to transport liquid hydrogen by way of containers or trailers that are driven onboard, said Per Brinchmann, the company’s vice president, special projects.
The ship is expected to be operational in the first half of 2024, he added.
“We believe once we have this demonstration vessel operational the intention will be to build up bunkering hubs on the west coast (of Norway),” Brinchmann said, referring to the filling stations.
Other companies are exploring a different route to avoid the cold conundrum and what may happen when hydrogen atoms interact with metal.
Canada’s Ballard Power Systems and Australia’s Global Energy Ventures, for example, are working together to develop a ship to transport compressed hydrogen in gas form.
“The earliest timeframe would be 2025/26,” said Nicolas Pocard, vice president marketing and strategic partnerships with Ballard.
The advantage of this gas approach is that it does not require any extreme temperatures. But the downside is that less hydrogen can be transported in a cargo than liquid hydrogen, which is why some of the early movers are opting for the latter.
Wilhelmsen’s Brinchmann said that a 40-foot container would carry about 800-1,000 kg of pressurized hydrogen gas, but up to 3,000 kg of liquid hydrogen.

Complex and costly
Such endeavours are far from risk free.
They are expensive, for a start; none of the companies would comment on the cost of their vessels, though three industry specialists told Reuters that such ships would cost more than vessels carrying LNG, which can run to $50-$240 million each depending on size.
“The cost of a vessel transporting hydrogen will mainly be driven by the cost of the storage system. Storing liquid hydrogen could be very expensive because of its complexity,” Carlo Raucci, marine decarbonization consultant with ship certifier LR, added separately.
The pilot projects, which are still in experimental stages, must overcome these technical challenges, and also rely on hydrogen catching on as a widely used fuel in coming years.
None of this is certain, though the state support being thrown behind this cleaner-burning fuel suggests it does have a future in the global energy mix.
More than 30 countries, including several in Europe such as France and Germany as well the likes of South Korea and Australia, have released hydrogen rollout plans.
Total planned investments could reach over $300 billion through to 2030 if hundreds of projects using the fuel come to fruition, according to a recent report by the Hydrogen Council association and consultants McKinsey.
The role of shipping would be important to unlocking the potential to convert industries such as steel and cement to hydrogen.
Those two heavy-industry sectors alone are estimated to produce over 10 percent of global CO2 emissions, and overcoming their need for fossil fuels is one of the key challenges of the global transition to a lower-carbon economy.

Faster than LNG?
Tiago Braz, VP energy with Norwegian marine technology developer Hoglund, said the company was working with steel specialists and tank designers on engineering a ship cargo system that can be used for transporting liquid hydrogen.
“We are at the early stages with hydrogen carriers. But unlike when LNG was first rolled out, the industry is more flexible to change,” Braz said.
“It should be a faster transition,” he added.
Specialists say the development of LNG took decades before it was fully rolled out, partly due to the infrastructure and ships required and the few companies willing to invest initially.
Companies active in wider shipping markets are also looking at the possibility of diversifying into transporting hydrogen in the future.
Paul Wogan, chief executive of GasLog Partners which is a major player in LNG shipping, said it was “open-minded” about moving into hydrogen, while oil tanker owner Euronav said it was examining future energy transportation.
“If that energy is hydrogen tomorrow, we would certainly like to play a role in the emerging industry,” Euronav’s CEO Hugo De Stoop said.
Others such as leading ship-management company Maersk Tankers said they would be open to managing hydrogen shipping assets.
Johan Petter Tutturen, business director for gas carriers with ship certifier DNV Maritime, said his company was involved in concept studies for the transport of hydrogen in bulk at sea.
“It’ll be some years before these projects come to fruition, but if hydrogen is to be a part of the future fuel mix then we have to begin exploring all possibilities now.”


Qatar pivots to LNG-hungry China in strategy shift

Qatar pivots to LNG-hungry China in strategy shift
Updated 12 May 2021

Qatar pivots to LNG-hungry China in strategy shift

Qatar pivots to LNG-hungry China in strategy shift
  • US shale gas revolution and increased focus on renewable energy as pressure mounts to tackle climate change has curbed the West’s appetite for gas

SINGAPORE/BEIJING: Qatar is in talks to make Chinese firms partners in its liquefied natural gas expansion project, the world’s largest, in a shift from the Gulf state’s reliance on western majors for technology and global outreach, industry sources said.
Since the early 1990s, Qatar has depended on international companies, including ExxonMobil, Royal Dutch Shell and Total, to help it to build its LNG industry. In exchange, the Western majors received lucrative long-term supply contracts.
But the US shale gas revolution and increased focus on renewable energy as pressure mounts to tackle climate change has curbed the West’s appetite for gas.
Three sources familiar with the matter told Reuters state energy giant Qatar Petroleum (QP) was in talks with Chinese state firms, including PetroChina and Sinopec , for equity stakes in Qatar’s $28.7 billion North Field expansion, the world’s biggest single LNG project.
Western majors ExxonMobil, Shell, ConocoPhillips, Total, Chevron and Eni have also been invited to bid for a share.
The sources spoke on condition of anonymity because the matter is private, although CNOOC Ltd’s CFO Xie Weizhi said last month the firm was “very interested” in Qatar’s gas projects.
It was unclear how advanced the talks were. One of the sources said PetroChina was discussing a 5 percent stake.
Biggest meets fastest
The North Field expansion should allow Qatar to strengthen its position as the largest LNG exporter, with output of 110 million tons per annum (mtpa) by 2026, a 40 percent increase.
The second largest exporter Australia has been closing the gap with Qatar through new gas projects in recent years.
Refinitiv Eikon shiptracking data showed Australia exported 77.3 million tons in 2020 compared with Qatar’s 77.6 million tons.
Although not carbon free, natural gas is less polluting than coal and China is expected to use it to replace coal in winter heating, electricity generation and industry to curb its emissions.
As a result, China is expected by next year to overtake Japan as the world’s biggest LNG importer.
China has already agreed supply deals and invested in producers such as Russia and Mozambique and is keen to diversify from Australian LNG following a deterioration in bilateral ties.
For its part, Qatar has courted China, whose gas demand accounted for about 8.3 percent of the world’s total in 2020 and is expected to grow by 8.6 percent in 2021 to 354.2 billion cubic meters, data from CNPC’s research institute showed.
Saad Al-Kaabi, Qatar’s energy minister and the head of QP, has met Zhang Jianhua, director of China’s National Energy Administration several times since 2018 to discuss cooperation.
Sinopec and Qatar signed two long-term deals, one last year and one earlier this year, following which Sinopec set up an office in Doha.
“China is the fastest growing market and is looking into long-term contracts to secure supply,” Carlos Torres Diaz from Rystad Energy consultancy said. “So moving deals to China would make a lot of sense for Qatar.”
Able to stand alone?
The western energy companies’ expertise and investment helped to make Qatar the world’s richest country on a per capita basis and to build up a sovereign wealth fund holding more than $350 billion in assets.
Now the joint LNG projects are established, Qatar is in a position to move forward without them.
One person involved in the talks said QP’s Kaabi told energy majors in meetings over the last months that it no longer depended on them to fund new projects.
Qatar was not necessarily dispensing with them, but would be seeking terms more favorable to it, the person said.
Last month, it decided not to extend its joint-venture contract for the Qatargas 1 LNG plant, with ExxonMobil, Total and Japan’s Marubeni and Mitsui after the 25-year contract expires in 2022.
Sources from Total and ExxonMobil told Reuters on condition of anonymity the companies had expected to negotiate an extension.
Mitsui and Marubeni both said they respected QP’s decisions and Mitsui also said it was interested in participating in the expansion.
Exxon spokesman Todd Spitler told Reuters the company looked forward to “continuing success” in future projects with QP and the state of Qatar.
“ExxonMobil affiliates are working with Qatar Petroleum to identify international joint venture opportunities that further enhance the portfolio of both,” he said.
Of the foreign partners, Exxon has the highest exposure to the country with access to 15.4 million tons per annum of Qatari gas, followed by Shell at 2.4 mtpa and Total at 2.3 mtpa. For Exxon, Qatar represents over 60 percent of its LNG sales volumes.
Western energy analysts say Qatar still has a use for the big, listed Western players, although it has less need for their direct investment.
Of the other companies with interest in Qatar, Chevron, and Total had no comment and PetroChina and Sinopec did not respond to requests for comment. QP also did not comment.
ConocoPhillips said it was preparing a competitive bid for the North Field expansion and an Eni spokesman also said it was considering a bid.
“International partners, especially the majors, remain key to helping Qatargas secure LNG off-take and global market access,” Valery Chow from Wood Mackenzie consultancy said. “QP doesn’t need foreign balance sheet funding for new projects.”
Having made a final investment decision on the expansion, Qatar is effectively building the North Field expansion project alone.
Kaabi has said Qatar has the muscle to continue without help, but would prefer to have partners to boost its global outreach and strengthen long-term deals.
It could also have political incentives to maintain ties as it considers a second phase of the expansion, which sources expect will be announced later this year and would increase its LNG capacity to 126 mtpa by 2027.
The value of Qatar’s US links was underscored as Washington helped it to resolve a row with Saudi Arabia, which ended early this year.
But the ties could be maintained with US companies taking a smaller share of Qatar’s LNG than in the past and through international connections.
The Western majors have over the last two years sold QP stakes in assets around the world, including exploration projects in Argentina, Brazil and Mozambique.
But they have not handed Qatar the kind of long-term deals in fast-growing Asian markets that the Chinese energy firms can deliver and Qatar regards as a priority, the sources said.


LNG shipments from Qatar to UAE to resume, signaling improving ties

LNG shipments from Qatar to UAE to resume, signaling improving ties
Updated 12 May 2021

LNG shipments from Qatar to UAE to resume, signaling improving ties

LNG shipments from Qatar to UAE to resume, signaling improving ties
  • Qatar has also resumed monthly exports of condensate to the UAE

DUBAI: A liquefied natural gas (LNG) tanker that loaded cargo from Qatar is signaling the UAE as its destination, the first such shipment since mid-2017, reflecting improving ties between the countries.
LNG tankers sometimes change destination, but if the shipment is completed, this would be the first time a Qatari LNG cargo has been shipped to the UAE since May 2017, ship-tracking data from Refinitiv Eikon and data intelligence firm Kpler showed.
The UAE and other countries in the region severed relations with Qatar in mid-2017 over accusations that Doha supports terrorism, a charge that it denies.
But the UAE re-opened all its land, sea and air entry points with Qatar this year after Saudi Arabia announced a breakthrough in ending a dispute between Gulf Arab states and Qatar at a summit. Before the dispute, Qatar was a regular exporter of LNG to the UAE during the summer, when demand for power generation increases. read more
The tanker, Al Ghariya, loaded a cargo from Ras Laffan on May 10 and is at anchor but is showing that it is due to discharge the cargo in Jebel Ali, in the UAE, on May 13, data showed on Wednesday.
Another LNG tanker, Al Gattara, which had loaded from Ras Laffan on May 5 had also initially signaled Jebel Ali as its destination but diverted to Asia, Kpler analyst Rebecca Chia said.
Both tankers are on long-term charter to Qatargas, she added.
Qatar has also resumed monthly exports of condensate to the UAE since February, shipping data on Refinitiv Eikon showed.
Qatari condensate exports to the UAE jumped to 1.7 million barrels in April, up from 287,000 barrels in February, the data showed.