Developing a energy transition strategy for oil infrastructure
Infrastructure Services – Energy Transition
The Engagement:
Business planning and projects identification for energy transition
The Client:
A fuels importation terminal operator in North West Europe
The Challenge:
How would energy transition impact on future revenues and how should the asset footprint change out to 2040 to allow diversification?
Duration:
3 months
How Energex helped:
- Provided energy transition scenarios for the client’s regional market specifically for diesel and gasoline demand
- Projected the implied throughput volumes out to 2040 at the client terminal on core business based on a detailed assessment of the competitive landscape and logistics options for supply
- Analysed revenues and EBITDAs generated for each storage tank to allow quantitative decision making
- Recommend capacity to be in service out to 2040 on the core business and therefore which tanks due for maintenance should be executed vs. assessed for mothballing or conversion options
- Identified mitigation business lines through e.g. bitumen, chemicals, biofuels, and hydrogen carriers and assessed their fit with the client’s business and location
- Through an evaluation of potential and in-flight investment projects (including chemicals, bitumen, hydrogen carriers and LPG), we layered diversification and growth into the business plan
Tangible Impact:
- Workshops were held with commercial, operations and projects teams
- Identified that gasoline volumes in the client’s market were most robust, with challenges around diesel meaning a specific focus on capacity
- Identified more efficient ways to store and handle biofuels with existing assets available
- Suggested a renegotiation with one of the client’s customers given economics on the capacity once costs were considered
- A clear strategy and business plan report was delivered to the CEO for presentation to the shareholders and future refinancing
- Around $60m of investment projects were recommended by Energex for further technical investigations and engagement with existing and potential customers