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Foreign firms participate in Vietnam’s second refinery Posted Tuesday, January 15, 2008 - 2:29 by hydrocarbonasia
Companies from Thailand, China, Australia, Malaysia and the United Kingdom will develop a multi-billion US-dollar crude oil refining and petrochemical complex with annual capacity of 7 – 8.4 million tons of crude oil in Vietnam’s central Than Hoa Province, according to local reports on January 2008.

Following a memorandum of agreement signed by the provincial authorities and Thailand-based Saha Regal B in late 2007, the Thai firm and its partners – China’s Kunming No. 1 Construction and Engineering, Australia’s Leighton Holdings, Honeywell Limited and Global Union, Malaysia’s Transkon Group, and the UK’s Jardin Lloyd Thompson want to develop the Nghi Son complex .

GE Oil & Gas signs Letter of Intent with QAFCO Posted Thursday, January 10, 2008 - 3:29 by hydrocarbonasia
The Qatar Fertilizer Company (QAFCO) has signed a letter of intent (LOI) with GE Oil & Gas for the supply of gas turbine and compressor technology for an expansion project that will result in one of the world’s largest fertilizer plants. The GE equipment will be used for an expansion of the ammonia and urea plant at the site and for a new cogeneration facility that is part of the overall project.

Under the terms of the LOI, GE will supply four Frame 6B gas turbine-generators, five compressors, five steam turbines, heat recovery steam generators (HRSGs) and related services. The cogeneration plant will provide 140 megawatts of power and up to 600 tons per hour of steam required on the ammonia and urea plant process.

When completed in 2010, QAFCO 5 will increase the company’s total production capacity to 4 million tons per year of urea, up from current levels of 2.8 million tons per year; and to 3.1 million tons per year of ammonia, up from 2 million tons per year.

With the nominal gross domestic product growing an average of 15% over the past five years, Qatar’s economy is rapidly expanding across all industrial sectors. The QAFCO 5 project is another signal that the strong upward trend is continuing.

“Our long-term relationship with QAFCO and the confidence they have in our technology and services were key factors in securing this LOI,” said Mohammad Ayoub, Operations Leader and Region General Manager – Middle East for GE Oil & Gas. “GE’s capability to act as a complete solution supplier of gas turbine, compressor, steam turbine generator and services will provide a significant benefit for the customer.”

“QAFCO 5 offers further evidence of GE’s on-going commitment to support Qatar’s growing oil and gas industry by providing reliable technology and services for projects throughout the country,” Ayoub added.

The gas turbines and compressors for the new project will be manufactured at GE Oil & Gas facilities in Florence, Italy and the steam turbines in Le Creusot, France. The gas turbines are scheduled for delivery to the site in Qatar in the first half of 2009, with the compressors and steam turbines to be shipped in the second half of 2009. The gas turbines will be equipped with Dry Low NOx (DLN) technology that will limit DLN emissions to 15 parts per million, and also will be customized to meet QAFCO’s specifications as well as the petrochemical industry requirements.

Offering proven reliability, GE’s Frame 6B is one of the most versatile and widely used gas turbines ever manufactured, with more than 900 units in service worldwide totaling more than 40 million operating hours in a wide range of applications.

GE Oil & Gas has been providing gas turbines, compressors and other equipment to support projects in Qatar for more than 35 years. To offer on-going support for customers such as QAFCO, GE Oil & Gas is building a new facility in Ras Laffan Industrial City that will act as a service technology hub for Qatar and the Middle East region.

“Establishing this service complex underscores GE’s strong commitment to continue increasing technology and service offerings for our customers in Qatar, one of the fastest growing centers for the oil and gas industry worldwide,” said Ayoub

Sinopec forecasts a rise in production Posted Friday, December 28, 2007 - 11:23 by hydrocarbonasia
Sinopec Corp. said it expects to process 42.5 million tons of crude oil in the final quarter this year, up, 7.5 percent from the third quarter., as China’s largest oil refiner acts to counter a fuel shortage.

The amount represents an increment of 500,000tons over its original fourth-quarter plan, according to Sinopec.

This also surpasses the 42.38 million tons made early this month. China has suffered a diesel shortage in October and November due to soaring crude prices and capped domestic prices for refined oil products. Domestic refineries had cut production to stem losses from the yawning price gap.

The National Development and Reform Commission has since asked state refineries to increase processing volumes and raised domestic fuel prices by as much as 19 percent at the start of November.

Sinopec said yesterday that the supply condition was basically back to normal, with increasing oil processing and imports.

The top Asian refiner said it processed 980,000 tons more crude last month from a year earlier, a record on a daily basis.

Sinopec also said it imported 287,000 tons of diesel in November and expected to import 423,000 tons this month.

Tangguh LNG project partners ponder additional trains Posted Monday, October 29, 2007 - 11:10 by hydrocarbonasia
BP PLC subsidiary BP Berau Ltd., operator of the Tangguh LNG project, is considering construction of as many as eight additional LNG trains at the company's existing site in Papua.
The company has set up a special team to study the possibility of new trains at the existing plant. Two other LNG trains are nearing completion.
"We are concentrating on getting these [two trains] finished. We are also looking at further development and opportunities for building more trains," said David Clarkson, the project's executive vice-president.
BP began construction of the two trains in March 2005, with the first due to go online in January 2009 and the second in May 2009. The project is said to be 82% complete as of September.
Tangguh will sell LNG to four overseas buyers—China's Fujian (2.6 million tonnes/year), South Korean K-Power and Posco (1.11 million tpy each), and Sempra Energy (3.6 million tpy).
Energy and Mineral Resources Minister Purnomo Yusgiantoro said he would like BP to sell LNG from the trains under consideration as several domestic firms, including state-owned Perusahaan Listrik Negara (PLN) and Perusahaan Gas Negara (PGN), have shown interest in buying gas from Tangguh.
Kanematsu Corp. earlier announced plans to sell its 3.93% stake in the Tangguh LNG project in Indonesia to Mitsui & Co. Ltd., Mitsubishi Corp., Nippon Oil, and Inpex Holdings for 15 billion yen
The share transfers, which were due for completion on Oct. 22, will see Nippon Oil raise its stake in the project to 13.45% from 12.23%. Mitsui and Mitsubishi will respectively increase their shares to 9.92% from 9.13% and INPEX will increase its stake to 7.79% from 7.17%.
Meanwhile, according to the most recent statement, BP has a 37.16% interest in Tangguh. Its partners include CNOOC Muturi Ltd. and CNOOC Wiriagar Overseas Ltd., 16.96%; MI Berau BV (held by Mitsubishi and Inpex), 16.3%; Nippon Oil Exploration (Berau) Ltd. (held by Nippon Oil Exploration Ltd. and Japan Oil, Gas & Metals National Corp.), 12.23%; KG Berau/KG Wiriagar (held by Kanematsu, Overseas Petroleum Corp., a subsidiary of Mitsui and JOGMNC) 10%; and LNG Japan Corp. (equally owned by Sumitomo Corp. and Sojitz Corp.), 7.35%.

Reliance to join GAIL, HPC in petchem project Posted Monday, October 29, 2007 - 11:08 by hydrocarbonasia
India's Reliance Industries Ltd. (RIL) likely will join public sector gas distributor GAIL India Ltd. and refiner Hindustan Petroleum Corp. (HPC) to construct a 1 million tonne/year petrochemical complex in Visakhapatnam (Visag) in India's Andhra Pradesh state.
The capacity of the $1.5 billion plant would equal the total polymer manufacturing capacity of RIL and Indian Petrochemicals Corp. Ltd. (IPCL) together.
RIL built up a capacity of 1 million tonnes after it acquired IPCL from the government in June 2002 and merged with it.
GAIL has an agreement with RIL for building petrochemical plants overseas. "We are looking to extend that agreement to our proposed plant in South India," said GAIL Chairman and Managing Director U.D. Choubey. "The most likely location of the plant is [Visag], with HPCL as the third partner."
RIL executives declined to comment on the proposed 60-billion-rupee petrochemical plant, but an HPCL executive confirmed that a plan to set up a petrochemical plant in Visag was being discussed and that the company is scouting for a partner for the venture.
GAIL, the country's largest transporter and marketer of gas, also is undertaking feasibility studies for building a 3-million-tonne/year petrochemical plant in Iran near offshore South Pars field. RIL is expected to be invited to join the state-run company in that project also.
The Visag petrochemical plant will be built in the proposed Petroleum, Chemicals, and Petrochemicals Investment Region (PCPIR) to be established by the Andhra Pradesh government in the Visag-Kakinada zone. HPCL already has a 7.5 million tonne/year refinery in the area that is being expanded to 15 million tonnes/year.
GAIL operates a 440,000 tonne/year petrochemical plant in Pata, Uttar Pradesh. Construction of another 52-billion-rupee ($1.3 billion) plant is under way in Assam.
GAIL intends to invest 300 billion rupees ($7.5 billion) during its current 5-Year plan (2007-12), of which almost 80 billion rupees ($2 billion) has been earmarked for the petrochemicals sector.

Petronet LNG plans gas-based power plants Posted Monday, October 29, 2007 - 11:07 by hydrocarbonasia
Indian state-run natural gas importer Petronet LNG Ltd. plans to diversify into the power sector and to establish an 1,100-Mw, gas-based power plant, near its Dahej LNG regasification terminal.
Given the synergies with the LNG terminal, the power project is expected to cost about 30 billion rupees ($760 million).
The diversification move by the country's largest LNG importer is a risk-mitigating exercise to protect the LNG capacity it plans at its two regasification terminals at Dahej and Kochi, said Petronet's Chairman and Managing Director P. Dasgupta.
The company is expanding the capacity of the Dahej LNG terminal to 12.5 million tonnes/year from 7.5 million, and it is creating an LNG regasification capacity of 5 million tonnes/year at the Kochi LNG terminal.
"There is a limit beyond which we cannot hold LNG in tanks," said Dasgupta. "Therefore, a logical way to utilize our capacity would be to venture into power production and maintain our existing profit lines. The existing synergies with our LNG plant will to a great extent help in reducing the cost of putting up a power plant, for which we have already applied for 60 hectares of land near Dahej."
If this model succeeds at Dahej, the company would look at implementing a similar power project at its Kochi terminal.
The Petronet chief said financing of the power project would be a mix of debt and equity. "A firm proposal on the investment plan for this project will be put up before the board in April 2008," said Dasgupta. "There are various options to fund the equity portion, and Petronet might even consider a 25% rights issue," he said. Other options, including a foreign currency convertible bond (FCCB), a public issue, or a preferential issue, would amount to diluting the promoters' stake, he added.
"If the promoters are comfortable with these options, we will look at them, or else we will go in for a rights issue," said Dasgupta.

UOP Technology Selected for new Jurong aromatic plant in Singapore Posted Monday, October 29, 2007 - 1:06 by hydrocarbonasia
UOP LLC, a Honeywell (NYSE: HON) company, announced today that Jurong Aromatics Corp. PTE Ltd (JAC) has selected UOP to supply technology, basic engineering services and equipment for a new aromatics plant to be installed in Jurong Island, Singapore.
Basic engineering design is underway by UOP, and commissioning of the complex is scheduled for 2011. When completed, this plant will be one of the largest private-owned petrochemical facilities in Singapore.
“UOP has been working with us to develop this project from its conception, providing a complete solution that will help us to meet growing demand for fuel and petrochemical products in this region,” said JAC Director Mr. Ewe Ee Foong. “We are confident this will be among the most competitive petrochemicals facilities in the world, using the most advanced technologies, and we consider UOP to be an important partner to help us make this happen.”
Using natural gas condensate, a mixture of the liquids present in the raw natural gas from many natural gas fields, as a feedstock, the plant will produce 800,000 metric tons per annum (MTA) of para-xylene. It will also produce 200,000 MTA of ortho-xylene and 450,000 MTA of benzene, both of which are raw materials that JAC provides to downstream manufacturers of textiles and electronic appliances. The facility will also produce 2.5 million MTA of valuable fuels to supply growing demand through the region.
The JAC facility is the third world-scale aromatics complex for para-xylene production UOP has designed to be built in Singapore. Globally, UOP has licensed more than 740 individual process units for the production of aromatics.

The new facility will feature a wide range of UOP technologies to produce low-sulfur, clean fuels and high-quality aromatics. Technologies include the UOP Merox™ process and the
UOP Distillate Unionfining™ processes to remove sulfur and upgrade distillate materials for the production of clean fuels. Additionally, JAC will utilize the UOP CCR Platforming™ process,
UOP Parex™ process, UOP Isomar™ process, UOP Tatoray™ process and the UOP Sulfolane™ process to support the production of high purity aromatics like para-xylene, a key ingredient in the production of PTA (purified terephthalic acid) used to make polyester for fabric
and PET (polyethylene terephthalate) chips for carbonated soft drink and water bottles.
JAC is majority-owned by Jurong Energy Corp. Other strategic partners include Glencore, one of the world's largest suppliers of commodities and raw materials, SK Energy, South Korea’s largest and one of the world’s leading energy and petrochemical companies with
a refining capacity of 1.15 million barrels per day and Sanfanxiang (SFX), the largest polyester and PET chip producer in the People’s Republic of China.
UOP LLC, headquartered in Des Plaines, Illinois, USA, is a leading international supplier and licensor of process technology, catalysts, adsorbents, process plants, and consulting
services to the petroleum refining, petrochemical, and gas processing industries. UOP is a wholly-owned subsidiary of Honeywell International, Inc. and is part of Honeywell’s Specialty
Materials strategic business group.

QP lets petrochemical contracts for Mesaieed complex Posted Friday, October 19, 2007 - 10:27 by hydrocarbonasia
Qatar Petroleum subsidiary Qatar Intermediate Industries Holding Co. Ltd. has awarded contracts to two subsidiaries of Foster Wheeler's Global Engineering & Construction Group for work on a proposed grassroots petrochemical complex at Mesaieed, Qatar.
One contract calls for Foster Wheeler to execute the front-end engineering and design, while the other is to provide project management and construction management services. Foster Wheeler said its work also includes procurement of long-lead items.
For this project, Qatar Holding is establishing a joint venture company with South Korea's Honam Petrochemical Corp.
The firm said the new complex, slated for completion in 2011, will include world-scale olefins and aromatics units, which will supply ethylene, propylene, and benzene to the downstream polypropylene, ethylbenzene, styrene monomer, and polystyrene facilities.

Pertamina seeks oil supplies for planned refinery Posted Friday, October 19, 2007 - 10:26 by hydrocarbonasia
Indonesia's state-owned PT Pertamina is seeking crude supplies from oil-producing countries to feed its refinery project in Bojonegara, Banten, after Iran reduced its supply commitment to 100,000 b/d from 300,000 b/d.
"The commitment with Iran is a fragile one, so we are looking for other sources to supply the crude," said Pertamina's director of refining Suroso Atmomartoyo. "We have to ensure we get the supplies before the refinery is completed."
Atmomartoyo said Pertamina is in talks with several countries for the crude supply, but he would not identify them, saying negotiations were still at the early stages.
Pertamina and Iran had signed a memorandum of understanding in March 2005 to jointly build the 300,000 b/d Banten refinery with the understanding that Iran would invest in the $5.6 billion refinery and supply the heavy crude.
In July, they agreed to build the refinery and said construction would start in 2008, with completion scheduled for 2012. Officials from the two countries planned an August meeting in Tehran to discuss project details, including equity distribution, project structure, and crude supply agreements.
However, in September Iran expressed disappointment with Indonesia's handling of the plan to build the refinery jointly, including the substitution of Pertamina for its 51.38%-owned subsidiary PT Elnusa to be partner with Iran's National Iranian Oil Refining & Distribution Co. in the project.
"The heads of state of the two countries made a commitment to support the development of the project, but after 3 years there is no progress toward its implementation," said Mahmoud R. Radboy, head of the economic section at the Iranian embassy in Jakarta.
At the same time, Pertamina Pres. Ari Hernanto Soemarno said implementation of the project would be postponed because of rising costs.

Pakistan approves Khalifa Point refinery near Hub Posted Friday, October 19, 2007 - 10:24 by hydrocarbonasia
Pakistan has approved construction of the $4-5 billion coastal refinery project at Khalifa Point near the Hub area of Balochistan province.
Ashfaq Hassan Khan, briefing adviser to the finance ministry, said preliminary work has begun on the refinery, which will have a capacity of 200,000-300,000 b/d.
The facility would be established as a 74:26 joint venture of Abu Dhabi-based International Petroleum Investment Co. (IPIC) and Pak-Arab Refinery Co. The project is expected to be completed and commissioned by first quarter 2011.
The Ministry of Petroleum and Natural Resources was authorized to sign the implementation agreement with IPIC within a month.
Various concessions had been announced for the project, including a 20-year tax holiday, exemption from 5% workers' profit participation, and exemption from 0.5% services charges under the export processing zones rules.
Pakistan also advises Oil & Gas Development Corp. to dedicate at least 80% of the liquefied petroleum gas produced from Chanda field for distribution in the Federally Administered Tribal Areas of northern Pakistan.

GCC countries' refining capacity to rise 45% by 2010 Posted Friday, October 19, 2007 - 10:22 by hydrocarbonasia
The total refining capacity of the six Gulf Cooperation Council (GCC) countries is expected to increase by 45.5% in 2010—to 6.3 million b/d from 4.33 million b/d, according to a report by the Emirates Industrial Bank (EIB).
"The potential increase is a result of four new refineries planned in Kuwait, Saudi Arabia, Qatar, and Oman, as well as of renovating old refineries and increasing their production capacity in the UAE and Kuwait," it said.
EIB noted that while the GCC's oil production currently comprises 19% of world output, the current capacity of the group's 20 existing refineries constitutes just 5% of the world's overall refining capacity of 85.4 million b/d.
The report blamed the lack of refining capacity around the world for the reduced supply of products and their consequent high costs. "The rise in the cost of oil refining and the closure of 15 refineries in the world have led to a shortage in oil products…in the past 3 years," it explained.
"The rise in oil refining capacity in some countries has contributed to curbing this gap, which eventually helped in curbing oil prices and creating huge inflation rates in world countries, including oil producing and exporting countries," EIB said.
GCC member countries are Bahrain, Kuwait, Qatar, Oman, Saudi Arabia, and the UAE.

Woodside brings Thylacine gas project on stream Posted Tuesday, September 25, 2007 - 2:01 by hydrocarbonasia
Woodside Petroleum Ltd. has brought on stream its Thylacine gas development in the Otway basin off western Victoria after the project's scheduled start-up had fallen behind by more than a year
Production from Thylacine field, which lies in Tasmanian waters, is being piped ashore to a processing plant in Victoria. Geographe field, adjacent to Thylacine in Victorian waters, will be connected to the main offshore pipeline during a later development phase.
Thylacine will supply 980 bcf of gas to Victoria over an estimated 10 years. There also will be 100,000 tonnes of liquid petroleum gas and about 800,000 bbl/year of condensate. These products will be the main revenue earners for the project.
The commissioning phase is complete, and gas production will be increased to scheduled levels over the coming weeks.
Sales gas is transferred to TruEnergy's adjacent Iona gas plant to be piped onward to Melbourne and Adelaide.
Condensate will be trucked to Shell Australia's refinery in Geelong, 50 km west of Melbourne.
Delays were concentrated in the onshore gas plant construction, which also inflated the project's Phase 1 cost by about 20% to almost $1 billion (Aus.).

construction of preheated pipeline from Rajasthan refinery progresses Posted Tuesday, September 25, 2007 - 1:59 by hydrocarbonasia
Cairn India and India's state-owned Oil & Natural Gas Corp. (ONGC), partners in Barmer field in Rajasthan, said they will not "go slow" in constructing a preheated pipeline to carry the waxy crude from the field.
This is despite the Rajasthan government's saying it would build a refinery to process the oil, making the $750-million pipeline superfluous.
"The pipeline is the most feasible option and is likely to [be built] before the start of crude oil production," said a senior official of ONGC, Cairn's 30% partner in the oilfield.
He said building a refinery with a capacity of about 7.5 million tonnes/year "would take around 40 months, whereas work on the pipeline is expected to take just 18 months," he said.
A Cairn India executive revealed that 83% of the pipeline engineering design work has been completed and that tenders for construction would open soon.
The Scottish explorer's oil discovery in Rajasthan is the largest in the country since ONGC struck oil in Bombay High in 1972. Barmer field is expected to produce 150,000 b/d during its 4-year peak production period.

Thailand's largest integrated energy group, has awarded contracts worth $1.1 billion to Samsung Engineering Posted Tuesday, September 25, 2007 - 1:53 by hydrocarbonasia
PTT PLC, Thailand's largest integrated energy group, has awarded contracts worth $1.1 billion to Samsung Engineering Co. of South Korea to build two natural gas separation plants, each capable of processing 800 MMcfd of gas.
The plants will be built on a turn-key basis in Rayong, about 180 km southeast of Bangkok for completion in March 2010, reported PTT executives.
The plants form part of a new gas system PTT is constructing to ramp up gas throughput from the Gulf of Thailand to meet the country's increasing appetite for energy.
PTT is completing a third trunk line that will provide a throughput capacity of 750 MMcfd, enhancing deliveries through decades-old transmission lines that are operating at capacity limits of 1,800 MMcfd

SP Chemicals plans petrochemical complex in Vietnam Posted Friday, September 14, 2007 - 3:57 by hydrocarbonasia
SP Chemicals Ltd., Singapore, has signed a tentative agreement with Vietnam to build a $5 billion petrochemical complex at Phu Yen, about 560 km northeast of Ho Chi Minh City.
SP plans to submit its proposal to Vietnam's prime minister next year, according to Vo Dinh Tien, an official with central Phu Yen province's planning and investment department.
If the prime minister approves the project, construction would begin in 2009 on 1,300 ha, Tien said. The aim of the project is to supply domestic as well as export markets.
SP is expected initially to invest $1.5 billion to build several petrochemical facilities in that area from 2009-14. SP then will invest $3.5 billion to enlarge the complex.
A refinery and a port that can accommodate ships as large as 250,000 dwt also will be built as part of the project, Tien said. The completed complex is expected to attract further investment of $6 billion from foreign and domestic companies, he said.

ExxonMobil plans second Singapore steam cracker Posted Friday, September 14, 2007 - 3:55 by hydrocarbonasia
ExxonMobil Chemical Co. plans to build a second world-scale steam cracker complex at its existing site in Jurong, Singapore.
The multibillion plant will be fully integrated with the company's 605,000 b/cd refinery and chemical plant, providing feedstock, operating, and investment synergies. The initial chemical plant began operating in 2001.
The new plant, expected to start up in early 2011, will include a 1 million tonne/year ethylene steam cracker, two 650,000 tpy polyethylene units, a 450,000 tpy polypropylene unit, a 300,000 tpy specialty elastomers unit, an aromatics extraction unit to produce 340,000 tpy of benzene, and an oxo-alcohol expansion of 125,000 tpy. A 220-Mw electric power cogeneration unit also will be built.
ExxonMobil Asia Pacific Pte. Ltd. has awarded the design, engineering, procurement, and construction contract for the steam cracker recovery unit to Shaw Group.
Mitsui Engineering & Shipbuilding and Heurtey Petrochem Group have been selected as EPC contractors for the steam cracker furnaces. Mitsui also received EPC contracts for the polypropylene and specialty elastomers units.
Mitsubishi Heavy Industries has been awarded the EPC for the two polyethylene units.

China has forged two sales deals for Western Australian LNG Posted Friday, September 14, 2007 - 3:49 by hydrocarbonasia
China has forged two sales deals for Western Australian LNG this week—the strongest sign yet that Gorgon will move forward.
Shell Australia concluded a binding heads of agreement to sell PetroChina 1 million tonnes/year of LNG for 20 years, primarily from Gorgon gas. A detailed agreement will be conditional on the Gorgon partners reaching a final investment decision before December 2008.
Shell also still has preliminary agreements to send Gorgon gas to India and to an import terminal in Baja California.
Woodside Petroleum Ltd. agreed to key terms with PetroChina for the potential sale of 2-3 million tonnes/year of LNG over 15-20 years from Woodside's Browse project, which includes the development of Torosa (formerly Scott Reef), Brecknock, and Calliance (formerly Brecknock South) gas fields some 430 km north of Broome off Western Australia. The three fields have gas reserves of about 20 tcf and lie in water averaging 800 m deep.
The agreement, which hinges on a final investment decision for the Browse project, anticipates deliveries start-up in 2013-15. Although terms were kept confidential, the expectation is for revenues of $35-45 billion (Aus.).
Woodside and partners BHP Billiton, Chevron, BP, and Shell aim to have determined an optimum development concept for Browse basin fields during 2008.
The interests in the various permits over the field areas vary, but Woodside has just under 50% overall. Although the latest agreement is with Woodside, it provides for the addition of LNG entitlements for the other partners to be commingled in sales.

State-owned Qatar Petroleum plans to build a grassroots refinery Posted Thursday, September 6, 2007 - 7:06 by hydrocarbonasia
State-owned Qatar Petroleum plans to build a grassroots refinery with 250,000 b/d capacity and other associated facilities in Messaieed, Qatar. QP has let a lump sum front-end engineering design contract to Technip for the work.
The $60 million contract covers the Al Shaheen facility and an oil pipeline that will extend from Al Shaheen oil and gas field 90 km offshore to Messaieed 110 km onshore, as well as other import-export facilities. Technip's operations and engineering centers in Paris and Abu Dhabi will carry out the contract work.
The refinery, which will produce mainly gasoline, diesel, and jet fuel, will incorporate some of the most technologically advanced conversion units for upgrading bottom of the barrel products. The facilities are scheduled to be operational by yearend 2011.
Qatar currently has just one refinery at Umm Said. It has a capacity of 200,000 b/cd and is operated by National Oil Distribution Co.
Qatar's crude production capacity is expected to increase to 1.1 million b/d by late 2008. The increase will come from expansion of Al-Shaheen oil field. A development effort in progress in Al Shaheen field will raise the field's oil production to 525,000 b/d from 240,000 b/d

Sinopec, CNPC to increase refineries in China Posted Thursday, September 6, 2007 - 7:04 by hydrocarbonasia
China Petrochemical Corp. (Sinopec) and China National Petroleum Corp. (CNPC) are expanding their refining facilities in order to ease the country's tight oil supply, according to media reports.
China's eobserver.com said Sinopec is scheduled to add and enlarge some 20 refineries with 10 million ton/year production capacity in the next 2-3 years, while CNPC plans to set up 10 refineries, each also having a production capacity of 10 million tons/year.
The financial daily said with completion of the 30 plants, China will have to import more oil because the country's current output of 200 million tons of crude has reached its peak. Now, it said, 50% of China's domestic crude oil consumption relies on imports.
Eobserver.com said Sinopec Group's planned refineries will be built in South and East China, especially in the relatively developed southern areas, where "the strong economic engines are in urgent need of more energy."
It said CNPC will mainly set up its new plants in West China and Northeast China, with plans calling for facilities in Daqing, Fushun, Jinzhou, Huludao, Dalian, Lanzhou, and Xinjiang.

Qatar Petroleum plans to build a refinery with 250,000 b/d capacity Posted Thursday, August 30, 2007 - 3:47 by hydrocarbonasia
State-owned Qatar Petroleum plans to build a grassroots refinery with 250,000 b/d capacity and other associated facilities in Messaieed, Qatar. QP has let a lump sum front-end engineering design contract to Technip for the work.

The $60 million contract covers the Al Shaheen facility and an oil pipeline that will extend from Al Shaheen oil and gas field 90 km offshore to Messaieed 110 km onshore, as well as other import-export facilities. Technip's operations and engineering centers in Paris and Abu Dhabi will carry out the contract work.

The refinery, which will produce mainly gasoline, diesel, and jet fuel, will incorporate some of the most technologically advanced conversion units for upgrading bottom of the barrel products. The facilities are scheduled to be operational by yearend 2011.

Qatar currently has just one refinery at Umm Said. It has a capacity of 200,000 b/cd and is operated by National Oil Distribution Co.

Qatar's crude production capacity is expected to increase to 1.1 million b/d by late 2008. The increase will come from expansion of Al-Shaheen oil field. A development effort in progress in Al Shaheen field will raise the field's oil production to 525,000 b/d from 240,000 b/d

Japanese firms to export more fuel products to US Posted Thursday, July 26, 2007 - 6:56 by hydrocarbonasia
Japan's Cosmo Oil Co. and Idemitsu Kosan Co. are taking steps to increase or start exports of products such as gasoline, diesel fuel, and kerosine to the US—California in particular.
Both firms are targeting California where—according to a University of California report authored by Severin Borenstein, James Bushnell, and Matthew Lewis—demand for gasoline is increasing, and refining capacity is stretched.
California also has higher prices because the low-polluting gasoline blend required by state rules is made only by 13 in-state refineries, according to the report, issued in May.
Just ahead of that report, Cosmo in April began testing the market by selling diesel fuel that complies with California's standards after securing its own unloading tanks in the suburbs of Los Angeles.
For the first time, Cosmo began selling diesel to local retailers, having before sold to US oil companies only through spot deals.
Cosmo hopes to increase its exports to the US to 700,000 kl. That's about 2% of its domestic sales and represents a three-fold increase of its exports to the US over the previous fiscal year.

India's first coalbed methane sale Posted Thursday, July 26, 2007 - 6:48 by hydrocarbonasia
Great Eastern Energy Corp. said it has made India's first sale of coalbed methane as compressed natural gas for vehicles in Asansol, West Bengal, 125 miles northwest of Calcutta.
The company said it is receiving $13-15/Mcf for the gas.
Great Eastern has drilled 23 production wells and plans to drill 80 more in phases over 3 years. It holds a CBM license on 210 sq km in the Raniganj coal field in West Bengal, where consulting engineers estimated original gas in place at 1.92 tcf.

India's first coalbed methane sale Posted Thursday, July 26, 2007 - 6:47 by hydrocarbonasia
Great Eastern Energy Corp. said it has made India's first sale of coalbed methane as compressed natural gas for vehicles in Asansol, West Bengal, 125 miles northwest of Calcutta.
The company said it is receiving $13-15/Mcf for the gas.
Great Eastern has drilled 23 production wells and plans to drill 80 more in phases over 3 years. It holds a CBM license on 210 sq km in the Raniganj coal field in West Bengal, where consulting engineers estimated original gas in place at 1.92 tcf.

Shell PLC affiliate buys Qatar Liquefied Gas 4 output Posted Monday, July 16, 2007 - 9:34 by hydrocarbonasia
A Royal Dutch Shell PLC affiliate signed an agreement with Qatar Liquefied Gas Co. Ltd. (4) in Doha to buy effectively the entire output—7.8 million tonnes/year—of LNG from the Qatargas 4 project.

Shell will send the LNG to its Elba regasification terminal for eastern US markets. Elba is being expanded to process 2.1 bcfd of gas by mid-2010 under an $850 million investment plan.

The sales contract underpins the development of Qatargas 4 which brings Qatar closer to its 77 million tonne/year target of becoming the world's leader in LNG production.

First LNG cargoes from Qatargas 4 are expected at the end of the decade, and the liquefaction complex will produce 1.4 bcfd of gas, including an average 24,000 b/d of LPG and 46,000 b/d of condensate from Qatar's North Field over the 25-year life of the project. The main engineering, procurement, and construction contract for onshore facilities was awarded in December 2005 and construction activities are progressing in Ras Laffan.

Linda Cook, Shell's executive director of gas and power, said the integrated project "is another clear illustration of our 'more upstream, profitable downstream' strategy in action". This is the seventh LNG project in which Shell has an equity stake.

Qatar Petroleum (QP) and Shell incorporated Qatargas 4 as a joint venture between an affiliate of QP (70%) and an affiliate of Shell (30%). The JV will own the Qatargas 4 project's onshore and offshore assets.

Inpex, KLC negotiate over Maret Islands LNG plant Posted Monday, July 9, 2007 - 11:04 by hydrocarbonasia
Japanese company Inpex Corp. has agreed to negotiate with the Kimberley Land Council (KLC) over the company's plans to build a $10 billion (Aus.) LNG gasification plant on the remote, uninhabited Maret Islands off northwestern Western Australia.
The Inpex-Total SA joint venture involves piping gas 200 km from Ichthys field in the Browse basin to two LNG trains of 3.8 million tonnes/year capacity (commissioned a year apart) to be built on South Maret Island (OGJ Online, Feb. 2, 2007). The accommodation, airstrip, and other service facilities will be on North Maret, and the two islands will be joined by a 500-m bridge or causeway.
Ichythys field received Australia's Major Project Facilitation status in August 2006. The field lies in about 250 m of water and has gas reserves estimated at 9.5 tcf, with 312 million bbl of condensate.
Pre-front-end engineering and design (FEED) work for the field and plant facilities is under way, and FEED is expected to begin by yearend, leading to a final investment decision at yearend 2008. The target is to bring LNG on stream in 2012.
Construction likely will require a site clearance of 260-340 hectares, requiring removal of 35-45% of the natural vegetation. Fauna consists of reptiles and birds, but no mammals.
Inpex has agreed to pay compensation if the plan to build facilities on the islands proceeds.
Inpex Managing Director Jiro Okada said the parties had finalized a heritage protection agreement, which involves identifying sites of cultural significance as Inpex continues its environmental studies on the two islands.
KLC executive director Wayne Bergmann said the deal would provide major benefits for indigenous communities in the Kimberley region and would enable cooperation in developing the Maret islands. KLC will now negotiate employment training, business and joint venture opportunities, land management programs, and compensation for traditional owners, he said.

Vietnam to speed up the construction of Oil & Gas projects Posted Saturday, July 7, 2007 - 3:09 by hydrocarbonasia
Vietnamese Prime Minister Nguyen Tan Dung has asked contractors to speed up construction of several oil and gas projects, including the Dung Quat refinery, the Nghi Son refinery and petrochemical complex, and the Ca Mau combined-cycle project.
Regarding the 140,000 b/d Dung Quat refinery in the central coastal province of Quang Ngai, Nguyen instructed state-owned PetroVietnam to work with Technip to address problems that he said have caused delays (OGJ Online, Feb. 19, 2007).
Nguyen wants the refinery to become operational by February 2009.
The $2.5-billion refinery is being built in the Dung Quat Economic Zone in Binh Son district's Binh Tri and Binh Thuan communes.
Construction of the refinery began in June 2005, 7 years after the target date stipulated by a 1997 National Assembly resolution.

Meanwhile, the Nghi Son refinery and petrochemical project is being built on 325 hectares in the Tinh Gia district of Thanh Hoa province, with completion set for 2011.
The project includes a 140,000-b/d refinery, a 150,000-350,000-tonne/year polypropylene plant, and a 260,000-tonne/year polyester fiber plant.
Construction of the Ca Mau combined-cycle project in U Minh district, 15 km from Ca Mau City, started in March 2001. PetroVietnam said the complex will include a gas pipeline, a power plant, and a nitrogen fertilizer plant.
Siemens planned to deliver two 250-Mw gas-fired turbines and generators to the Ca Mau project last August and to start them by March.
Nguyen specifically requested a speed-up of installation of heat-control units on the 332-km PM3-Ca Mau pipeline, which is to carry 2 billion cu m/year of gas from offshore fields to the complex.

S-Oil to boost Onsan refinery's paraxylene output Posted Saturday, June 23, 2007 - 1:57 by hydrocarbonasia
S-Oil Corp. has started a project aimed at increasing paraxylene production at its 520,000 b/cd Onsan refinery and chemical complex in South Korea.
The company has selected ExxonMobil Chemical Technology Licensing LLC's selective PxMax technology, which will allow for an 8% capacity increase without requiring modification of the paraxylene separation process facilities.
The PxMax method produces a paraxylene-enriched mixture that is further processed into sales grade paraxylene. It replaces a nonselective toluene disproportionation process that produced equilibrium mixed xylenes.

Sabic signs $1 billion China petrochem deal Posted Monday, June 11, 2007 - 12:30 by hydrocarbonasia
Saudi Basic Industries Corporation (Sabic), the world's largest petrochemical firm by market value, and China's Sinopec have agreed to invest more than $1 billion in a petrochemical plant, industry sources said yesterday.

Under the preliminary deal signed late last month, which needs Beijing's final approval, the companies will build a 1-million-tonne per year naphtha cracker to produce ethylene, a key building block for petrochemicals, in the northern China city of Tianjin, the sources said.

If approved, the deal will mark a breakthrough for international companies seeking a foothold in China's fast growing petrochemical market, as it comes just when Beijing seemed to be shifting to self-reliance in building the booming sector.

Sabic would also be a partner in two production lines of polyethylene, a raw material for plastics, and one mono ethylene glycol facility, an intermediate for chemical fibre.

The facilities form a key part of a $3.1bn investment planned by the Chinese state giant, which also includes an expanded refinery and other downstream petrochemical units, they said.

Sinopec and domestic rival PetroChina are set to add at least half a dozen huge crackers, costing some $20bn by 2010, to meet a double-digit growth in petrochemicals consumption.

Global players BP, Shell, BASF and ExxonMobil were then picked for their cash, technology and management, owning up to a 50 per cent stake in each of a string of petrochemical complexes on the east coast. Sabic, 70pc owned by Riyadh, will not be involved in building the 240,000 barrel per day Tianjin refinery, sources said, which is in line with the petrochemical giant's investment pattern in other regions such as India.

PetroChina approves ethylene bid Posted Friday, June 8, 2007 - 10:53 by hydrocarbonasia
PetroChina Co, the nation's biggest oil company, has won state approval for its plan to double ethylene capacity at its Daqing petrochemical plant in northeastern China, the nation's top economic planner said.

PetroChina will increase the unit's ethylene capacity to 1.2 million metric tons a year, the National Development and Reform Commission said in a statement on its Website, without giving an investment figure for the project.

China's petrochemicals makers are raising capacity and output as a faster pace of economic expansion stokes demand for chemicals used to make yarn and plastics, Bloomberg News reported. China, whose economy grew 11.1 percent in the first quarter, imports half its ethylene needs.

PetroChina will increase its ethylene capacity to seven million tons a year by 2010 from 2.63 million tons last year, Liu Jie, deputy chief economic adviser at PetroChina's chemicals and market unit, said earlier.

Foster Wheeler awarded contract for new refinery in Saudi Arabia Posted Monday, May 28, 2007 - 6:06 by hydrocarbonasia
Foster Wheeler Ltd subsidiary, Foster Wheeler USA Corporation, part of its Global Engineering and Construction Group, has been awarded a contract by Aramco Services Company and Total France for a process design package for a new delayed coker.

The delayed coker is part of the Jubail Export Refinery, a grassroots full-conversion refinery designed to process Arabian heavy crude, to be built in Jubail Industrial City, Kingdom of Saudi Arabia.

The delayed coker unit, one of the largest in the world, will be based on Foster Wheeler's leading Selective Yield Delayed Coking (SYDEC(SM)) process.

The coker design package will be developed by Foster Wheeler's Houston, Texas, office.

The terms of the award, which was included in the company's fourth-quarter 2006 bookings, were not disclosed.

"Foster Wheeler is delighted to be awarded this important project, which reflects our market leadership in delayed coking,” said Troy Roder, president and chief executive officer of Foster Wheeler USA Corporation.

"We look forward to working with Aramco Services Company and Total France to deliver a successful project,"

Foster Wheeler's SYDEC(SM) process is a thermal conversion process used by refiners worldwide to upgrade heavy residue feed and process it into high value transport fuels.

The SYDEC(SM) process achieves maximum clean liquid yields and minimum fuel coke yields from high sulphur residues.

By installing a SYDEC(SM) unit, a refinery owner is able to process heavier crudes, which sell at a discount to the benchmark light, sweet crudes, thereby allowing the owner to receive the benefit of increased refining margins.

Papua's Tangguh LNG plant on track for 2008 opening Posted Monday, May 28, 2007 - 6:04 by hydrocarbonasia
The Tangguh liquefied natural gas (LNG) plant, located in a Papua gas field with proven reserves of more than 14 trillion cubic feet of LNG, is entering the final phase of construction and remains on track for its operations to commence in late 2008.

At the end of the first quarter of this year, the construction of the plant, to be operated by a consortium led by BP Indonesia, was over 70 percent complete and all major equipment to build the train one and train two LNG procession facilities had been delivered, a statement sent to It also said drilling operations were scheduled to commence in late May.

BP Indonesia president director John C. Minge said the company would start drilling the first of 15 planned wells to be completed within the next 18 months in early June.

He also said the company was in discussions with a group of investors to build the third and final train in the complex. However, he refused to give further details, including the names of the investors.

Earlier this month, the world's largest LNG importer, Korea Gas (Kogas), told the Post it was interested in taking part in the development of a third train at the LNG plant.

BP is currently in the process of setting up a new consortium made up of global and domestic lenders to provide an additional US$880 million to complete the construction of the plant.

Two major state-owned banks, Bank Mandiri and Bank Negara Indonesia (BNI), may join the loan syndicate to finance the construction of the plant.

The extra money will come on top of the $2.6 billion disbursed in August for the project by an international consortium of foreign banks.

BP is the largest single investor in the Tangguh plant, and holds a 37.16 percent stake. CNOOC, China's largest offshore oil producer, is the second biggest investor with 16.96 percent.

Other investors include Mitsubishi Ltd. and Inpex Corp., which hold a combined 16.3 percent interest in Tangguh. A Nippon Oil Corporation-led grouping has a 12.23 percent stake and LNG Japan, owned by Sumitomo Corp. and Sojitz Holdings Corp., holds 7.2 percent.

China to face petrochemical feedstock shortfall due to robust ethylene demand Posted Saturday, May 26, 2007 - 12:44 by hydrocarbonasia
China's rapidly expanding ethylene production capacity and accelerating efforts to improve automotive fuel quality standards will lead to a shortage of petrochemical feedstocks, particularly naphtha, according to industry insiders at a petrochemicals forum in Shanghai this week.

Due to efforts by the Chinese government to encourage ethylene self-sufficiency as well as soaring downstream demand for the key petrochemical building block, the country's annual ethylene production capacity will rise to 18.3 million tons this year, almost double the 9.67 million tons seen in 2006, according to Liu Jie, deputy chief economist of the PetroChina Chemicals & Marketing Co., which is afflicted with the country's top oil and gas producer China National Petroleum Corp. (CNPC).

However, at the same time the country will face the challenge of securing cheap and stable supplies of naphtha, a raw material derived from crude oil that is used to produce ethylene. With international crude oil prices fluctuating at high levels at present and domestic crude oil too heavy to produce the feedstock cheaply, sourcing adequate supplies of naphtha for ethylene production could be difficult, Liu said.

His views were echoed by Qin Weizhong, vice director of China Petroleum & Chemical Corp.'s (Sinopec) development and planning department, who also believes that the Chinese government's ambitious plan to improve the quality of automotive fuel will further drive up the country's demand for naphtha. Naphtha is also the raw material for lighter, and thus cleaner, gasoline.

Qin added that ongoing double-digit growth in downstream industries that use ethylene as a raw material, including the automobile, textile and costume, chemical building materials and electronic industries, will ensure that market demand for ethylene is maintained at very high levels in the foreseeable future.

In response to such promising market prospects for the petrochemical element, both Sinopec and PetroChina have invested heavily in expanding their ethylene production capabilities.

PetroChina, for example, currently has five large ethylene projects under construction in the provinces of Dushanzi, Fushun, Sichuan, Daqing and Urumqi, which are all expected to be completed around 2009 or 2010. The oil giant, traditionally dominant in the upstream oil and gas exploration sector, aims to have an annual ethylene production capacity of 7 million tons by the end of the decade.

However, PetroChina's increased production capacity will still only account for approximately one-third of the country's total capacity at the end of the decade, as it is projected that 60 percent of China's ethylene production capacity will be held by Sinopec, Asia's largest refiner and the major player in the country's downstream energy sectors.

Sinopec's latest attempt to maintain its dominance in the ethylene sector has led it to plan for the construction of a $1.9 billion (RMB 14.5 billion) ethylene project in central China's Wuhan Province with a planned annual production capacity of 800,000 tons. To be developed in partnership with SK Corp., South Korea's largest refiner, and Formosa Plastic Group, Taiwan's leading petrochemical producer, the project will be the first such ethylene production facility in the region.

Though China is expected to produce around 14.5 million tons of ethylene annually by 2010, 42 percent of its 25 million-ton market consumption will still be met by imports, state-affiliated National Petroleum & Chemical Planning Institute official, Bai Yi, said. The country's ethylene self-sufficiency rate stood at less than 50 percent last year.

With Royal Dutch Shell planning to increase its petrochemical production capacity by 10 percent over the next four years, the manager of the company's Nanhai joint venture, Colin McKendrick, is confident that the Nanhai petrochemical complex in southern Guangdong Province's Huizhou City will be well supplied with feedstock due to its flexible approach to supplies.

"We will make the most economic decision in securing feedstock," McKendrick said.

He added that the petrochemical facility, the result of a co-investment between Royal Dutch Shell and the China National Offshore Oil Corp. (CNOOC), has and will continue to be fed with Naphtha and other feedstock sourced from both domestic refineries and overseas markets. He believes that through such diversification, feedstock supply security can be ensured.

McKendrick also revealed that the nearby Huizhou oil refinery project, a CNOOC project that is scheduled to begin operation in 2008, is another potential source of high quality raw material that can be used by the petrochemical complex's ethylene cracking plant.

The Nanhai complex, which was officially put into operation in February last year, is able to produce 2.3 million tons of various petrochemical products annually.

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Thailand: PTT to import 2m tonnes more LNG Posted Saturday, May 26, 2007 - 12:42 by hydrocarbonasia
PTT Plc, the state-owned oil and gas conglomerate, plans to secure an additional two million tonnes per year of imported liquefied natural gas (LNG) from overseas suppliers, according to senior executive vice-president Chitrapongse Kwangsukstith.

Five million tonnes per year of LNG will be imported to meet rising demand for electricity production and alternative fuel for vehicles.

PTT will import three million tonnes per year of LNG from the Pars LNG project, a joint venture of the National Iranian Oil Co, TotalFinaElf, and Petronas, in Iran.

The Energy Ministry signed an agreement in principle with the Oil Ministry of Iran to purchase LNG from the Pars LNG site in July last year. Both sides are expected to finalise LNG price negotiations on June 6-8 and sign the contract before the end of this year.

According to Mr Chitrapongse, PTT is searching for places that can supply additional LNG volume. PTT may import LNG from Malaysia, Australia and some countries in the Middle East.

Thailand will import Iranian LNG in 2011-12 and two million tonnes per year in 2013-14. Afterward, PTT plans to import another 10 million tonnes per year.

Construction of an LNG receiving terminal and depot costing about US$700 million will start soon in Rayong. Mr Chitrapongse said Myanmar wanted PTT Exploration and Production Plc (PTTEP), an exploration arm of PTT, to speed up its exploration work in the M9 Block to enable it to begin natural gas production by 2009.

Natural gas from the M9 Block will be sold to PTT at 300-400 million cubic feet per day as fuel for electricity production.

Exploration work in the M9 Block is still in the beginning stages, so PTT will begin production in 2012. The initial agreement between the seller and buyer for gas purchase in the M9 Block will be signed this year.

Some 15 companies to bid for Kuwait's 4th refinery Posted Saturday, May 26, 2007 - 12:36 by hydrocarbonasia
At least 15 companies are expected to tender bids for the fourth refinery that Kuwait National Petroleum Company (KNPC) intends to construct in al-Zour, southern Kuwait, it was reported on 20 May.

KNPC's Deputy Managing Director Asaad al-Saad was quoted as noting that the construction budget has been brought up from six billion U.S. dollars to 12 billion dollars after the first bid failed.

Al-Saad explained that raising the project's budget was to counter increased cost of construction material resulting from the hike in global oil sector investments, especially in the Gulf region.

Moreover, he noted that KNPC had held a meeting recently with top companies that had not placed bids the previous time but were willing to take part now.

The official then urged oil companies that did not bid for the first time to do it now, according to the report.

KNPC had allocated a budget of six billion dollars for the construction of the fourth refinery in Kuwait, but tendered bids exceeded this by at least double the costs, compelling the company to cancel the bid and call for a re-bid.

The new refinery in Al-Zour will produce environmentally-friendly fuel to operate electricity and water plants around the country, and will produce petrochemicals for export.

The refinery was to come into operation in 2010, whose designed production capacity will be 615,000 barrels per day.

Accounting for 10 percent of the world's proven oil reserves, Kuwait boasted proven oil reserves of about 101.5 billion barrels and now produces 2.45 million barrels of crude oil per day.

Aromatics complex in Shangdong province inaugurated Posted Wednesday, May 23, 2007 - 3:30 by hydrocarbonasia
The Aromatics complex of Qingdao Lidong chemicals company in which Oman Oil Company (OOC) holds 30 per cent stake was inaugurated here yesterday under the auspices of Ahmed bin Abdulnabi Macki, Minister of National Economy and Deputy Chairman of the Financial Affairs and Energy Resources Council and Chairman of Omani Shipping Company (OSCO), and Maqbool bin Ali Sultan, Minister of Commerce and Industry and Chairman of Oman Oil Company (OOC).

In a statement, Macki underlined the Sultanate government’s keenness to attract foreign investments and diversify sources of the national income. He said the project is a new addition to the Omani economy and an asset for the state’s public finance as China boasts the fastest growing economy in the world.

The facility is considered a milestone due to industrial and commercial developments witnessed by Shandong province. Raw materials produced by the project will be incorporated in several plastic and fibre industries which will meet Chinese market’s growing needs. Maqbool said the aromatics complex is one of the OOC’s important projects which gives the company access to Chinese market and helps engage in other economic ventures, including oil-and-gas related industries. OOC also owns interests in China Gas Company which operates in more than 50 cities in China.

The marine dock is designed to receive between 2,000 and 85,000 ton-commercial oil and gas carriers. Qingdao Lidong chemicals company's project is an Omani-Chinese-Korean venture. The OOC holds 30 per cent, GS Aromatics of Korea 60 per cent and Shanddao Chemicals Red Star of China owns 10 per cent interest of the project.

The Quingdao Lidong chemicals company is located in Lidong region in the city of Shangdao in Shangdao province and occupies 300,000 sqm. The project started actual production in December 2006. It produces about 700,000 tons of the Bazlin substances, the material bed to produce polyester used in manufacturing of fibres, plastics and detergents.

The project also produces an annual 240,000 tons of benzene used in producing insulators and pharmaceuticals. It also produces 160,000 tons of toluene annually which is used in making paints and adhesive materials.

Oman: Oiltanking starts work on tankage terminal in Sohar Posted Friday, May 18, 2007 - 11:38 by hydrocarbonasia
Oiltanking has announced the start of construction of the first phase of an independent bulk liquid storage terminal in the Industrial Port of Sohar. This 537,000 cubic-metre-capacity first phase will cater for clean petroleum products and has already been reserved by the market. The completion is envisaged before the end of 2008, the company said in a statement.

The strategic location of Sohar, just outside the Strait of Hormuz and close to the main international shipping lanes, offers excellent distribution possibilities to the various Middle Eastern countries inside the Gulf, India, Asia, Europe and the east coast of Africa, said Oiltanking Odfjell.

The facility will accommodate those customers who wish to use the terminal for consolidation and/or break of bulk of cargo, for upgrading and blending of their product, or for distribution purposes. Today, Oiltanking Odfjell Terminals and Co LLC (OOT) already operates six deepwater marine jetties in the Port of Sohar, capable of handling up to 107,000 DWT vessels, and has been allocated an adjacent plot of 36-hectare for terminal development.

The storage infrastructure will provide the necessary flexibility to customers and a quick turnaround time for vessels. Additionally OOT is in discussion with a number of petroleum and chemical companies that have or target to have production facilities within the Industrial Port of Sohar. These discussions focus on the possibilities to outsource the production related bulk liquid storage facilities under a long-term agreement to OOT.

OOT is a joint venture of Oiltanking Odfjell Terminals Oman BV (70 per cent), Oman Oil Company SAOC (25 per cent) and Seven Seas Company LLC (5 per cent). Oiltanking Odfjell Terminals Oman BV is a joint venture registered in the Netherlands between Oiltanking GmbH (42.5 per cent), Odfjell Terminals AS (42.5 per cent) and Star Energy Group Limited (15 per cent).

Oiltanking, a division of Marquard & Bahls AG, Germany, is one of the largest independent tank storage providers for petroleum products, chemicals and gases worldwide. Oiltanking owns and operates 73 terminals in 21 countries in Europe, North and South America, Middle East, India and Asia.

The group has an overall capacity of nearly 12 million cubic metres. Odfjell is a leading company in the global market of transporting chemicals and other specialty bulk liquids as well as providing related logistical services. Odfjell owns and operates parcel tankers in global and regional trade as well as a network of tank terminals. The fleet totals about 123 ships, trading both globally and regionally.

Reliance Petroleum Limited to Build 900 KTA UNIPOL™ PP Process Plant Posted Wednesday, May 16, 2007 - 11:18 by hydrocarbonasia
Dow Global Technologies, Inc.(DGTI), a wholly-owned subsidiary of The Dow Chemical Company, announced on 16 May that Reliance Petroleum Ltd., (RPL), a wholly-owned subsidiary of Reliance Industries Ltd. (RIL), has selected the UNIPOL™ PP Process for a new world-scale polypropylene (PP) production facility. The facility will be built in a special economic zone (SEZ) adjacent to the company’s Jamnagar complex. The plant will have two reactor lines, each with a capacity of 450 KTA; the total capacity of the facility will be 900 KTA of PP. Start-up is scheduled in December 2008.

Reliance Industries Limited currently operates four UNIPOL PP Process lines at its Jamnagar complex and two UNIPOL PP Process lines at its Hazira complex. Reliance Industries Ltd. is the largest producer of polypropylene in Asia. The new facility will produce a full range of homopolymers to supply the growing markets in Asia.
“We are eager to play an ongoing role in the growth of the Reliance Group’s polymer business and we are pleased that they have chosen to continue a successful relationship with the UNIPOL PP Process,” says Dr. Molly Peifang Zhang, vice president of DGTI. She further adds, “The UNIPOL PP Process is the most competitive and productive polypropylene technology available today. Reliance’s new lines will benefit from our commitment to deliver groundbreaking single-line capacities while driving the capital cost down.”

Licensees of the UNIPOL PP Process operate more than 35 production lines around the world, accounting for more than 5.5 million metric tons of global polypropylene production.

Singapore: SRC Refinery to start plan revamp Posted Tuesday, May 15, 2007 - 5:11 by hydrocarbonasia
US oil giant and home-grown Singapore Petroleum Company (SPC) are going ahead with building their clean fuels project starting with US$81 million revamp of the hydrode-sulphurizer plant at their joint venture Singapore Refining Company complex to produce ultra-low sulphur diesel (ULSD) of Euro-IV specifications.

This represents just the first phase of their SRC upgrading project – ultra-low sulphur gasoline (ULSG) – which Chevron’s head of refining Jeet Bindra said could cost as much as US$400 million to build.

Work will start this quarter and is expected to be completed in early 2009. There will be minimal disruptions to the 285,000 b/d SRC refinery at Jurong Island during construction, the company says.

Aramco, Dow sign agreement for $20b plant Posted Tuesday, May 15, 2007 - 4:13 by hydrocarbonasia
Saudi Aramco and US Dow Chemical Co. yesterday announced a deal to build a petrochemical plant that industry insiders expect to be the largest foreign investment in Saudi Arabia's energy sector.

The cost of the Ras Tanura plastics and chemicals complex would be "mammoth", said Saudi Aramco's President Abdallah Jumah, although he declined to give details.

Earlier this week, industry sources said the plant would have an investment cost of at least $20 billion. Costs have risen with soaring inflation in the energy industry from an Aramco estimate last year of around $15 billion. Ras Tanura will be one of the biggest plants of its kind built from scratch, the two companies said in a joint statement from Aramco's headquarters in Dhahran.

"When fully operational, the new complex will be one of the largest grassroots plastics and chemicals production facilities in the world and will be ideally positioned to serve major world markets," the statement said. Aramco and Dow signed a memorandum of understanding and will now enter a final negotiation phase for the formation of a joint company to build, own and operate the plant, it said.

The companies plan to float a 30 per cent stake in Ras Tanura and raise the rest through debt, Jumah told reporters. The investment is Dow's largest in the region and its biggest joint venture, said Chief Executive Andrew Liveris.

"We have other investments in the Middle East... but nothing rivals the scale, size and breadth of this project. (It is) the largest proposed joint venture in our 110-year history."

Dow is the largest US chemical maker by sales and has faced tough competition from Middle East chemical producers such as Saudi Arabia's Sabic that have access to cheap crude and natural gas. Sabic is the world's largest chemicals company by market value. Sabic, along with other companies, was invited to bid for Ras Tanura but was unsuccessful, Jumah said.

Diversifying Saudi economy: The world's largest oil exporter Aramco chose Dow last July to discuss the plant, which Aramco will supply from the nearby 550,000 barrels per day Ras Tanura oil refinery and Ju'aymah gas processing plant.

The petrochemical plant was scheduled for startup in 2012-2013, Jumah said. It will produce 4.5 million tonnes of basic chemicals and 7 million tonnes per year of derivative plastic and chemical products, he added.

Like its Gulf Arab neighbours, Saudi Arabia is making major investments to diversify its economy away from oil. Oil Minister Ali Al Naimi said last week that a $70 billion investment programme would make the kingdom the world's third largest petrochemical producer by 2015, up from its current ranking of tenth.

Saudi petrochemical output would rise to 100 million tonnes in 2015 from 60 million tonnes, and it would double the number of petrochemical products produced, Naimi said.

Aramco is also engaged in the PetroRabigh refining and petrochemicals joint venture project with Japan's Sumitomo Chemical. Jumah yesterday declined to give an updated cost estimate for that project, last pegged at around $10 billion.

Petronas wins gas supply deal Posted Tuesday, May 15, 2007 - 4:12 by hydrocarbonasia
Malaysia's state energy firm Petronas has secured a 15-year contract to supply gas to Japan's Shikoku Electric Power Company from April 2010.

Petronas said that the deal involves its unit Malaysia LNG supplying up to 420,000 metric tonnes of liquefied natural gas (LNG) a year to the Japanese power company.

Shikoku Electric, which provides electricity to Shikoku Island, will use LNG as fuel in its power plants for the first time from 2010 onwards.

Petronas said the LNG will be delivered from its MLNG complex in Bintulu, Sarawak to Shikoku Electric's new receiving terminal in Sakaide, Japan which is due to be completed in 2010.

Indian refining capacity set for big rise Posted Friday, May 4, 2007 - 2:33 by hydrocarbonasia
With a view to ensuring energy security for the nation and earning foreign exchange, the Union Petroleum and Natural Gas Ministry has drawn up an ambitious plan to substantially expand the capacity of the refineries in the country from 148 million tonnes at present to 235 million tonnes by 2011-12.

With petroleum emerging as one of the highest foreign exchange earners in the last fiscal, the Ministry is all set to go pro-active on raising the internal refining capacity to emerge as a `petroleum hub' for the Asia-Pacific region.

Under this plan, Indian Oil Corporation (IOC) has drawn up a plan to set up a new 15-million tonne refinery-cum-petrochemicals complex at Ennore on the outskirts of Chennai in Tamil Nadu with an investment of around Rs. 25,000 crore.

The Petroleum and Natural Gas Minister, Murli Deora, who has been working on an aggressive strategy in this regard, has already taken up the matter of allotment of around 4,000 acres with the Tamil Nadu Chief Minister, M. Karunanidhi, for setting up the complex.

IOC plans to build the Ennore refinery, mainly catering to the export market, four years after it commissions its East Coast Paradip refinery in Orissa. "The 15-million tonne Paradip refinery is scheduled for commissioning in 2011 and the Ennore refinery will come up sometime in 2015-16,'' a Ministry official said. The Ennore complex would be set up in joint venture with Chennai Petroleum Corporation, an arm of IOC. It is understood that IOC wants to set up a naphtha cracker and aromatics complex at Ennore to utilise the products from the refinery. IOC has a total refining capacity of 60 million tonnes, which it plans to increase to 80 million tonnes by 2012 while pushing up revenues to $60 billion.

At present, the public sector has a refining capacity of 105.47 million tonnes and the private sector 43.50 million tonnes. Reliance Industries has a capacity of 33 million tonnes.

Essar Oil is the other private sector refiner with a capacity of 10.50 million tonnes. Reliance Petroleum is adding another 27 million tonnes capacity in Jamnagar.

Papua New Guinea endorses InterOil's LNG project Posted Saturday, April 28, 2007 - 9:58 by hydrocarbonasia
InterOil Corp. on Wednesday provided an update on its efforts to commercialize the previously announced Elk natural gas and condensate discovery in Papua New Guinea.
In a recent statement, the Government of Papua New Guinea endorsed InterOil's liquefied natural gas (LNG) project proposal and recommended to proceed to the next phase - finalizing a project agreement, which will establish the framework for developing the regulatory, licensing and fiscal requirements for the project.

"We are excited to have received support from the Government. It is apparent that they recognize how advanced our LNG project is and the benefits of utilizing existing infrastructure," said InterOil Chairman and CEO Phil Mulacek. "We share the Government's belief that their actions are an important step for the country in becoming a world-scale LNG producer."

InterOil has completed the preliminary engineering and evaluation design work, and an evaluation of potential contractors for the project. The LNG facility is planned to be built adjacent to the company's refinery where operational synergies can be achieved. The current project design consists of a liquefaction plant with capacity up to 9 million tons per year of LNG from two processing trains, condensate and gas liquid processing, handling and storage facilities, and a 36-inch natural gas pipeline from supply sources. First supply of LNG is targeted to commence by 2012.

The project will be led by Liquid Niugini Gas, a group of LNG experts brought together by the project partners - InterOil, Merrill Lynch Global Commodities (Europe) and Pacific LNG. Total investment required is expected to be approximately US$4 to 6 billion. "We have made significant progress since kicking off our LNG initiative, which I attribute to the hard work of our people and running activities in parallel," said Mulacek.

The company is presently drilling a delineation well, Elk-2, about 2.9 miles north-west from the discovery well in a down-dip position, along with acquiring about 100-kilometers of high-quality 2D seismic. "This additional well and seismic data will provide valuable information to better understand the natural gas resource potential in the Elk structure, which is targeted to underpin the development of the proposed LNG project. The next location, Antelope, is already being prepared to advance the Exploration and appraisal process," said Mulacek.

The Elk-2 well had been drilled to a vertical depth of about 5,379 feet (1,640 meters) with drilling operations resuming after tripping for a new drill bit and conditioning the wellbore. Drilling progress has slowed over the last couple of weeks as it was necessary to increase the drilling mud weight to 14 pounds per gallon and to spend considerable drilling time maintaining the wellbore largely due to the swelling and sloughing of the shale. "The drop in drilling productivity is common, and safety will continue to be our focus as we approach the target zone. We expect to be in the target zone with-in 15 days, " Mulacek concluded.

InterOil Corp. is developing a vertically integrated energy company whose primary focus is Papua New Guinea and the surrounding region. InterOil's asset comprise of exploration petroleum licenses covering about 9 million acres, a 36,500 barrel per day capacity oil refinery, and retail and commercial distribution assets servicing 67% of the domestic market. During 2006, the company made a significant gas and condensate discovery, revamped and optimized its refinery, and more than doubled its downstream market presence. In addition, it initiated early stage development activity on a liquefied natural gas project.

Iran to invest $8.7b in refinery development Posted Saturday, April 28, 2007 - 9:55 by hydrocarbonasia
The managing director of National Iranian Oil Refining and Distribution Company (NIORDC) here Sunday said 8.7 billion dollars would be invested in the development of refineries.

Giving the news in a press conference at the 12th International Oil, Gas, and Petrochemicals Exhibition, Mohammadreza Ne’matzadeh added, “We put the plan out to tender, valued at 8.7 billion dollars in the previous year and the credits, due to the signing of main contracts, had opened.

“Such a huge investment is unprecedented in the past 10 years,” boasted the official, expressing hope the executive operations of the projects would be carried out in the current and next years. Referring to main goals of the NIORDC, Ne’matzadeh said, “We seek three objectives in the oil refining and distribution sectors this year. We aim to become self-sufficient in oil products and to prevent imports, to improve the quality and to increase the quantity of oil products through further participation of the private sector, and to manage the energy consumption in order to curb the fuel consumption.”

The official added that the oil industry was the basic industry of the country, playing a very important role in developing the economy, providing the public welfare, creating job opportunities, and upgrading the technologies.

Desirable dissemination of information and organization of international exhibitions were playing effective roles in updating the general public’s information, he added.

Shifting to the country’s gasoline output, he said the daily petrol production would hit 126.053 million litres by 2011.

Ne’matzadeh added the plans on optimization and improvement of refining process and increase of refineries’ capacities would help achieve the objective. “We have carried out comprehensive studies on refineries and have prepared a master plan for every refinery during the past two years. Now, development plans and new refining patterns of all refineries are ready to put into action in the Fourth Development Plan.”

He said the development plans of refineries aimed to improve manpower structure, economize refining operations, promote the quality of oil products according to the latest international standards, optimize refining model, reduce the production of low-value products such as furnace oil, boost the output of high-value products like gasoline, cut the consumption of energy and fuel, and improve the control systems.

Ne’matzadeh added the NIORDC held domestic and international tenders and signed various contracts worth six billion euros on the development plans and improvement of quality of products of Abadan, Bandar Abbas, Arak, Isfahan, Tabriz, Tehran, and Lavan refineries in the past Iranian calendar year.

Petron to spend bulk of capex on petrochemicals Posted Saturday, April 28, 2007 - 9:54 by hydrocarbonasia
Petron Corp. has allotted the bulk of its multibillion-peso capital expenditure this year to its petrochemical business on the back of the success of its mixed xylene project.

The company said that it has earmarked about P5 billion of its capex program for petrochemicals. About P4.4 billion has been allocated for major capital projects, which include its refinery expansion, while P583 million has been programmed for miscellaneous projects.

Because of its successful mixed xylene project, the country’s largest oil refiner is looking at further expansion into its petrochemical business with about P3.2 billion in planned investments.

The company earlier reported that the construction of its PetroFCC project, under its $300 million Refinery Master Plan, is more than 50 percent complete and is expected to be on stream by the first quarter of 2008.

The PetroFCC will allow the company to produce more high-value white products and make it the only local producer of the petrochemical grade propylene. The unit will also produce aromatics such as benzene and toluene and expand the company’s mixed xylene production capacity.

Petron said it also set aside about P260 million for Tank Farm Relocation under the Joint Oil Companies Avfuel Storage Plant.

The relocation of the JOCASP tank farm is in line with government’s development plan for the Ninoy Aquino International Airport.

In addition, Petron is also looking at funding an ethanol program in compliance with the Biofuels Law. The oil company has programmed to spend about P205 million for installation facilities to enable the blending of ethanol into gasoline.

Earlier, the company reported a P6.02-billion profit last year, from P6.05 billion in 2005 because of inventory losses arising from a drop in petroleum prices.

ONGC to set up $2.5B refinery Posted Saturday, April 28, 2007 - 9:53 by hydrocarbonasia
India's state-run Oil and Natural Gas Corp. plans to set up a 15 million-ton refinery at Kakinada, in Andhra Pradesh state, at a cost of $2.5 billion.

"A special-purpose vehicle called Kakinada Refinery and Petrochemicals Ltd. will be set up to construct the refinery," R.S. Sharma, chairman and managing director, said at a news conference. "Mangalore Refinery Petrochemicals Ltd. will hold a 46 percent stake, Andhra Pradesh Industrial Development Corp. 3 percent and the remaining stake will be held by financial institutions." He said the new company would announce an initial public offering to raise the funds for the project. Government-controlled Engineering India Ltd. has been chosen to conduct a feasibility study for the refinery.

The refinery was initially conceived with a capacity of 7.5 million tons, but this was found to be unviable.

India is quickly trying to position itself as a major global refining centre. With a shortage of refining capacity in Asia and a continued economic boom, projects like ONGC's and others will likely help India toward its goals.

Woodside favours offshore LNG plant for Browse Posted Saturday, April 28, 2007 - 9:51 by hydrocarbonasia
Woodside Petroleum Ltd. Tuesday said an offshore liquefied natural gas processing plant for its giant Browse field will be cheaper to build than an onshore operation.

Woodside director of development Paul Moore the company is considering different production scenarios for the field off the coast of Western Australia, but an offshore facility will be "potential several billion dollars" cheaper.

"We believe at the moment that, in the very early stages of screening, that our offshore option is less costly than onshore and therefore would be more robust," he said. Woodside owns about 50% of the field, which had an initial development cost estimate of A$10 billion.

While Moore said Woodside has identified six possible onshore sites between Broome and the northern Kimberley, proceeding with an onshore facility will require a 450 kilometre pipeline to the shore.

Under its offshore scenario, Woodside faces higher operating costs and the challenges of dealing with environmental concerns over the stressed Scott Reef and the interests of the large numbers of Indonesian fisherman who legally fish the reef. But Moore said onshore option means the company could face significant environmental and native title challenges.

Moore said Woodside is working towards project sanction on development of the field, which holds about 20 trillion cubic feet of gas, in 2008 or 2009 with a four year construction process.

An offshore LNG plant at Browse would be the first of its kind in Australia and pipe gas from the three fields that make up the project to a central liquefaction plant in a lagoon on the Scott Reef.

Federal Resources Minister Ian Macfarlane this week urged Woodside and the other partners in the Sunrise project in the Timor Sea to speed up development of the gas field.

Moore said Woodside is committed to the project but more work needs to be done before the decision to proceed is made.

"Many decisions need to be taken before this project becomes a reality," he said.

Malaysia mulls major oil pipeline across peninsula Posted Saturday, April 28, 2007 - 9:50 by hydrocarbonasia
Malaysia said Monday it is looking into a proposal to build a pipeline that will transport oil across the north of its peninsula, bypassing the piracy-prone Malacca Strait.

According to reports the proposal involves the construction of two oil refineries and a 312-kilometer (194-mile) pipeline from northwestern Kedah state to northeastern Kelantan state.

Deputy Prime Minister Najib Razak Monday confirmed the project, but said it was still only at proposal-stage.

"It's only a proposal. It's not been finalized yet. They are still looking at the details," Najib Razak said.

Based on reports, tankers will offload crude oil from the Middle East in the coastal town of Yan, Kedah for refining.

The oil will then be transported through the pipeline across the north of Malaysia to Bachok on Kelantan's coast, for distribution to countries in the Asian region, including China.

The pipeline would bypass the 960-kilometer Malacca Strait, which runs along Malaysia's western coast, and is notoriously vulnerable to pirate attacks, with fears it could also be a tempting target for terrorists.

Half of the world's oil shipments currently pass through the strategic Malacca Strait, the busiest seaway in the world.

Kedah's Chief Minister Mahdzir Khalid said last month the project is a joint venture between the National Iranian Oil Company (NIOC) and Malaysian firm SKS Development, according to Bernama.

"The state government will have equity in the company undertaking the project; the percentage is being discussed," Mahdzir was quoted as saying.

The project is expected to cost 50 billion ringgit (14.5 billion dollars) and site clearing work could start as early as July, with construction to commence next year until 2015, Mahdzir said.

"It is estimated that 350 billion ringgit a year in the form of oil derivatives will be marketed through Malaysia with the refinery's capacity of six million barrels a day and a 30-day stock of 150 million barrels," he said.

Indian Cabinet clears petrochemical policy Posted Sunday, April 15, 2007 - 3:39 by hydrocarbonasia
The Indian Cabinet on Thursday approved a national policy on petrochemicals aimed at giving a big boost to India’s $8.8 billion petrochemical industry.

The policy outlines measures to attract more investments in the sector and to enable it to capture a larger slice of the Asian demand for polymers. For this, the government would provide natural gas - the feedstock — at globally competitive prices, create infrastructure and further rationalise tariffs and taxes. “The Cabinet also approved setting up an inter-ministerial expert committee to recommend the use of plastics in the thrust areas as mandatory,” information and broadcasting minister PR Dasmunsi said in New Delhi after the meeting.

The policy will also provide for modernising the downstream plastic processing industry to enhance its capacity and competitiveness. By 2011, the per capita consumption of plastic products and synthetic fibre would go up three-fold from the current 4 kg and 1.6 kg respectively.

The policy envisages setting up a petrochemical technology upgradation fund, a plastic development council and a task force on petrochemical feedstock to suggest measures to ensure the availability of petrochemical feedstock at internationally competitive prices and for setting up future cracker complexes.

The policy also envisages increasing the investment limit for SSI units making plastic articles from Rs 1 crore to Rs 5 crore. De-reserving the items of plastics reserved for SSIs, inclusion of the synthetic fibre industry under the textile technology upgradation fund and phasing out the Jute Packaging Materials Act are the other priorities outlined in the policy.

Borouge awards Dh11.3b contracts for new units Posted Saturday, April 14, 2007 - 10:53 by hydrocarbonasia
Borouge, Abu Dhabi-based polymer manufacturers, yesterday awarded two engineering, procurement and construction (EPC) contracts worth Dh11.3 billion ($3.08 billion) for its Borouge 2 expansion project at its production facilities at Ruwais in Abu Dhabi.

This is the third in a series of contracts awarded by the company, totalling Dh16 billion that includes a $1.3 billion ethylene cracker contract awarded in December 2006.

The EPC contract to construct three new Borstar Technology polyolefins units has been awarded to Tecnimont SpA of Italy on a lumpsum turnkey basis for approximately $1.85 billion. The project will be managed from Tecnimont's office in Milan and is scheduled for completion in 38 months including pre-commissioning.

This contract will lead to development of two new Borstar polypropylene plants with an annual capacity of 800,000 tonnes and a new Borstar enhanced polyethelene plant with an annual capacity of 540,000 tonnes which will complement the existing 600,000 tonnes unit.

The contract for utilities and offsites has been awarded to Technicas Reunidas of Spain on a convertible lumpsum turnkey basis. It has an estimated final agreement price of $1.23 billion. This project will be managed from TR's office in Madrid and is scheduled for completion in 34 months including successful test runs. This plant will supply the utilities to all the associated packages.

Borouge, a joint venture between Abu Dhabi National Oil Company (Adnoc) and Borealis, a leading provider of plastics solutions, awarded a lumpsum turnkey $1.3 billion EPC agreement to Linde Engineering of Germany last December for construction of a new ethylene cracker.

The initial activities are already underway and it is scheduled for completion in 2010 as is the case for all packages.

The Borouge project management team will manage the execution of Borouge 2 expansion project packages with the support of Foster Wheeler as management consultant.

Horizon to expand Singapore terminal Posted Saturday, April 14, 2007 - 10:51 by hydrocarbonasia
Middle East oil storage operator Horizon Terminals Ltd will expand its Singapore facility by 266,000 cubic metres to 1.2 million cubic metres by second-half 2008, the company said yesterday.

The $90 million expansion comes amid a flurry of projects that will see a total of 6.52 million cubic metres of additional capacity in the city-state by the end of next year.

Demand for storage is high, particularly for fuel oil, which has seen more volumes this year due to increased flows of high-sulphur grades from the West after some European governments imposed stricter sulphur emission limits in their waters.

Construction of the 23 new tanks under third phase of the terminal's development has started, targeted at clean oil products including middle and light distillates, the firm said.

Horizon, majority-owned by Emirates National Oil Co (Enoc), also has an additional 230,000 cubic metres of capacity, mainly for products such as fuel oil, slated for operations by the middle of this year under Phase 2.

This additional capacity will be taken up by its existing customers, including US-based firms such as Cargill International and Koch Refining, South Korea's SK Corp and UAE trader DNK Petroleum.

Mitsui Oil Asia (MOA) was to have taken up about 130,000 cubic metres of this capacity but gave it up after the unit of Japan's Mitsui and Co. was wound up following $81 million of losses in naphtha trading.

"Many players were eyeing the space when Mitsui gave it up, including some who do not have tankage presently. I think Horizon decided to give it to their customers to reduce the strain on its terminal logistics," a Singapore-based storage operator said.

Horizon's Singapore terminal came into operation last October.

Foster Wheeler wins coker heater contract for new COPC refinery in Posted Thursday, April 12, 2007 - 9:25 by hydrocarbonasia
Foster Wheeler Ltd. announced today that its subsidiary Foster Wheeler USA Corporation, part of its Global Engineering and Construction Group,
has been awarded a contract by CNOOC Oil & Petrochemicals Co., Ltd.
("COPC") for the thermal design, engineering, procurement, and
material supply of two delayed coker heaters. The heaters will be
installed in a new four-drum delayed coking unit, which will be part
of the new COPC Huizhou refinery at Daya Bay, Guangdong Province,
People's Republic of China. This latest contract follows the 2005
award to Foster Wheeler of the process design package for the new
delayed coking unit, which will be based on its leading Selective
Yield Delayed Coking (SYDEC(SM)) process.

Malaysia: Trafigura to help develop world class logistics hub at Posted Thursday, April 12, 2007 - 9:22 by hydrocarbonasia
Trafigura, one of the world’s leading international commodity traders, today signed an agreement for sole use of a new world-class tankage facility and terminal at the port of Tanjung Langsat.

The agreement came as Dialog Group Berhad (DGB) today, through its wholly owned subsidiary Dialog Equity Sdn Bhd (Dialog), entered into a 30-year concession with Tanjung Langsat Port Sdn Bhd (TLP) for the development of an independent centralized tankage facility (CTF) and a dedicated tank terminal (hereafter referred to as ‘the proposed facilities’) at Tanjung Langsat.

The proposed facilities will propel the port of Tanjung Langsat into a world-class logistics, liquid bulk-handling and trading hub of petroleum and petrochemical products. The proposed facilities will cater for the handling, storage and blending of these petroleum and petrochemical products. The proposed facilities is a logistic project, which is one of the six (6) nominated services situated within the Iskandar Development Region (“IDR”) promoted by the Iskandar Regional Development Authority (IRDA).

Under the concession agreements signed today, TLP will grant Dialog an exclusive concession for a term of thirty (30) years over two (2) pieces of land within the port on a ‘build, own, operate and transfer’ (BOOT) basis. The first piece of land, measuring approximately forty (40) acres, will be used for the development of a dedicated tank terminal with a storage capacity of 400,000 m3 of petroleum and petroleum related products. The adjacent second piece of land, measuring approximately ten (10) acres, is for the development of an independent CTF to serve the abovementioned tank terminal and such other tank terminals to be developed in its vicinity.

Under separate lease agreements signed, Dialog will lease the 2 pieces of lands covered under the concession from TLP for an aggregate sum of about RM38.1 million. Dialog will fund the lease payments from its internally generated funds and bank borrowings. TLP is the legal and beneficial owner of the 2 pieces of land covered under the concession.

At the same signing ceremony, Dialog signed a MOU with Trafigura Beheer B.V. (Trafigura), who is involved in global energy trading businesses, whereby 100% of the storage capacity of the tank terminal will be jointly developed and leased solely and exclusively to Trafigura on a fixed monthly rental basis. Trafigura also has the option to take up a 20% equity stake in the special purpose joint venture companies (Newcos) to be set up for this purpose.

Formosa Petrochemical plans to start new naphtha plant next month Posted Thursday, April 12, 2007 - 4:57 by hydrocarbonasia
Formosa Petrochemical Corp., Taiwan's only publicly traded oil refiner aims to start production from one of Asia's largest naphtha-processing plants next month.
Formosa's new plant, or cracker, will produce as much as 1.2 million metric tons of ethylene a year from the crude distillate naphtha, boosting Taiwan's ethylene capacity 42 percent to 4.04 million tons a year.

"We're aiming to start the cracker next month," Lin Keh-yen, a director at the company, said from Taipei. "We're confident of achieving this target."

Asian chemical makers are boosting capacity to tap China's soaring demand for petrochemicals. South Korea's LG Chem Ltd. and Exxon Mobil Corp.'s Singapore chemical unit are among companies that have increased ethylene capacity.

The new cracker is the third such plant operated by Formosa at its refinery and petrochemical complex in Mailiao, Yunlin county. Formosa's two existing naphtha processing plants have combined ethylene capacities of 1.7 million tons a year.

Santos joins ExxonMobil, Oil Search and Nippon Oil in PNG gas project Posted Thursday, April 12, 2007 - 4:55 by hydrocarbonasia
Oil producer Santos has joined with an ExxonMobil-led consortium in a bid to exploit vast gas resources in Papua New Guinea.

Santos will work with ExxonMobil, Oil Search Ltd and Nippon Oil to jointly progress a detailed study of a stand-alone liquefied natural gas (LNG) project in PNG.

The consortium is investigating the viability of a stand-alone LNG operation after shelving its troubled $8 billion PNG to Australia gas pipeline project in February.

Santos managing director John Ellice-Flint said the move to join the consortium would increase the company's participation in the expanding LNG market.

"Santos is committed to working with the PNG government, ExxonMobil and the other project partners to progress LNG development options in a timely manner, and in a way which will maximise the value of the large contingent gas resources in PNG," he said.

The consortium is expected to spend about $US60 million ($72.7 million) evaluating the merits of a 5 million to 6.5 million tonne per annum LNG facility.

Santos said the Hides gas and condensate field was expected to underpin the gas volumes required, with additional gas potentially sourced from the nearby Juha and Angore fields.

"Santos has been involved in exploration and production in PNG for more than thirty years and we look forward to playing a role in evaluating the LNG development option for our gas resources at the Hides field," Mr Ellice-Flint said.

The evaluation is expected to be completed by the end of 2007, with first LNG shipments targeted for 2012-2013.

Oil Search managing director Peter Botten said the study represented a step forward to the exploitation of the vast gas reserves.

"This agreement represents another step forward in the commercialisation of the large PNG gas resources through the development of a world scale LNG industry in PNG," he said.

Foundation stone laid for Assam gas cracker project Posted Wednesday, April 11, 2007 - 4:17 by hydrocarbonasia
India’s Prime Minister Manmohan Singh laid the foundation stone for the Rs. 5,460 crore petrochemical project of Brahmaputra Cracker and Polymer Limited (BCPL) in Lepetkata, in Dibrugarh district of Upper Assam, on Monday.

Declaring that India is on the march, Prime Minister, Manmohan Singh said on Monday that he expected the industrial growth to set the pace of national economic growth. Dr. Singh also announced that a revival package for the tea industry was in the offing and a new dynamic North-East Industrial policy is being implemented with various incentives from this year itself.

Speaking at the foundation stone laying ceremony of the Rs. 5,460-crore petrochemical project of Brahmaputra Cracker and Polymer Limited (BCPL) near Dibrugarh, Dr. Singh said the United Progressive Alliance Government was working for the revival of the tea industry in Assam.

A package had been prepared by the Union Minister of State for Commerce, Jairam Ramesh, after an extensive tour of the State and the same would be unveiled soon. ``We need industrial employment which alone can generate employment for our youth for unskilled labour migrating from rural to urban areas,'' he remarked.

Dr. Singh said the UPA Government had recently approved a new North-East Industrial Package and this would be in force from this year itself. "Under this policy, we have extended the facilities and incentives available for new investments in the North-East. Industries can be set up anywhere in the region and the capital investment subsidy has been raised to 30 per cent with automatic approval till Rs. 1.50 crore. It also covers new areas such as hotels and hospitals,'' he added.

Dr. Singh said the new project, a dream of the former Prime Minister, Rajiv Gandhi, would generate direct and indirect employment opportunities for nearly one lakh people when completed. He urged the project implementing agencies to take up the project on super fast track basis and complete it well before the five year scheduled time of 2011.

Brahmaputra Cracker and Polymer Limited is a joint venture company promoted by GAIL (India) Limited with 70 per cent equity stake. The remaining 30 per cent equity will be shared equally among Oil India Limited, Numaligarh Refineries Limited and the Assam Government.

The Assam Government has agreed to grant exemption from entry tax on capital goods, exemption from works contract tax during construction and VAT exemption on feedstock and products for 15 years from the date of commencement of production. The feedstock for the petrochemical complex is 6 million square cubic metre a day (mmscmd) gas from OIL, Duliajan, and 1.35 mmscmd gas from Oil and Natural Gas Corporation (ONGC) up to 2012 and one mmscmd thereafter. The petrochemical complex will also utilise 1.60 lakh tonnes annually of petrochemical grade naphtha from Numaligarh Refinery Limited (NRL).

The

Shell launches butadiene extraction unit project in Singapore Posted Wednesday, April 11, 2007 - 4:16 by hydrocarbonasia
Shell Eastern Petroleum (Pte) Ltd today announced that it has taken a final investment decision to proceed with the construction of a new butadiene extraction unit on Pulau Bukom (or Bukom Island), Singapore. The project will have an initial capacity of 155 kilo tonnes per annum and is part of the world-scale Shell Eastern Petrochemicals Complex (SEPC), targeted for start-up in 2009/2010. The project will now enter the implementation phase.

“This project is yet another significant investment in Shell’s downstream business portfolio, and in Singapore. As an integral part of SEPC, it will help us to meet the demands of the region’s fast-growing petrochemical industry. Shell remains committed to grow chemical investments in Asia-Pacific, and today’s announcement is another example of how we are delivering on our ‘Grow East’ strategy,” said Pieter Eijsberg, SEPC General Manager.

The Shell Group is considered the largest marketer of butadiene globally. It has now contracted a large part of the new plant capacity for butadiene to customers, and discussions are in progress with a number of potential customers for raffinate-1.

Butadiene is used primarily in the production of polymers, co-polymers and chemical intermediates. Examples include styrene-butadiene rubber, polybutadiene rubber, adiponitrile and butanediol.

CNOOC to build liquefaction plant on China coast Posted Tuesday, April 10, 2007 - 6:00 by hydrocarbonasia
China National Offshore Oil Corp. has signed a contract with authorities in Zhuhai, in Guangdong Province, China, to build an LNG liquefaction plant there.
The facility, which will have a processing capacity of 200 million cu m/year of gas, will be built on Hengqin Island within Zhuhai on the western coast of the Pearl River basin. The produced LNG will be supplied mainly to local cities, including Zhuhai and Zhongshan, about 30 miles inland.
CNOOC said gas for the project will come from three fields in the eastern South China Sea off Guangdong: Hui Zhou (HZ) 21-1, Panyu 30-1, and Panyu 34-1 gas fields.
The LNG plant is due for completion at the year end.

Qatar: Laffan Refinery on track to meet 2008 completion target Posted Tuesday, April 3, 2007 - 10:30 by hydrocarbonasia
Construction activity has peaked at the Laffan Refinery site and the $800mn joint venture project is well on course to achieve the scheduled completion in the third quarter of 2008.
Laffan Refinery, a joint venture among QP (80%), ExxonMobil (10%) and Total (10%) has a planned processing capacity of 146,000 bpd of gas condensates. The operator is Qatargas.

The refinery, a 100% export-oriented project, would produce LPG, naphtha, heavy naphtha, kerosene, propane and butane using the North Field condensate.

“The construction activities are in full swing,” Qatargas said, after the Laffan Project achieved a major milestone of 4mn man-hours without a lost time incident in December.
The construction of five storage tanks, each with a capacity of 80,000 cu m is in advanced stages. The remaining four tanks are also under construction.

Foundations for most of the equipment are in place and purchase orders for the equipment have been placed. The first package consisting of an air cooler and a boiler arrived on site in mid-February.

Qatargas said the underground piping work was also in progress. Work on the East-West corridor crossing has been completed.

The construction of the main electrical sub station is nearing completion and is expected to be ready to receive power from Kahramaa’s sub station by next month.

The pipe fabrication shop, warehouse and equipment storage facilities at the refinery site have already been built. The final “tie-in” works for the amine unit will be completed during the planned Qatargas Train 3 shutdown later this month.

Qatargas said the project was now in its final phase of detailed engineering at the contractor’s office in Seoul.

The engineering, procurement and construction (EPC) contract was awarded to a consortium of GS Engineering & Construction Corporation and Daewoo Engineering & Construction Company (South Korea) in April 2005.

The EPC contract also involved the establishment of associated storage and export facilities at the Ras Laffan Industrial City (RLC).

Currently, there are about 2,100 workers assigned to the project. The EPC contractor recently began construction of the second phase of the workers’ camp which can accommodate another 1,500.

Sources said the Laffan Refinery would help both Qatargas and RasGas process rising volumes of condensate.

“More LNG trains mean more condensate. This needs to be broken down into LPG, naphtha, heavy naphtha, kerosene, propane and butane. And there is a huge demand for LPG, naphtha, kerosene and gas oil all over the world,” they said.

With six huge LNG trains being set up by RasGas and Qatargas, QP might consider another train for processing North Field condensate later, sources added.


Aramco, Sinopec and Exxon to sign deal Posted Tuesday, March 27, 2007 - 7:42 by hydrocarbonasia
Saudi state oil giant Aramco, US major ExxonMobil and China's Sinopec will hold on Friday a formal signing ceremony for a multi-billion dollar joint-venture in China's Fujian province.

They announced they had finalised the deal to triple the capacity of the Fujian oil refinery in February, pending government approval in both Saudi Arabia and China. When it was agreed in 2005, the project had a price tag of $3.5 billion.

"The signature of the partnership accord for the Fujian joint-venture project... strengthens the solid strategic economic partnership between the kingdom and China," Aramco said in a statement.

Saudi Oil Minister Ali Naimi and Aramco CEO Abdullah Jumah will attend the signing ceremony in Beijing with Sinopec and Exxon executives.

Saudi Arabia is the main supplier of crude to China, the world's second largest energy consumer.

The deal gives Aramco and Exxon a foothold in China's sector, dominated by state giants Sinopec and PetroChina.

It would triple Fujian refinery's capacity to 240,000 barrels per day (bpd). The expanded refinery will start up in early 2009, Aramco said.

South Koreans, Germans to upgrade Iran refinery Posted Tuesday, March 27, 2007 - 1:23 by hydrocarbonasia
South Korea's Daelim Industrial Corp. with two German and three Iranian firms signed a contract on Thursday worth about 1.3 billion euros ($1.72 billion) to upgrade Isfahan Refinery in central Iran.

With the goal of producing 12 million litres of gasoline per day, the contract includes detailed engineering, procurement, and site engineering.

The project to upgrade the refinery was awarded to an international consortium consisting of Iranian companies Nargan, Namvaran and, Chagalesh, Germany's UHDE and Lurgi, as well as Daelim.

France's Axens, British UOPL, Denmark's H. Topsoe, and Italy-based Technip KTI SpA will carry out basic engineering for the licensed units, with main consulting awarded to Technip Italy, another Italian-based branch of Technip.

The client is the Oil Industries Engineering and Construction Company (OIEC), a subsidiary of National Iranian Oil Refining and Distribution Company (NIORDC).

The project would take 48 months to complete.

Iran, the world's second-biggest exporter of crude, is seeking to boost the capacity of its refineries to make gasoline in order to meet domestic needs. The country imports about 40 percent of its requirements.

ExxonMobil Chemical Completes Expansion of Ethylene Capacity in Singapore Posted Tuesday, March 27, 2007 - 1:21 by hydrocarbonasia
ExxonMobil Chemical today announced the successful completion of the expansion of its steam cracker in Singapore. The expansion project, announced in 2005, has increased the ethylene capacity of the world-scale Singapore Chemical Plant by 75,000 tons per year to more than 900,000 tons per year.

Lynne Lachenmyer, Asia Pacific Manufacturing Director, ExxonMobil Chemical Asia Pacific, said, “We are pleased that the completion of the expansion comes at a time of continued growing demand for petrochemical products in the region. This adds to our capability in meeting the needs of our customers. We at ExxonMobil Chemical continually seek opportunities to enhance our manufacturing capability to respond to customers' needs. We are fully committed to be a reliable global supplier and technology leader.”

Malaysian refinery offers Iran stake in $2bn project Posted Saturday, March 24, 2007 - 4:56 by hydrocarbonasia
Iran's state oil company has been invited to take a stake in a Malaysian refinery, officials said yesterday, amid increasing US scrutiny of energy deals between the two Muslim nations.

The Malaysian firm, SKS Development, whose parent company recently won a $16 billion gas-development deal with Tehran, has offered National Iranian Oil Company (NIOC) a minority stake in the $2.2 billion project, a government source and an official said.

"The Malaysian firm will still own the majority stake," the government source said, adding that the 200,000 barrels per day (bpd) refinery would process Iranian crude.

The project got government clearance last year but only came to light this week.

SKS Development, linked to Malaysian tycoon Syed Mokhtar Al-Bukhary, plans to start building the refinery in July in northern Kedah state, an aide to Kedah's chief minister said. He said SKS Development wanted NIOC as a partner.

The northwestern region is also host to a second refinery project of the same size, the aide said, plants that add to the wave of global downstream investment that some analysts say threatens to send the cyclical industry into another profit slump by 2010.

Malaysia's growing commercial ties with Iran have become a concern among lawmakers in Washington, which bans US firms from doing business with Tehran and is currently negotiating a free-trade deal with the Southeast Asian nation.

In January, the head of a key committee in Congress called for a halt to trade talks with Malaysia after SKS Development's parent, SKS Ventures, signed the deal to develop Iran's southern Golshan and Ferdos gas fields and produce liquefied natural gas.

The gas deal potentially allows Washington to penalise SKS under the recently expanded Iran Sanctions Act, which calls for steps against companies involved in Iranian energy development, although the United States has not taken measures against the big European and Chinese firms doing business there.

An equity stake would help Iran lock in guaranteed long-term demand for its crude at a time when some of its customers in Japan are anxious about depending too heavily on its exports, and as Middle East competitors invest more in the downstream.

In 2005 Iran agreed to build a 300,000-bpd plant in Indonesia, but it has no other major overseas holdings.


Norway's Statoil to develop LNG projects with China National Petroleum Posted Saturday, March 24, 2007 - 12:14 by hydrocarbonasia
Norway's Statoil will cooperate with China National Petroleum Corp (CNPC), China's largest oil producer, to develop a liquefied natural gas (LNG) projects, a senior Statoil official said.
Ole-gohan Lydersen, vice-president of Statoil (nyse: STO - news - people ) International EMP Co, told reporters at an industry conference here that both sides will also cooperate on domestic and international oil and gas exploration.

Lydersen did not provide further details of the collaboration. Earlier this month, the two sides signed a memorandum of understanding for strategic cooperation.

Local media said the two companies may jointly develop Block 14 of the offshore South Pars gas field in Iran.

CNPC is in talks with Iran over the project and is expected to sign a seven-year deal soon, according to the official Shanghai Securities News.

Jiangsu LNG Terminal Gains Chinese Government Approval Posted Saturday, March 24, 2007 - 12:12 by hydrocarbonasia
The PetroChina led Rudong liquefied natural gas (LNG) terminal project in Jiangsu Province has been approved by the government, Pacific Oil & Gas, a Hong Kong-based partner in the $952 million project, said today.

"We began planning the project in 2002 and finally gained approval from the government at the end of last month," a project manager from Pacific Oil & Gas, surnamed Ni, said. Although he explained that it is likely the terminal will be supplied with gas from the Middle East, he declined to provide further details.

The terminal will be the country's second LNG project that involves foreign investment, and the first being Guangdong's Dapeng terminal, in which British Petroleum (BP) holds a 30% stake.

"The approval is a sign that the government is continuing to encourage foreign investment in big energy projects," senior energy expert from the China University of Petroleum, Dong Xiucheng, said. "In the interests of energy security though, state-owned companies will certainly hold controlling stakes in such projects," he added.

According to a report by state-backed Shanghai Securities Journal, the first phase of the Rudong LNG terminal will have the capacity to handle 3.5 million tons of LNG annually once it begins operations in 2011. Completion of the second phase of the project will add an additional 2.5 million tons in capacity.

The first phase of the terminal's development will involve the construction of two 160,000-cubic meter LNG storage tanks and a jetty, according to the report.

PetroChina owns a 55% stake in the project, Pacific Oil has 35%, and Jiangsu Guoxin Investment Group, an investment firm affiliated with the provincial government, holds 10%.

Domestic media reported late last year that China National Petroleum Corp., PetroChina's parent company, had secured a gas deal with the National Iranian Gas Export Co. to receive 3 million tons of LNG annual from the Middle Eastern country after 2011.

"Securing LNG supplies is a very complicated process," Ni said. "We need to consider the volume of the potential sources, their distance from the terminal and the prices that are offered."

Despite China's plans to build 10 LNG plans, only three terminals with long-term supply deals have been announced so far. Guangdong's Dapeng terminal received its first shipment of LNG from Australia in June last year, the Fujian terminal is to receive 2.6 million tons of LNG annually from Indonesia beginning later this year and the Shanghai terminal, which is still under construction, has secured a supply agreement with Malaysia.

In the lead up to the Olympic Games in Beijing next year, China's government is campaigning for the increased use of cleaner fuels in order to cut pollution. China aims to have gas account for approximately 8% of its energy supplies by 2010, up from the current 3%.

Such ambitions have been dampened though by soaring international LNG prices, driven up by high crude oil prices. Only last year, Indonesia raised its LNG export price to China by $13 a barrel.

"I believe the government guarantees such project operators some profit margin, otherwise the artificially low domestic natural gas prices will hinder any company from taking on a big project such as the Jiangsu LNG terminal," Dong said.

First piles driven into the ground at Shell Eastern Petrochemicals Posted Saturday, March 24, 2007 - 12:08 by hydrocarbonasia
The construction of the Shell Eastern Petrochemicals Complex (SEPC) achieved a significant milestone yesterday as the first piles were driven into the ground on Pulau Bukom and Jurong Island.
When complete, the complex will include a new 800,000 tonnes per annum, world-scale ethylene cracker and a 750,000 tonnes per annum mono-ethylene glycol (MEG) plant. The project scope also
includes modifications and additions to the Bukom Refinery.
Yesterday’s events were marked by three separate ceremonies that took place at the Ethylene Cracker Complex on Pulau Bukom, the MEG site on Jurong Island and at the existing Bukom Refinery. Staff
and contractors working on the project were invited to the ceremonies where the management team took the opportunity to congratulate them on the milestones achieved and to recognise the excellent safety record the project has achieved to date: one million exposure hours without a single recordable
incident.
Construction of SEPC began in late October last year and remains on target for start-up in 2009/2010. With a current workforce of nearly 1,400 people and resources mobilised in over 15 locations from
Glasgow to Tokyo, across five different time zones, the project has achieved a number of milestones already.
The project now moves in to an intensive construction phase, which at its peak will require the services of between 6,000 and 8,000 people. The project represents Shell’s largest-ever Chemical investment in Singapore and reaffirms our commitment to serve the fast growing demand in the region.

Reliance Industries Ltd. (RIL) and Rohm & Haas to build chemical plant at Jamnagar Posted Saturday, March 24, 2007 - 12:02 by hydrocarbonasia
Reliance Industries Ltd. (RIL) on Thursday signed a memorandum of understanding with the U. S. based specialty chemicals major, Rohm & Haas, for setting up an acrylic monomer complex at Jamnagar in Gujarat.

The latest iniitative coincides with reports that a top level RIL team is holding parleys with another North American chemical giant Nova for a possible joint venture for product manufacturing, a move that may lead to equity participation.

The two firms will explore the possibility of setting up a plant to make two lakh tonnes a year of acrylic acid, a Reliance Industries press release said.

Rohm & Haas Co is headed by India-born and IIT-Mumbai alumnus Raj Gupta as Chairman and CEO. The company is a global pioneer in the creation and development of innovative technologies and solutions for the specialty materials industry. Its technologies are found in a wide range of markets including building and construction, electronics, food and retail, household and personal care, industrial process, packaging, paper, transportation and water. The company has revenues of more than $8 billion.

Reliance is consolidating and expanding its chemical operations after prices of ingredients for packaging, detergents and adhesives rose 27 per cent last year. Chemicals make up about 45 per cent of RIL's earnings.

The MoU follows RIL's decision early this month to merge its petrochemical subsidiary IPCL with itself to consolidate operations of the two companies.

Launch of $1.7bn RasGas Train 5 today Posted Tuesday, March 20, 2007 - 9:55 by hydrocarbonasia
The 4.7mn tonnes per year (tpy) Train 5 will be inaugurated by Qatar’s HH the Emir Sheikh Hamad bin Khalifa al-Thani at Ras Laffan this morning, 20 March
.
RasGas managing director Dr Mohamed al-Sada said all future liquefied natural gas trains of the LNG producer would be equipped with the DLN system.

“We are also in the process of equipping our existing four trains with DLN which highlights our commitment to the environment,” he said.

Dr al-Sada said DLN reduced nitrous oxide emissions by as much as 80%. “DLN system will be fitted to our LNG trains during their planned shutdown. So no separate plant shutdown is required.”

He said RasGas’ LNG production capacity would scale up by 4.7mn tonnes annually with Train 5 being brought online today.

RasGas is set to achieve an LNG production capacity of 37mn tonnes per year (tpy) by 2010.

By the decade-end Qatar’s capacity will be ramped up to 77mn tpy. At that stage Qatar will account for a third of the projected world LNG supply.

Majority of LNG from Train 5 will head to European gas markets through various gas wholesalers including Distrigas of Belgium.

“We will supply gas to Distrigas’ Zeebrugge terminal in Belgium. From there it will be taken to customers across Europe,” Dr al-Sada said.

On Train 5 construction, he said the LNG liquefaction plant was completed in less than 28 months and like Train 4 it was completed within budget and ahead of schedule. Additionally, Train 5 was built with an outstanding safety record with safety incident frequencies, almost 80% lower than the industry norm.

“We have completed Train 5 in 27 months, three months ahead of schedule. The EPC start date was June 30, 2004. The EPC completion was declared on October 25, 2006. We brought Train 5 onstream on November 22 last year,” Dr al-Sada pointed out.
Train 5 onshore EPC was completed by Chiyoda, Mitsui, Snamprogetti and Al Mana. Train 5 offshore EPC was completed by J Ray McDermott.

Dr al-Sada said some nine wells have been dug as part of the Train 5 project. So far, some 90 wells have been dug by RasGas.

In 2008 RasGas will begin supplying LNG to the Chinese Petroleum Corporation in Taiwan and in 2009 to the Golden Pass LNG Terminal in the USA. To fulfil these major contracts RasGas will construct two more LNG trains (trains 6 and 7).

Each train will have a production capacity of 7.8mn tpy which, together with similar trains built by sister company Qatargas, will make them the world’s biggest LNG plants.
Train 6 is scheduled to come on stream in 2008 and Train 7 in 2009.

Dr al-Sada said: “By the decade-end we will have a production capacity of approximately 37mn tpy and will supply markets around the world including South Korea, India, Taiwan, Belgium, Italy, Spain and the US.

“Qatar’s total production capacity will be 77mn tpy and Qatar LNG will account for a third of the projected world liquefied natural gas supply in 2010.”

“Train 5 set multiple benchmarks for excellence of project execution, but the aspect that we’re most proud of is our construction safety performance,” said Dave Marchak, RasGas venture manager.

“We have achieved levels of performance that are really unsurpassed in industry. We have reduced the frequency of incidents to about one fifth of the industry average in terms of incidents and that with a workforce of over 10,000 people,” he added.

Indian Oil Corporation contract Posted Sunday, March 18, 2007 - 11:39 by hydrocarbonasia
Foster Wheeler Ltd reported today that its subsidiary Foster Wheeler USA Corporation, part of its Global Engineering and Construction Group, has been awarded a contract by Indian Oil Corporation Limited (IOCL) to provide a license and basic engineering package for a new delayed coker.

The 3.7 million tonnes per annum delayed coker, which will be based on Foster Wheeler's Selective Yield Delayed Coking (SYDEC(SM)) process, forms part of IOCL's residue upgrading project at its Gujarat refinery in India.

The terms of the award, which will be included in the company's first-quarter 2007 bookings, were not disclosed.

The SYDEC(SM) process achieves maximum clean liquid yields and minimum fuel coke yields from high sulphur residues.

By installing a SYDEC(SM) unit, a refinery owner is able to process heavier crudes, which sell at a discount to the benchmark light, sweet crudes, thereby allowing the owner to receive the benefit of increased refining margins.

High costs put on hold new refinery projects Posted Sunday, March 18, 2007 - 11:34 by hydrocarbonasia
Refinery project cancellations have accelerated in recent weeks as escalating costs raise more questions over the future profitability of new units making key transport fuels.
Kuwait’s energy minister said on Tuesday the Gulf Arab state might scrap a plan to build a 615,000 bpd oil refinery and upgrade its existing Shuaiba plant instead.
State refiner Kuwait National Petroleum Co had said on Monday it would reissue a tender for a new refinery soon, after it deemed bids in the first round too costly.
Earlier this month, Russia’s Lukoil and Austria’s OMV scaled back their Turkish refinery plans, while Angolan state oil company Sonangol ended talks with China’s Sinopec on a new refinery in the southern African country.
The cancellations form a growing global trend of both new plants and refinery upgrades being shelved due to swelling costs, a shortage of engineers and uncertainty about future returns.
But while shelved expansion plans will cut into future refining capacity, some analysts said they had already factored in such a scenario into their expectations.
The IEA in its medium-term oil market report last month lowered its prediction of new refinery crude distillation capacity between 2006 to 2011 to 10.2mn bpd: 82,000 bpd lower than its initial forecast last July.
The Paris-based agency, which advises 26 industrialised nations on energy policy, said last July that 15.2mn bpd of new refining capacity had been announced for completion before 2011, but expected just 10.3mn bpd to be completed.
Lukoil said last week it had suspended plans for a new refinery in Turkey, while OMV said it was open to scaling back its participation in a refinery it aimed to build in the same country. Both companies had announced their Turkish project plans less than a year ago.
The cancellations and delays around the world follow years of rebounding refinery profit margins driven by accelerating transport fuel demand in countries including China and the US. That strained refiners’ capacity to supply sufficient volumes of oil products such as diesel, gasoline and jet fuel, prompting a wave of expansion plans to meet the shortfall.
But as new capacity has started to come on line, analysts and refiners have started to fret over future profitability.

NWS Venture, Tohoku Electric sign LNG heads of deal Posted Sunday, March 18, 2007 - 11:27 by hydrocarbonasia
The North West Shelf Venture participant companies and Tohoku Electric of Japan have signed a heads of agreement for the ongoing supply of liquefied natural gas from Australia's largest resources project.

In a multi-part deal commencing in April 2010, the North West Shelf Venture will:

--increase LNG quantities under an existing agreement
--convert that agreement from a loaded basis to an ex-ship basis
--supply a new quantity of LNG on an ex-ship basis

The net effect of these elements is to increase the supply of LNG by about 0.5 million tonnes a year starting in 2010 for eight years. Total North West Shelf Venture LNG sales to Tohoku Electric will now be about 1 million tonnes a year from 2010.

The six equal participants in the NWS Venture are: Woodside Energy Ltd. (16.67% and operator); BHP Billiton Petroleum (North West Shelf) Pty Ltd (16.67%); BP Developments Australia Pty Ltd (16.67%); Chevron Australia Pty Ltd (16.67%); Japan Australia LNG (MIMI) Pty Ltd (16.67%); and Shell Development (Australia) Proprietary Limited (16.67%).

Indonesia: Oiltanking to build terminal in Cilegon at cost of $120 million Posted Saturday, March 17, 2007 - 7:41 by hydrocarbonasia
Responding to the liberalization of the gasoline retailing sector, Oiltanking, the world's second largest independent tank storage provider for petroleum products, gases and chemicals, is planning to build the first independent oil storage terminal in Indonesia at a total cost of US$120 million.

The construction of the terminal, which will be located in Cilegon, Banten, will begin in April, after being delayed for almost a year due to the complexity of the project.

Oiltanking president director Theo Pangraz said Friday in Jakarta that the first phase of the terminal would have a capacity of 280,000 cubic meters (cbm), part of which had already been reserved by market players.

He said he hoped operations could commence in the second half of 2008.

"We are very confident that in a very short time, we will be able to expand the storage facilities," Pangraz said, adding that the company hoped to increase storage capacity to 600,000 cbm in the coming years.

He also said that Oiltanking was considering building storage facilities in East Kalimantan, Sumatra and Kalimantan.

"We have to see what is available, what makes sense, and where storage terminals are needed. We are looking at the whole Indonesia. We will go where our customers need us," Pangraz said.

The need for independent storage facilities is growing following the removal of state-owned oil and gas company Pertamina's monopoly on the distribution of non-subsidized high-octane fuels. Pertamina still retains the exclusive rights over subsidized fuels.

To date, only two foreign gas-station operators have actually set up shop here: Shell Indonesia (the local arm of Royal Dutch Shell Plc.), and Malaysian state oil and gas firm, Petronas, which have opened a number of gas stations in Greater Jakarta selling high-octane fuels.

U.S.-based energy firm Chevron is currently conducting a feasibility study before deciding on whether to submit an application for a permanent license from the government to enter the retail fuel market.

Meanwhile, Total E&P Indonesie -- the local affiliate of the world's second largest liquefied natural gas producer, Total SA, is in the process of obtaining a license.

Total's corporate communications manager, Ananda Idris, has said that the company plans to build five gas stations this year at a total cost of $5 billion.

Pangraz refused to confirm whether Total and Chevron were among Oiltanking's clients, saying that the company was ready to do business with all industry players.

Oiltanking, a division of Germany's Marquard & Bahls AG, owns and operates 72 terminals in 19 countries in Europe, North and South America, the Middle East and Asia. The group has an overall capacity of 11.9 million cbm.

India and China - significant contributors of petrochemicals Posted Thursday, March 15, 2007 - 10:49 by hydrocarbonasia
India and China are significant contributors to the rising petrochemical demand. Worldwide ethylene demand is projected to expand at an average of 3.0%/y through 2022, equal to another 82 M tonnes/y of capacity. Asia may advance at 3.5% (25 M tonnes/y) and India at 5.9% (4 M tonnes/y) during the period. To meet the demand growth, India is set to raise ethylene supply by 80% or 2.3 M tonnes/y through 2013. Development of integrated chemical complexes is expected in five locations.

Polymers demand has increased in the country in 2006. According to ChemSystems Online, polypropylene (PP) demand, for use in films and bags, climbed by 15% to around 1.6 M tonnes in 2006. High density polyethylene (HDPE) is estimated to have expanded by over 10% to 1.2 M tonnes, while polystyrene (PS) demand escalated by 12% from a negative growth in 2005 to 250,000 tonnes.

Indian Oil Corp will bring online its 800,000 tonne/y ethylene facility at Panipat, Haryana in 2010. Reliance Industry will establish two 450,000 tonne/y PP plants in 2009. Completion of the company's 548,000 bbl/day export oriented refinery complex in Gujarat is set in 4Q 2009.

Ethylene capacity in India will climb to 5.1 M tonnes/y by 2013 from 2.8 M tonnes/y in 2007. The country's crude oil imports reached almost 100 M tonnes in 2005-2006. Natural gas reserves are at 1.101 bn cu m. Natural gas consumption in the petrochemicals industry is forecast to rise by 40%.

Qatar RasGas LNG: Train 5 to boost output by 4.7mn tonnes Posted Tuesday, March 13, 2007 - 5:13 by hydrocarbonasia
RasGas LNG production capacity will go up by another 4.7mn tonnes annually with Train 5 being brought online on March 20. RasGas is set to achieve an LNG production capacity of 37mn tonnes per year (tpy) by 2010.

By the decade-end Qatar’s capacity will be ramped up to 77mn tpy. At that stage Qatar will account for a third of the projected world LNG supply.

Majority of LNG from Train 5 will head to European gas markets through various gas wholesalers including Distrigas of Belgium, RasGas said here yesterday.
“As a result of both technological innovations and optimal project management, LNG can be shipped over long distances from Qatar in a cost effective manner to compete with pipeline gas,” RasGas said.

It said the world demand for natural gas would rise to 4,700bn m3 in 2030. In 2004 the demand stood at 2,800bn m3.

European countries are increasingly turning to LNG due to its environmental benefits in relation to oil-based fuels and are already negotiating long-term contracts to ensure reliable and secure supplies. Japan, South Korea and India are already well established markets for LNG.

In 2008 RasGas will also begin supplying LNG to the Chinese Petroleum Corporation in Taiwan and in 2009 to the Golden Pass LNG Terminal in the USA. To fulfil these major contracts RasGas will construct two more LNG trains (trains 6 and 7). Each train will have a production capacity of 7.8mn tpy which, together with similar trains built by sister company Qatargas, will make them the world’s biggest LNG plants.

Train 6 is scheduled to come on stream in 2008 and Train 7 in 2009.
RasGas managing director Dr Mohamed al-Sada said, “By the decade-end RasGas will have a production capacity of approximately 37mn tpy and will supply markets around the world including South Korea, India, Taiwan, Belgium, Italy, Spain and the US.

“Qatar’s total production capacity will be 77mn tpy and Qatar LNG will account for a third of the projected world liquefied natural gas supply in 2010.”
On Train 5 construction, he said the LNG liquefaction plant was completed in less than 28 months and like Train 4 it was completed within budget and ahead of schedule. Additionally, Train 5 was built with an outstanding safety record.
“Train 5 set multiple benchmarks for excellence of project execution, but the aspect that we’re most proud of is our construction safety performance,” said Dave Marchak RasGas Venture Manager.

“We have achieved levels of performance that are really unsurpassed in industry. We have reduced the frequency of incidents to about one fifth of the industry average in terms of incidents and that with a workforce of over 10,000 people,” he added.

Oman Oil Co signs EPC contract for Salalah methanol project Posted Tuesday, March 13, 2007 - 5:11 by hydrocarbonasia
Oman Oil Company yesterday announced the signing of an engineering, procurement and construction (EPC) contract for the Salalah Methanol Company (SMC), a state-of-the art, methanol production facility to be set up in Salalah Free Zone. The EPC contract for RO 350 million-project was awarded to GS Engineering and Construction Company (GS E&C), after an international bidding process initiated last year.

The contract was signed on behalf of SMC by Maqbool bin Ali Sultan, Minister of Commerce and Industry and Chairman of Oman Oil Company and Sang-Ryong Woo, Chief Executive Officer and President of GS Engineering and Construction Company on behalf of GS Engineering and Construction Company. “We are proud to develop our latest project in Salalah Free Zone, which comes in line with the government's strategy to diversify the economy. The project will not only enhance the future downstream methanol based industries but will also provide training and job opportunities for Omanis,” said Maqbool in a statement.

Salalah Methanol, which is wholly owned by Oman Oil Company and formed in February 2006, has been set up to own, operate and maintain the plant. Commercial operations are scheduled to commence in the first half of 2010. As part of its commitment to the region, SMC will commence hiring Omanis at an early stage of the project and provide extensive training to enable them to be ready to operate and maintain the plant once completed. The approximately RO 350 million total project cost, is designed to produce 3,000 metric tonnes per day methanol.

It will also include other related utilities such as a captive power generation, water desalination units and a waste water treatment plant to make SMC self-sufficient and environmentally friendly, as well the export facilities. The feedstock for the plant is natural gas, which will be supplied by the Ministry of Oil and Gas through the existing pipeline, owned and operated by Oman Gas Company. Methanol is an intermediary chemical feedstock, which is used in manufacturing other chemicals and end-products such as various forms of formaldehyde, acetic acid, MTBE and other industries producing plastic materials.

India's Reliance Industries moves to strengthen petrochemical business Posted Monday, March 12, 2007 - 2:35 by hydrocarbonasia
India's Reliance Industries Ltd. said Saturday that its board has approved a merger with Indian Petrochemicals Corp. Ltd., a formerly state-run company in which Reliance bought a strategic stake five years ago.

The share-swap merger will further strengthen Reliance's presence in the petrochemical business, the company said in a statement.

Mumbai-based Reliance Industries - India's largest private company with interests ranging from oil and gas refining to retail trade - is currently the market leader in the country's petrochemical sector, followed by IPCL.

The Indian government sold a 26 percent equity stake in IPCL to Reliance in 2002 under a privatization program. Reliance later increased its holding to 46 percent though an open offer.

According to the merger terms, subject to the approval of shareholders and regulators, IPCL shareholders will trade five shares for one share in Reliance Industries.

Reliance Chairman Mukesh Ambani said the merger will benefit shareholders of both companies.

"This merger will be earnings accretive for the shareholders of RIL (Reliance) and shall provide shareholders of IPCL an opportunity to participate in RIL's diversified business,'' Ambani said in a statement.

IPCL's product portfolio focuses on polymers, making the company prone to earnings volatility and cyclical risks. The merger will help its shareholders "de-risk their investment,'' the Reliance statement said.

Following the merger, Reliance's equity base will increase 4.3 percent to 14.54 billion rupees.

Indonesia seeking higher price for LNG exports Posted Monday, March 12, 2007 - 2:11 by hydrocarbonasia
In an effort to obtain higher prices for its LNG exported from Tangguh in Papua New Guinea, Indonesia Energy and Mineral Resources Minister Purnomo Yusgiantoro said the country wants to renegotiate LNG contract terms with South Korean buyers and is seeking to divert to Japan supplies contracted for the US West Coast.

Purnomo told a meeting of the Indonesian House of Representatives that the government is seeking to increase the LNG selling price to South Korea's SK Power and to steelmaker Posco.

Under original contracts due to start in 2008, Tangguh is to supply SK Power with 550,000 tonnes/year for 20 years at $3.50/Mcf and Posco with 550,000 tonnes/year over 20 years at $3.36/Mcf.

Purnomo did not state by how much Indonesia was seeking to raise the price, saying the matter was still under discussion. The original agreements were based on a maximum oil price of $25/bbl, and Indonesia will attempt to raise the price based on a new benchmark as it did last year with China.

Indonesia in 2006 increased the selling price of Tangguh LNG to China's CNOOC to $3.35/Mcf by renegotiating the original contract, using a new maximum oil price of 38/bbl. The original contract, under which the Tangguh plant will supply 2.6 million tonnes/year of LNG for 20 years to generate power in Fujian province, set the price at $2.60/Mcf.

Purnomo said Indonesia was planning to talk to Sempra Energy Corp., San Diego, with which it had agreed to deliver 3.7 million tonnes/year of gas from Tangguh for 20 years at $5.90/Mcf.

Although Purnomo said the renegotiating plan had less to do with price than the government's wish to reallocate some of the LNG supplies to Japan instead of Sempra, he added, "We have the chance to get higher prices from Japan."
A clause in the contract with Sempra allows either of the parties to allocate some of the LNG shipments to a third party as long as the new contract benefits all parties, Purnomo said. The government has not determined the percentage to be reallocated, he said.

Qatargas-III start-up in 2009 Posted Tuesday, March 6, 2007 - 6:38 by hydrocarbonasia
Qatargas–III will come online in 2009 as scheduled, a senior executive has said.
Speaking on the sidelines of the 12th Annual Middle East Gas Summit yesterday, ConocoPhillips Qatar president Mike Stice said Qatargas-III was on budget and schedule despite rising costs and tight supplies of raw materials.
Qatargas Train 6, which will be set up under Qatargas–III, is a joint venture among QP (68.5%), ConocoPhillips (30%) and Mitsui (1.5%).
“Higher costs and rising prices have affected everybody in the industry. But I am pleased to say that both Qatargas–III and Qatargas–IV, a 70:30 joint venture between QP and Royal Dutch Shell are on track, on schedule and within budget,” Stice said.
According to reports, Stice said the gas-to-liquid projects Conoco was looking at, remains a possibility, despite ExxonMobil’s recent dropping of a similar project due to spiralling cost.
“Nothing is off the table. Conoco would look at the project again when Qatar raises the moratorium on new gas projects,” he said.
Qatar has frozen all new gas projects until 2012 to assess reserves at its vast North Field.
Stice said the projects stayed on track due to accurate initial cost forecasts and early purchases of raw materials and supplies for the construction.
Rapidly rising fees for oil service contractors, tight labour supplies and raw materials scarcity have strained the budgets of big energy projects around the world.
Rising costs forced ExxonMobil to drop plans to build the world’s largest GTL project in Qatar last month. A number of gas projects Qatar is executing simultaneously have further tightened supplies and fanned costs.
Earlier, presenting the topic “Gas Price Volatility” Opportunity or Threat” Stice said consumers might choose a different fuel if gas prices were high. “We see high volatility during a period of high price. Gas price volatility is therefore a threat,” Stice said.
Price volatility could be tackled by bringing more gas into the market for which more production, storage and transportation facilities were required. Peak US gas demand during the winter was met from the stockpiles.
According to Stice, Qatar would be playing a key role in meeting the increasing global requirements for LNG. Two key advantages for Qatar are its huge reserves and destination flexibility.

BP Migas says Tangguh project 70% completed Posted Tuesday, March 6, 2007 - 1:30 by hydrocarbonasia
Two LNG trains in the Tangguh project in Papua are 70 percent completed. The first train is expected to be finished in the fourth quarter of 2008 while the other one will start operation in the first quarter of 2009.

"The project is running according to schedule," BPMIGAS Chairman Kardaya Warnika said in Jakarta recently.

BP Berau is in charge of Tangguh project in Bintuni Bay, west Papua. The project involves the development of fields to supply the natural gas and the construction of an LNG plant with a capacity of 7.6 million tons per annum.

Field development to feed natural gas to the Tangguh LNG plant is conducted in three areas, namely Wiriagar, Berau and Muturi. The areas are expected to supply 1.5 billion cubic feet a day with an investment of $1 billion. The field development is 70 percent completed.

Aside from the LNG plant, gas processing facilities (GFP) will also be built in Tangguh. The GFB installation is 70% underway and is expected to be completed by the fourth quarter of 2007. At least 8,200 workers are involved in developing this project.

BP has signed loan agreements of US$2.616 billion on Aug. 1, 2006, to finance the project. The loans came from JBIC at US$1.2 billion, ADB at US$350 million, and a group of commercial banks at US$1.066 billion. The remaining requirement of US$884 million will be secured from Chinese lenders.

Kardaya said that negotiations with the Chinese lenders are continuing. "Funding from China is not impacting the project. BP guaranteed the project will continue, with or without Chinese financing," he said.

BP owns 37.16% stake in Tangguh. The other owners are CNOOC with 16.99%, MI Berau BV 16.3%, Nippon Oil Exploration Ltd 12.23%, KG Berau/KG Wiriagar 10% and LNG Japan Corporation 7.35%.




Qatar set to lead growth in LNG production Posted Tuesday, March 6, 2007 - 1:30 by hydrocarbonasia
Liquefied natural gas may deliver 31% of global gas by 2010 as production surges, PricewaterhouseCoopers, the world’s biggest accounting firm, said in a report.
Production of LNG, gas cooled to a liquid for transport by ship, will almost double in the five years between 2005 and 2010, lifting its share of the global gas market to as much as 31% from 22% in 2005, the report said, citing data from Paris-based Cedigaz, an industry association.

Qatar, Nigeria and Australia will lead the growth, Michael Hurley, Global LNG leader at the accounting firm, said in the report.

Qatar became the world’s largest liquefied natural gas exporter in 2006 overtaking Indonesia. The rise of Qatar is a key factor in a more global market, with supplies able to serve both the Atlantic and Pacific markets, Hurley said.

Qatar and its partners led by ExxonMobil Corp shipped about 26mn metric tonnes last year, Qatargas spokesman Abdulla M Hijji said on December 12.

Qatar may account for two-thirds of the increase in LNG exports between 2005 and 2015.
Qatar Petroleum will become the world’s largest LNG producer, accounting for about 11% of the world’s LNG output of about 460mn tonnes a year by 2015, the report said.

Lubrizol to build $40 mln plant in Shanghai Posted Monday, March 5, 2007 - 1:41 by hydrocarbonasia
Specialty chemical company Lubrizol announced on Thursday it will build a $40 million factory in Shanghai, the largest investment it has made worldwide in the past decade.

The 31,000-square-meter plant in Songjiang industrial zone will make primary resins, polymers and specialty additives. Construction is planned to begin in the third quarter of this year and be completed in the fourth quarter of 2008.

The US-based Fortune 500 company has produced fuel additives and lubricants for 75 years.

"This investment helps us further expand our global reach and improve our operational efficiency in China, a fast-growing market and an important one for Lubrizol," said Charles Cooley, senior vice-president of the firm.

The company's total global revenue in 2006 reached $4 billion, 20 percent of which came from Asia.

"China is the second-largest market following the US for Lubrizol, with the revenue of at least $100 million," Cooley said.

Lubrizol's first business in China was selling lubricant additive technology to Sinopec. The company established its first representative office in Beijing in 2006 and formed two joint ventures with Sinopec for blending plants in Tianjin and Lanzhou.

"Our target for expansion in China is to grow profits by 9 to 10 percent per year," he said.

The company will also rebrand its products to include the name Lubrizol instead of Noveon, which it has been using in China.

"The change will simplify our communication with all stakeholders and clarify the company's identity," said Cooley.

Headquartered in Wickliffe, Ohio, the company owns and operates manufacturing facilities in 20 countries and has sales and technical offices around the world.


Malaysia's Petronas seals cooperation deal with Italian auto lubricants manufacturer Posted Monday, March 5, 2007 - 1:41 by hydrocarbonasia
Malaysia's state-owned oil-and-gas company Petroliam Nasional Bhd., or Petronas, said Friday it has signed a lubricant distribution pact with FL Selenia SPA, Italy's largest independent manufacturer of branded auto lubricants.

The strategic alliance agreement allows Selenia to market Petronas' SYNTIUM car lubricants in several European markets by mid-2007, while Petronas will provide similar services for Selenia's lubricants in China and other parts of the Asia-Pacific region, Petronas said in a statement.

The deal, signed by officials from both companies in Kuala Lumpur on Jan. 31 but announced Friday, also provides opportunities for both companies to embark on technology transfer and joint research and development activities in the lubricant business, the statement added.

Petronas has said its SYNTIUM synthetic car lubricants are engineered using race-tested Formula One technology to deliver efficient engine power, protection and fuel economy. The lubricants are currently available in at least 15 countries, mostly in Asia.

The Turin-based Selenia has more than 1,500 products ranging from lubricants, anti-freeze, transmission and engine fluids for autos, trucks and tractors.

Indonesian team to discuss LNG contracts with Tokyo Posted Monday, March 5, 2007 - 1:40 by hydrocarbonasia
Indonesia will send a team to Japan this month to negotiate renewing liquefied natural gas (LNG) contracts due to lapse over the next few years, Energy Minister Purnomo Yusgiantoro said on Thursday.

He also said production from Indonesia's $2.6 billion Cepu oil and gas development should start toward the end of 2008 or in 2009, and that Jakarta anticipates near term global oil prices of around $60 a barrel.

The oil price will probably be "around $60 per barrel, and if that's going to be the defence line for us, then I would like first for all the Opec member countries to obey... the quota," Yusgiantoro said, referring to the group's crude production quotas.

On LNG, he said: "The key of the game is prices. As long as they give us a good price then, what we can do is to save the priority."

Indonesia, one of the world's top LNG exporters and the main supplier of the fuel to Japan, has an 8.4 million tonnes-per-year (tpy) contract that expires in 2010 and another 3.6 million-tpy deal ending in 2011.

The future of Indonesia's LNG exports has been placed in some doubt as it plans to divert more of its production to domestic use at a time when its oil and gas output has been under pressure from ageing fields.

One hope for new production is the Cepu field on Indonesia's main Sumatra island, where forecasts have varied as to when any output would actually begin.

ExxonMobil is co-operator of the field, Indonesia's biggest untapped oil reserve, with Indonesian state oil and gas company Pertamina.

Asked when output from Cepu would start, Yusgiantorosaid, the "end of 2008 or sometime [in] 2009, but it may not be the full capacity".

On the status of a contract dispute between Exxon Mobil and the Indonesia government over another promising field, the Natuna offshore area, he said he was leaving that to negotiators from oil and gas regulatory body BPMIGAS.


BP Migas says Tangguh project 70% completed Posted Monday, March 5, 2007 - 1:39 by hydrocarbonasia
Two LNG trains in the Tangguh project in Papua are 70 percent completed. The first train is expected to be finished in the fourth quarter of 2008 while the other one will start operation in the first quarter of 2009.

"The project is running according to schedule," BPMIGAS Chairman Kardaya Warnika said in Jakarta recently.

BP Berau is in charge of Tangguh project in Bintuni Bay, west Papua. The project involves the development of fields to supply the natural gas and the construction of an LNG plant with a capacity of 7.6 million tons per annum.

Field development to feed natural gas to the Tangguh LNG plant is conducted in three areas, namely Wiriagar, Berau and Muturi. The areas are expected to supply 1.5 billion cubic feet a day with an investment of $1 billion. The field development is 70 percent completed.

Aside from the LNG plant, gas processing facilities (GFP) will also be built in Tangguh. The GFB installation is 70% underway and is expected to be completed by the fourth quarter of 2007. At least 8,200 workers are involved in developing this project.

BP has signed loan agreements of US$2.616 billion on Aug. 1, 2006, to finance the project. The loans came from JBIC at US$1.2 billion, ADB at US$350 million, and a group of commercial banks at US$1.066 billion. The remaining requirement of US$884 million will be secured from Chinese lenders.

Kardaya said that negotiations with the Chinese lenders are continuing. "Funding from China is not impacting the project. BP guaranteed the project will continue, with or without Chinese financing," he said.

BP owns 37.16% stake in Tangguh. The other owners are CNOOC with 16.99%, MI Berau BV 16.3%, Nippon Oil Exploration Ltd 12.23%, KG Berau/KG Wiriagar 10% and LNG Japan Corporation 7.35%.




Qatar set to lead growth in LNG production Posted Monday, March 5, 2007 - 1:39 by hydrocarbonasia
Liquefied natural gas may deliver 31% of global gas by 2010 as production surges, PricewaterhouseCoopers, the world’s biggest accounting firm, said in a report.
Production of LNG, gas cooled to a liquid for transport by ship, will almost double in the five years between 2005 and 2010, lifting its share of the global gas market to as much as 31% from 22% in 2005, the report said, citing data from Paris-based Cedigaz, an industry association.

Qatar, Nigeria and Australia will lead the growth, Michael Hurley, Global LNG leader at the accounting firm, said in the report.

Qatar became the world’s largest liquefied natural gas exporter in 2006 overtaking Indonesia. The rise of Qatar is a key factor in a more global market, with supplies able to serve both the Atlantic and Pacific markets, Hurley said.

Qatar and its partners led by ExxonMobil Corp shipped about 26mn metric tonnes last year, Qatargas spokesman Abdulla M Hijji said on December 12.

Qatar may account for two-thirds of the increase in LNG exports between 2005 and 2015.
Qatar Petroleum will become the world’s largest LNG producer, accounting for about 11% of the world’s LNG output of about 460mn tonnes a year by 2015, the report said.

BP, Gazprom discuss intl LNG joint venture Posted Monday, March 5, 2007 - 1:38 by hydrocarbonasia
Top executives of U.K. oil major BP PLC (BP) and Russian gas monopoly OAO Gazprom (GSPBEX.RS) met Thursday to discuss the creation of a joint venture, Gazprom said, against the backdrop of heightened tensions between the two companies over BP's future in Russia.

Chief executive of BP PLC (BP), Lord Browne, and his successor-designate, Tony Hayward, discussed with Gazprom Chief Executive Alexei Miller the formation of an international joint venture for liquefied natural gas, Gazprom said, without giving more details.

A person familiar with the situation said that Browne and Hayward were also scheduled to meet with Gazprom Chairman Dmitry Medvedev later Thursday.

Medvedev, Russia's First Deputy Prime Minister, is widely seen as a leading contender in presidential elections scheduled for spring 2008. He meets with foreign energy executives less often than does Miller.

The executives discussed the possibility of establishing a joint venture for the development of the international business of the companies, including liquefied natural gas, Gazprom's statement said.

Gazprom doesn't produce any LNG of its own, although the company aims to become a major player in the global LNG market during the next several years.

Gazprom is the world's biggest producer of natural gas, pumping out about 550 billion cubic meters of gas a year and supplying a quarter of Europe's total gas consumption.

In recent months Gazprom has placed limits on the development of BP's Russian joint venture, TNK-BP Holdings (TNBP.RS), through its monopoly control over Russia's gas transit network.

TNK-BP is pushing hard to reach agreement with Gazprom on developing its massive Kovykta gas field in Siberia. TNK-BP has offered Gazprom majority control over a new consortium that would develop the field, but Gazprom has yet to show interest in the offer in public.

TNK-BP risks losing its license for Kovykta as Russian regulators have accused the company of under-development of the field - though the company has been unable to export Kovykta gas for lack of Gazprom's approval.

Gazprom has also decided to limit the amount of gas TNK-BP unit Rospan International can ship through Gazprom's gas network to only 1.7 billion cubic meters in 2007, down from more than 3 bcm of gas in 2006.

TNK-BP is half-owned by BP and half-owned by a consortium of Russian investors.

Hayward, who serves on the board of directors of TNK-BP, will become chief executive of BP Aug. 1.


Sinopec and oil majors ink US$3.5b refinery contract Posted Monday, March 5, 2007 - 1:38 by hydrocarbonasia
China Petroleum & Chemical Corp - better known as Sinopec - signed a contract Sunday with Saudi Arabian Oil and US major Exxon Mobil on a US$3.5 billion (HK$ 27.3 billion) refinery project in southern China's Fujian province after months of talks.

The refinery in Quanzhou will have a crude refining capacity of 240,000 barrels a day and is expected to be operational in early 2009, according to a statement from the three companies.

A separate contract was signed by Sinopec, Exxon and Saudi Arabian Oil - better known as Saudi Aramco - for a retail joint venture to manage and operate around 750 filling stations and a network of terminals in Fujian.

China is badly in need of new refineries, with many of its existing plants operating at more than 90 percent capacity to meet growing demand for oil products such as gasoline and diesel.

Investment in new refining capacity has been constrained by government caps on retail prices of oil products, which has left the refining businesses of Sinopec and PetroChina (0857) operating at a loss in recent years.

However, the government has repeatedly signalled that it intends to bring its domestic oil products prices more in line with the international market.

China introduced a new pricing mechanism at the start of this year that links the domestic price of oil products to a basket of benchmark crudes, namely Brent, Dubai and Minas.

Signing of the contracts took place less than a month after the National Development and Reform Commission, China's economic planning agency, said on its Web site that the Fujian refinery project had been approved.

Sinopec will own 50 percent of the refining joint venture, with Exxon Mobil and Saudi Aramco each holding 25 percent.

According to the statement, the refinery will primarily process sour Arabian crude supplied by Saudi Aramco. No details were given on the crude supply prices involved.

The joint venture also involves the construction of an ethylene steam cracker with a capacity of 800,000 tonnes a year, a polyethylene unit with a capacity of 800,000 tonnes a year, a polypropylene unit with a capacity of 400,000 tonnes a year and an aromatics complex to produce 700,000 tonnes a year of paraxylene.

Support facilities including power generators and a berth capable of handling tankers with a capacity of 300,000 deadweight tons will also be built.

"The signing of the two joint venture contracts marks significant milestones in the development of China's first fully integrated Sino- foreign projects that involve refining, petrochemicals and fuels, and chemicals marketing," the statement said.

For the filling stations joint venture, Sinopec will hold 55 percent, with Exxon Mobil and Saudi Aramco each owning 22.5 percent.

Saudis may drop planned China petrochemical plant Posted Monday, March 5, 2007 - 1:37 by hydrocarbonasia
Saudi Basic Industries may find another location for a $5.2 billion petrochemical plant planned for China if Beijing keeps delaying approval for the project, its chairman said Sunday.

The Saudi petrochemical company says it has been waiting for more than a year to start work on the complex in the north-eastern city of Dalian, which would include an oil refinery and an ethylene plant.

"We hope this approval gets completed so that we can go ahead with our investment in the project," the company chairman, Prince Saud bin Abdullah bin Thunayan al-Saud, told reporters.

"There are many opportunities in the world. But there isn't a specific alternative to China," he said.

The company hopes a big plant in China will help achieve its goal of almost doubling output to 100 million tons by 2015.

The state-controlled Saudi company has been in talks on the project with the Chinese companies Sinopec and Dalian Shide for three years, it said in December.

The Chinese companies have been waiting for 18 months for the authorities in Beijing to approve the project, Saud was quoted as saying last week.

India’s Reliance to set up 3-billion-dollar petrochemical complex Posted Monday, March 5, 2007 - 1:36 by hydrocarbonasia
India’s petrochemicals giant Reliance Industries Ltd (RIL) plans to build a three-billion-dollar petrochemical complex in the country’s western Gujarat state, news reports said Sunday.

The facility to be located in a special economic zone in the coastal town of Jamnagar would have an output capacity of two million tonnes per year, the Economic Times daily reported. The decision was taken at the company’s board meeting on Saturday.

The factory, expected to be operational by 2011 is billed as one of the largest integrated petrochemicals complexes in the world.

It will use gases and other by-products of RIL’s refinery in the same town as feedstock to manufacture ethylene, propylene and its downstream commodity and speciality derivatives, the Business Standard newspaper reported.

The Reliance refinery at Jamnagar is considered the world’s third-largest and has a production capacity of 660,000 barrels of refined products per day.

‘The unique integration with the refinery will enable Reliance to achieve one of the most competitive cost positions,’ a company statement mentioned.

Founded as a textile concern, Reliance is one of India’s most successful companies, but it has only in the recent years entered the energy sector. It began building its first refinery at Jamnagar in 1996 and aims to have the refinery producing high-value fuels by December 2008. The fuels would be exclusively for export to the West, primarily to Europe and the United States, company officials have said.


India fuel demand leaps higher in Jan Posted Monday, March 5, 2007 - 1:36 by hydrocarbonasia
India’s fuel demand jumped 7.3 per cent in January from a year ago, led by naphtha and diesel, extending a period of rapid demand growth in Asia’s third-largest consumer, official data showed on Monday.

Sale of refined oil products, a proxy for oil demand, rose to 10.46 million tonnes, the data showed. The growth came a month after India’s first reduction in domestic fuel prices and just ahead of its second, pushed through two weeks ago to combat inflation at a two-year high.

Pump prices of petrol have fallen by 4.5 per cent and diesel by 3.2 per cent. Diesel sales, which account for nearly a third of consumption, rose 8.2 per cent in January from a year earlier to 3.71 million tonnes (900,000 barrels per day).

But oil demand was also fuelled by growing industrial use of feedstock naphtha, as fertiliser firms and some power plants struggled to get enough cheaper natural gas. Domestic naphtha sales surged 28 per cent, their third double-digit rise in a row.

“Higher consumption by petrochemical plants and the restarting of the Dabhol power plant have added to naphtha growth,” said a government source. India has been importing naphtha to run the Dabhol project in the western state of Maharashtra, which was fired up in October after demand for its power picked up.

Despite the increase in consumption, however, the data showed an unexpected trebling in naphtha exports to 1.3 million tonnes for January, although this was partly offset by imports, which rose by nearly 154 per cent to 476,900 tonnes. “Higher naphtha imports resulted in more domestic surplus available for exports,” said the oil ministry official, who did not wish to be identified. “(Gas) scarcity appears to have extended into January, since one of the main source of LNG imports, Qatar’s RasGas 2 plant, declared force majeure ... and deferred two cargo loadings contracted by India’s Petronet,” , it was reported.

Motor fuel sales also rose due to a court ruling banning the overloading of trucks, forcing more vehicles on to the roads. “High GDP growth especially in manufacturing sector is also reflected in the petroleum product sales,” the official said.

Oil product exports in January rose 173 per cent to 6.1 million tonnes, driven by naphtha and jet fuel. Fitch in its outlook for the Indian oil and gas sector for 2007 has said, “with the increase in refining capacity in 2006, domestic overcapacity will country, leading to higher exports.”

India forecast an increase in oil product exports to 93 million tonnes in 2012 from 21.5 million tonnes in 2005/06. Oil product imports rose by 21.7 per cent to 1.2 million tonnes, mainly due to diesel and naphtha imports. Reliance Industries Ltd, Indian Petrochemical Corp Ltd and Haldia Petrochemicals Ltd have imported over 1.2 million tonnes of naphtha this year. Crude oil imports during January rose 0.7 per cent to 9.08 million tonnes. India imports nearly 70 per cent of its total crude oil requirement in a year.






India’s RIL to raise USD 6 bn for petrochem, oil & gas projects Posted Thursday, March 1, 2007 - 6:50 by hydrocarbonasia

Reliance Industries is raising funds again. Its Board has approved a USD 6 billion capital expansion plan for its petrochemicals, oil and gas projects, it was reported.

Mukesh Ambani, Chairman of Reliance Industries, has big plans in mind. His RIL will raise about USD 6 billion in the form of equity and debt for its petrochemicals and oil and gas projects.

The company's board approved the issue of 12 crore preferential warrants to promoters, convertible after 18 months. The conversion will lead to an equity dilution of 8.6%, raising over Rs 16,750 crore rupees or USD 3.76 billion. The promoters' stake after the conversion will rise to 54.8 from 51%. On exercise of such rights, Reliance Industries' paid-up capital will increase to Rs 1,513 crore from 1,393 crore.

The other USD 2 billion will be raised through debt from external commercial borrowings, an instrument the company's using after about 14 years.

RIL says it will invest USD 3 billion in an integrated petrochem complex adjacent to Reliance Petroleum's refinery in the Jamnagar complex.

Cheap feedstock for the project is likely to come from off gases and by-products of the refinery, a move that will ensure RIL continues to get tax incentives for its petrochem division beyond 2010.

The 2 million metric tonne a year petrochem complex will be the largest exporting complex in India, adding nearly 14 percent to RIL's petrochem capacity.

RIL is also betting big on global petrochem demand. RIL sells most of its petrochem products in the domestic market but with the construction of this facility it will enter high-margin olefins and derivatives markets, as capacity expansion in West Asia is limited.

The petchem complex in the SEZ will also help it to remain a low cost producer and insulate it from volatility in feedstock prices.

The facility will be built in phases and the petrochem project is expected to be complete by 2010-11.

Foster Wheeler wins contract for Terrace-Wall(TM) reformer and Posted Thursday, March 1, 2007 - 6:49 by hydrocarbonasia
Foster Wheeler Ltd. announced today that its subsidiary, Foster Wheeler Energy
Limited, part of its Global Engineering and Construction Group, has been awarded an engineering and materials supply contract for a Terrace-Wall(TM) reformer and three fired heaters by CTCI Corporation. CTCI is the engineering, procurement & construction (EPC) prime contractor for the Bangchak Petroleum Public Co. Ltd.'s Product Quality Improvement project at its refinery in Thailand. The objective of the project is to upgrade fuel oil to produce higher-value products such as gasoline, kerosene and diesel.

The Foster Wheeler contract value was not disclosed and the award was included in the company's fourth-quarter 2006 bookings.

The project includes a hydrogen production plant, which will use steam-reforming technology licensed from Foster Wheeler and a Foster Wheeler Terrace-Wall(TM) reformer. The hydrogen production plant will have the capacity to produce 40 million standard cubic feet per day, or 44,680 normal cubic meters per hour, of high-purity hydrogen. The hydrogen production plant is planned for operation by mid-2008. Foster Wheeler will also supply three fired heaters for the vacuum distillation and hydrocracker units.

"This award further strengthens Foster Wheeler's excellent relationship with the Bangchak Refinery. We first worked at the refinery in 1995, on the successful clean fuels project," said Steve Davies, chairman and chief executive officer, Foster Wheeler Energy Limited. "This award also reinforces our position as a leading supplier of technology and reformers for hydrogen production, in particular where heavier feedstocks are processed that require pre-reformer technology."

Foster Wheeler's Terrace-Wall(TM) reformer features a unique firing arrangement within a sloped-wall radiant section, enabling long catalyst and catalyst tube life, and can be designed for natural draft operation, providing additional operational, reliability and cost benefits. Foster Wheeler has supplied over 200 Terrace-Wall(TM) steam reformers to the refining and petrochemical industries in more than 40 countries worldwide.

Sinopec signs joint venture contract with Saudi Arabian, U.S. oil giants Posted Thursday, March 1, 2007 - 11:21 by hydrocarbonasia
China Petroleum and Chemical Corporation (Sinopec) has signed a joint venture contract with Saudi Aramco and ExxonMobil to refine and process sour crude oil in southeastern China's Fujian Province.

Sinopec, Saudi Aramco and ExxonMobil will have 50 percent, 25 percent and 25 percent stakes respectively in the joint venture project, which will start operation in 2009, with an output of 240,000 barrels per day, or 12 million tons per year.

The crude oil to be processed by the Quanzhou-based refinery will come from the Saudi Arabian oil giant but at what prices the oil will be provided has not been disclosed.

The three oil giants will also establish a retail company, with Sinopec, Saudi Aramco and ExxonMobil possessing 55 percent, 22.5 percent and 22.5 percent stakes respectively. The company will operate 750 gas stations and a network of terminals in Fujian.

Total value of the two deals was unavailable in the statement of the three companies but a preliminary estimate in 2005 showed it would amount to 3.5 billion U.S. dollars, as reported.

The two deals formed the first Sino-foreign integrated project in China, involving refining, petrochemical and fuels marketing, said the report.

With the Saudi Arabian company providing the hydrocarbon resources, Sinopec will be able to lower its production cost and avoid losses from fluctuations of oil prices on the international market, the report quoted Qiu Xiaofeng, an analyst with the Everbright Securities, as saying.



BP Tangguh LNG plant nearing completion Posted Thursday, March 1, 2007 - 11:21 by hydrocarbonasia
The Tangguh LNG plant, located in a Papua gas field with proven reserves of more than 14 trillion cubic feet, is entering the final phase of construction and is expected to commence initial production by the last quarter of 2008, an official says.

Kardaya Warnika, chairman of the Upstream Oil and Gas Executive Agency (BP Migas), said on Tuesday that the construction of the plant, to be operated by a consortium led by BP Indonesia, was 70 percent completed.

Having already secured more than $2 billion in loans, Kardaya said negotiations between BP and a group of Chinese banks for $884 million in loans were still underway.

To build the plant, the third in the country after the Arun and Bontang LNG plants, BP needs financing of $6.5 billion, of which $3.5 billion consists of loans, with the remainder coming from the company's own resources.

In August last year, BP secured loans of $2.616 billion, made up of $1.2 billion from the Japan Bank for International Corporation, $350 million from the Asian Development Bank and $1.066 billion from commercial banks.

If the latest loan negotiations are successful, the loans from the Chinese banks should be disbursed some time in April.

BP Migas records show that the government has signed contracts with Fujian-China for the delivery of 2.6 mmtpa (million metric tons per annum) of gas over 25 years from Tangguh, with SK Power Korea for 0.55 mmtpa over 20 years, with Posco Korea for 0.55 mmtpa over 20 years and with U.S. West Coast for 3.7 mmtpa over 20 years, with prices ranging from $3.5 to $5.94 per mmbtu (million British thermal unit).

BP Indonesia operates the Tangguh block together with Japan's LNG Corporation, Nippon Oil Corporation and CNOOC.

North West Shelf Venture, Kyushu Electric sign LNG supply deal Posted Tuesday, February 27, 2007 - 1:31 by hydrocarbonasia
The North West Shelf Venture participant companies and Kyushu Electric Power Company, Incorporated of Japan have signed a heads of agreement for the ongoing supply of liquefied natural gas from Australia's largest resources project.
All eight of the North West Shelf Venture's original Japanese LNG customers have now renewed their long-term LNG purchase commitments.

The North West Shelf Venture will supply 0.73 million tonnes a year to Kyushu Electric in an eight-year deal commencing in April 2009.

Kyushu Electric is Japan's fourth-largest power utility. Kyushu Electric's service area, centred on the island of Kyushu, is home to about 15 million people and accounts for around 9.5 percent of Japan's GDP.

Kyushu Electric is a long-standing customer of the NWSV, having signed an original contract in 1985 that ends in March 2009 and a further contract in 2002.

The six equal participants in the NWS Venture are: Woodside Energy Ltd. (16.67% and operator); BHP Billiton Petroleum (North West Shelf) Pty Ltd (16.67%); BP Developments Australia Pty Ltd (16.67%); Chevron Australia Pty Ltd (16.67%); Japan Australia LNG (MIMI) Pty Ltd (16.67%); and Shell Development (Australia) Proprietary Limited (16.67%).

CNOOC NWS Private Limited is also a member of the North West Shelf Venture but does not have an interest in North West Shelf Venture infrastructure.




Shell bullish on GTL Posted Tuesday, February 27, 2007 - 1:29 by hydrocarbonasia

Shell executives stressed that GTL is a proven technology and Shell has achieved very high results at its pilot plant in Malaysia.

“We are very optimistic about our project in Qatar. Pearl GTL will be the world’s largest integrated GTL plant and we have the technology to operate it,” said Royal Dutch Shell chief executive officer, Jeroen van der Veer.

He clarified there was no huge escalation in the Pearl GTL implementation costs and said, “we have estimated how much it takes to produce about 140,000barrels per day of GTL and 120,000bpd of condensate, LPG and ethane from our Ras Laffan plant. The project cost is still within our estimate and we will complete it within our budget as well.”

He also denied a report which had earlier said the Pearl GTL project would cost about $20bn.

Although Van der Veer did not give a precise figure with regard to the total project cost he said, “We have already awarded $10bn of contracts worldwide that cover all the major engineering, procurement and construction work.”

Shell Gas and Power CEO Linda Cook said she was very optimistic about the Pearl GTL project.

“For us, GTL is a proven technology. We have achieved very high results at our pilot plant at Bintulu, Malaysia. Though much smaller at 12,000bpd, the plant has been working extremely well since 1993,” she said.

She added there would be a big market for Pearl GTL worldwide, in view of growing concerns about environment pollution.

HPCL to offer Oil India stake in refinery Posted Tuesday, February 27, 2007 - 1:28 by hydrocarbonasia
India's Hindustan Petroleum (HPCL) will offer a stake in the expansion of its southern India refinery to Oil India, and expects Total to join the project, a company source has said.

HPCL also hopes to rope in Kuwait Petroleum International as it looks to more than double capacity at its Visakhapatnam unit to 330,000 barrels a day by 2011 with an investment of Rs100 billion ($2.26 billion).

"We will be signing a memorandum of understanding with Oil India (this) week for their participation," the company official, who did not wish to be identified, said.

Oil India Chairman MR Pasricha confirmed that he would meet HPCL officials this week on possible participation in the project, which will come up in the southern state of Andhra Pradesh.

Total senior vice-president Jean Jacques Mosconi is expected to be visiting India in early March and is likely to discuss the plans with HPCL officials. "Total said they want to come with Kuwait Petroleum, and we will take Oil India with us," the official said.

Last Tuesday, HPCL said it would sell a 49 per cent stake in a new refinery in northern India to steel tycoon Lakshmi Mittal.

The official said: "We expect the Vizag deal with Oil India, Total and Kuwait to be finalised by April. Equity structure of the project will be similar to our arrangement with Mittals."

HPCL shares closed down 4.3 per cent in a weak Mumbai market on Friday.

The firm's managing director, MB Lal, and Total Gas and Power India managing director JP Junqua declined to comment, while officials at Kuwait Petroleum could not be reached.

"Kuwait Petroleum wants to partner as they want to push their crude for our refinery," the official said. HPCL buys one million tonne of crude from Kuwait every year.


India: RIL board approves three billion dollar cracker project in Jamnagar Posted Tuesday, February 27, 2007 - 1:27 by hydrocarbonasia
The board of Reliance Industries Limited (RIL) has given its approval for the construction of a three billion dollar cracker project in Jamnagar.

The integrated cracker and petrochemicals complex is expected to be the largest in India with a total capacity of 2 mmtpa, and it will come up in the Special Economic Zone (SEZ) at Jamnagar.

A company release said that the cracker project would use refinery off gases and other by-products as feedstock to manufacture ethylene, propylene and its downstream commodity and speciality derivatives. The proposed facility is expected to go on stream by 2010 -11.

This unique integration with the refinery will place the proposed cracker complex at par with the most efficient producers of olefins and derivatives in the world including those in the Middle East and will enable the Company to achieve one of the most competitive cost positions.

The other decisions that the RIL Board took were to confirm the decision taken on November 9, 2006 to raise two billion dollars to finance the capital expenditure plan for oil and gas business through External Commercial Borrowings by way of debt, to raise further equity by way of preferential issue of 12 crore warrants exercisable into equal number of equity shares of Rs.10 each of the Company to the Promoters as per SEBI guidelines for Preferential Issues, subject to shareholders approval and to appoint Dr. R.A. Mashelkar as an independent director on the Company's board, subject to necessary Government approvals.

Dr. Mashelkar is an eminent scientist and engineer and has an outstanding academic record and has held several high positions in the field of Science and Technology. Dr. Mashelkar is presently the President of the Indian National Science Academy (INSA) and President of Global Research Alliance, a network of publicly funded R and D institute from Asia Pacific, Europe and U.S.A. with over 60,000 scientists. Dr. Mashelkar was awarded the Padmashri in 1991 and Padmabhushan in 2000, and is the only third Indian engineer to have been elected as Fellow of Royal Society (FRS) London in the twentieth Century.

Commenting on the above, RIL Chairman, Mukesh Ambani said: "The Board's approval to enhance the equity capital of the Company by Preferential issue of warrants to promoters demonstrates our commitment to value creation at Reliance. The substantial enhancement of shareholders funds will take RIL to a higher growth platform by strengthening its capital structure. I am really excited about accelerating our investments in all our key businesses - oil and gas, refining, petrochemicals and retailing by both organic and inorganic growth initiatives."

Reliance Industries Limited Reliance Industries Limited (RIL) is India's largest private sector company on all major financial parameters with turnover of Rs 89,124 crore (20 billion dollars), cash profit of Rs 13,174 crore (3 billion dollars), net profit of Rs 9,069 crore (2 billion dollars), net worth of Rs 49,804 crore (11 billion dollars) and total assets of Rs 93,095 crore (20.9 billion dollars).

RIL is the first and only private sector company from India to feature since 2004 Fortune Global 500 list of 'World's Largest Corporations' and ranks amongst the world's Top 200 companies in terms of profits. It emerged in the world's 10 most respected energy/chemicals companies and amongst the top 50 companies that create the most value for their shareholders in a global survey and research conducted by PricewaterhouseCoopers and Financial Times in 2004. RIL also features in the Forbes Global list of world's 400 best big companies and in FT Global 500 list of world's largest companies.

Iran to compete with Australia for LNG sales Posted Friday, February 23, 2007 - 6:57 by hydrocarbonasia
Iran will compete with Australia for liquefied natural gas (LNG) sales if the country can attract the investment capital required to develop its vast energy reserves, the AustralAsian Oil & Gas Conference was told on 22 February 2007.

In a paper delivered at the conference, Mr Hedayat Omidvar, a senior official of the National Iranian Gas Company, says that Iran, along with major oil reserves, also hosts about 18% of global gas reserves.

“These gas reserves are the second largest gas holdings in the world and roughly ten times Australia’s proven reserves,” Mr Omidvar says.

“Iran is eyeing off a number of the big LNG customers that Australian LNG companies are dealing with,” he says.

“The country believes the strategic role of the Persian Gulf and the huge amount of gas reserves available in this area has provided a very good opportunity for Iran to export gas to energy hungry countries.

“Gas as a major energy source in Iran, was long overshadowed by oil, with the National Iranian Oil Company giving no priority to gas in its plans.

“Fortunately, the importance of gas and its by-products has led to gas industry liberalisation becoming a major program for the Iranian Government in the 21st century.

“This rapid expansion in gas developments will dramatically change the energy picture in Iran by the end of the current decade.

“However, despite the high added value that can be created by the gas industry, finding the necessary finance to achieve the country’s aims is still a problem.”

(Note: Mr Omidvar’s paper was delivered by Swan Exhibitions Conference Coordinator, Mr Colin Hay, after the National Iranian Gas Company official was unable to attend the conference.)

Kuwait to reopen bidding for refinery project Posted Thursday, February 22, 2007 - 3:22 by hydrocarbonasia
Kuwait said yesterday it will reopen bidding for a new refinery project in the oil-rich emirate after it complained about the high estimates in initial tenders by international companies. “We will be shortly re-entering the project after the bids we received were found to be very high,” Sami al-Rasheed, chairman of Kuwait National Petroleum Company (KNPC), said.

“The new tender will be based on a cost plus profit margin,” which means paying the cost to the foreign companies plus an agreed profit, Rasheed said. KNPC, the downstream arm of state-owned Kuwait Petroleum Corp, has projected the cost of the 615,000 barrels per day (bpd) refinery at around $6.3 billion.

But the refinery project director Ahmad al-Jeemaz complained last week that some companies bidding for the project had inflated their estimates to as high as $15 billion. KNPC has received nine bids from seven of the 11 international companies selected to submit offers to build the refinery, which is due to come on stream in early 2010. KNPC, which owns all refineries in the emirate, has divided the project into four major contracts.

Sinopec and Syntroleum announce joint technology development plan Posted Thursday, February 22, 2007 - 3:19 by hydrocarbonasia
China Petroleum & Chemical Corporation (Sinopec Corp.) and Syntroleum Corporation (Syntroleum) have today announced their intention to cooperate. Sinopec Corp. is an integrated energy and chemical company, with its oil refining capacity ranking No. 4 in the world.

Syntroleum Corporation, located in Tulsa, Oklahoma, has developed GTL technologies with unique features. The two parties have signed a non-binding memorandum of understanding (MOU). This establishes a joint technology development effort to advance natural gas-to-liquids (GTL) and coal-to-liquids (CTL) technologies, cooperation in verifying Syntroleum GTL technologies on an industrial scale, construction of a 700,000 tonne per annum (17,000 barrel per day) GTL plant and a 3,000 tonne per annum (100 barrel per day) CTL pilot plant in China using Syntroleum’s technologies, and jointly marketing SSTC technology (Sinopec Syntroleum technology) in China through the most effective means.

The MOU calls on Syntroleum to provide Sinopec with access to its complete set of proprietary GTL technologies including catalyst technology and Fischer-Tropsch technologies related to CTL for use in China on an exclusive basis during the period of cooperation. After signing a formal cooperation agreement, Sinopec agrees to provide Syntroleum with $20 million per year over the next five years to support development of the technology. Sinopec and Syntroleum have already commenced relevant work on a legally binding cooperation agreement “Research and Development Cooperation Agreement”.

The MOU also calls on Sinopec to start feasibility studies for the construction of a 700,000 tonne per annum GTL plant in China and a 3,000 tonne per annum CTL pilot plant, upon the completion of the cooperation agreement. Both plants will be fully capitalized by Sinopec, with technological support from Syntroleum. The two projects will provide the basis for the two parties to jointly market the combined FT technology capabilities to third parties within China. This will give the parties a competitive position in providing engineering and technological capabilities to the China market.

Syntroleum is jointly developing a 50,000 barrel per day GTL project in Papua New Guinea (PNG) with Kuwait Foreign Petroleum Exploration Corporation (KUFPEC). Following a joint Sinopec/ Syntroleum visit to PNG, Sinopec has expressed its wish to become the main Engineering, Procurement and Construction contractor for this GTL project. Syntroleum has expressed its firm desire to cooperate with Sinopec in the project.

“We have conducted many years of research and testing on Fischer-Tropsch technology. We are convinced that Syntroleum’s slurry column reactor technology is one of the most advanced in the world,” said Mr. Cao Xianghong, Chief Engineer of Sinopec. “We believe that Sinopec’s Fischer-Tropsch expertise combined with that of Syntroleum, will enable us to jointly provide world-class Fischer-Tropsch solutions to the marketplace and help meet the growing demand for this technology in China.”

“Having a highly sophisticated refining and construction company like Sinopec as a partner is a major advancement of Syntroleum’s business. Our FT technologies developed through extensive research are suitable for different types of plants and enable us to meet the requirements of Sinopec,” said Jack Holmes, president and CEO of Syntroleum. “The full-scale 700,000 tonne per annum GTL plant to be constructed, along with the 3,000 tonne per annum CTL pilot plant will place Syntroleum and Sinopec as leaders in the Fischer-Tropsch industry in China. Together with Sinopec, we believe that our combined technology will be successful in capturing market share in China.”

Thailand’s IRPC anticipates improved profit after last year's tumble Posted Thursday, February 22, 2007 - 3:18 by hydrocarbonasia
IRPC Plc expects to see its profit pick up slightly this year after a massive drop last year, said President Piti Yimprasert.

IRPC, formerly Thai Petrochemical Industry Plc and now a subsidiary of PTT Plc, posted sales of 205 billion baht last year, a 9.7% increase from 187 billion in 2005. But net profit fell 89% to 6.8 billion baht last year from 61.5 billion in 2005.

Performance last year dropped from 2005 because the company had gained extra revenue of 35.55 billion baht from debt restructuring in 2005.

Additionally, costs of raw materials last year rose faster than the increases in its finished product prices, resulting in reduced profit.

Mr Piti said sales would be better this year in line with the company's higher oil-refining capacity, which had been expanded to 190,000 barrels per day (bpd) from 180,000 bpd last year. Oil production also dwindled last year because its refinery was shut down for maintenance for 45 days.

Mr Piti said the company had adopted a cost-reduction programme this year aiming to cut costs by 5-10% from last year by sharing facilities with other PTT affiliates such as Thaioil and PTT Chemical Plc.

In addition, the company's interest burden will ease this year after its existing debts have been restructured by refinancing, repayments and rescheduling.

Banlue Chantadisai, IRPC's chief financial officer, said the company currently had a debt burden totalling US$800 million with a one-year repayment period, of which $400 million would be refinanced, $100 million paid to its creditors and $300 million rescheduled to eight years.

The company plans to issue debentures to refinance its $400-million debt with Citibank, with Barclays Bank being responsible for bond credit rating currently.


"We aim to cut our interest burden by almost two billion baht," he said.

The company has also set aside a $1.37-billion budget for a five-year investment plan, beginning this year. The new investment will include $980 million for production upgrading, $200 million to build a 200-megawatt power plant, and the remainder to expand its specialty-product capacity and improve its existing deep-sea port.


IRPC yesterday signed a memorandum of understanding with PTT to purchase natural gas from the latter to serve its planned new power project and replace fuel oil used in IRPC's existing 60-MW plant.

Mr Piti said the new plant would require about 50 million cubic feet of gas per day.

Using gas to generate electricity would help IRPC save fuel costs of three billion baht per year.

The company's oil and petroleum complex requires a power supply of 120 MW, and the remaining power generated would be sold to the Provincial Electricity Authority, he said.

IRPC shares closed yesterday on the SET at six baht, down 10 satang, in trade worth 310.6 million baht.

Pearl GTL foundation to be laid 22 February Posted Thursday, February 22, 2007 - 3:18 by hydrocarbonasia

The Heir Apparent H H Sheikh Tamim bin Hamad Al Thani will sponsor the foundation stone-laying ceremony for the multi-billion dollars world-scale integrated Pearl Gas to Liquids (GTL) project at Ras Laffan Industrial City today.

The Pearl GTL project is being developed by Qatar Petroleum (QP) and Royal Dutch Shell Plc. It comprises the development of upstream gas production facilities as well as an onshore GTL plan that will produce 140,000 barrels per day of GTL products as well as significant quantities of associate condensate and liquefied petroleum gas (LPG).

The project includes the development of offshore natural gas resources in Qatar’s North Field, transporting and processing the gas to extract natural gas liquids and ethane. The remaining gas will be converted into clean liquid hydrocarbon products through the construction of the world’s largest integrated GTL complex in Ras Laffan Industrial City.

With huge investments going as high as over $90bn by 2010, oil, gas and petrochemical industries are growing at an accelerated and promising pace, thanks to the wise leadership of the Emir H H Sheikh Hamad bin Khalifa Al Thani, the Second Deputy Premier and Minister of Energy and Industry H E Abdullah bin Hamad Al Attiyah said.


Qatar’s GTL project abandoned due to high costs Posted Thursday, February 22, 2007 - 9:42 by hydrocarbonasia

Qatar Petroleum (QP) and ExxonMobil have decided “not to go ahead” with a gas-to-liquids (GTL) plant they were jointly planning at Ras Laffan.

“We have dropped plans to build a GTL plant due to the mounting costs,” the Second Deputy Premier and Minister of Energy and Industry, HE Abdullah bin Hamad al-Attiyah, said last night.

Asked whether more GTL projects would be taken up in Qatar, he said: “For the time being we will not go ahead with projects which we have been discussing with our various partners.”

Qatar already has two GTL projects -– Oryx GTL and Pearl GTL.
Qatar’s first GTL project – the $1bn Oryx GTL - a joint venture between Qatar Petroleum (51%) and South Africa’s Sasol (49%), is set for its first shipment next month. Oryx GTL has successfully started production at its Ras Laffan facility.
Oryx GTL has a production capacity of 34,000bpd of liquids including 24,000bpd of green diesel, 9,000bpd of naphtha and 1,000bpd of LPG.

Pearl GTL, a fully integrated GTL project being developed by Qatar and Shell, is slated to come online in 2010. The foundation stone for the Pearl GTL project, a multi-billion dollar facility, is being laid at Ras Laffan tomorrow.

It will produce some 140,000bpd of GTL and 120,000bpd of condensate, LPG and ethane in two trains.

By 2010 Qatar’s GTL production will exceed 170,000barrels per day (bpd).
Al-Attiyah explained that GTL technology was very expensive and technical.
“The implementation costs are mounting for a variety of reasons including the spiralling costs of construction materials. This is a worldwide phenomenon,” he said.

Indonesia mulling over construction of refinery fed by Iranian crude Posted Wednesday, February 21, 2007 - 4:22 by hydrocarbonasia
Indonesia is mulling over setting up a home refinery which is planned to be fed by Iran’s southern Sorush and Noruz crude oil, an Indonesian official said here on Sunday.

The refinery would have a capacity of 300,000 barrels per day, and would be fed by the crude oil produced from Iranian Sorush and Noruz oilfields, the head of the Board of Directors of the Indonesia’s Pertamina added while speaking at First Iran’s Oil Refining Forum (IORF).

Maziar Rahman noted that Indonesia's demand for clean fuel is growing, adding, his country considers Iran as a strategic partner for its fuel requirements.

“Therefore, the two countries have a long-term panorama ahead for refining industry,” he added.

He also said that Indonesia is currently importing 500,000 barrels of its fuel.

First Iran’s Oil Refining Forum was opened here on Saturday at the IRIB International Conference Centre (IICC).

The two-day forum was organized by the National Iranian Oil Refining and Distribution Company (NIORDC).

It was aimed at attracting domestic and foreign investments, promoting the technical know-how of Iran’s oil refining industry, and obtaining state-of-the –art technology from global markets.

Companies from Algeria, China, Bahrain, France, Denmark, Germany, Greece, India, Indonesia, Italy, and Japan were attending the forum. Malaysia, the Netherlands, Oman, Pakistan, South Korea, Britain, and the U.S. were other foreign participants in the event.

Foster Wheeler wins contract for refinery complex in India Posted Wednesday, February 21, 2007 - 4:21 by hydrocarbonasia
Foster Wheeler Ltd reported that two subsidiaries in its Global Engineering and Construction Group, Foster Wheeler Energy Limited and Foster Wheeler India Private Limited, have been awarded services contracts by Indian Oil Corporation Limited (IOCL) for the Paradip Refinery Project.

This is expected to be one of the largest integrated refinery petrochemicals complexes in India.

This world-scale facility, comprising a new export refinery and petrochemicals complex, will be built in Orissa State.

The terms of the contracts were not disclosed, and the projects will be included in the company's first-quarter 2007 bookings.

"Foster Wheeler is very pleased to be awarded this strategically important project," said Steve Davies, chairman and chief executive officer, Foster Wheeler Energy Limited.

"This award reflects our in-depth expertise in refining and petrochemicals and in the successful integration of refining and petrochemicals production. We have been active in the Indian market for over seventy years and it remains a very important market for Foster Wheeler. We look forward to working with IOCL to deliver a high quality FEED which meets or exceeds our client's expectations."

Foster Wheeler's scope includes the front-end engineering design (FEED), preparation of cost estimates and the overall project strategy, and supervision of early works on site up to financial investment decision for the refinery, which is expected in mid-2008.

The planned new refinery, with a crude processing capacity of 15 million tonnes per annum (TPA), will include a fluidized catalytic cracking unit, an aromatics complex and a polypropylene unit.

The new complex will ultimately produce 700,000 TPA of polypropylene, 1.2 million TPA of paraxylene, 600,000 TPA of styrene monomer, along with 10.5 million TPA of refined petroleum products. This award also includes a detailed feasibility study for Phase 2 of the development, the Paradip Naphtha Cracker Project.



Thai Oil reports net profit lower last year Posted Wednesday, February 21, 2007 - 4:19 by hydrocarbonasia
Thai Oil, Thailand’s largest oil refiner, has reported a consolidated 2006 net profit of Bt16.65 billion, compared to Bt18.75 billion in 2005. It says it will pay a dividend of Bt2 a share on May 3 for its second-half operations, to shareholders whose names appear on the share register on March 21.

Thai Oil said outstanding performances by its Thai Paraxylene and Thai Lubebase subsidiaries contributed to a 25-per-cent increase in revenues.

"The cost of paraxylene and lube-base oil increased, while their raw-material costs fell - along with lower oil prices - helping to compensate Thai Oil for a decrease in its revenues. Besides, the company gained a profit of Bt3.49 billion from the added value of the baht," Thai Oil managing director Viroj Mavichak told the Stock Exchange of Thailand (SET) yesterday.

Thai Oil paid an interim dividend of Bt1.50 per share last October for its operations in the first half of 2006.

In the forth quarter alone, Thai Oil and its subsidiaries generated revenues of Bt61.72 billion, down Bt5.36 billion year on year. The net operating profit for the fourth quarter was Bt1.84 billion, down Bt681 million year on year as a result of oil-price fluctuations.

Petrol and natural-gas prices were down sharply, because of a mild winter in the US and no severe hurricane problems. Moreover, the high level of crude-oil and product stocks in the US gave the market a bearish sentiment.

"However, the business structure of Thai Oil and its subsidiaries, as an oil refinery integrated with paraxylene and lube-base oil plants, led to support from a surge in paraxylene and lube-base oil prices, and this fostered profits for Thai Oil while the oil market declined," said Viroj.

As of last December 31, Thai Oil and its subsidiaries had total assets of Bt124.68 billion, total liabilities of Bt51.87 billion and shareholders' equity of Bt72.81 billion. Its total liability-to-equity ratio of 0.9 in 2005 fell to 0.7 last year.

The company's statement to the SET said it planned to issue bonds worth US$500 million (Bt17.84 billion) to local and foreign investors.

Abu Dhabi likely to build $2b refinery in Pakistan Posted Wednesday, February 21, 2007 - 4:18 by hydrocarbonasia
Abu Dhabi is likely to build a 200,000-barrel-per-day (bpd) refinery in southwestern Pakistan, that will double the country's refining capacity, Pakistani Prime Minister Shaukat Aziz said.

"We have given an initial go ahead to the government of Abu Dhabi to build this plant," said Aziz, who was speaking at the inaugural session of a three-day energy conference in Islamabad.

To be built at Khalifa Point in the Hub district of Balochistan province, about 15 km west of the port city of Karachi, the refinery will have a capacity of 200,000 bpd middle distillate products.

Aziz said the Pakistani government was in the process of finalising the refinery project with Abu Dhabi.

Abu Dhabi has a 40 per cent stake in Pakistan's biggest refinery, the Pak-Arab Refinery, in Meh-mood Kot in the central province of Punjab.

Aziz said the new $2 billion refinery would also enable Pakistan to export petroleum products.

"Khalifa Point will clearly add to Pakistan's refining capacity and more importantly we are, for the first time, going in a serious way in the export market."

Pakistan, almost totally dependent on oil imports, has an installed refining capacity of 12.82 million tonnes a year from its five refineries.

Last year, the refineries produced 11.33 million tonnes, according to official figures. Pakistan consumes about 15 million tonnes of oil products annually.

The oil import bill for the 2005-06 fiscal year (July-June) exceeded $6.5 billion, compared with $4.4 billion the previous year.

Another refinery, the Indus Refinery, is under construction in Karachi. It will have capacity to process 4.2 million tonnes of crude oil a year, and will be completed by December at a cost of about $250 million.

Pakistan's annual energy requirements are expected to more than double to 177 million tonnes of oil equivalent by the year 2020 from the current 58 million tonnes.

Aziz said the country's newly constructed deep-sea Gwadar port had the potential to be an outlet for Central Asian oil and gas supplies to other countries in Asia.

The government is providing incentives, regulatory framework and infrastructure in Gwadar to ensure it becomes a main regional port and economic hub, he said.


India: Mittal picks up 49 p.c. stake in Bhatinda refinery Posted Wednesday, February 21, 2007 - 4:14 by hydrocarbonasia
In a breakthrough in the oil refining sector, state-owned Hindustan Petroleum Corporation Limited (HPCL) and the Mittal Group of companies owned by L. N. Mittal have joined hands to execute the Rs. 15,700-crore under construction Bhatinda Refinery project in Punjab.

According to the joint venture agreement approved by the HPCL Board, Luxemburg-based Mittal Investments and HPCL would hold a 49 per cent stake each in the project and the remaining two per cent would be allocated to financial institutions with the consent of both the parties. The project would be completed in 48 months and would have capability to process 100 per cent high sulphur and heavy crude, thus ensuring attractive terms.

Terming it a major breakthrough, Petroleum and Natural Gas Minister, Murli Deora said that with the new joint venture in place, the project would now proceed on fast track. It will create a large number of jobs in Punjab and increase industrial activity in the State. "I congratulate HPCL on getting the first Foreign Direct Investment (FDI) of the country in the refining sector,'' he added.

The state-run Oil India Ltd (OIL) may join the project at a later date and may get 10-15 per cent equity stake, leaving HPCL with a lower stake. The nine million tonnes per annum refinery is likely to be commissioned by 2011. All statutory and regulatory approvals including environmental clearance for the project have already been obtained.

An estimated 2,000 acres of land has been acquired for the refinery and a lease agreement has also been signed for 300 acres of land with Adani Port Trust for setting up a crude oil terminal at Mundra. Initially, discussions centred around HPCL-Mittal-OIL holding equal stake in the project and offering the rest through an initial public offering closer to commissioning of the refinery. Now the equity pattern has undergone a change. The IPO may be considered at a later date.

Earlier, HPCL had signed a Memorandum of Understanding (MoU) with France-based TOTAL in March 2005 but not much progress was made in the project. Later, Britain-based BP showed keen interest in the project but this alliance also did not materialise.

Once again HPCL started scouting for a joint venture partner and this was when Mittal Investments showed keen interest in this project and discussions were held that finally led to signing of the successful joint venture agreement.

Refinery project gets green light Posted Friday, February 16, 2007 - 5:03 by hydrocarbonasia
China's top economic planner has approved a plan by the China National Petroleum Corporation (CNPC) to build a huge refinery in Guangxi in South China.

With an investment of 15.2 billion yuan (1.95 billion U.S. dollars) and a planned annual processing capacity of 10 million tons, the proposed Qinzhou refinery in the Guangxi Zhuang Autonomous Region will be one of the core energy projects during the country's 11th Five-Year Plan (2006-10), CNPC said in a statement yesterday.

"It is expected to come on stream before 2008 and play a crucial role in the country's new energy grid," the National Development and Reform Commission (NDRC) said.

The project is the largest refinery in the south-western part of the country. It is expected to better meet demands in the region and boost the refining industry, the NDRC said.

Zhang Zhiguo, a press official with Sinopec, said: "It will benefit the fuel-thirsty southwest, and is surely positive for the overall energy grid."

However, he admitted the refinery may impose some competition for Sinopec, Asia's largest refiner.

Once the project is completed, CNPC's fuel transport costs to the south-western region will be reduced. As a result, the retail price will be more flexible within the government-set range, Zhang said.

Han Xuegong, an analyst with CNPC, said it was right for the NDRC to take the competition factor into consideration when reviewing new projects.

Sinopec previously wanted to build an 8-million-ton refinery in Guangxi. However, the NDRC did not approve the application.

"Guangxi plays an important role in serving as a bridge to import crude oil and export oil products to Southeast Asian markets. That is why the two firms are competing to have a foothold there," said Han Wenke, director of NDRC's Energy Research Institute.

The proposed CNPC refinery will also supply fuel to Yunnan and Guizhou provinces in Southwest China.


Petronet chief embarks on LNG buying journey Posted Friday, February 16, 2007 - 5:02 by hydrocarbonasia
Petronet LNG, India's biggest LNG importer, sent the company's managing director, Prosad Dasgupta, on a tour of Africa and the Middle East to buy liquefied natural gas amid a shortage caused by soaring demand in Europe and Asia.

Petronet plans to buy as much as 2.25 million metric tons of LNG, equal to about 40 individual cargoes, for delivery in the year starting in April to supply the country's largest gas-fired power plant at Dabhol, Dasgupta said on Feb. 9, before leaving for Algeria, Oman, Qatar and Abu Dhabi on an "LNG buying spree."

The state-controlled Petronet plans to increase LNG imports by 40 percent in the next business year, raising profit and making it the world's largest buyer of spot cargoes. The company, shares of which have tripled since it was listed in March 2004, has gained from demand at gas-fired power stations as utilities expand capacity to ease blackouts across the nation.

"The spot market is beneficial to them because they make marketing margins," Ballabh Modani, an oil and gas analyst with the Mumbai-based Batlivala & Karani Securities, said Wednesday.

The government bars Petronet from charging sales commission on LNG imported under multiyear contracts, in addition to a fixed fee to turn liquid cargoes into gas at its terminal, Modani said. Petronet gets about 2 percent commission on domestic sales of imported spot LNG cargoes.

The company, which has exhausted capacity at its 5 million ton-a-year terminal at Dahej, will lease 40 percent of Royal Dutch Shell's 2.5 million ton-a- year terminal. Petronet and Shell could import up to 8 million tons in 2007, Dasgupta said. That's equal to 5 percent of global LNG demand last year, according to consultants Wood Mackenzie.

"We are leasing capacity at Shell's LNG terminal in Hazira to import some cargoes," Dasgupta said in a telephone interview from Delhi. "Our terminal in Dahej cannot accommodate all the additional LNG."

Petronet will import 13 individual cargoes in the year ending March 2007, Dasgupta said. Two cargoes are arriving from Algeria in February and March. Qatar, where production was disrupted last month, supplied one each in January and February, he said. Each cargo of LNG, gas chilled to liquid form for supply by ship, averages 55,000 tons.

Because of cargo shortages in parts of the Middle East, Dasgupta is tapping supplies from countries as far away Algeria and Egypt, making a tanker a journey twice as long to reach India compared with supplies from Qatar, Middle East, he said.

Petronet could make an additional 2.5 billion rupees, or $57 million, in operating profits next year after selling the extra spot cargoes to its customers, Modani said.

The company made a profit of 8.5 billion rupees in the three months ended Dec. 31, 2006. Sales rose 53 percent to 15.8 billion rupees in the quarter.

Locally produced gas supplies of 11 million cubic meters, or 22.2 million cubic yards, a day are not enough to meet the 17 million cubic meters required by NTPC, India's biggest power producer, the company's chairman, T. Sankaralingam said on Feb. 7.

The power plant in Dabhol, begun by Enron in 1996, is key to ending power shortages in Maharashtra state, home to India's financial capital, Mumbai. The plant has never worked at more than one-third of capacity because of Enron's collapse, disputes over power prices and a lack of gas for the furnaces.

Today, the plant operates at 15 percent, burning the costlier oil product, naphtha. It will start receiving gas through a new pipeline later this year.

Maharashtra faces a shortage of 4,500 megawatts of power, Jayant Kawle, Maharashtra's principal energy secretary, told reporters on Feb. 5. Areas outside Mumbai face 12-hour-a-day power cuts, according to Maharashtra State Electricity Distribution.

Petronet, which is spending 16 billion rupees to double Dahej's capacity by December 2008, is controlled by Bharat Petroleum, Oil & Natural Gas, Gail India and Indian Oil. The state companies together hold 50 percent. A new terminal in Kochi on the east coast will be completed by 2010 at a cost of 20.5 billion rupees, according to Petronet.

IPIC to build US$5bn refinery in Pakistan Posted Thursday, February 15, 2007 - 6:23 by hydrocarbonasia
Abu Dhabi-owned International Petroleum Investment Company (IPIC) will establish a US$5-billion crude oil refinery in Pakistan, a senior official of the Consulate General of Pakistan said yesterday.

Led by Secretary Petroleum Ahmed Waqar, a senior delegations from the Pakistan’s Petroleum Ministry held talks with senior IPIC officials to set up Khalifa Coastal Refinery in Hub, Balochistan, Press Consul Dr. Muhammad Zafar Iqbal said.

It will have a capacity to refine 102.7 million barrels of crude oil per annum. IPIC will hold 74 percent while the Pakistan government will own 26 percent stake in the project, Iqbal said.

Work on the project is expected to start next month and would complete in three years.

Iqbal said the refinery would substantially boost Pakistan’s capacity to refine crude and also create job opportunities for thousands of skilled and unskilled people in the country. Iqbal said the ground-breaking ceremony would be attended by senior officials from the UAE including Abu Dhabi Crown Prince and Deputy Supreme Commander of the UAE Armed Forces Sheikh Mohammed Bin Zayed Al-Nahayan.




Foundation stone for Pearl GTL to be laid on Feb 22 Posted Thursday, February 15, 2007 - 5:40 by hydrocarbonasia
The foundation stone for the world’s largest gas-to-liquids plant – Pearl GTL - will be laid at Ras Laffan on February 22.

Pearl GTL is a fully integrated gas to liquids project being developed by State of Qatar and Shell under a Development and Production Sharing Agreement (DPSA).

The Pearl GTL will produce some 140,000 barrels per day of GTL and 120,000bpd of condensate, liquefied petroleum gas and ethane in two trains. The production from the first GTL train is slated for 2010, with the start up of the second train scheduled a year later, Brown said.

The fully integrated upstream/downstream Pearl GTL project covers all aspects of the value chain, from the reservoir in the North Field to the marketing of products.
Shell’s country chairman Andrew Brown fad earlier told Gulf Times that delivery of large equipment required for the multi-billion dollar Pearl GTL project at Ras Laffan would begin later this year.

Shell is building a Material Operating Facility (MOF) at Ras Laffan to handle about 3.5mn freight tonnes of equipment and materials needed for the Qatar’s second gas-to-liquids project, he said.

“We are setting up the facility on behalf of Ras Laffan Industrial City. And there has been a good progress on that. This will allow us to bring material directly to Ras Laffan and avoid transportation by road. Besides saving time, it will also be a safer process,” Brown pointed out.

RasGas and Qatargas among others would also be able to use the material operating facility, he had said.

In terms of procurement, Brown said, most of the large equipment has already been ordered. The orders for piping materials have also been placed.
Contracts worth over $10bn have been placed around the world for equipment relating to the Pearl GTL project, Brown said.

“Work is now going on at eight different locations worldwide. And site preparation works at Ras Laffan were already on,” Brown said.

He said Pearl GTL was one of the largest equity investments Shell had ever made.
“It shows our commitment to Qatar and the GTL technology,” Brown said.
Shell’s first GTL plant at Bintulu in Malaysia is making profits. However, the Malaysian plant with a capacity of 14,700bpd is small when compared to Pearl GTL.

Meanwhile, a Reuters’ dispatch here yesterday said the Swiss engineering firm Sulzer has won a large contract from Qatar Shell GTL Ltd to design and provide gas equipment to the Pearl GTL plant at the Ras Laffan Industrial City.

Asian companies put off maintenance as ethylene prices soar Posted Wednesday, February 14, 2007 - 3:27 by hydrocarbonasia
Asian makers of ethylene, the chemical used to make plastics, have postponed maintenance to benefit from near-record prices.

Chemical makers in Japan, Asia's largest producer after China, will close half as much capacity this spring as in 2007, Mizuho Securities said. Honam Petrochemical, South Korea's fourth- biggest maker, has delayed work on its plant. In the first half of 2007 ethylene producers' profit will be double the ten- year average, consultant Steve Zinger said.

"The strong margin is a big disincentive for ethylene makers to carry out maintenance," said Zinger, a director at Chemical Market Associates. "Ethylene is enjoying the biggest margin in the whole chain" of plastics production.

China's burgeoning manufacturers have sucked in chemicals from across Asia as factories increase production of electronics, toys and construction materials made from plastics. China, Asia's biggest chemical producer and buyer, imported 8.8 million tons of chemicals made from ethylene and propylene in 2006, almost a third of Asian production, Zinger said.

Zinger forecasts ethylene margins will average $600 a ton in the first six months of 2007, double the 10-year average of $300 a ton. The margin, or price spread between ethylene and naphtha, surged to a near-record levels of about $800 a ton in December and January as crude oil lost 11 percent.

Ethylene, used to make plastic bags, drinks bottles and tires, rose 12 percent in the year to Feb. 9. Prices closed at $1,200 a ton last week, 16 percent lower than the record $1,430 reached in September, according to data supplied by the pricing service ICIS. Prices of the raw material naphtha added 10 percent in the year to Feb. 9.

Plants that turn naphtha and liquefied petroleum gas into ethylene and propylene typically shut for maintenance in the second and third quarters of the year in Asia. Repairs and overhaul may cut total Asian ethylene output by as much as 10 percent in the second quarter, Zinger said.

Sanyo Petrochemical, a unit of Japan's fourth-largest petrochemical company, Asahi Kasei, postponed its closure by a year to March 2008 because of higher ethylene prices and after government regulators waived an order for maintenance to be carried out annually, a company official said.

Honam Petrochemical said last week it had pushed back plans to shut its 720,000 tons-a-year plant to October from May.

Margins are likely to fall as much as 33 percent to an average of $400 a ton later this year, when Taiwan's Formosa Petrochemical starts a 1.2 million tons- a-year factory, increasing the island's annual capacity by 42 percent to 4 million tons, Zinger said.

Supply will rise further when Iran's Marun Petrochemical, a unit of National Petrochemical, starts a 1.1 million tons-a-year plant this year, Koichi Ishihara, a senior analyst at Mizuho Securities, said in a report last month.

It makes sense for companies "to push back maintenance, if they can, when supply is tight," said Larry Tan, a business director at chemical trader Integra Marketing in Singapore. "Margins are likely to come under pressure in the second half," when the Taiwan plant comes online, he said.

Traders including Tan had expected ethylene prices to fall after the December restart of Yeochun NCC's expanded factory. The plant, whose capacity was increased by 68 percent to 857,000 tons, was shut on Feb. 5 because of mechanical faults. It restarted on Feb. 9.

South Korean ethylene makers including Yeochun NCC are raising capacity to tap China's appetite for chemicals as domestic demand stagnates. Expansion has boosted the country's ethylene capacity to 6.3 million tons a year. In addition, Samsung Total Petrochemicals plans a 30 percent increase to 850,000 tons by June. South Korea's annual ethylene exports may double to 600,000 tons this year, according to Ginga Petroleum.

Formosa Plastics in talks for China refinery venture Posted Tuesday, February 13, 2007 - 5:28 by hydrocarbonasia
Formosa Plastics Group, the nation's biggest diversified industrial company, said it is in talks with the Chinese government for a refinery joint venture with a state-owned Chinese oil producer.

The group could cooperate with Beijing on refining and chemicals projects, chief executive officer William Wong said. Formosa Plastics could partner with China National Petroleum Corp or China Petrochemical Corp, the nation's two biggest oil companies, to build a refinery in China, it was reported yesterday.

Formosa Plastics will need to overcome political obstacles to complete projects that will enable it to supply Taiwanese plastics makers that have factories in China.

Companies also want to tap demand in China, the only major market where there is a shortage of petrochemicals, Formosa Plastics Corp Chairman Lee Chih-tsuen said.

"We are renewing our efforts to get the Taiwan government to lift its ban" on building ethylene plants in China, Lee told reporters yesterday in Mailiao, where the group has its refinery. "We've been talking with the government for too long."

Taiwan bars the nation's businesses -- which have a total of US$150 billion invested in China -- from building ethylene plants in China on grounds that they may siphon away funds and hurt Taiwanese petrochemical makers.

Taipei restricts Chinese investment because of concern Chinese companies may grab business or gain advanced technology.

Formosa Plastics' chemical project in Ningbo, including a 1.2 million-tonne-a-year ethylene plant, could cost NT$150 billion (US$4.5 billion), Lee said. That estimate didn't include an oil refinery.

Approximately 15 years ago, Formosa Plastics founder Wang Yung-ching proposed to build a naphtha cracker - a plant that uses naphtha, distilled from petroleum, to make ethylene - in China.

Ethylene is the basic raw material for plastics and chemical fibres.

Formosa Plastics has factories in China that produce PVC, pipes and fabrics. It lacks a plant making ethylene, the chief building block for these products. The mainland is the biggest overseas market for Taiwan and Formosa Plastics.

Wong said yesterday that he had visited China last week, holding talks with officials who handle Taiwanese affairs at the State Council.

US$300mn linear alkyl benzene plant opens formally in Qatar Posted Tuesday, February 13, 2007 - 5:27 by hydrocarbonasia
Qatar is on course to become a leading global supplier of linear alkyl benzene, a detergent intermediate used for the manufacture of environmentally friendly household detergents.

A 80:20 joint venture between Qatar Petroleum (QP) and United Development Company (UDC), the project known as SEEF, has been set up near the Qatar Petroleum Refinery in Mesaieed.

Linear alkyl benzene (LAB) is in great demand worldwide.

The project was completed in March last year and production commenced immediately. In April, LAB exports began to buyers in the Middle East, Far East and Europe.
Yesterday, the US$300mn LAB plant was formally inaugurated by the First Deputy Premier and Minister of Foreign Affairs, HE Sheikh Hamad bin Jassim bin Jabor al-Thani.

The LAB plant – set up near the Qatar Petroleum Refinery in Mesaieed - has been designed to produce 100,000 metric tonnes of linear alkyl benzene a year. It comprises seven main processing units.

Besides the main units, the LAB plant also has associated and off-site facilities. The plant requires about 80,000MT of n-paraffin and 36,000MT of benzene to produce 100,000MT of LAB.

These will be produced by the state-of-the-art LAB plant itself using kerosene supplied by QP Refinery and treated pygas supplied by Qatar Petrochemical Co (Qapco) and Qatar Chemical Co (Q-Chem). Part of the benzene will be produced from reformate supplied by QP Refinery.

The LAB plant also produces a small quantity of heavy alkyl benzene (HAB), which is used as a base in the manufacture of lube oil. HAB production from the plant would total about 3,600 tons per annum.

The LAB project was conceived in 2002 and after various stages of development, the EPC contract was awarded in January, 2004 to LG Engineering & Construction, South Korea, now renamed GS Engineering & Construction.

The market study and front-end engineering design were carried out by Foster Wheeler Energy (UK).

The project was completed a month ahead of schedule and within budget.
According to a SEEF presentation during the LAB inauguration, the plant construction involved about 8.2mn man-hours. At the peak of construction, some 9,000 personnel worked on site.

The total plant area is 154,000m2 of which 83,700m2 is dedicated to storage and 70,300m2 to process areas and export/import berth facilities.

Speaking to Gulf Times after the plant inauguration, HE the Second Deputy Premier and the Minister of Energy and Industry Abdullah bin Hamad al-Attiyah said the project was yet another “classic example” of what could be achieved with public–private sector co-operation.

“I am happy UDC has partnered QP in the project. I wish to see more public–private partnerships in the hydrocarbon sector,” al-Attiyah said.

“The project represents the implementation of the vision of HH the Emir Sheikh Hamad bin Khalifa al-Thani to enhance and promote the role of the private sector in national development,” he said.

SEEF chairman Hussain M al-Ishaq, company board members, GS Engineering & Construction executives and senior QP officials were among those present during the plant inauguration.


Saudi Kayan awards two contracts to Tecnicas Reunidas and Daelim for the construction of Phenolics and Polycarbonates projects at Jubail Industrial City Posted Monday, February 12, 2007 - 3:19 by hydrocarbonasia
SABIC affiliate, SAUDI KAYAN, has signed two letters of award with the first contract being awarded to TECNICAS REUNIDAS GROUP to construct a Phenolics Plant, to produce 240 kta of Bis-Phenol A. The second contract was awarded to DAELIM Industrial Co, Ltd. to construct a Polycarbonate (PC) plant to produce 260 kta of PC.

The letters of award were signed by Mr. Abdullah S. Al-Rabeeah, President of SAUDI KAYAN. Mutlaq Al-Morished, SABIC Vice President Corporate Finance and Chairman of SAUDI KAYAN explained that the company plans to go live in 2009 with an annual capacity exceeding 4 million tons of varied petrochemical products. These products will strengthen SABIC’s competitiveness, introduce specialty products for the first time in Saudi Arabia, provide wide opportunities for the growth and diversity of national downstream industries and create promising job opportunities for Saudi citizens.

SAUDI KAYAN is currently under construction. SABIC holds 35 percent of the company’s capital of SR 15 billion and the Kayan Petrochemical Company holds 20 percent. The remaining 45 percent will be offered for public subscription.










Building of Singapore's first underground oil storage cavern commences Posted Monday, February 12, 2007 - 1:05 by hydrocarbonasia

Singapore's first underground chemical storage facility was broken ground Thursday on Jurong Island, the country's petrochemical centre.

The 700 million Singapore dollars (about 455 million U.S. dollars) Phase one of the Jurong Rock Cavern will be commissioned in 2011 and will offer 1.47 million cubic meters of storage space for liquid hydrocarbons, Lim Hng kiang, Minister for Trade and Industry, announced at the ground breaking ceremony.

Built at subterranean depths beneath the seabed of Banyan Basinin Jurong Island, the storage facility is able to save an equivalent of at least 60 hectares of surface land, according to Lim.

Meanwhile, Jurong Town Corporation (JTC), Singapore's lead agency to plan, promote and develop industrial facilities, is already exploring a second phase that could add an additional 1.3 million cubic meters of underground storage.

"For both phases, the primary objective of the Jurong Rock Cavern will be to support the operations of Jurong Island manufacturers," Lim said.

It is expected that the facility will help enhance Singapore's position as a leading chemicals hub, which is now one of the world's top three refining centres and the third largest oil trading hub and bunker port.

Singapore's chemicals industry made good performance in 2006. The output from the chemicals industry grew by over 10 percent to exceed 74 billion Singapore dollars (about 48 billion U.S. dollars) while it attracted more than 2.6 billion Singapore dollars (about 1.7 billion U.S. dollars) in fixed asset investments.

Along with the electronics cluster, the chemicals cluster is now one of Singapore's largest industry sector in manufacturing, Lim noted.

Thailand: Shell Global Solutions to help IRPC reduce costs Posted Monday, February 12, 2007 - 1:04 by hydrocarbonasia
The petrochemical producer IRPC Plc will hire Shell Global Solutions to review its capacity expansion plan to optimise investment, according to IRPC president Piti Yimprasert. The Shell consulting unit will also study the efficiency improvement of IRPC's petrochemical production facilities as a whole with a view to reducing operating costs and raising productivity and efficiency.

Shell Global Solutions has done consulting for several energy companies in Thailand, particularly companies affiliated with PTT Plc, which is the largest shareholder in IRPC, formerly known as Thai Petrochemical Industry (TPI).

Based on an earlier study, Mr Piti said, IRPC planned to expand production capacity to 260,000 barrels per day from 220,000 barrels with a budget of US$1.1 billion, which was considered too high.

This year, IRPC expects to raise its production capacity by just 10,000 bpd, to 190,000 bpd, due to volatility of refining margins and a general economic slowdown. As a result, the company decided to review the capacity expansion plan to ensure that it would not be investing more than was reasonable.

Mr Piti said the overall goal was to reduce operating costs by 5-10%. One strategy would involve more pooling of operations with other petroleum and petrochemical companies under the PTT umbrella, particularly Thai Oil Plc.

Operations that could be pooled include logistics and crude oil procurement, which are expected to help cut IRPC's operating cost by two billion baht this year.

Mr Piti said the cost-reduction programme would help IRPC achieve total revenue equal to or higher than last year's figure of 200 billion baht, despite the fact that petrochemical and petroleum prices were expected to weaker than they were last year.

He also said IRPC would move forward with a debenture issue worth US$800 million for refinancing. Half of the issue would be in baht and half in foreign currencies following the decision by the Bank of Thailand to relax its 30% reserve rule for companies that hedge their foreign-exchange transactions.

The debentures were expected to be issued in June and July, he added.

IRPC shares closed yesterday on the Stock Exchange of Thailand at 6.10 baht, up 15 satang, in trade worth 568.5 million baht.

Osaka Gas deal: Virtually all Sakhalin II capacity sold Posted Monday, February 12, 2007 - 1:04 by hydrocarbonasia

Sakhalin Energy Investment Company Ltd. on Thursday signed a binding Heads of Agreement (HoA) for long term supply of liquefied natural gas (LNG) to Japan. This deal with Japan's fourth largest LNG buyer – Osaka Gas – represents the latest and last agreement for term sales of LNG from Trains 1 and 2 of Russia's first LNG plant. Sales of 98% of the combined future capacity of these two trains are now formalized, effectively selling-out the entire capacity of the foundation project.

Ate Visser, Commercial Director of Sakhalin Energy, and Seishiro Yoshioka, Executive Vice President of Osaka Gas, signed the HoA on 8th February at a ceremony in Moscow. Sakhalin Energy will supply to Osaka Gas about 0.20 million tonnes of LNG per annum for more than 20 years.

Ate Visser said: "Japanese customers represent over 60% of the term sales from Sakhalin LNG. This reflects both the proximity of Sakhalin to Japan, as well as customer confidence in the Sakhalin II project and its shareholders." He also expressed his confidence that, although capacity of the first two trains is now fully committed, LNG demand in the region remains strong and that Sakhalin II has the potential to grow further into a regional LNG hub.

Ivan Materov, Deputy Minister of Industry and Energy of the Russian Federation commented that: "Energy security is one of the key elements of the modern world, and LNG from Sakhalin helps the customers to diversify their supply sources. In the near future Russia's Far East will take its rightful place as a new reliable strategic supplier of energy to Japan and the rest of the Asia Pacific Region."

LNG will be supplied from Sakhalin Energy's new LNG plant, which is in the final stages of construction at Prigorodnoye on the southern tip of Sakhalin Island. The LNG plant is a major part of the Sakhalin II Phase 2 project, and will have two gas liquefaction process trains, each with a capacity of 4.8 mtpa. Currently the works at the LNG plant are over 95% complete, with first deliveries anticipated in 2008. Japan will be the destination for over 60% of Sakhalin LNG, delivered to nine customers across the length of the country. The remainder of the LNG is contracted for delivery to the South Korea and the North America West Coast.




Singapore group plans central Vietnam oil refinery Posted Monday, February 5, 2007 - 4:26 by hydrocarbonasia
Singapore-based SP Chemicals Corporation (SPC) is seeking to build an oil refinery in a central Vietnam province, its executive director said at a meeting with the Vietnamese authorities Wednesday.

Executive Director and CEO Chan Hian Siang told the authorities of Binh Dinh province that SPC would send experts to the province for further feasibility studies for the project.
The province's propitious location was one of the key factors prodding SPC to invest in the province, he said.

A refinery in Binh Dinh could process crude oil transported from the Middle East its products could be exported to China as well as sold domestically.

SPC representatives were introduced to the local Nhon Hoi industrial zone and De Gi port, which are considered favourable locations for the construction of the oil refinery.
Despite being Southeast Asia's third-largest crude oil producer with an output of more than 360,000 barrels per day, Vietnam relies mainly on oil imports as it lacks large refineries.

State-owned PetroVietnam is building a facility in central Vietnam that will begin operations in 2009.

Timor Sea gas projects granted Major Project status Posted Monday, February 5, 2007 - 4:25 by hydrocarbonasia

Australian Industry Minister Ian Macfarlane yesterday granted Major Project Facilitation (MPF) status to speed up the development of two major Timor Sea gas projects.

The projects, the Timor Sea LNG Project and the Tassie Shoal Methanol Project, involve the development of gas accumulations in the region, including the Epenarra gas discovery in the exploration permit area awarded to Methanol Australia Limited, now known as MEO Australia Limited, in 2004.

Mr Macfarlane said these projects would further develop Australia's valuable petroleum resources and would serve the rapidly expanding markets in the Asia Pacific region.

“Australia has lower sovereign risk and is highly competitive compared with other LNG-producing countries,” he said.

“MEO Australia Limited proposes to use advanced engineering concepts, including the world's first offshore LNG production and loading facility. The LNG and methanol production facilities could also act as a hub to encourage the development of stranded gas discoveries in adjoining fields.”

Mr Macfarlane said the LNG project and the adjoining methanol project would share common infrastructure on Tassie Shoal, a shallow area in the Bonaparte Basin, about 275km north of Darwin.

"The new offshore facilities are expected to produce about three million tonnes of LNG a year and about 5,000 tonnes of methanol a day," Mr Macfarlane said.

"As well as providing a boost to Australia’s exports, the projects offer considerable scope for economic benefits to Darwin,” he said.

Mr Macfarlane said MPF status meant the Australian Government's inward investment agency, Invest Australia, would work with MEO Australia Limited to progress the projects through the approvals process and identify relevant government programs that may assist the projects.

Aromatics (Thailand) investing on expansion Posted Monday, February 5, 2007 - 4:24 by hydrocarbonasia
The Aromatics (Thailand) is spending US$50 million (Bt1.79 billion) to increase production capacity.

The company predicts revenue and profit will grow by 10 per cent this year thanks to higher world prices and rising international and domestic demand for paraxylene.

Executive vice president Permsak Shevawattananon said last week that the company would spend $100,000 boosting cyclohexane production by 30 per cent from the current 150,000 tonnes a year. This should be realised by May.

A further $20 million will be spent speeding completion of expansion to its first aromatics plant, due for completion in 2009.

Its second aromatics plant will be commissioned in the third quarter of next year. The company will then pour in another $30 million to increase paraxylene and benzene production by 20 per cent by 2010, he said.

When the expansion is complete in 2010, The Aromatics will have paraxylene production of 1.3 million tonnes a year - up from 530,000 tonnes at present. Benzene capacity will rise from 300,000 tonnes to 730,000 tonnes over the coming three years.

Cyclohexane production will reach 200,000 tonnes in the same year.

The Aromatics' long-term strategy is to produce more value-added products in demand, such as nylon, Permsak said.

A third aromatics unit is planned for 2012, depending on demand. The company will know more in two years, he said.

Executive vice president for business and finance Atikom Terbsiri said an additional 2.8 million tonnes from the Middle East and 1.67 million tonnes from China would boost world paraxylene capacity in 2010.

The Aromatics will concentrate on the domestic market, where more than 600,000 tonnes are imported each year.

The company predicts paraxylene demand will grow 6.2 per cent and benzene 5.2 per cent in the coming year.

Demand in China is 3 million tonnes this year, and new production facilities in the Middle East are delayed. Therefore, the spread between end product and raw materials will increase more than 10 per cent in 2007.

Meanwhile, major shareholder PTT is studying the merger of The Aromatics and Rayong Refinery. There could be a decision at the beginning of next month, Atikom said.

Oil Search examines alternative gas projects Posted Wednesday, January 31, 2007 - 6:58 by hydrocarbonasia
Oil Search is developing potential liquefied natural gas projects with international partners ExxonMobil and BG Group, with the long-delayed $8 billion Papua New Guinea gas pipeline to Queensland looking increasingly unlikely to proceed.

In its December quarterly report, Sydney-based Oil Search maintained the PNG pipeline project "appears" to be economically viable, despite massive cost blowouts.

But it also assured investors it was examining other options for commercialising its huge in-ground gas resource in PNG.

During the December quarter it undertook initial LNG studies with the UK's BG Group, while the pipeline project's upstream operator, ExxonMobil, conducted its own studies. Oil Search is also looking at a liquids cycling project at its Juha field, and potential petrochemical projects with Japanese companies Mitsubishi Gas Chemical and Itochu.

Oil Search managing director Peter Botten could not be reached for comment yesterday.

But analysts rated the company's move towards alternative projects as a positive.

"It's a very low-margin business, selling gas in Australia," Fat Prophets resources analyst Gavin Wendt said. "The ideal thing to do is to find an international market for your gas."

In a statement in Oil Search's quarterly report, Mr Botten confirmed returns from LNG, liquids cycling and petrochemical projects "have the potential to be significantly better than could be achieved" by the pipeline.

Oil Search produced 10.2 million barrels of oil equivalent (boe) last year, falling short of its latest, already lowered, guidance of 10.5 million to 10.8 million boe. It told the market it planned to produce 10.5 million to 11 million boe this year.

Qatar’s Oryx GTL products start to flow Posted Tuesday, January 30, 2007 - 4:40 by hydrocarbonasia
Qatar has made history with its first Gas-to-Liquid project Oryx GTL, currently the world’s largest, “producing the final GTL product after completing start-up of the final process unit” at its Ras Laffan facility.

Oryx GTL general manager Chris Turner yesterday said: “Since construction of the plant was completed we have been following a structured start-up plan. That plan was fulfilled at the weekend when the first final product from Oryx GTL was produced.”

He said: “We are producing GTL products and are on target to have product ready for the market by the end of the first quarter as previously announced. Oryx works.”

Last week, at the International GTL Commercialisation Conference in Doha, Turner had said the first shipment from Oryx GTL would be before March-end as previously announced.

The $1bn Oryx GTL is a joint venture between QP (51%) and Sasol (49%). The plant is also the world’s first commercial GTL plant outside South Africa.

Oryx GTL has a production capacity of 34,000 barrels per day (bpd) of liquids. This will comprise about 24,000bpd of diesel, also known as green diesel because of its ultra clean nature, 9,000bpd of naphtha and 1,000bpd of liquefied petroleum gas (LPG).

Oryx GTL will be using about 330mn cubic feet per day of lean gas from the North Field. It deploys Fischer–Tropsch (FT) technology.

Oryx GTL was inaugurated in June 2006 and since then has been subject to a progressive start-up process.

Speaking at the GTL conference Turner said: “As is typical of plants of this scale anywhere in the world, we have followed a detailed, sequential start-up process.

“There is no magic switch that gets flicked to start 34,000barrels of product per day flowing. Each of our systems has to be started sequentially and, once they are running successfully, you can move on to the next one. The process takes time and you can’t cut corners”.

The Oryx GTL plant, he said, was completed within budget. “While the start-up has taken a couple of months longer than we anticipated, that’s not much on a pioneering and complex project such as Oryx GTL.

“The message today is that Oryx GTL works and is on track to be the highly successful pioneer for a global industry that we always said it would be. That’s good news for Qatar and the GTL industry as a whole,” Turner said.

Aramco continues talks with Dow on chemical plant Posted Tuesday, January 30, 2007 - 4:40 by hydrocarbonasia
Saudi Aramco, the national oil company of Saudi Arabia, is seeking partnership with America's Dow Chemical Company for the construction of a petrochemical complex at Ras Tanura.

A delegation from Saudi Aramco is currently negotiating the project with the American company.

Ras Tanura, the world's largest petroleum port, is located in the eastern region of the kingdom, north of Dhahran.

A Saudi Aramco official said if the two companies reach an agreement, they would set up a new unit that will be named Ras Tanura Petrochemicals Company.

The unit will be established with an estimated capital investment of more than $15 billion. The project will involve the biggest investment for Saudi Aramco in this sector and the second after its partnership with Sumitomo.

Incidentally, Saudi Aramco does not include the cost of the project in its $80 billion oil and refinery investments for the coming five years.

"No agreement has been reached yet, but all options are in favour of the final agreement or looking for another partner in case the negotiations reached a deadlock," the source said yesterday.

Sources said the Saudi company is looking forward to start execution of the project any time between 2008-09 and begin production in 2011.

Negotiations between Saudi Aramco and Dow Chemical began in the final quarter of 2006. The plan is to enter into a partnership agreement for the construction and operation of a state-of-the-art complex for petrochemicals and plastic products in Ras Tanura.

The project includes a range of advanced utilities for the production of chemicals and plastic products.

Aramco claims the new petrochemicals project is the largest of its kind in the world. Industrial reports say that the manufacturing of such products would help in setting up manufacturing industries in Saudi Arabia to boost the kingdom's industrial base.

Dow Chemical produces a wide range of products for its clients in 175 countries around the world. Its annual sales reached $ 46 billion last year.


CNOOC eyes natural gas in Yemen Posted Tuesday, January 30, 2007 - 12:32 by hydrocarbonasia
CNOOC, the largest offshore oil producer in China, is reportedly in talks aimed at acquiring a stake in a liquefied natural gas project in Yemen from US company Hunt Oil in a bid to secure its natural gas supply.

The Beijing-based oil producer has made a non-binding offer of less than US$600 million for Hunt's 18 percent stake in the Middle East project, according to according to reports which quoted an unnamed CNOOC official.

The first output from the LNG project in Yemen, near Saudi Arabia, is due at the end of 2008, with an annual volume of about 6.7 million tonnes.

Should Dallas, Texas-based Hunt decide to sell its stake, it would have to secure agreement from other shareholders of the Yemen project. Major shareholders include France's Total, which owns 39.62 percent, Yemen Gas with 16.73 percent, and South Korea's SK Corp with 9.55 percent.

CNOOC hopes to source more natural gas from overseas to supply its parent's LNG terminal project in the mainland.

China, the world's second-biggest oil consumer, is promoting the increased use of natural gas for both environmental and economic reasons, and has set a target of raising the country's natural gas consumption to 8 percent by 2010.

To achieve this target, Beijing has been encouraging oil giants CNOOC, Sinopec (0386), and PetroChina (0857) to step up acquisitions of overseas oil and gas assets to ensure security of supply. CNOOC abandoned its plan to acquire California-based Unocal in 2005 because of opposition by the US government.

Iran signs $10b LNG deal with Repsol and Shell Posted Tuesday, January 30, 2007 - 9:44 by hydrocarbonasia
Iran said yesterday it had signed an initial deal worth $10 billion with Spain's Repsol and Royal Dutch Shell to produce liquefied natural gas (LNG) from the South Pars gas field.

Gholamhossein Nozari, head of state-owned National Iranian Oil Company (NIOC), was quoted as saying the deal would be worth $10 billion and said a final investment decision was expected by the end of 2007.

An industry source close to the deal said the deal signed was an upstream service agreement.

"It is part of the work to assess the feasibility of the project," the source said.

"The important thing is that the final decision to develop the LNG project is a year or so away."

The project with Repsol and Shell would involve developing phases 13 and 14 of the South Pars gas field in the Gulf.

A source said last Tuesday such a preliminary deal would be signed in days and put the value at $4.3 billion for an LNG plant and port terminal. Nozari said the $10 billion price tag was for both upstream work and the LNG facilities.

The source said the LNG plant would cost about $2.5 billion and the port terminal and other infrastructure would cost about $1.8 billion, the source said, adding that exports - if the project went ahead - could start in 2011 or 2012.

Under the deal, Shell and Repsol would each take a 25 per cent stake in the project to produce 16 million tonnes a year of LNG, super-cooled natural gas that can be transported on tankers.

"This contract is the biggest project of its kind for investment and the amount of gas to be turned into LNG (in Iran)," Nozari was quoted as saying, adding that the deal, signed on Saturday, would be based on Iran's so-called "buyback" terms.

Under Iran's "buy back" contracts, investment in developing a field is rewarded with a share of production for a short period before the state repurchases the field.

Iran has said it is reviewing the terms of deals to make them more attractive, after criticism from foreign investors.

The Islamic Republic is negotiating terms on other LNG deals but analysts say it could take at least 10 more years for Iran to become a major gas exporter.


SASREF, ABB Lummus in Deal on Sulphur Diesel Project Posted Tuesday, January 30, 2007 - 9:44 by hydrocarbonasia
Saudi Aramco Shell Refinery Co. (SASREF) and ABB Lummus, a Dutch company that focuses on the oil and gas, petroleum refining and petrochemical process industries, have signed a contract for front-end engineering development of SASREF’s ultra-low sulphur diesel project at its headquarters in the Jubail Industrial City yesterday.

SASREF’s President Muhammad Al-Omair signed the contract with Foeke Kolff, president-director of Lummus Global and Tareq Kawash, general manager of Lummus Saudi Arabia.

The engineering work will be carried out in ABB Lummus offices in The Hague and Lummus Ali Reza offices in Alkhobar will support activities in the Kingdom.

At the same time, SASREF appointed Shell Global Solutions to provide the project management support during this phase of the project development.

The new unit is planned for the pre-construction work in the second half of 2007 and start operations in 2009.

Muhammad Al-Omair said “the investment in this project is to reduce the sulphur content of the diesel fuel manufactured in SASREF by installing an ultra-low sulphur gas oil unit and revamping the existing gas oil de-sulfurizer to meet the new diesel specification.”

SASREF’s president added that after completion of the project, SASREF’s capacity of ultra-low sulphur diesel will be 11,600 tons per day.

This will also make SASREF the first producer of the ULSD of 10ppm in the Kingdom.

Sinopec crude processing meets target in 2006 Posted Tuesday, January 30, 2007 - 9:43 by hydrocarbonasia
China Petroleum & Chemical Corp. (SNP), better known as Sinopec, said Thursday it processed 4.56% more of crude oil last year than in 2005, thanks to strong domestic demand for fuel and chemical products.

Sinopec, the largest refiner in Asia by capacity, processed 146.32 million metric tons of crude oil in 2006, meeting the target of 146 million tons it set for the year, according to a post on the company's Web site.

It processed 139.94 million tons of crude oil in 2005. Sinopec last year sold 111.68 million tons of oil products domestically, such as gasoline and diesel, up 6.81% from 104.56 million tons in 2005.

Late last year, Sinopec received a CNY5 billion state subsidy to compensate for low domestic oil product prices. But the company said the subsidy wouldn't offset the operating losses of its refineries last year due to high crude costs.

In order to better control crude costs, Sinopec has been aggressively expanding its upstream operation in recent years to supply more feedstock to its own refineries.
In 2006, it produced 2.28% more of crude oil to 285.19 million barrels, but fell short of the target of 291.7 million barrels it set for the year. It produced 278.82 million barrels of crude in 2005.

Natural gas production rose a sharp 15.60% to 256.54 billion cubic feet in 2006, beating its target of 247.17 billion cubic feet. It produced 221.92 billion cubic feet of gas in 2005.
In 2006, it produced 6.16 million tons of ethylene, up 15.87% from 5.32 million tons in a year earlier, through its 55.56%-owned Sinopec Shanghai Petrochemical Co. (SHI), the country's largest ethylene producer by capacity.

It had set a production target of 5.9 million tons of ethylene for last year.

Shanghai is building liquefied natural gas terminal Posted Friday, January 26, 2007 - 3:07 by hydrocarbonasia
Shanghai has started construction on a terminal to receive liquefied natural gas shipments from Malaysia, part of a plan to help increase reliance on clean fuels and curb pollution, reports said Tuesday.

The new terminal, being built at the Yangshan Deep Water Port south of the city, is expected to begin operation in 2009. The 7 billion yuan, or $90 million, first phase of the project will be able to handle four billion cubic meters, or 140 billion cubic feet, of LNG, a year, according to reports..

Construction of the project was inaugurated Monday by Mayor Han Zheng and other top city officials.

A second phase will double the facility's capacity, it said.

The terminal will receive shipments from Malaysia's national oil company, Petronas, which has a contract with Shanghai LNG Co. to provide four billion cubic meters of liquefied natural gas annually for 25 years.

Shanghai is building liquefied natural gas terminal Posted Friday, January 26, 2007 - 3:06 by hydrocarbonasia
Shanghai has started construction on a terminal to receive liquefied natural gas shipments from Malaysia, part of a plan to help increase reliance on clean fuels and curb pollution, reports said Tuesday.

The new terminal, being built at the Yangshan Deep Water Port south of the city, is expected to begin operation in 2009. The 7 billion yuan, or $90 million, first phase of the project will be able to handle four billion cubic meters, or 140 billion cubic feet, of LNG, a year, according to reports..

Construction of the project was inaugurated Monday by Mayor Han Zheng and other top city officials.

A second phase will double the facility's capacity, it said.

The terminal will receive shipments from Malaysia's national oil company, Petronas, which has a contract with Shanghai LNG Co. to provide four billion cubic meters of liquefied natural gas annually for 25 years.

Output at three LNG trains is being restored, says RasGas Posted Friday, January 26, 2007 - 3:05 by hydrocarbonasia
Ras Laffan Liquefied Natural Gas Company (RasGas) said yesterday it was gradually restoring production in its RasGas 2 facilities after it had to close three trains earlier this month.

“Following remedial action, the production of LNG is gradually being restored,” the company said in a statement.

RasGas said last week that Trains 3, 4 and 5 from RasGas 2 had to close due to hydrate formations in pipelines bringing gas from Qatar’s North Field. It did not say when production would be back to normal levels or give the current output level.

Hydrate formations occur when natural gas and water are exposed to certain pressures and temperatures.

RasGas blamed the disruptions on lower-than-normal temperatures in the Gulf state. Production problems first started on December 29 and operations were completely shut down on January 6.

RasGas 2, a joint venture between state-run Qatar Petroleum (QP) and US energy major ExxonMobil supplies LNG to Europe and Asia.

QP has a 70% stake in the company while ExxonMobil holds 30%. Qatar’s North Field is home to the world’s third largest reserves of natural gas after Russia and Iran.

Saudi Aramco’s Al-Hawyah gas project to be launched Posted Friday, January 26, 2007 - 3:05 by hydrocarbonasia
Saudi Aramco plans to commission the Al-Hawyah project with a record daily capacity of four billion cubic feet of gas and 310,000 barrels of ethane in October. Its products will be supplied to Al-Hawyah and Harad plants for commercial and industrial marketing.

The project also includes the expansion of gas production at the Al-Hawyah and Al-Juaymah plants to supplement the shortfall in the expected volume of supply. The Hawyah plant will be linked with the Shadqam plant.

The project also covers the first phase of Shaibah-1 pipeline expansion to increase the capacity of pumping station No. 6 on the East-West pipeline and raise the capacity of the pipeline linking Shadqam and Al-Juaymah and the ethane line between Al-Juaymah with Jubail.

In another development, delegations of the 17 contracting companies met with officials of exploration and production at Hawyah facility. Muhammad Hammad, project director of the company, reviewed the progress in the project. The contracting companies were satisfied working with foreign companies and hoped that they would be able to undertake skilled works carried out by their foreign counterparts. Saudi Aramco has long maintained a position of global leadership in the oil industry. It has quickly become one of the world leaders in gas production, as well.

In both areas, Saudi Aramco remains committed to maintaining its state-of-the-art levels of research and exploration and a comparable focus on care for the environment.



Saudi Aramco’s Al-Hawyah gas project to be launched Posted Friday, January 26, 2007 - 3:04 by hydrocarbonasia
Saudi Aramco plans to commission the Al-Hawyah project with a record daily capacity of four billion cubic feet of gas and 310,000 barrels of ethane in October. Its products will be supplied to Al-Hawyah and Harad plants for commercial and industrial marketing.

The project also includes the expansion of gas production at the Al-Hawyah and Al-Juaymah plants to supplement the shortfall in the expected volume of supply. The Hawyah plant will be linked with the Shadqam plant.

The project also covers the first phase of Shaibah-1 pipeline expansion to increase the capacity of pumping station No. 6 on the East-West pipeline and raise the capacity of the pipeline linking Shadqam and Al-Juaymah and the ethane line between Al-Juaymah with Jubail.

In another development, delegations of the 17 contracting companies met with officials of exploration and production at Hawyah facility. Muhammad Hammad, project director of the company, reviewed the progress in the project. The contracting companies were satisfied working with foreign companies and hoped that they would be able to undertake skilled works carried out by their foreign counterparts. Saudi Aramco has long maintained a position of global leadership in the oil industry. It has quickly become one of the world leaders in gas production, as well.

In both areas, Saudi Aramco remains committed to maintaining its state-of-the-art levels of research and exploration and a comparable focus on care for the environment.



Japan to shut 14% of refinery capacity for overhaul Posted Friday, January 26, 2007 - 3:03 by hydrocarbonasia
Oil refiners in Japan plan to take 14 per cent of capacity offline for second-quarter maintenance, leading to a potential drop in crude buying, but an increase in gasoline imports may be slower than 2006 when fires hit output.

A survey of refiners showed that the April-June shutdowns of crude distillation units (CDUs) will take down an average 682,000 barrels per day (bpd) off Japan's 4.83 million-bpd capacity.

The shutdown programme is seen as large because various mandatory works coincided this year, taking scheduled maintenance 7 per cent above second-quarter 2006, and it comes as Japan's crude stocks are already 5 per cent above last year's levels.

"Refiners now hold sufficient crude inventories and they will be able to meet domestic fuel demand without increasing crude stocks," said Masanori Maruo, an industry analyst at Deutsche Securities.

The bulk of the maintenance programme will take place in May, when an average 1.02 million bpd, or 21 per cent, of the country's total capacity will be offline. The level to be taken offline will ease to 655,000 bpd in June.

"Crude demand will go down, but the impact on the spot market depends on Opec and Official Selling Prices," said a Singapore-based crude trader. Japanese buying of spot crude for April delivery has already tailed off, trade sources say.

The deeper scheduled maintenance this year is likely to draw down product stocks levels in the world's third-largest oil consumer, in a season when refiners usually increase gasoline imports ahead of peak summer demand.

However, imports may be lower than the same quarter last year when a series of unexpected outages increased shutdowns to 746,000 bpd - about 15 per cent of Japan's total - from scheduled maintenance of 636,000 bpd, after fires at TonenGeneral Sekiyu and Cosmo Oil refineries.

Barring any unexpected outages this time, Japanese refiners could limit the need for costly gasoline imports.

"If you think simply, higher runs translate into higher domestic production, lower imports," one trader said. Last year, gasoline imports totalled 73,700 bpd in May, government data showed, higher than in May 2005 when gasoline inflows ran at 63,600 bpd due to lighter refinery maintenance.

Top-ranked refiner Nippon Oil Corp, which controls about a quarter of the country's total capacity, and all other refinery groups, except for Fuji Oil, plan to conduct maintenance works this year.

First GTL shipment from Oryx in March Posted Thursday, January 25, 2007 - 3:10 by hydrocarbonasia
The first shipment from Qatar’s first Gas-to-Liquids project at Ras Laffan – Oryx – will be in the last week of March.

Speaking at the 6th Annual Gas-to-Liquids Technology & Commercialisation Conference at the Sheraton yesterday Oryx GTL general manager Chris Turner said the plant was now producing intermediate product and only the product work-up unit now remained to be tested.

“Subject to the current levels of progress being made, our plant will achieve the milestone with regard to first shipment in the first quarter of 2007 as previously announced,” Turner said.

“The Fischer – Tropsch (FT) technology has produced intermediate product and proved itself. Overall the start-up is progressing smoothly, though, as we expected, it has not been without challenges,” he said.

Oryx GTL was inaugurated in June 2006 and since then has been subject to a progressive start-up process.

“As is typical of plants of this scale anywhere in the world, we have followed a detailed, sequential start-up process. There is no magic switch that gets flicked to start 34,000 barrels of product per day flowing.

“Each of our systems has to be started sequentially and, once they are running successfully, you can move on to the next one. The process takes time and you can’t cut corners,” Turner said.

The Oryx GTL plant, he said, was completed within budget.

“While the start-up has taken a couple of months longer than we anticipated, that’s not much on a pioneering and complex project such as Oryx GTL. The message today is that Oryx GTL works and is on track to be the highly successful pioneer for a global industry that we always said it would be. That’s good news for Qatar and the GTL industry as a whole.”

The $1bn Oryx GTL is a joint venture between QP (51%) and Sasol (49%). The plant is the world’s first commercial GTL plant outside South Africa and is currently the world’s largest.

Oryx GTL has a production capacity of 34,000 barrels per day (bpd) of liquids. This will comprise about 24,000bpd of diesel, also known as green diesel because of its ultra clean nature, 9,000bpd of naphtha and 1,000bpd of liquefied petroleum gas (LPG).

Oryx GTL will be using about 330mn cubic feet per day of lean gas from the North Field to produce the liquids.



French bank backs Vietnam first oil refinery Posted Thursday, January 25, 2007 - 10:39 by hydrocarbonasia
French bank BNP Paribas has agreed with Vietnam's Finance Ministry to a 13-year 300 million dollar deal to build the country's first oil refinery, according to official sources.

The amount "is part of the 1.0 billion dollars that the ministry of finance is responsible to arrange and mobilize for the Dung Quat oil refinery according to the assignment by the government," a bank official said.

The signing ceremony should be organized soon, he said.

Vietnam's government website said the loan carries an annual interest rate of 6.78 percent and was approved on Monday by Deputy Prime Minister Nguyen Sinh Hung, on behalf of Prime Minister Nguyen Tan Dung.

The total project, which is considered a major step towards energy autonomy, is expected to cost the state-owned PetroVietnam around 2.5 billion dollars.

It is carried out by the Technip group of France, leading a consortium including the Japanese engineering giant JGC Corporation and Spain's Tecnicas Reunidas.

Dung Quat, 120 kilometres (75 miles) south of the central city of Danang, was picked as the site partly as Vietnam wants to develop an industrial counterweight between the two existing economic poles, Hanoi and Ho Chi Minh City.

Indonesia has difficulty meeting Japan's gas supply demand: minister Posted Thursday, January 25, 2007 - 10:38 by hydrocarbonasia
Indonesia has difficulty meeting Japan's demand of 12 million tons gas supply per year until 2011, Indonesian Mines and Energy Minister Purnomo Yusgiantoro said in Jakarta Wednesday.

"Twelve million tons per year is difficult to meet, as the capacity of the production is only around 6 million tons per year," Yusgiantoro said.

In addition, the government planned to meet the domestic demand of gas, whose amount will be calculated later, he said.

The minister said that a balance for the gas will be made between domestic gas consumption and spare capacity exports.

He said that the gas operator Total, which is the biggest gas producer in the country, has reported that its production will fluctuate between 5 million and 6 million tons per year, while another operator, Chevron, has not reported yet.

Japan has a 12 million ton-a-year contract with Indonesia, which will expire between 2010 and 2011.

Foster Wheeler awarded EPC contract for refinery project in Malaysia Posted Thursday, January 25, 2007 - 10:37 by hydrocarbonasia
Foster Wheeler Ltd. announced today that its subsidiary, Foster Wheeler E&C
(Malaysia) Sdn. Bhd., part of its Global Engineering and Construction
Group, has been awarded a contract by Malaysian Refining Company Sdn.
Bhd. (MRC), a joint venture between PETRONAS and ConocoPhillips, for
the basic design engineering package (BDEP) and the engineering,
procurement and construction management (EPC) for a
debottlenecking/revamp project at MRC's PSR-2 Melaka Refinery in
Malaysia.

The Foster Wheeler contract value was not disclosed and the
project will be included in the company's first-quarter 2007 bookings.

"This award reflects our in-depth technical expertise in refining,
our revamp experience, and our reputation as one of the leading EPC
contractors in the industry," said Aziz Ali, director, Foster Wheeler
E&C (Malaysia) Sdn. Bhd. "In addition, we have an extensive knowledge
of this refinery, having been MRC's front-end engineering design
contractor and project management consultant for the original PSR-2
facility, which was completed in 1999. We look forward to building
upon our close working relationship with MRC and are committed to
delivering a successful project which fully satisfies our client's
business objectives."

The debottlenecking and revamp project is expected to permit MRC
to increase the overall refinery throughput from 130,000 to 175,000
barrels per day. This project includes the revamp of the hydrocracker
unit, significant modifications to the internals of the vacuum
distillation and crude distillation units, the installation of
additional heat exchangers, and modifications to other process units
and associated offsites and utilities.

Pilipinas Shell defers refinery expansion Posted Monday, January 22, 2007 - 12:25 by hydrocarbonasia
Pilipinas Shell Petroleum Corp. has decided to put off the planned expansion of its Tabangao refinery in Batangas province because of high project costs.

“Pilipinas Shell has decided to cease further work on the current study and will therefore defer any major investment decision for the Tabangao refinery in the foreseeable future,” Edgar O. Chua, the company’s country manager, said.

Chua said the cost of raw materials and services have gone up “tremendously,” raising the overall expense to between $1 billion and $3 billion.

“The environment is currently far too overheated to do an economic project,” he said.

Chua said that the company would instead look at different options as an alternative plan in running and maintaining its Tabangao refinery with its initial public offering (IPO) anchored on the plan to be adopted.

The government, however, is hopeful that the project would push through because of a projected overcapacity in refineries in a couple of years.

“Within two to three years a number of analysts have forecasted an overcapacity in both refinery and oil and gas production. So these are the things, the countries and companies will have to consider whether to forge ahead with expansion plans or not,” Secretary Raphael P.M. Lotilla said.

“There is a strategic value from the standpoint of the countries to have the refineries in the Philippines. For that, the incentives available under the Omnibus Investments Code are in place. Hopefully, we will be able to provide a better business climate—since the country remains a strategic market for a number of these companies that have been with us for many decades,” he added.

$11bn boost for Qatar gas tanker fleet Posted Monday, January 22, 2007 - 10:29 by hydrocarbonasia
Investment by Nakilat (Qatar Gas Transport company) in the 60 ships it plans to acquire by 2010 to ferry liquefied natural gas and liquefied petroleum gas worldwide will be about $11.5bn.

The total cost of these tankers will be $15bn, Nakilat Vice-Chairman Faisal M al-Suwaidi said yesterday.

The DSM-listed Nakilat is set to become the world’s largest owner of LNG/LPG tankers fleet by the decade-end.

While 46 tankers are meant for LNG transportation, the rest will be used for liquefied petroleum gas supply. As many as 25 LNG tankers will be of the Q-Flex category, while 21 liquefied natural gas tankers will be Q-Max.

Q-Flex vessels have a cargo capacity ranging between 210,000cu m and 217,000cu m. On the other hand, Q-Max tankers have cargo capacities exceeding 260,000cu m.

Shipbuilders require about 36 months to deliver vessels such as LNG tankers.

Al-Suwaidi said Nakilat would fully own 28 of the 60 tankers it planned to buy within the next three years. In the remaining ships, Nakilat will have an average stake of 54%.

Initially, he said, Nakilat was focused on securing partial ownerships in these tankers with stakes ranging between 30% and 60%. Subsequently, however, Nakilat decided to pick up 100% equity in some tankers to "maximise returns to shareholders."

Under the new strategy, al-Suwaidi said, Nakilat would have full ownership of the vessels on order for Qatargas and RasGas LNG projects. Some 16 LNG tankers have been ordered for LNG trains being set up for Qatargas-II and Qatargas-III. Nakilat plans to order another 11 tankers for RasGas-III and Qatargas-IV this year.

"By fully owning LNG carriers meant for Qatargas and RasGas, our two LNG producers can meet their ship delivery schedules," he pointed out.

Last year, Nakilat ordered 16 LNG vessels and entered into a 25-year time charter agreement with Qatargas II and Qatargas III. These ships comprise the first of the 100% owned vessels worth $5bn.

Nakilat is in a strategic alliance with Shell International Trading and Shipping Company, a leading international vessel owner/operator with an extensive experience in operating LNG vessels.

Last year Nakilat successfully closed a $4.3bn financing which will be used primarily to fund 16 LNG vessels being built at shipyards around the world. The funds raised from a variety of sources, including commercial banks, capital markets and some export credit agencies in South Korea, are the single largest tranche of LNG tanker financing till date.

Al-Suwaidi said Nakilat was well on track fulfilling its commitment to its shareholders and customers.

"Our 2006 results have exceeded our expectations. Nevertheless, we require more funds to meet our obligations to ship building yards, especially in South Korea. This is why we have given the cash call for the remaining 50% of the total capital," he explained.

Nakilat’s total capital is QR5.6bn. The founding companies have subscribed 50% or QR2.8bn. Of the remaining QR2.8bn, QR1.4bn was raised through a month-long initial public offering in February 2005. The remaining QR1.4bn will be raised between February 1 and 15.

The share split among Nakilat’s founding members is Qatar Shipping (20%), Qatar Navigation (20%), Qatar Petroleum (5%), Qatar Foundation (2%), General Pension and Retirement Authority (1%), Ministries of Health and Education (1% each) and Woqod (1%).

He clarified that the cash call was being made as planned earlier.

"In 2004 we had advised our shareholders that cash call for the remaining 50% amount will be made after three years. Nakilat’s IPO prospectus is very clear on this. Concerns expressed by some shareholders in this regard have no basis," he said.

Al-Suwaidi hoped QNB’s decision to finance shareholders under the cash call scheme would benefit them.


Reliance Industries profit rises to record on margins Posted Friday, January 19, 2007 - 3:58 by hydrocarbonasia
Reliance Industries Ltd., India's second-biggest company by market value, said profit rose 58 percent to a record, beating estimates, because of higher returns from refining.

Net income climbed to 27.99 billion rupees ($631 million) in the quarter ended Dec. 31, compared with 17.76 billion rupees a year ago, according to an e-mailed statement from the company. That beat the 23 billion rupees median estimate of five analysts surveyed by Bloomberg News.

Billionaire Chairman Mukesh Ambani needs higher profits from operating the world's third-largest oil refinery to finance a $17 billion foray into retailing, oil and gas exploration, and a refinery expansion. Reliance's profit in one quarter exceeds the annual earnings of every Indian company outside state control except Tata Steel Ltd. and Tata Consultancy Services Ltd.

``Cash flows which are coming in from existing businesses will help the company fund its new business plans,'' said Mahesh Patil, a senior fund manager at Birla Sun Life Asset Management Co. in Mumbai. ``That's the company's growth strategy.'' Birla Sun Life owns about 1.04 million shares of Reliance, according to available data.

Earnings per share at Reliance increased to 20.1 rupees compared with 12.7 rupees a year earlier. Reliance Industries shares have risen 8 percent this year to 1,367 rupees, outpacing a 3 percent rise in the Bombay Stock Exchange's benchmark Sensex index. The earnings were announced after the market closed.

Chairman Ambani has almost doubled Reliance's market value to $43 billion since the Mumbai-based group was split with his brother Anil 12 months ago today.

Ambani countered an industry wide fall in refining margins as the company's modern refinery allows it to process the cheapest varieties of crude oil into expensive fuels such as gasoline, diesel and jet fuel.

``They probably processed a higher volume of cheaper heavier crude oil during the quarter and that may have helped in beating the Asian average,'' said Karthik Ramakrishnan at Mumbai-based brokerage Sunidhi Consultancy.

Total SA, Europe's largest oil refiner, said Jan. 15 profit from converting crude oil into gasoline, diesel and other products in the quarter ended Dec. 31 fell by almost half to $22.80 a ton from $45.50 a year earlier.

BP Plc, Europe's second-largest oil and gas company, said Jan. 9 its refining global indicator margin, a measure of the profitability of its refineries worldwide, fell to $6.30 a barrel in the fourth quarter from $7.60 a year earlier.

Refinery Shutdown

Reliance's earnings last year were lowered by scheduled maintenance that shut down parts of its refinery. That resulted in a 24 percent decline in the volume of crude oil processed, according to oil ministry data.

Higher earnings from the chemicals business further boosted net income, the Mumbai-based company said.

``The outlook for our business is good because of robust economic growth and a stable business environment,'' Reliance said. Earning prospects for retail, oil and gas exploration, refining and chemicals is good, the company said.

LG Petrochemical Co., a unit of South Korea's largest chemicals maker, said Jan. 16 profit in the quarter ended Dec. 31 almost tripled to 79.5 billion won ($85 million) because of higher demand for its products.

``The petrochemicals cycle is still going strong, longer than people expected,'' Patil said before the earnings were announced. ``That will help Reliance.''

The company's output of chemicals rose 34 percent to 3.63 million tons after it expanded capacity. Reliance increased capacity of yarn used to make textiles by 550,000 tons a year, raising annual capacity to 2 million tons.

Reliance processed 7.89 million tons of crude oil into fuels in the quarter compared with 6.7 million tons a year ago, the company said.

Fuel exports increased to 4.8 million tons in the quarter compared with 2.6 million tons a year ago. The company earned $3.6 billion from exporting fuels, up from $1.5 billion.

Chairman Ambani is expanding Reliance's chemicals business by setting up a new plant that will make the company the world's fourth-largest producer of chemicals on completion in 2008.

Reliance is investing on doubling the size of its oil- refining complex to make it the world's largest on a single site. The company expects to start producing natural gas from fields off eastern India by 2009. Ambani is diversifying Reliance's business by building convenience stores and gas stations.

Indonesia to determine size of future LNG exports to Japan Posted Thursday, January 18, 2007 - 3:19 by hydrocarbonasia
The government said it will soon decide the volume of annual exports of liquefied natural gas (LNG) to Japan to start in 2011.

Under the on going contract due to expire in 2010, Indonesia is to export 12 million tons of LNG annually to that country.

Head of the upstream oil and gas regulatory body (BP Migas) Kardaya Warnika said the government has formed a team to negotiate possible renewal of contract with Japanese buyers.

Currently the government exports LNG to Japan from the Bontang LNG plant, which has gas supplied from gas fields of Total E&P and Vico Indonesia and Chevron in East Kalimantan.

Energy and Mineral Resources Minister Purnomo Yusgiantoro said the government has yet to determine the gas reserves of the suppliers especially Chevron before deciding on renewal of contract with Japan.

Gas reserves owned by Chevron are not yet included in the gas balance in East Kalimantan, Purnomo said, adding Chevron has not yet reported the size of its reserves in the East Kalimantan Block.

Indonesia could not export 12 million tons of LNG a year to Japan without including supplies from Chevron after 2010.

BP Migas indicated that the government will likely agree only to export 6 million tons of LNG annually after the termination of the present contract.

Asian oil marts to see resilient growth in 2007 Posted Monday, January 15, 2007 - 4:56 by hydrocarbonasia
Oil prices have started 2007 with a plunge, but support should come from steady Asian growth for light oil products this year, as strong regional economies and tougher fuel specifications soak up crude supplies.

Less than 100,000 barrels per day (bpd) of new Asia-Pacific crude is set to hit the market, though refiners will be able to draw on increased West African supplies to meet booming demand for transport and petrochemical fuels.

The stronger oil product demand - after a weak 2006 that saw governments slash retail subsidies, thin refining margins and new arbitrages out of the region - should boost downstream profits as industries and holidaymakers get used to costly fuel.

"Demand seems on the verge of a new spurt, buttressed by high economic growth in China, India and the commodity-producing countries," said Lehman Brothers. "New refining capacity growth remains lower than incremental demand for oil."

Asia's top oil consumer China decided to trim crude imports from Iran this year, amid worries over its nuclear dispute with the West, and increase purchases by 9 per cent from Saudi Arabia. Kazakh and Venezuelan supplies to China are also on the rise.

China's oil demand, which roiled markets in 2004, is seen up 5.4 per cent, slowing from 5.6 per cent last year, says the International Energy Agency. The swing factor will be how it takes advantage of oil's fall to fill up new strategic tanks.

Demand from Japan is not seen rising as the import-reliant country strives for greater efficiency and to use higher rates of nuclear power, while South Korea is going on its biggest energy hunt yet to secure more supply from Korean-owned fields.

India's crude buying is seen as stable ahead of a burst of new refineries around the turn of the decade. Indonesian buying will be volatile as it struggles to stay a net oil exporter.

Against a backdrop of stable Asian crude supply, OPEC cuts and non-Opec growth, fuel demand keeps on rising. Economies are mostly seen posting slower growth, but in China and India 9.5 per cent and 7.6 per cent gross domestic product (GDP) growth is still expected.

"The strength of the (oil demand) growth is in road transportation, due to burgeoning demand in commercial transport," said analyst John Waterlow from Wood Mackenzie.

"It is remarkable how well developing Asia has handled high oil prices," said Al Troner, head of Asia Pacific Energy Consulting Inc. "Further spec tightening can be expected - it is cumulative, progressive and irreversible."

Vietnam has switched to lower sulphur diesel this month and Indonesia will follow suit in March, when it may boost diesel purchases further.

This buying will continue for the year as refineries run at lower capacity and take time to upgrade units.

China is due to launch one or two new refineries, but otherwise product supply growth will be limited to a few Thai projects and South Korean upgrades, a survey shows. The Middle East may cut back swing product exports to meet its own needs.

This should be supportive for oil product cracks, and refiner bottom lines - simple units are breaking even after months of losses. Cracking margins for Dubai crude in Singapore are the strongest since July.

Diesel demand growth in Asia is seen up 3.5 per cent, says consultancy Purvin & Gertz. New North Asian petrochemical plants will boost demand for feedstock naphtha. Regional air passenger growth, seen at 5.7 per cent by IATA, will suck up jet fuel.

PetroVietnam invests US$ 187 in Polypropylene plant Posted Thursday, January 11, 2007 - 9:45 by hydrocarbonasia
The Viet Nam Oil and Gas Corporation (PetroVietnam) has been licensed to build a 3 trillion VND (187.5 million USD) plant to produce polypropylene (PP) in the Dung Quat economic zone in central Quang Ngai province.

The plant will be built on an area of 16 ha and will be capable of turning out 150,000 tonnes of products a year. The plant will use Propylene gas supplied by the Dung Quat Oil Refinery.

The plant is expected to be operational in 2009.

Vietnam to produce polypropylene in first oil petrochemical refinery complex Posted Thursday, January 4, 2007 - 6:45 by hydrocarbonasia
The Vietnam Oil and Gas Group (PetroVietnam) is investing 187.5 million U.S. dollars in manufacturing polypropylene in Dung Quat Industrial Zone, the country's first oil petrochemical refinery complex.

Capitalized at 3 trillion Vietnamese dong (187.5 million dollars), a plant with annual capacity of 150,000 tons of polypropylene used for making plastic packaging items, home utensils and automobile parts, is scheduled to become operational in 2009, according to the management board of Dung Quat Industrial Zone in central Quang Ngai province on Wednesday.

Construction of the polypropylene plant will start in the third quarter of this year.

The construction of the Dung Quat oil refinery, the first of its kind in Vietnam, started in the industrial zone in November 2005.

Capitalized at 2.5 billion dollars and expected to become operational in late 2008 or early 2009, the oil refinery with an annual refining capacity of 6.5 million tons of crude oil is of significance in ensuring energy for the country, which is a crude oil exporter, but petroleum product importer, said the management board.


India hopes to sign LNG deal with Australia Posted Thursday, January 4, 2007 - 6:43 by hydrocarbonasia
India is hopeful of signing a long-term supply deal for 2.5 million tonnes of liquefied natural gas (LNG) from Australia over the next two months, Petroleum Secretary MS Srinivasan said on Wednesday.

"We hope to sign the deal in the next two months," Srinivasan said on the sidelines of a press conference organised ahead of the biennial International Oil and Gas Conference and Exhibition (Petrotech).

Under the proposed 25-year contract, LNG supplies from Australia will begin from 2011, the official said.

Facing over 50 percent shortage in gas supplies despite import of LNG from Qatar under a long term contract and spot purchase of cargoes from various gas rich countries, India is in talks with Qatar, Myanmar and Iran among other countries for supply of the environment friendly fuel.

On the domestic front, Srinivasan expressed hope that in the next five years India's gas production should double while oil production is expected to go up by 20 per cent in the next three years.

India's gas production is currently around 85 million standard cubic meters per day (MMSCMD), while that of oil is about 30-32 million tonnes annually.

Iran: Abadan Oil Refinery under reconstruction Posted Wednesday, December 27, 2006 - 9:35 by hydrocarbonasia
Iran’s Oil Minister Kazem Vaziri Hamaneh said that the Abadan Oil Refinery was undergoing reconstruction and that a number of oil projects were on line for implementation in Abadan such as commissioning of a second refinery with a projected capacity of 180,000 barrels of oil per day.

He added that implementation of the projects will begin after the necessary budgets are earmarked.

Refusing to state a possible time schedule or credit for implementation of the projects, he said that an invitation had been extended to local and foreign investors to participate in implementation of the second refinery.

He assured the people of Abadan that the plant would definitely be constructed.

He also referred to the equal share of Iran and Qatar in gas exploitation in South Pars gas field, adding that the two states are now actively exploiting the field on an equal basis, and noted that the more investment Iran puts into the field the greater will be the rate of return in the phases being currently exploited.

Turning to the subject of membership in OPEC, Vaziri Hamaneh said that Angola was set to join the cartel and will raise the membership to 12. OPEC, he added, will then have a stronger voice in the international energy market both in terms of supply and prices.

The oil minister and his accompanying delegation paid an inspection visit to the Abadan Oil Refinery Plant on Wednesday.

Talking to company personnel, he underscored his ministry's determination to give the old plant, which had suffered considerable damage in the Iraqi-imposed war, a thorough renovation.

PNG gas attracts more players Posted Friday, December 22, 2006 - 4:36 by hydrocarbonasia
Gas-to-Liquids specialist Syntroleum Corporation has signed a joint development agreement with Kuwait Foreign Petroleum Exploration Company (KUFPEC), to participate in the development of the 50,000 barrel per day gas-to-liquids (GTL) facility in PNG.

The proposed plant, when completed, will produce Syntroleum Ultra Clean S-2 Diesel and other clean products, making PNG one of a few countries producing environmentally friendly GTL fuels, according to Syntroleum.

Syntroleum president and chief executive Jack Holmes said the proposal had received formal support from PNG Prime Minister Sir Michael Somare following the submission of a feasibility study.

He also claimed the project had been granted "priority status" and had been designated as a "lead project" in PNG's quest to create a commercial gas industry.

"We have completed our feasibility study, received the PNG Government's strong support, and have been joined in the project by one of the world's lead exploration companies, KUFPEC," Holmes said.

"We are pleased that the project is moving forward with such support [and] our focus now is to put in place the major contracts for the facility and move to financing."

KUFPEC chairman and managing director Bader Al-Khashti was "excited" to be part of the project, describing it as a stepping stone for the company to "embrace downstream monetisation of gas resources".



North West Shelf partners sign three LNG supply deals Posted Friday, December 22, 2006 - 4:35 by hydrocarbonasia

The North West Shelf Venture participants have signed three heads-of agreement for the ongoing supply of liquefied natural gas from Australia's largest resources project. The deals are with Tokyo Electric Power Co., Osaka Gas Co., Ltd., and Tokyo Gas.
The eight-year deal with Tokyo Electric Power Company, one of the North West Shelf Venture's original Japanese LNG customers, is a renewal of that company's long-term LNG supply requirements. The venture will supply Tokyo Electric with five cargoes of LNG a year--about 0.3 million tonnes a year--on an ex-ship basis. The agreement goes into effect in April 2009.

Osaka Gas Co., Ltd. is another of the North West Shelf's original Japanese LNG customers to renew its long-term LNG supply requirements this year. The deal is for the supply of approximately 0.5 million tonnes a year for six years, to be delivered in Japan by the North West Shelf participants. It will commence in April 2009.
In a deal commencing in April 2009, the North West Shelf participants will supply around 0.53 million tonnes a year of additional LNG for eight years to Tokyo Gas on a delivered Japan basis.

The Tokyo Electric Power Company is the largest power utility and largest consumer of LNG in Japan, serving more than 27 million customers in and around the Tokyo area. It is a long-standing customer of the North West Shelf Venture, having signed a contract in 1985 that ends in March 2009.

Osaka Gas Co., Ltd. Japan's second-largest gas company, serving 6.8 million customers in the Kansai region and representing 27 percent of the country's city gas market. Osaka Gas is a long-standing customer of the North West Shelf Venture, having signed long-term contracts in 1985 and 2002.

Tokyo Gas is Japan's largest gas utility company and its second-largest consumer of LNG. Tokyo Gas services the Tokyo region, which has a population of approximately 44 million people and accounts for about 39 percent of Japan's GDP. It is also a long-standing customer of the North West Shelf, having signed an original contract in 1985 that ends in March 2009. In addition, the NWS participants and Tokyo Gas have an existing contract that started in 2003.

The six equal participants in the North West Shelf Venture are: Woodside Energy Ltd. (16.67% and operator); BHP Billiton Petroleum (North West Shelf) Pty Ltd (16.67%); BP Developments Australia Pty Ltd (16.67%); Chevron Australia Pty Ltd (16.67%); Japan Australia LNG (MIMI) Pty Ltd (16.67%); and Shell Development (Australia) Proprietary Limited (16.67%).

CNOOC NWS Private Limited is also a member of the North West Shelf Venture but is not a party to these agreements.




Essar Oil standardizes on aspenONE solutions for major new refinery in India Posted Friday, December 22, 2006 - 4:16 by hydrocarbonasia
Aspen Technology, Inc. today announced that Essar Oil, part of the Essar Group, one of India's largest corporations, has signed a major license agreement to use aspenONE for Energy solutions to support its new refinery operations. Essar is using the aspenONE Production Management & Execution for Energy application to provide managers with real-time production data from the plant, giving them the ability to monitor and track refinery performance against a series of key performance indicators (KPIs).

The aspenONE application incorporates a number of important capabilities including a plant data historian, yield accounting and visualization of refinery wide performance. The application has an interface to Essar's SAP enterprise resource planning (ERP) system, so that production data can be integrated with financial accounting information. This provides an integrated refinery management system which will enable Essar to make more profitable operating decisions, respond more quickly to market opportunities, and optimize refinery production.

"Essar is committed to implementing best-in-class technologies at its new Vadinar refinery," said Adi Shroff, Chief Information Officer, Essar Oil. "The aspenONE Production Management & Execution for Energy application enables us to provide real-time performance data to decision makers across our organization. Integrating the application with our ERP system will also give our senior managers clear visibility of how the refinery is performing against our main financial and operational KPIs."

Essar's new refinery is located at Vadinar in Jamnagar, Gujarat on India's West Coast, and was commissioned on November 24, 2006. The refinery will have a capacity of 10.5 million tonnes per annum (MTPA) and has required an investment of close to US$ 2.2 billion. The aspenONE application, which is being implemented by refining specialists from AspenTech's Professional Services group, will be used from the initial commissioning stage so that managers can monitor plant performance as the refinery moves to full production.

"This agreement with Essar represents a significant first step in establishing a strong, mutually beneficial relationship between our companies," said Blair Wheeler, Senior Vice President, AspenTech. "Once our aspenONE Production Management & Execution application is successfully deployed, we look forward to working with Essar to deliver additional value through the implementation of our aspenONE solutions across its refinery and supply chain operations."

License revenue from this project was recognized in the fiscal quarter ended September 30, 2006.

UAE: Enoc set for major expansion of Jebel Ali condensate refinery Posted Thursday, December 21, 2006 - 4:55 by hydrocarbonasia
Emirates National Oil Company (Enoc) is set to produce 120,000 barrels per day of distillates after a major expansion by the end of 2007 a company statement said yesterday.

GE's oil and gas business will supply eight compressors and a steam turbine power generation set for the expansion of Enoc condensate refinery at Jebel Ali.

After the completion of the expansion, the output of the existing units would be sustained at 120,000 barrels per day of distillates. The upgrade will enable the refinery to produce high grade reformate.

The GE steam turbine generator set will operate on steam coming from the refinery processes to produce power for the plant. Foster Wheeler London is the engineering, procurement and construction (EPC) contractor.

Mohammad Ayoub, regional general manager for GE Oil and Gas, said: "GE has played an integral role in the area's development by providing high-tech products and services necessary to advance the region's infrastructure and meet its energy and industry needs."

GE Oil and Gas will also upgrade gas turbines and compressors. This will increase the processing and production capabilities of the Asab Gas Development gas re-injection plant. The plant is owned by the Abu Dhabi National Oil Company.




PetroChina to buy Iran LNG Posted Thursday, December 21, 2006 - 4:54 by hydrocarbonasia
PetroChina, the nation's largest oil company, has signed an initial agreement to buy three million tons of liquefied natural gas a year from Iran to supply terminals it plans to build on China's northern coast.

PetroChina signed the 25-year agreement with National Iranian Gas Export, spokesman Cao Zhengyan said Wednesday. Gas deliveries will start in 2011, Cao said.

The company is expanding gas production and sales as demand for cleaner-burning fuels increases in the world's fastest-growing major economy.

PetroChina plans to build three LNG receiving terminals in Rudong in Jiangsu province, Dalian in Liaoning and Tangshan in Hebei. The first phase of the terminals will be completed by 2010, the company said.

"It is a very initial agreement," Cao said, declining to give details of the contract or which terminal the Iranian gas will supply. The company is looking for LNG suppliers and is in talks with potential foreign partners for the terminals, PetroChina said.

PetroChina targets 26 million tons of LNG receiving capacity for the three terminals, more than double the combined 10.5 million tons they are designed to have in their first phase of development, Su Yun, a marketing executive from PetroChina Natural Gas and Pipeline, said November 28. The Dalian terminal is projected to have initial capacity of three million tons a year.

China Petrochemical Corp, the nation's second-largest oil company, is in negotiations with Iran for an agreement estimated to be worth as much as US$100 billion, involving crude oil and LNG purchases.

Sinopec Group, as China Petrochemical is known, and Iran still need to agree on pricing of the energy deal, Tehran Times said, citing Mehdi Bazargan, the managing director of state-owned Petroleum Engineering and Development, which supervises foreign oil and gas projects in Iran.

National Iranian Oil president Gholamhossein Nozari said "all elements" of the contract had been completed and that an invitation to sign the accord had been sent to the mainland company.

Under an initial agreement signed by Sinopec in 2004, China would pay Iran as much as US$100 billion over 25 years for the oil and gas purchases and for a 51 percent stake in the Yadavaran oil field, in Khuzestan province near the border with Iraq. The deal would allow China to buy 150,000 barrels of Iranian crude a day at market rates for 25 years as well as 250 million tons of LNG.

Shell wins contract to boost performance of four India refineries Posted Wednesday, December 20, 2006 - 4:06 by hydrocarbonasia
A unit of oil giant Royal Dutch Shell PLC won a three-year contract Tuesday to provide technology services to help four major state-owned Indian refineries boost their efficiency and competitiveness.

Shell's technology consultancy arm, the Kuala Lumpur-based Shell Global Solutions, inked the pact with the Centre for High Technology, an Indian government agency tasked with improving the performance of the country's 15 public sector refineries.

The centre’s executive director, K.S. Balaraman, said the contract for a three-year business improvement program was awarded to Shell after a benchmark exercise showed Indian refineries lagged in efficiency internationally.

Four refineries, belonging to the Indian Oil Corp., Chennai Petroleum Corp., Hindustan Petroleum Corp. and Bharat Petroleum Corp., have been identified for the program, he said.

The four refineries currently supply about a quarter of refined petroleum products like gasoline, aviation fuel and diesel to the local Indian market, Balaraman added.

"Most of our refineries are commissioned in the early 70s, they are very old. We want to be more competitive," he told a news conference.

"We will be incorporating structured operational and technical processes that will contribute toward higher energy efficiency, better production capabilities and improved bottom lines. It will help us to be on par with international excellence," he said.

Officials said the move could boost India's status as an export hub for refined oil, challenging Singapore.

India's current refinery production is about 130 million metric tons a year and expected to surge to 200 million tons by 2012 when three more state-owned facilities and a second private refinery come on stream, Balaraman said.

The country now exports about 25 million tons of refined oil a year but this will increase in the next five years and likely to overtake Singapore, which now exports about 60-70 million tons, he added.

GAIL bids for LNG from Myanmar Posted Wednesday, December 20, 2006 - 4:04 by hydrocarbonasia
India’s State-owned GAIL (India) Ltd has bid for sourcing 3.5 million tonnes per annum of liquefied natural gas (LNG) from Myanmar in addition to a bid for sourcing natural gas via a pipeline from block A-1 and A-3 to India through the northeast.

"GAIL submitted its bid (for pipeline proposal) ... for purchase of gas from Shwe and Shwe Phyu fields in A-1 block and Mya field in A-3 block in September 2006," Minister of State for Petroleum and Natural Gas Dinsha Patel informed parliament in a written reply Tuesday.

"The government of Myanmar subsequently intimated GAIL that they were reviewing their decision to sell this gas through the pipeline route," he said.

India holds 30 percent stake in both A-1 and A-3 offshore block through GAIL and state-owned ONGC Videsh Ltd.

GAIL had envisaged the import of natural gas through 1,573 km on land pipeline from Myanmar via India's northeast.

The minister informed Rajya Sabha that while exploring alternatives to the pipeline route, Myanmar had asked GAIL to bid for 3.5 MMTPA of LNG. "GAIL has submitted its bid to Myanmar in response to the same," Patel stated.

The gas infrastructure major has completed detailed feasibility report (DFR), environment management plan and rapid risk analysis study.

"As indicated in DFR, the length of the possible pipeline from Myanmar border to Gaya (Bihar) is about 1,573 km and the project cost is estimated at Rs.85 billion. The pipeline was envisaged to route through Mizoram, Assam, West Bengal and Bihar," Patel said.

India plans 62 pct rise in refining capacity by 2012 Posted Tuesday, December 19, 2006 - 5:07 by hydrocarbonasia

India on Tuesday unveiled plans to expand its refining capacity by 62 percent to 4.82 million barrels per day over the next five years as it steps up efforts to become a major global fuel exporter.

The new targets are an increase to estimates of capacity of 4.2 million barrels a day that were announced in March.

Petroleum and natural gas minister Murli Deora told a closed-door panel of politicians on Monday night that the extra capacity would enhance India's energy security. The remarks were released to the media on Tuesday.

State-run refiners are planning to add capacity of about 1.06 million barrels a day by 2012, about 50 percent of their present capacity, Deora said.

The rest of the extra capacity would come from private refiners, such as Reliance Petroleum Ltd., Essar Oil Ltd. and Nagarjuna Oil Corp. Ltd.

Simultaneous to the refinery expansions, India forecast an increase in its oil products exports to 93 million tonnes in 2012 from 21.5 million tonnes in 2005-06.

The country expects to export 31 million tonnes oil products in 2007/08, 41 million tonnes in 2008-09, 68 million tonnes in 2009-10 and 80 million tonnes in 2011-12, which Deora said would boost foreign exchange earnings.

Asia's third largest oil consumer expects domestic demand to grow at a compounded annual growth rate of 2.9 percent to sees 132 million tonne in 2011-12 from 114 million tonnes estimated for the current year. India imports 70 percent of its oil needs.


Technip in Thailand steamcracker contract Posted Tuesday, December 19, 2006 - 5:06 by hydrocarbonasia
Technip has been awarded a contract by Map Ta Phut Olefins Co. Ltd. (MOC, a joint venture between Siam Cement Group and DOW Chemicals) for the construction of the furnace section of a steamcracker located in Map Ta Phut, Thailand.

The lumpsum turnkey contract, worth approximately $150 million, covers basic and detailed engineering, procurement and supply of materials, construction, pre-commissioning, and training of the owner’s personnel.

Technip’s operations and engineering centre in Zoetermeer, near The Hague in the Netherlands, will execute the contract.

Technip’s operations and engineering centre in Bangkok (Thailand) will provide logistic support and perform the construction.

This furnace section will be based on Technip’s proprietary GK6 cracking furnace technology and will allow the MOC plant to reach a production capacity of 1.7 million tons olefins.

Thailand: BASF adds plants in Chon Buri, Rayong Posted Monday, December 18, 2006 - 4:24 by hydrocarbonasia
BASF, the giant international chemical company based in Germany, has acquired two plants in Thailand as part of its worldwide expansion aimed at maintaining annual business growth of 7 per cent.

One of the facilities, to be renamed BASF Construction Chemicals, produces admixtures and "construction systems" and was purchased from Degussa in Chon Buri. The second is Engelhard Chemcat (Thailand), in Rayong province, which the group acquired from Engelhard this year. It produces auto-emission catalysts.

John Fastier, managing director for the Asean market, said the chemical market in this region was the world largest and fastest growing. BASF has capitalised in this region over the past few years. As a result, the group has a total of five plants in Thailand.

The original plant is for super-absorbent polymers, in Rayong. Twin plants Polyurethanes System House and a plant for the production of chlorine, chloride and vitamin premix for animal nutrition are in Bangpoo Industrial Estate in Samut Prakan province.

BASF group in Thailand produces various chemical products including agricultural products, functional polymer, acrylic monomer and super-absorbents, textile chemicals, plastic and fibres, polyurethanes and fine chemicals.

Pracha Chivapornthip, chairman and managing director of BASF (Thailand), said the group has been operating in Thailand for 40 years. It services 500 corporate customers in Thailand and earned more than Bt9.5 billion last year.

The group expects total business will grow by 7 per cent this year, with total earnings increasing to more than Bt10 billion.

Some multinational operators are direct competitors of the group, including Bayer of Germany, Dow of the United States and Carien of Switzerland.

Pracha said the group would maintain its market share in Thailand by adding new products as well as enhancing technology.

"Thailand is one of the most important markets in the Asean region, as many companies are locating here. We foresee some emerging opportunities in sectors such as automobiles, foods, textiles and construction materials," said Pracha.

The expansion in the Asean market is part of BASF's long-term strategy for the group to become a major manufacturer in these emerging markets.


Sabic eyes Indian chemical plant as part of global expansion plans Posted Monday, December 18, 2006 - 4:23 by hydrocarbonasia
Saudi Basic Industries Corp (Sabic) is in talks to build a chemical plant in India as part of plans to boost capacity by almost 50 per cent between 2009 and 2015, the company's CEO said yesterday.

The world's largest chemical company by market value expects to reach an agreement with a partner to build the ethylene and other chemicals-products plant by the end of next year, Mohammad Al Mady said in Dubai. He did not give further details.

Sabic, which expects to produce about 51 million tonnes of chemicals and steel this year, plans to boost total capacity to 100 million tonnes by 2015, building plants in China, India and Saudi Arabia, and acquiring companies in Europe and the United States, Mady said.

Sabic has already committed to development plans worth at least $25 billion to boost capacity by a third to 68 million tonnes in 2009, Mady said. In September, it agreed to buy the European operations of US chemical maker Huntsman Corp for $700 million. "It is a huge market," Mady said of India, the world's second-most populous country. The planned plant would supply the local market where a surging economy is spurring demand, he said.

Sabic is also in talks with China's Dalian Shide and China Petroleum and Petrochemical Corp (Sinopec) about building a plant in China. "Doing business in China takes patience," Mady said, declining to predict when he might reach an agreement.


India’s HPCL to pick refinery partner by mid-2007 Posted Monday, December 18, 2006 - 1:00 by hydrocarbonasia
Hindustan Petroleum Corp. Ltd. (HPCL) aims to finalise a strategic partner by mid-2007 for its 180 billion rupees expansion in southern India, a senior official said.

HPCL, India's second-largest state-run refiner, plans to build a 90-billion-rupee 150,000 barrels per day refinery that would double its existing capacity at the east coast city of Vizag, to 300,000 bpd by August 2010.

It is also planning a 1-million-tonne petrochemicals plant at the new complex that will cost another 90 billion rupees.

"We are talking to many companies for participation in the refinery," A.S. Rao, HPCL's executive director, told reporters over the weekend.

Rao, who runs the Vizag refinery, declined to identify potential partners, but said HPCL was looking at firms that were willing to invest in the refinery, facilitate crude supplies and share technical expertise.

HPCL aims to finance the projects through a combination of internal accruals, strategic investment and debt.

A source at HPCL said in September that French oil company Total SA and Kuwait Petroleum International Ltd. had expressed interest in picking up 25 percent stake each in the expanded refinery.

HPCL and Total are jointly setting up South Asia's first-ever underground liquefied petroleum gas storage also in Vizag.

Western oil companies are keen to gain access to India's refining and retail sector, third-largest in Asia, as the country's economy expands at more than more than 8 percent annually.

Indian state-run refiners are wooing foreign investment to help finance big expansion plans, part of India's vision of becoming a key fuel exporter by end of the decade.

But HPCL suffered a setback in March this year when oil major BP walked away from their proposed joint venture for a $3 billion refinery in Bhatinda in northern India, after differences over sharing marketing infrastructure.

Separately, Rao said HPCL would invest 6.6 billion rupees to build its first-ever single buoy mooring to handle crude carriers of up to 270,000 tonnes of oil, and for a storage facility.

"This will help us cut our freight costs as we are able to import more crude at any given time," he said.

HPCL is also investing 430 million rupees to expand its polypropylene capacity to 74,000 tonnes annually from 33,000 tonnes, to meet increased demand from domestic customers as well as for exports.

Other refiners are also expanding. Indian Oil Corp. Ltd. has set up a new petrochemicals plant, while Mangalore Refinery and Petrochemicals Ltd., a subsidiary of state-run explorer Oil and Natural Gas Corp. Ltd., plans to invest 150 billion rupees to build a petrochemicals complex in the south-western coastal city of Mangalore.



India: Mangalore Refinery plans expansion Posted Monday, December 18, 2006 - 12:58 by hydrocarbonasia
Mangalore Refinery & Petrochemicals of India plans to export 10 million tons of fuel each year starting in 2010, according to L.K. Gupta, director of finance at Mangalore.

The company, 72 percent owned by Oil & Natural Gas, the biggest Indian oil producer, plans to spend 80 billion rupees, or $1.8 billion, to increase oil processing capacity to 15 million tons a year by 2010 from the current 9.69 million tons to accommodate larger exports.

The refiner, which sells diesel and gasoline through state-run companies like Indian Oil and Hindustan Petroleum because it does not have any fuel retail outlets of its own, also plans to build 500 retail outlets by 2010, Gupta said.

"Most of our fuel will be sold in our own outlets from 2010," Gupta told reporters Friday in the southern Indian city of Mangalore. "Some amount will be sold through other retailers such as Indian Oil, and the rest will be exported."

The expansion of Mangalore's existing refinery from 9.69 million tons is set to start in the middle of next year and most of the funds earmarked for the project should be utilized in the 2008- 09 financial year, Gupta said. The refiner also plans to start producing chemicals used to make plastics and fibres near the refinery. Gupta said he did not expect the expansion costs to escalate beyond the initial estimates.

Mangalore Refinery, which exported 5.86 million tons of fuel in the last financial year, estimates it will export up to 4.5 million tons of fuel in the year ending March 31.

Fuel exports may slow this year because of higher domestic demand, Gas R.S. Sharma, the chairman of Oil & Natural said Friday.

Mangalore Refinery is in talks with companies in South Asia and eastern Africa to sell products on an annual contract, which would reduce sales in the spot market.

Mangalore Refinery on May 10 said it would export one million tons of fuel to Mauritius for one year starting in August. The refiner also plans to export gasoline, diesel, jet fuel and fuel oil to the island nation.


Japan deal secures N W Shelf LNG supply Posted Wednesday, December 13, 2006 - 3:59 by hydrocarbonasia
Sales agreements for the delivery of more than 3 million tonnes of liquefied natural gas from the North West Shelf project have been completed this year. They will add billions of dollars to Australia's export income.

The orders reflect increasing concern about energy security in Japan with companies not wanting to be too reliant on LNG supplies from the Middle East.

Australia is benefiting also from the inability of some Indonesian LNG operations to meet contractual terms with Japanese buyers.

NW Shelf operator Woodside said yesterday that one of the project's foundation customers, Tokyo Gas, had signed a binding heads of agreement for supply of 0.53 million tonnes of LNG a year for eight years beginning in 2009.

Tokyo Gas is Japan's biggest gas utility, serving 44 million people, and is its second-largest LNG consumer. Based on current benchmark prices for natural gas at Henry Hub in the US, the new contract is estimated to be worth more than $US200 million ($254 million) a year to the six NW Shelf participants.

North West Shelf Australia LNG president Peter Cleary said Tokyo Gas had been a major customer of the project since deliveries began in 1989 and the new contract was a statement of confidence in safe, secure and reliable supplies of LNG.

The original Tokyo Gas contract with the Shelf expires in 2009 but in 2003 the company signed its first additional contract.

The original contracts were signed in 1984 - to supply Tokyo Electric, Kansai Electric, Chigoku Electric, Tokyo Gas, Osaka Gas, Toho Gas, Chubu Electric and Kyushu Electric - for initial quantities of 6 million tonnes of LNG a year for 20 years from 1989. They had options for volumes to be extended beyond 2009.

The NW Shelf joint venture is building a $2.4 billion fifth production train on the Burrup Peninsula which will take annual production capacity to more than 16 million tonnes, making the development one of the world's biggest LNG processing operations outside the Middle East.

It is expected more NW Shelf supply contracts will be announced in the next two months. According to Tokyo reports, the NW Shelf's total exports to Tokyo Gas will drop 16 per cent to about 1.6 million tonnes a year in 2009, from about 1.9 million tonnes now, with the reduction tipped to be picked up by demand from other customers.

During the past two years, as NW Shelf gas markets have been negotiating extensions to original contracts, they have been virtually overwhelmed by interest.

Woodside chief executive Don Voelte has said production from the fifth processing train on the Burrup Peninsula could have been sold many times on interest from Japan, South Korea and China. Apart from NW Shelf gas, Tokyo Gas has initial sales arrangements with the Gorgon project and is a foundation customer for Woodside's projected LNG Pluto development.

Foster Wheeler awarded contract for gas separation plant in Thailand Posted Tuesday, December 12, 2006 - 5:37 by hydrocarbonasia
Foster Wheeler Ltd. announced on 11 December that its subsidiary Foster Wheeler
International Corporation (Thailand Branch), part of its Global
Engineering and Construction Group, has been awarded a front-end
engineering design (FEED) and project management consultancy (PMC)
contract by PTT Public Company Ltd. for its sixth gas separation
plant, GSP6, which will be located at Rayong, Thailand.

The terms of the contract were not disclosed, and the project was
included in the company's third-quarter 2006 bookings.

GSP6 will have a capacity of 800 million standard cubic feet of
natural gas per day and will produce ethane, propane, butane,
liquefied petroleum gases and natural gas liquids. The products will
be supplied to downstream petrochemical plants and to supplement the
local market for domestic consumption. Residue gas will be sent to the
natural gas distribution network.

In addition to the preparation of the FEED, Foster Wheeler's scope
of work includes preparation of the invitation to bid package for the
engineering, procurement and construction (EPC) contract, and the
prequalification, evaluation, selection and supervision of the EPC
contractor.

"This award builds on our previous successful working relationship
with PTT," said Graham Pope, general manager, Foster Wheeler
International Corporation (Thailand Branch). "We bring to the project
the strong combination of our extensive gas processing experience and
our Thailand operation's expertise, local knowledge and 37-year track
record of delivering successful projects."

"We are pleased to be working again with the Foster Wheeler team
which successfully completed our GSP5 project. PTT will be drawing on
Foster Wheeler's extensive project execution expertise to deliver
another world-class plant. This new plant is a key element in our
strategy to add value to Thailand's natural gas resources," commented
Suchart Thevithivarak, project director, PTT Public Company Ltd.


Shell makes new offer to Gazprom on Sakhalin-2 project Posted Tuesday, December 12, 2006 - 5:36 by hydrocarbonasia

Royal Dutch Shell has made new proposals to Russian gas giant Gazprom on joining the massive Shell-led Sakhalin-2 liquefied natural gas project in the far east of Russia, company officials said on Monday.

Shell Executive Director Jeroen van der Veer met with Gazprom chief Alexei Miller and Industry and Energy Minister Viktor Khristenko on Friday to discuss Gazprom's participation in the Sakhalin-2 project, officials said.

Gazprom spokesman Sergei Kupriyanov confirmed that van der Veer "made a number of proposals concerning the Sakhalin-2 project" and Gazprom is studying them, it was reported.

Shell's spokesman Maxim Shub said that the meeting between van der Veer and Miller was "constructive and positive."

Neither official elaborated on the new proposals.

Under a preliminary asset swapping agreement reached last year, Gazprom would get 25 percent plus one of the shares in Sakhalin-2 for giving Shell 50 percent of the stake in its Zapolyarnoye field in western Siberia.

The 22-billion-U.S.-dollar Sakhalin-2 project, the biggest single foreign investment in Russia, is 55 percent owned by Shell. Japan's Mitsui and Mitsubishi hold a combined stake of 45 percent.


Petrochemicals become major key to UAE growth Posted Tuesday, December 12, 2006 - 5:35 by hydrocarbonasia
GCC petrochemical investments totalled $29 billion in 2005, approximately 60 per cent of the region's manufacturing sector investments, a Dubai Chamber of Commerce and Industry (DCCI) study said yesterday.

The study said that oil and gas contributed about 35.6 per cent of the UAE's GDP last year.

In 2005, the UAE contributed six per cent to GCC petrochemical production, and refined oil production in the UAE totalled 437,000 barrels per day an increase of 48 per cent over the period 2000-2005.

The study considers the petrochemical industry to be a major industry because of its contribution to investment, capital attraction, diversification of sources of income and creation of employment opportunities.

It added that in 2005 there were 55 petrochemical companies employing 153,000 people or 20 per cent of the manufacturing sector in the GCC with an estimated production of 40 million tons.

GCC production contributed seven per cent to world petrochemical output in the same year.

In the second quarter of 2006 and according to the DCCI membership data-base, there were 183 petrochemical companies in Dubai.

Approximately 75 per cent of them are engaged in manufacturing other chemicals, which include pesticides, agro-chemical products, paints, varnishes, pharmaceuticals, medicinal chemicals, detergent and cosmetics.

Companies involved in manufacturing and refining petroleum products accounted for nine per cent of all companies.

Overall, the total labour and capital employed by Dubai petrochemical companies registered with the DCCI in the second quarter of 2006 was 8,786 workers and Dh9.9 billion, respectively.

The foreign trade of the petrochemical industry in Dubai was Dh12.2 billion in 2005 of which 79.3 per cent was imports, 14.7 per cent was re-exports and six per cent was exports.

Dubai contributes almost 70 per cent of the total foreign trade carried out by the petrochemical industry in UAE.


Global Resource's Technology succeeds in turning refinery waste oil into valuable commodity; increasing value of each barrel of resid/slurry Oil Posted Monday, December 11, 2006 - 3:47 by hydrocarbonasia
Global Resource Corp. reports today another major breakthrough in the application of its revolutionary microwave technology in the processing of waste oil, or more commonly known as Resid/Slurry Oil. Resid/Slurry Oil is refinery waste oil that is too thick to economically crack or reprocess with past and current technologies. At least 3%, and in some refineries as high as 7%, of typical oil refinery production is Resid/Slurry Oil. The amount of Slurry Oil worldwide is estimated to be approximately 365,000,000 barrels a year, of which at least a billion gallons of Resid/Slurry Oil reside in US refineries alone each year.

GBRC, using its unique patent pending technology, is able to cost effectively breakdown this Slurry Oil, commonly considered waste oil, into its natural component parts, which contain the essential elements of various types of valuable fuels, including such products as kerosene, diesel fuel, and heating oil. Because of its revolutionary microwave technology, GBRC can process this Slurry Oil product worth between $3.00 and $10.00 and turn it into a product valued at up to $35.00 a barrel.

"We are very happy with the results but more importantly, these results show that we have the ability to crack and gasify a much greater amount of oil worldwide that is still captured in oil wells. Resid/Slurry oil has a similar viscosity comparatively to the oil that is non-recoverable in capped wells worldwide. With our technology, we have an opportunity to extract much more oil out of each capped well. Around 60% of oil in the ground is non- recoverable and now we can get a piece of that. That is why getting approval from the US Department of Energy to use The Rocky Mountain Oilfield Testing Centre (RMOTC) http://www.fossil.energy.gov/facilities/rmotc/index.html is a giant step to potentially improving worldwide oil production," said Frank Pringle CEO of Global Resource Corp.


Invensys awarded multimillion dollar contract to upgrade Foxboro control systems at Saudi Aramco’s two largest gas plants Posted Monday, December 11, 2006 - 3:47 by hydrocarbonasia
Shedgum and ‘Uthmaniyah Gas Plants’ I/A Series systems will be upgraded to the latest Mesh Control Network technology

Invensys Process Systems has announced that it has been awarded a multi-million dollar contract from Saudi Aramco to upgrade the existing Foxboro distributed control systems (DCS) at Saudi Aramco’s Shedgum and ‘Uthmaniyah Gas Plants. Invensys Middle East will provide all engineering, procurement (hardware and software), and site services for the DCS upgrade project.

These large I/A Series systems were installed late in the 1990s to replace the analogue panel board controls at both plants. Under this DCS upgrade contract, which is designed to help keep both plants technologically current, Invensys will upgrade the existing I/A Series control networks at each plant with state-of-the-art Mesh Control Network technology.

A large number of control processors and workstations throughout both plants will also be upgraded to current I/A Series technology. Invensys and Saudi Aramco personnel are working closely to help ensure that these upgrades will be completed without production interruptions and with maximum re-use of existing control strategies, operator displays, and information applications.

Saudi Aramco constructed the Shedgum and ‘Uthmaniyah Gas Plants in the 1980s as key components of Saudi Arabia’s visionary Master Gas Plan. They remain the two largest gas plants in the Kingdom, with a combined processing capacity of well over four billion standard cubic feet per day (scfd). The output from these plants is fed into the Saudi gas grid where it fuels local power plants and provides feedstock for petrochemical plants.

Total buys stake in Exxon-Qatar LNG terminal venture in UK Posted Monday, December 11, 2006 - 3:46 by hydrocarbonasia
Total SA, Europe’s third-largest oil company, bought an 8.35% stake in a UK liquefied natural terminal, a venture of ExxonMobil Corp and Qatar Petroleum, to gain a share of Britain’s growing gas-import market.

The South Hook LNG terminal in Milford Haven, Wales, due to start operations in early 2008 by the end of next year will be able to import 15.6mn metric tons a year of gas, the Paris-based company has said in an e-mailed statement.

Britain currently has one LNG import facility, the Isle of Grain terminal in southeast England, owned by National Grid.

A new LNG import facility at Teesside on England’s northeastern coast will begin receiving shipments in January.

The facilities will accommodate growing gas imports, which may account for as much of 80% of UK’s demand for the fuel by 2020.

Total also said in yesterday’s statement it completed the purchase of a 16.7% stake in the Train 5 production line of the Qatargas II LNG project.

The Paris-based company has agreed to buy as much as 5.2mn tons of LNG a year from Qatargas II over 25 years and plans to deliver the LNG to France, the UK and the Gulf of Mexico.

LNG is gas cooled to liquid for transport by tanker to destinations not connected by pipeline. Qatar is the site of the world’s third-largest gas reserves.

The Qatargas II project is the world's first fully integrated value chain LNG venture.

It involves the development of two world-class LNG trains, each with a capacity of 7.8mn tonnes per annum, three storage tanks, power utilities and water injection systems, a fleet of 14 ships and a receiving terminal.


Malaysia: Methanol plant to boost traffic at Labuan Port Posted Monday, December 4, 2006 - 11:59 by hydrocarbonasia
The development of the second methanol plant in Labuan, Sabah, is expected to significantly boost the traffic volume handled at Labuan Port.

The port recently started to receive vessels carrying construction materials for the multi-billion plant that is being built in Labuan.

Labuan Port senior manager Ghani Paijan said the proposed second mega methanol processing plant is being built by Petronas Methanol Labuan (PML) Sdn Bhd.

The project is estimated to cost RM1.5 billion and is scheduled to start construction work early next year.

Once completed, the Petronas Methanol Plant will be the third largest plant in the world after Trinidad and Iran.

The plant will have a daily production capacity of 5,000 tonnes; double that of the island's existing methanol plant built in 1984.

"Although we are a small port, Labuan Port is growing fast," Ghani said.

"The methanol plant will further boost our handling capacity in 2007 as construction work begins and we hope to handle 150,000 tonnes worth of various cargoes for this project," he said.

Iran signs deal to supply China gas Posted Monday, December 4, 2006 - 11:58 by hydrocarbonasia
Iran's state-owned gas exports company has agreed to supply Chinese company PetroChina with about three million tonnes of liquefied natural gas (LNG) a year, The supply will be for 25 years beginning in 2011.

A heads of agreement was inked on Tuesday between the National Iranian Gas Exports Company (NIGEC) and PetroChina, the largest oil producer in China, it added, without giving a value of the deal.

"According to the agreement, 3m tonnes of LNG will be exported (annually) by Pars LNG project for a 25-year period to the Chinese market starting early 2011," NIGEC official Majid Zamani was quoted as saying.

The Pars LNG project, which teams up the National Iranian Oil Company, French Total and Malaysian Petronas, is one of three consortia in Iran producing LNG.

Phase 11 of Iran's offshore South Pars gas field, which is still to be finalised, is slated to feed the LNG production facilities of the project.

In April 2004, Iran awarded the $1.2 billion Pars LNG project to French oil giant Total.

$10bn Pearl GTL-linked contracts placed globally Posted Monday, December 4, 2006 - 11:57 by hydrocarbonasia

Contracts worth over $10bn have been placed around the world for equipment relating to the Pearl GT1L project at Ras Laffan, the world’s largest integrated gas to liquids complex.
Work is now going on at eight different locations worldwide, said Andrew Brown, Pearl GTL managing director and Shell’s country chairman in Qatar.
“Since launching the project in July, after receiving the full approval from Qatar Government and from the Shell board of directors, we have made steady progress on the $12bn to $18bn project,” he told Gulf Times at the weekend.
The Pearl GTL, a fully integrated gas to liquids project being developed under a Development and Production Sharing (DPSA) between State of Qatar and Shell, would produce some 140,000barrels per day of GTL and 120,000bpd of condensate, liquefied petroleum gas and ethane in two trains.
Production from the first GTL train is slated for 2010, with the start-up of the second train scheduled in 2011, Brown said.
The fully integrated upstream/downstream Pearl GTL project covers all aspects of the value chain, from the reservoir in the North Field to the marketing of products.
“Around the world we have different design locations where thousands of engineers are working. We are going at great speed and are well on track to start up by 2010,” the Pearl GTL managing director said.
Some of the key locations where Pearl GTL work goes on are; the UAE (offshore jackets and fabrication of top sides), France (design for water treatment plant), Japan (gas processing) - Chiyoda and Hyundai Heavy Industries, (core GTL design) - JGC, and (liquid processing unit) - Toyo. Toyo will be moving to Korea because they are in partnership with Hyundai E&C.
In terms of procurement, Brown said, most of the large equipment has already been ordered. The orders for piping materials have also been placed.
“They will all come to the site through next year and early 2008 when the construction will actually start,” he said.
“Currently, we are starting site preparation works at Ras Laffan. The construction of the contractors’ camp has begun. It can accommodate up to 35,000 people,” Brown said.
Asked whether capacity expansion would become possible at the Pearl GTL project, he said, “We haven’t had any talks with Qatar Petroleum on that so far. But this is one project where you can replicate and clearly the North Field is an enormous resource.”
Brown said Pearl GTL is one of the largest equity investments Shell had ever made.
“It shows our commitment to Qatar and the GTL technology,” Brown said.
Shell’s first GTL plant at Bintulu in Malaysia is making profits. The plant with a capacity of 14,700bpd is small when compared to Pearl GTL.
“But it gives us information every day on how to operate a GTL plant. It is a very reliable plant.
“It gives us the confidence to make this very huge investment here in Qatar,” Brown said.
GTL fuelled cars have proved to be more efficient than petrol vehicles, he pointed out.




Thailand: Dow Chem to apply for privileges Posted Monday, December 4, 2006 - 10:29 by hydrocarbonasia
US chemicals giant has $900m for making Thailand a major production base in SE Asia

US-based Dow Chemical, a leading chemical and plastics manufacturer, has announced its intention to apply for Board of Investment (BoI) incentives based on US$900 million (Bt32.28 billion) it plans to invest in Thailand.

"Thailand's political uncertainty has not affected our business' expansion plans, because we believe it is a short-term problem that will not negatively affect our investment," chairman and CEO Andrew Liveris said after meeting yesterday with Deputy Industry Minister Piyabutr Cholvijarn at the Industry Ministry.

Liveris said $408 million would be spent on construction of a propylene oxide and propylene glycol plant. Another $350 million will be invested over the next five years in a joint venture with the Siam Cement Group to construct a facility that will make use of a by-product from the plant.

He said the company would reveal how the remaining $142 million would be spent in next year's first quarter.

Liveris was appointed honorary investment adviser to the BoI in June. His duties in that role involve encouraging leading international companies, particularly those from the US, to invest in Thailand.

During his current visit, Liveris also met with Prime Minister Surayud Chulanont to be briefed on the current government's economic policies. During that meeting, Liveris reportedly told Surayud that Dow Chemical was committed to making Thailand a major production base for its Southeast Asian operations.

Piyabutr said after yesterday's meeting that the current government would continue to place a high level of importance on foreign direct investment. He also insisted the government would do its best to keep the market system free and fair for investors.

Liveris said Dow Chemical explained its investment plans during the meeting with Piyabutr, as well as its intention to apply for investment privileges with the BoI.

"As Thailand is our main production base in the Southeast Asian region, we have continued to expand our investment here," he said, adding that the company had not yet decided whether it would seek further joint investments in the Kingdom next year.

Dow Chemical first invested in Thailand in 1967. Since then, it has spent more than Bt50 billion in the Kingdom, including Bt9.85 billion in joint investments with the Siam Cement Group.

Dow Chemical's worldwide sales last year totalled $46.39 billion.

Pertamina signs $1b gas unit deal with Japan's Mitsui Posted Monday, December 4, 2006 - 10:26 by hydrocarbonasia
Jakarta: Indonesia's state oil and gas firm, Pertamina, has signed an agreement with Japan's Mitsui to build a new gasoline cracking unit costing about $1 billion at the Cilacap refinery, a Pertamina official said yesterday.

"Mitsui is ready to cooperate with Pertamina to support the Cilacap refinery expansion project," Pertamina's president director, Ari Soemarno, said.

The refinery currently has a capacity of 348,000 barrels per day (bpd).

Soemarno, who has just returned from a trip to Japan, said Pertamina was looking into forming a joint venture with trading house Mitsui over the new unit.

"We want to make Cilacap refinery more economic and more competitive. We need about $1 billion for such a project, including other facilities," he said, without elaborating.

Pertamina's processing director, Suroso Atmomartoyo, said last week the new unit would have a capacity of between 40,000 bpd and 50,000 bpd.

He said Pertamina planned to start building it by 2008 at the latest and expected it to begin operations in 2010.

Pertamina's Cilacap refinery, located in Central Java, has two crude distillation units with a capacity of 118,000 bpd and 230,000 bpd respectively. The refinery also has a 29,000-bpd gasoline-making reforming unit and a 50,000-bpd visbreaker.

The biggest gasoline-making facility in Indonesia is Pertamina's 83,000-bpd residual cracking unit at its Balongan refinery.

In August, Pertamina said it would boost its oil refining capacity 20 percent by 2012, spending $11 billion on the sector in a move to cut costly imports.

Indonesia is Asia's top diesel and gasoline importer, floating a tender each month for large spot volumes that can drive up benchmark regional prices.

Indonesia will import 10.9 million barrels of oil products in December, up 4.6 per cent from this month, industry sources who monitor the country's imports have said.

Pertamina will import 3.82 million barrels of gasoline in December, down 19.1 percent from November's 15-month high and consistent with average monthly volumes.


Japanese consortium joins Qatar refinery Posted Thursday, November 30, 2006 - 9:36 by hydrocarbonasia
Four Japanese firms led by Idemitsu Kosan and Cosmo Oil Co. said they have agreed to join a new Qatari refinery project, marking the Japanese industry's first overseas refinery investment.

The project, expected to cost $800 million, comes as Japan's refiners seek more business opportunities in the natural-gas-rich Gulf state.

Idemitsu and Cosmo Oil, Japan's No. 3 and No. 4 refiners, will each take a 10 per cent stake in state-run Qatar Petroleum's Laffan Refinery, which plans to build a 146,000-barrel-per-day plant in Ras Raffan Industrial City in Qatar.

Japanese trading houses Mitsui & Co. and Marubeni Corp. will each take 4.5 per cent, reducing Qatar Petro-leum's holding to 51 per cent. US major ExxonMobil and French oil giant Total hold 10 per cent each.

Slowing domestic fuel demand in Japan has eroded refiners' margins, making it hard for them to pass on higher crude oil costs to retailers and prompting them to look to refinery projects overseas.

"Qatar's energy industry has lots of prosperity, an Idemitsu spokeswoman said.”Our company is looking to join more projects there, such as natural gas and petrochemicals, through this investment."

Marubeni, which is already in the liquefied natural gas (LNG) business in Qatar, said it wants to further expand its operations there and boost trading volumes of Qatari crude oil.

Idemitsu said it would pay 10 billion yen ($86 million) for its stake in the Qatar refinery. The other three did not disclose the size of their investments.




Linde Engineering wins billion dollar Borouge contract Posted Thursday, November 30, 2006 - 9:35 by hydrocarbonasia
Borouge has awarded the contract to build its new ethylene cracker to Linde Engineering.

The cracker will have a capacity of approximately 1.5 million tons per annum and is considered to be the largest gas cracker in the world.

The value of the contract is approximately US$ 1.3 billion and is awarded on a lump sum EPC turn key basis.

Work is expected to begin in the 1st week of December 2006, and is scheduled for completion in 41 months from the effective date.

This award is the first step in Borouge 2, the major expansion project being undertaken by Borouge, which will triple production capacity.

Borouge 2 is a key part of Borouge’s strategy for growth, tripling its production capacity and consolidating its position in markets throughout the Middle East, Asia-Pacific and Africa. It is expected to come on stream by 2010.

In addition to the ethylene cracker, the Borouge 2 project comprises the world’s biggest olefins conversion unit, producing 752 Kilotonnes per annum and two Borstar polypropylene plants with a combined annual capacity of 800 Kt along with a new Borstar Enhanced PE plant that will have an annual capacity of 540 Kt to complement the existing 600Kt unit.

The project will also include a general Utilities and Offsite package. The award of the above 3 remaining packages is expected during first and second quarter 2007.

The new expansion will be located next to Borouge’s existing petrochemical complex in Ruwais, Abu Dhabi in the United Arab Emirates.



Some Asia refiners to get more Saudi oil Posted Tuesday, November 28, 2006 - 10:25 by hydrocarbonasia
Top oil exporter Saudi Arabia has told some of its Asian customers it will sell them more crude in December, industry sources said yesterday, raising questions about the kingdom's adherence to Opec's accord.

Although not all refiners will receive the extra supplies, news of the increase surprised traders who had expected the kingdom to maintain the export curbs implemented this month as part of Opec's 1.2 million barrels per day (bpd) output cut.

Some lifters of Saudi crude said state firm Aramco had notified them that their supplies would be unchanged next month, but others were told that restraints would be slightly relaxed, despite Opec's concern that markets are still oversupplied.

Two refiners in Japan were notified by Aramco that it would supply them about 4-5 per cent less crude than stipulated under their annual contract next month, a shallower cut than November's 7-8 per cent reduction, industry sources said.

"The reduction in volumes is smaller for December than November," a refinery source in Japan said.

A refinery in Taiwan received a similar notice, a source said. Two Southeast Asian refiners will actually receive 100 per cent of their allocations for Dec-ember, sources at the two companies said, despite being cut in November.

However, two refiners in South Korea and one in India will receive steady supplies compared to this month, sources in those countries said. One Japanese refiner will receive less crude due to refinery outages, a source said.

The apparent rise in eastward exports comes despite talk from many in Opec - including Saudi Oil Minister Ali Al Naimi that a further reduction in supplies may be necessary when the group meets on December 14 to address swollen global crude inventories.

Although some dealers said the rise in supplies might revive doubts over compliance with Opec's first formal output curbs since 2004, others said it was too early to make that link as cuts to Western buyers could offset the higher Asian sales.

"It's a bit too early to conclude that Saudi will supply more compared with last month, as we have to see what they are going do with Europe and the US," said Tony Nunan, a manager at Mitsubishi Corp.'s risk management unit.

"I believe Saudi is seriously committed to the output cut."

Major global oil customers and US refiners who were also cut more deeply this month are expected to see their December allocations later in the day.

The kingdom tells customers how much crude they will sell by the middle of the preceding month.

The increased shipments will reach Asian refiners in January, potentially helping meet peak winter demand if unusually early or chilly weather draws down swollen heating fuel stocks, which reached their highest in 12 years at the end of October

Kuwait postpones new refinery tender Posted Monday, November 27, 2006 - 12:57 by hydrocarbonasia
Kuwait: State refiner Kuwait National Petroleum (KNPC) said yesterday it had postponed the award of a tender for a new 615,000 barrels per day refinery by three months to March due to delayed bidding by international firms.

"The contractors are asking for postponement and we try to accommodate the contractors as much as possible," KNPC Chairman and Managing Director Sami Rushaid told a news conference.

Rushaid also said KNPC was likely to award in September or October 2007 a tender for a major upgrade project to boost the refining capacity of two of the three existing refineries.

He said the Supreme Petroleum Council last week initially approved the project which involves upgrading the 460,000-bpd Mina Ahmadi and the 270,000-bpd Mina Abdullah refineries.

KNPC officials say the new refinery, coupled with the upgrade works to end in August 2011, will boost Kuwait's total refining capacity to 1.5 million bpd from 930,000 bpd now.

Asked when the upgrade project tenders will be awarded, Rushaid said: "I imagine it will be in September or October 2007 ... It is expected around the last quarter of this year."

Regarding the new refinery tender, originally scheduled for award in December, he said: "We still have not received the bids. When we do receive the bids in December, three months after that we will (award it)."

Eleven international companies are bidding for the new refinery which is due to be completed by 2010 and is estimated to cost about $6 billion. The complex will mostly produce low sulphur fuel oil for the state's electricity plants.

Gulf Opec producer Kuwait, which sits on about a tenth of the globe's petroleum reserves, is also expanding its refining capacity abroad.


Iran to partner Concord Energy in Jurong Island refinery complex Posted Monday, November 27, 2006 - 12:56 by hydrocarbonasia
Iran’s participation in a US$300 million refinery project being built by Concord Energy on Jurong Island, it has been confirmed marks the first direct Middle Eastern investment in Singapore’s oil refining industry.

And more Middle Eastern investments could follow, as Singapore leaders actively engage the Gulf countries, industry observers say.

In fact, Iran, which will supply most of the feedstock for Concord Energy’s condensate splitter, will not be its sole Middle East partner. Confirming Iran’s 30 per cent stake, Concord Energy’s project and acquisitions director Victor Ogg said yesterday there will likely be another Gulf partner, though he declined to identify it.

Iran’s participation was revealed by the country’s Deputy Oil Minister Mohammad Reza Nematzadeh at an oil and gas conference in Teheran on Tuesday. He said it will hold a 30 per cent stake in a 75,000 barrels per day (bpd) refinery, which he did not name.

Iran already supplies Singapore with condensates from its South Pars natural gas field, the deputy minister told Bloomberg. “Because we are exporting anyhow, we can also invest in (the) downstream (project),” he said. “We can participate in the value-added of this product.”

Condensate, an ultra-light form of oil, is a by-product of natural gas production.

Concord’s Mr Ogg said the company has been in talks with Iran for about a year. “Besides taking a stake, Iran will provide a substantial portion, or over 50 per cent, of the condensates we need,” he said.

Concord, which has been an oil trader here for the past eight years, announced its greenfield project in March, making it the first new refinery investment here in a considerable time.

The refinery, to be built on a 45 hectare site, will use a range of “sour” or high-sulphur condensates to produce naphtha, jet kerosene and ultra-low sulphur diesel for customers including the oil majors and downstream petrochemical plants on Jurong Island.

But the project originally scheduled to be completed by end-2007 has now been pushed back to Q3 2008 because of delays in getting contractors amid the worldwide building boom in new petrochemical and refining projects, Mr Ogg said.

Concord has also been trying to finalise feedstock supplies, but the latest Iranian announcement this week signals “the project is moving forward,” he said.

Condensate supplies from the Middle East are set to triple in the next five years, he added, when asked where else Concord will obtain its feedstock.

Welcoming the Iranian investment in Singapore’s refining sector, the director of the Economic Development Board’s chemicals cluster, Aw Kah Peng, said it is in the business interests of oil and gas-rich Gulf countries to invest in Singapore’s oil hub – the world’s third-biggest.

Concord’s 75,000 bpd will add to Singapore’s 1.39 million bpd of refining capacity, comprising ExxonMobil (605,000 bpd), Shell (500,000 bpd) and Singapore Refining Company (285,000 bpd).

The only other infrastructural energy investment by Gulf investors here so far is that of the recently started Horizon Terminals oil storage project by Dubai government-owned Emirates National Oil Company (ENOC), which includes Kuwait’s Independent Petroleum Group among its partners.

ENOC’s group chief executive Hussain Sultan said in September that it is also considering building a condensate splitter in Singapore, like Concord’s.

Thailand’s PTTCH expects fall in margins next year Posted Monday, November 27, 2006 - 12:56 by hydrocarbonasia
PTT Chemical expects its petrochemical margins to fall by 5% to 10% next year due to price declines. President Aditheb Bisalbutr said margins between feedstock and finished petrochemicals would narrow due to new supplies from Middle East refineries, as well as a projected slowdown in the US economy.

''Economists predict that US economic growth would slow by 0.5 to one percentage point from this year. Considering the huge role of the US in global economic growth, it will affect our business more or less,'' Mr Aditheb said.

He said strong growth in the Chinese economy would not be sufficient to offset a US economic slowdown. China accounts for around one-third of PTTCH's export revenues.

PTTCH, the olefins flagship of the energy conglomerate PTT Plc, projects a decline in spreads to $540 per tonne in 2007 from $600 this year.

Revenues for the year are expected to reach 72 billion baht, with 65% generated from base chemicals like ethylene and propylene and another 24% from new investments in intermediate petrochemical products. Downstream products account for around 11% of revenues.

PTTCH reported nine-month net profits of 12.94 billion baht, on revenues of 53.67 billion. Despite margin declines and a 60-day shutdown for debottlenecking in early 2007, the company still forecasts revenue growth of 5% to 10% for 2007.

Mr Aditheb said the debottlenecking programme would help raise output by 150,000 tonnes to 1.7 million per year.

PTTCH next year also will fully realise revenues from investments in three intermediate producers: Bangkok Polyethylene, TOC Glycol and Thai Oleo Chemicals.

Mr Aditheb said the company's investment budget had been set at $1.3 billion through 2010, and that the firm was studying other possible ventures in intermediate and downstream projects.

''We have to pave the way to achieve our integrated petrochemical goal and ensure sustained revenue growth for the long-term,'' he said.

Its investment policy would focus on the intermediate and downstream products which would provide higher value and margins for the company. By 2010, PTTCH projects base chemicals to account for 45% of revenues, with the rest from intermediate and downstream goods.


PTTCH shares closed Friday on the Stock Exchange of Thailand at 77.50 baht, up 50 satang, in trade worth 30.31 million baht.


Qatar to nearly double LNG exports to Japan Posted Thursday, November 23, 2006 - 3:07 by hydrocarbonasia
Qatar plans to boost its exports of liquefied natural gas to Japan to more than 11 million tons a year in 2010 from the current 6 million tons, according to Abdullah bin Hamad al-Attiyah, the nation's energy and industry minister.

"Now we're listening to our customers (in Japan), we feel they need more LNG. So I think we can increase another 5 million tons in the coming years," said al-Attiyah, who doubles as second deputy premier of the fourth-biggest supplier of oil and natural gas for Japan.

"We are very committed to Japan," he said in a recent interview in Tokyo. "We would like to be a more reliable energy supplier for Japan."

The comments are a godsend for Japan at a time when Indonesia, the nation's No. 1 supplier of LNG, is considering cutting shipments to Japan from 2010, and Japan and Russia remain at odds over the Sakhalin-2 oil and natural gas project in the Russian Far East.

Al-Attiyah said Qatar plans to expand global LNG shipments to 35 million tons a year in 2007 from the current 29 million tons, making it the world's biggest LNG producer.

He projected that Qatar's global LNG shipments will steadily grow to 77 million tons per year in 2010.

Along with Japan, al-Attiyah said, Qatar plans to increase LNG exports to South Korea by 2 million tons next year to 7 million tons a year and to India by 2.5 million tons in 2009 to 7.5 million tons. Qatar will also start shipping LNG to Taiwan in 2008.

The minister said recent global oil prices are "very volatile" due to active speculative trading in an apparently oversupplied market, signalling that OPEC will decide to cut oil output further at their next meeting in December.

Al-Attiyah said he currently sees "no shortage" of oil in the market, given mild winters in countries including Japan and the United States and high inventories of oil.

"If you continue to see this volatile market, going down very sharply and going up very sharply, this is not good for business," he said. "I hope that oil markets will stabilize.

Al-Attiyah was on a nine-day visit to Japan through Monday, during which he has held talks with major clients, including Chubu Electric Power Co. and other end-users.

He also met with Foreign Minister Taro Aso and Minister of Economy, Trade and Industry Akira Amari during the first Japan-Qatar Joint Economic Committee, a ministerial forum aimed at boosting bilateral economic relations.

Abu Dhabi’s IPIC to invest Dh18.3b in Pakistan refinery Posted Tuesday, November 14, 2006 - 1:46 by hydrocarbonasia
International Petroleum Investment Co. (IPIC) is to invest Dh18.3 billion in a refinery project in Pakistan, with a capacity of 200,000 to 300,000 barrels a day.

The project is expected to play a great role in backing the Pakistani economy, making jobs available for Pakistanis and adding value to the UAE's economy. The project stands at the beginning of a new phase which is built over internal and external investment expansion, while diversifying its sources and channels.

The IPIC board, which met yesterday evening, discussed several projects to be carried out in the UAE and abroad.

Presided over by Shaikh Mansour Bin Zayed Al Nahyan, Minister of Presidential Affairs and Chairman of IPIC, the meeting evaluated the company's performance for the period between January and September and reviewed future plans. The company's profits this year are expected to reach Dh1 billion.

Shaikh Mansour gave new directives to expand the company and ensure success in its investments in the energy sector.


SABIC plans $5 billion joint venture in China Posted Monday, November 13, 2006 - 10:54 by hydrocarbonasia

Saudi Basic Industries Corp. (SABIC), the world’s most profitable petrochemical firm, said yesterday that it intends to form a joint venture in China with possible investment of up to $5 billion.

The company is keen on building a manufacturing base in China, a market where it has been selling products for the past 28 years, Mutlaq H. Al-Morished, chief financial officer of the company told a news conference. “We are looking at building facilities in China when the time is right,” he said.

He said SABIC was in talks with a number of private and government groups for a joint venture and was eyeing eastern China as a possible location for the unit.

Al-Morished said it could be a $3 billion to $5 billion ethylene cracker with facilities to manufacture downstream products like polyethelyne and glycol, but there were no concrete plans as yet.

SABIC officials are in Asia where they are making presentations to potential investors for a debut, benchmark-sized eurobond issue, depending on the market response. Benchmark-sized euro bonds usually total at least 500 million euros ($636 million).

Netherlands-based plastics and commodity chemicals producer SABIC Europe, SABIC’s fully owned unit, is holding roadshows in Asia and Europe from Nov. 9 to Nov. 17, for selling the bond whose tenor would be between seven and ten years.

HSBC and J.P. Morgan Securities Ltd. are joint bookrunners for the deal. The proceeds will be used for general corporate purposes including SABIC’s recent acquisition of Huntsman Petrochemicals (UK) Ltd.

In September, SABIC agreed to buy the European bulk chemicals unit of US-based Huntsman Corp. for $700 million, saying the assets fit well with its other European operations and would allow it to gain scale on the continent.

CNOOC plans to import 25 mln tons of LNG annually by 2010 Posted Monday, November 13, 2006 - 10:54 by hydrocarbonasia

China National Offshore Oil Corporation (CNOOC) will import 25 million tons of liquefied natural gas (LNG) annually by 2010, said a senior executive with CNOOC Gas and Power Limited on Friday.

Liu Liming, Vice General Executive Manager with CNOOC Gas and Power Limited, said at the China Gas Summit held here that his company is still seeking partners to supply LNG for CNOOC's fourth LNG terminal in East China's Zhejiang Province.

"We have had talks with several possible partners including enterprises from Qatar and Indonesia," said Liu.

CNOOC Gas and Power Limited is a wholly owned company of CNOOC the third largest oil producer of the country.

CNOOC's LNG terminal in Shenzhen of South China's Guangdong Province was put into production in June of this year. The terminal, supplied by natural gas from Australia, is also the first LNG terminal in China.

CNOOC has signed long-term LNG supply contracts with Indonesia for its terminal in Fujian Province which is under construction and with Petronas of Malaysia for the terminal in Shanghai.

Some of the LNG will be used for power generation, said Liu, adding that natural-gas fuelled power generation could reach 9.16 million kilowatts by 2010.

CNOOC now has five natural gas power generation projects, in China's power-hungry regions in the east and in the south, that are designed to be fuelled imported LNG projects or offshore natural gas fields.

China now has 23 natural gas power generation projects with a total installed capacity of 18.37 million kilowatts.

By 2020, natural gas generated electricity will account for 6.7 percent of the country's total, said Liu.

However, considering the high price of natural gas on the international market, China has decided to adopt a prudent strategy in developing natural gas power generation over the next five year.

Liu hopes the development of natural-gas power generation will continue in a proper and moderate way as it will promote the construction of infrastructure and accelerate the development of China's natural gas market, he said.


Petronas trading arm lands in India Posted Monday, November 13, 2006 - 10:53 by hydrocarbonasia
Mitco Labuan, the trading arm of the $44.3-billion Malaysian petrochemicals giant Petronas, is setting up a wholly owned subsidiary to engage in trading and related activities in the country..

Mitco Labuan, which clocked revenues of $1.37 billion last year, would be involved in activities including cash and carry wholesale trading and export trading of products like chemicals, polymers and other general merchandise. It will also provide marketing services for Petronas and other group companies.

According to sources, the initial investment would be small but there would be additional investment in the future which would depend on requirements for the operations here.

This would be Petronas’ third venture in India. Currently it has a 50:50 joint venture with public sector oil company IOC under IndianOil Petronas Pvt Ltd and another wholly owned subsidiary Petronas Marketing India.

While the JV is engaged in importing, exporting, bottling, storage, marketing and distribution of LPG in bulk and packed forms, the wholly owned subsidiary is into marketing and distribution of petroleum products including lubricants.

Even as the new entity is expected to be involved in a similar line of business as the joint venture and the other wholly owned entity, the Indian entities have given their no objection certificates(NoCs) to Petronas.

While 100% foreign investment is allowed in cash and carry wholesale trading as well as export trading and marketing services through the automatic route, the NoC was required as Petronas had a joint venture and subsidiary in a similar business.

Rosneft to build refinery in China Posted Friday, November 10, 2006 - 12:24 by hydrocarbonasia
Russian state oil firm Rosneft plans to construct a 200,000 barrels per day refinery together with China National Petroleum Corp (CNPC) and build hundreds of petrol stations in China, it said on Thursday.

Rosneft, the Kremlin's oil vehicle that plans to become a key China player, said the refinery could be located at a site 200 km from Beijing.

"The refinery will be supplied by Russian and Chinese oil," Rosneft president Sergei Bogdanchikov said. He added that Rosneft wanted to build up to 300 petrol stations in the country.

Rosneft has been supplying around 180,000 bpd to China by rail since buying the former key oil production unit of bankrupt oil firm Yukos after a forced state auction in 2004.

Rosneft is also set to become the key supplier via Russia's first pipeline to Asia, due on stream by the end of this decade, as it is speeding up development of rich deposits in East Siberia in addition to its West Siberian production.

Russia, the world's second largest oil exporter, has repeatedly said it is looking to diversify its energy exports away from saturated European markets and considers China, the world's second biggest oil consumer, as a vital future market.

Russian gas monopoly Gazprom is also planning to build two major gas pipelines to China.

Chinese firms are in turn keen to expand into Russia's upstream sector as the country is believed to hold massive unconfirmed reserves in East Siberia and the Far East.

Rosneft and China's second largest energy firm, Asia's top refiner Sinopec, already share a mid-sized oil unit, Udmurtneft, in the Volga region.

Sinopec also has a 25 per cent share in the Rosneft-led Sakhalin-3 Veninsk block off Russia's Pacific coast.

CNPC, China's largest oil and gas firm, has yet to establish a big presence in Russia, despite having bought $500 million worth of Rosneft stock during its record $10.6 billion public share offering in July.

Bogdanchikov said Rosneft and CNPC would set up a joint exploration and production venture in Russia, Vostok Energy, in which Rosneft would retain 51 per cent.

"Next year this venture will be already buying exploration licences and probably some assets with existing production," Bogdanchikov said.

Bogdanchikov confirmed his company was seeking to borrow up to $24.5 billion from Western banks, which would be Russia's largest ever syndicated loan, but declined to discuss details.

"The consortium will be broadened. There will be banks, which have already served us, and new banks," he said referring to a consortium of banks, which helped Rosneft organise the share offering and raise the previous massive $7.5 billion syndicated loan.


He said the loan would be used for general corporate purposes.

Many analysts believe it will help the company buy the remaining assets of bankrupt oil firm Yukos, such as five refineries and two oil production units, when they go for sale.

Bogdanchikov also denied the loan may serve to help Rosneft buy out the Russian shareholders in rival Russian oil producer TNK-BP, a 50/50 joint venture with BP.


Groundbreaking ceremony for Shell Eastern Petrochemicals Complex Posted Monday, November 6, 2006 - 9:55 by hydrocarbonasia
Shell’s newest integrated petrochemical facility, the Shell Eastern Petrochemicals Complex1 (SEPC) took a step closer to becoming reality at a groundbreaking ceremony held today on Bukom Island, Singapore. SEPC represents Shell’s largest ever chemicals investment in the country.

The ceremony was attended by over 300 guests, dignitaries and staff who witnessed Guest of Honour, Prime Minister Lee Hsien Loong and Dr Rob Routs, Shell’s Executive Director Downstream break the ground at the Pulau Bukom refinery signalling the start of building work for the complex.

When complete, the facility will include a new world-scale 800,000 tonnes per annum ethylene cracker on Bukom Island and a 750,000 tonnes per annum Mono-Ethylene Glycol (MEG) plant on Jurong Island using Shell’s proprietary technology. The project scope also includes modifications and additions to the Bukom refinery. Start-up of the new and modified facilities is expected in 2009/2010.

The Shell Eastern Petrochemicals Complex represents a significant step in Shell’s commitment to delivering a profitable downstream business. The Group is committed to grow Chemicals investments in the Asia Pacific and Middle East regions, in line with its strategy to grow where the market is growing.

New Shell complex to boost Singapore's position as chemical hub Posted Thursday, October 26, 2006 - 5:51 by hydrocarbonasia
New Shell complex to boost Singapore's position as chemical hub

A new multi-billion dollar petrochemicals complex by Shell Eastern will open by 2009 on Bukom island, southwest of Singapore.

At the groundbreaking ceremony on Friday, Prime Minister Lee Hsien Loong said the complex will enhance Singapore's competitiveness as a global chemicals hub while reaping significant spin-offs for Singapore's economy as a whole.

The facility is also Shell's largest investment in Singapore so far.

The new Complex will include an ethylene cracker that will manufacture annually 800,000 tonnes of ethylene, which is a key industrial component.

It will also contain the world's largest mono-ethylene glycol, or MEG, production plant to produce a chemical which is used to make polyester in clothes and even plastic water bottles.

The MEG will then be exported to countries in the Asia-Pacific region with about half going to the China market alone.

Demand from the region is expected to grow further down the road.

Dr Rob Routs, Executive Director, Oil Products and Chemicals, Shell, said: "When completed, the cracker and the new MEG plant will create an advantaged site through full integration with the Bukom refinery enabling feedstock and operating benefits. The cracker will also be ideally positioned to supply products to our major customers located here. We also expect the majority of MEG production to be consumed in the region where there is considerable demand growth."

Looking ahead, PM Lee said the complex is a strategic investment for Singapore.

He added: "It will also strengthen Singapore's position as a regional node for supplying to emerging markets such as India and China. All this will reinforce our position as one of the top ten petrochemical hubs in the world."

Over the past decade, Singapore's petrochemicals industry has grown 5-fold to around S$21 billion (US$13 billion) every year.

And Mr Lee said that Shell's new complex on Bukom island will be a key anchor for the entire chemicals cluster, for the continued growth and diversification of the industry, and to create new jobs for engineers and skilled workers.

Shell said the new complex would create 200 permanent high skilled jobs as well as spin-offs beyond the industry.

INPEX says LNG likely option at Indonesia gas field Posted Wednesday, October 18, 2006 - 4:20 by hydrocarbonasia
INPEX Holdings Inc. said on Wednesday that producing liquefied natural gas (LNG) at the offshore Abadi gas field in Indonesia is a likely option.

The Japanese energy developer currently has a 100 percent stake in the project to develop the eastern Indonesian field, situated in the Timor sea.

"Our company will drill four more test wells at the end of this year or early next year to confirm the size of reserves at the field, then we will make a final decision," INPEX spokesman Kazuya Honda said. "But at this point, we think the field has the size of reserves that can produce LNG."

He said production volume would be 3 to 5 million tonnes per year.

INPEX told analysts earlier this year that it aimed to start commercial gas production at Abadi in 2014-2016.

It was reported on Wednesday that INPEX plans to invest 500 billion yen ($4.22 billion) to develop the Indonesian gas field. But INPEX spokesman Honda did not confirm the figure.

It will submit a production plan to the Indonesian government in 2008 and ask other major international oil companies to participate in the project to diversify risk.

India: Government price controls have pushed India's state-controlled oil refineries into the red Posted Monday, October 16, 2006 - 6:31 by hydrocarbonasia
High crude prices may be fattening profits at oil companies around the world, but in India state-controlled refiners and retailers are losing money hand over fist. In the fiscal year that ended in March 2006, those companies lost a combined $8.6 billion. And Merrill Lynch (Charts) estimates they will lose another $12 billion to $20 billion this year.

The reason: government price controls on gasoline, diesel and cooking fuels. "Today we are selling gasoline at 8 cents a litre below cost, diesel at 17 cents a litre below cost and kerosene at 39 cents a litre below cost, to retail customers," says N. Srikumar, a spokesman for Indian Oil, the country's largest refiner, which reported its first quarterly loss, on revenues of $41 billion, last year.

Bharat Petroleum, another Fortune Global 500 company, also posted its first loss, of $145 million, in the quarter ended in June. And Hindustan Petroleum had a loss for the quarter of $130 million. Says Sudhir Joshi, finance director at Bharat Petroleum: "Kerosene used by poor families in India for cooking and lighting is sold at less than the price of packaged drinking water."

Murli Deora, India's Minister of Petroleum and Natural Gas, acknowledges that the international price for kerosene, widely used for cooking in India, has increased by 254 percent since 2002 without any increase in cost to individual consumers. But he defends the government's price-control policy. "The citizens of the country," he says, "have limited capacity to bear high price increases, particularly in the case of lifeline fuels like kerosene. The government is making every effort to see that the impact on our consumers is minimal."

Fund managers take a dimmer view. "The government's petroleum-pricing policy is creating problems in realising the sector's huge potential," says Paras Adenwala, chief investment officer at ING Investment Management in Mumbai.

Indeed, shareholders are feeling the pain. The stock price of Bharat has fallen by more than 15 percent since May, while Indian Oil has dropped 7 percent and Hindustan Petroleum 11 percent in the same period. All those stocks have been underperforming India's benchmark indexes for two years, although they make up the largest single chunk, by way of value, of public-sector companies traded on the country's bourses.

To help offset the burden placed on the oil sector, the government will issue bonds worth $6 billion. It has also directed state-controlled exploration companies to sell crude oil and gas to state-owned marketing companies at discounted prices, a move that will cause the exploration majors to lose approximately $5.2 billion this year, according to Iyer. The government has also cut some taxes and allowed a small increase in the price of auto fuel in June.

The rest of the loss will have to be borne by oil marketers, who are borrowing record amounts. Indian Oil's borrowings rose by 52 percent last year, to $5.7 billion. "Over the longer term, if the market and prices are freed, then everything will get normalised," says Indian Oil's Srikumar. "Right now we can't put the average Indian to inconvenience for our commercial gain, and yet we need to earn a surplus to invest for the future."

Private-sector refiners and marketers, such as Reliance Industries, have found a way out of the dilemma. Rather than sell auto and cooking fuels below cost in India, the company has taken to exporting a large part of its output. Reliance's exports for the quarter ended in June rose more than 85 percent over the previous year, to $2.9 billion, helping boost net profit by 10 percent , to $553 million.

State-owned companies don't dare export - or complain too loudly. Earlier this year Subir Raha, the outspoken chairman of Oil & Natural Gas Corp., was shown the door after publicly demanding that the government pay the company prevailing international prices for the crude oil it produces.


PTT's aim is to match S Korea in petrochemicals Posted Monday, October 16, 2006 - 1:22 by hydrocarbonasia
PTT Plc needs at least five years to develop its petrochemical operations to match South Korea's, even though Thailand has an advantage in terms of raw materials.

Executive vice president Pailin Chuchottaworn said Thailand enjoyed such an advantage because South Korea must import all of the raw materials used in its petrochemical production. However, he added that management and personnel in the Kingdom still lagged far behind South Korea's, in terms of both skill and discipline.

"It will take time to raise the quality of our personnel to the South Koreans' level," he said.

South Korea is considered an Asian leader in the petrochemical industry. It is the world's fifth-largest producer of ethylene, and the country's nine major operators have made South Korea the world's eighth-largest petrochemical producer overall.

One of those producers is Samsung Total Petrochemical in Daesan, located in the country's largest petrochem complex.

There are 15 petrochemical factories in the Daesan Industrial Estate, representing an investment of US$5 billion (Bt187 billion). South Korea uses naphtha as a raw material in the production of several types of petrochemical pellets. Samsung Total has a combined annual production capacity of more than 4 million tonnes. PTT's production capacity pales in comparison.

Pailin said PTT planned to learn how to improve its administration and management from South Korea, so it could upgrade its own petrochemical operations. "We can see how a country with no energy resources of its own developed its energy and petrochemical industries to compete in the world market."

South Korea may have to buy fuel from outside, but it was able to build up its industries - steel, engineering, construction and tankers - by itself, and the money earned from them is kept in the country. "Thailand is willing, but it cannot yet stand on its own, because the quality of our human resources is lower," he said.

Pailin said the Korean petrochemical industry had a 10-15-year head start on Thailand, managing to become four times larger than the Kingdom's. He attributed the success to its disciplined and diligent managers and workers.

For example, Samsung Total's management has proven very effective in maintaining low production costs and maximising energy use, and the company continually monitors its rival companies. Therefore, it is better equipped to withstand any risks than are its rivals, he said.

Pailin said PTT started learning from South Korea two years ago. He said if PTT was determined enough, the company could reach South Korea's level in five years.

But although Thais can learn theory, they often fail to translate it into practice. "Thais tend to be more laid back, a characteristic that has slowed efforts to upgrade our industries," he said, adding that Thailand also lacked an adequate supply of human resources.


2.99b yuan Hainan buy for Sinopec Posted Friday, October 13, 2006 - 5:14 by hydrocarbonasia
China Petroleum & Chemical Corp, also known as Sinopec, will invest 2.99 billion yuan (HK$2.94 billion) to acquire a 75 percent stake in an oil refiner from its parent in the southern province of Hainan.
Sinopec, the biggest refiner in Asia, expects the investment in Hainan Petrochemical to boost its oil processing capacity by 5 to 6 percent, while lowering production costs, the Beijing-based company said Thursday in a statement to the Hong Kong stock exchange.

Hainan Petrochemical, which is wholly owned by Sinopec Group, started trial runs at the end of September and expects its annual production capacity to reach 483,000 tons of liquefied gas and 2.37 million tons of gasoline after it kicks into full gear later on.

Sinopec Group, the controlling shareholder of the Hong Kong- listed subsidiary, will inject 1 billion yuan to retain a 25 percent interest in Hainan Petrochemical. Upon completion of the capital injection, the registered capital of the Hainan refiner will rise to 3.99 billion yuan from 2.8 billion yuan.

In addition, the Hainan refinery project is earmarked for 11.96 billion yuan worth of investment after completion of the deal. The difference between the total investment and registered capital will be funded by bank loans, Sinopec's statement said.

"The acquisition comes at the right time as the refining operation is about to turn around after the sharp fall in the price of oil," said Bank of China International analyst Lawrence Lau.

"The operating cost of the newly acquired refinery project is 84.6 yuan per ton, 27 percent lower than Sinopec's overall level in the first half of this year."

In the first six months, Sinopec's net profit rose 8.9 percent to 21.4 billion yuan, thanks to strong growth in its upstream exploration business amid soaring oil prices, but its refining business widened losses to 16.6 billion yuan, from only 1.3 billion yuan a year earlier.

Analysts expect Sinopec's refining margin to improve during the second half of this year amid declining crude oil prices.

Sinopec, whose share price has gained 27 percent this year, will announce third-quarter results at the end of this month.

"We are positive on Sinopec's long-term prospects, given the central government's determination to introduce a more market-oriented refined product pricing mechanism," said Core Pacific Yamaichi analyst Danny Lai.


Gujarat State Petroleum plans to build 5m-tonne LNG terminal by 2011 Posted Friday, October 13, 2006 - 5:13 by hydrocarbonasia
India's Gujarat State Petroleum Corporation (GSPC) plans to build a 5-million tonne LNG terminal in western Gujarat state by 2010 or 2011, managing director P.J. Pandian said yesterday.

GSPC plans to retain a 26 per cent stake in the proposed LNG terminal and offer the rest to various investors, he said.

"Investment talks are still at preliminary stage and a number of companies, both Indian and foreign, have expressed interest," he said. He added that bids for development of its Krishna Godavari gas block would be opened on November 2.

GSPC has shortlisted oil majors Chevron, BP, BG Group and Italy's ENI from about 13 oil firms that had expressed interest in picking up a stake in the KG basin off India's east coast.

The field is estimated to have reserves of about 20 trillion cubic feet (tcf) of gas. Gas discoveries in the KG basin, where Reliance Industries found an estimated 35 tcf, have encouraged global oil majors to consider projects in India, where they have so far refrained from committing large investments.

Oil firms are eyeing new markets as most energy-rich regions, such as the Middle East and Russia, are increasingly off-limits and easy discoveries in the traditional exploration hot spots such as the Gulf of Mexico are a thing of the past.



Akzo Nobel's new chemicals production expansion in China Posted Friday, October 13, 2006 - 5:10 by hydrocarbonasia
The company plans to install the chemicals production facilities on a 50 hectare plot in Ningbo, making it one of the biggest sites for Akzo Nobel's activities in the world.

Akzo Nobel signs a memorandum of understanding with the Ningbo Chemical Industry Zone (NCIZ) which paves the way for the creation of a new chemicals multi-site in China.

The company already operates two production sites in Ningbo (Polymer Chemicals and Powder Coatings) and receives excellent cooperation from the local government. "We investigated a number of possible locations, but building the new facility in Ningbo was always an attractive option," added Darner. "We have a strong presence in the area and have received the full support of the local authorities, who are committed to helping make this project a success."

The new project, which provides the basis for a variety of future investments in grassroots chemicals production facilities, would involve building plants for the manufacture of ethylene amines and chelating agents. The company also intends to produce organic peroxides on the site. More details about these intended investments will be announced early next year.

"This is a clear signal that our growth strategy is gathering momentum," said Leif Darner, the Akzo Nobel Board member responsible for Chemicals. "China is becoming increasingly important for us, driven mainly by growing demand in the country. Lower production costs are also an important factor. This new multi-site represents an excellent opportunity for us to invest in a key strategic market where we are continuing to target expansion plans for our refocused Chemicals businesses."

The NCIZ not only offers excellent transport links, with a sea port located nearby, but official approval has also been given for a petrochemical cracker to be installed within the complex, which will give access to a number of basic raw materials.

"We are fully committed to supporting the growth of our global activities," continued Darner. "A number of our Chemicals businesses are exploring opportunities to expand in Asia and investments such as this emphasise Akzo Nobel's commitment to organic growth in emerging markets. Being well placed to serve our Asian and overseas customers will also enable us to ensure that we retain our competitive edge."

Recently, the company officially opened its two new chemicals plants for chlorine and monochloroacetic acid (MCA) production in the Netherlands.

Akzo Nobel currently operates eight Chemicals production plants in China, while the Coatings business has 13 facilities. The company has set a target for combined sales of more than USD 1 billion in China by 2010.



Asian naphtha prices continue to tumble Posted Friday, October 13, 2006 - 5:08 by hydrocarbonasia
The price of naphtha in Asia looks set to continue to fall relative to crude oil as Indian refiners boost exports and chemical plants shut for maintenance.

With no indication of a let-up in Indian exports, which rose 75 per cent in August from a year earlier to as much as 7 million tonnes, and dampened demand, due to high refinery run rates leading to an inventory-build in Japan and South Korea, prices seem likely to fall in the short term.

Prices for naphtha in Japan , for example, have dropped 23 per cent to $529 a tonne since reaching a record $688 in July.

Taiwan 's Formosa Petrochemical Corporation shut a naphtha plant, which converts fuel into the chemical ethylene, recently for scheduled maintenance, while Yeochun NCC Company, South Korea 's largest ethylene maker, will close a plant for an overhaul. It takes about three tonnes of naphtha to make one tonne of ethylene.


North West Shelf expands LNG sales to Chubu Electric Posted Friday, October 13, 2006 - 5:07 by hydrocarbonasia

A new liquefied natural gas supply agreement with a long-term Japanese customer further confirms
growing market interest in safe, secure and reliable supplies of LNG from the North West Shelf Venture,
according to North West Shelf Australia LNG.

Chubu Electric Power Company, Incorporated and the six participants in the North West Shelf Venture
today signed a binding heads of agreement for the supply of over 24 trillion British thermal units,
amounting to just less than 0.5 million tons, of LNG a year starting in April 2009 for seven years. This
agreement expands the North West Shelf LNG sales to Chubu Electric to over 1 million tons a year from
2009.

North West Shelf Australia LNG President Peter Cleary welcomed today's signing of a heads of agreement
between Chubu Electric Power Company, Incorporated and the Venture.

"Chubu Electric is a long-term and highly valued customer of the North West Shelf Venture," Mr. Cleary
said.

"We are extremely pleased to further enhance our long-term business relationship and friendship with
Chubu Electric which now extends more than 17 years."

The six equal participants in the North West Shelf Venture are: BHP Billiton Petroleum (North West Shelf)
Pty Ltd; BP Developments Australia Pty Ltd; Chevron Australia Pty Ltd; Japan Australia LNG (MIMI) Pty
Ltd; Shell Development (Australia) Proprietary Limited; and Woodside Energy Ltd (Operator).

CNOOC NWS Private Limited is also a member of the North West Shelf Venture but does not have an
interest in North West Shelf Venture infrastructure.





Shell to make major expansion project in Singapore Posted Friday, October 13, 2006 - 4:04 by hydrocarbonasia
World-scale petrochemical facility will be a major provider of raw materials in Asia.

Singapore's petrochemicals industry has attracted one of its biggest construction projects to date from international chemicals and energy giant, Royal Dutch Shell plc.

In late July, Shell, which enjoys a local presence dating back to the 19th century, announced its biggest investment yet in the Republic. Named Shell Eastern Petrochemicals Complex (SEPC), the new integrated refinery and petrochemicals project will be threefold, and upon completion by 2010, will serve as a crucial raw materials provider to the Asian region.

"This project represents another significant step in Shell's commitment towards delivering a profitable downstream business for the group," said Rob Routs, executive director, downstream, for Shell. "Shell is committed to growing chemicals investments in Asia Pacific and the Middle East and [this] announcement is another example of how we are delivering on that strategy."

The project in Singapore is just one of several new investments, planned or under construction by a number of producers, destined for the region.

"Asia is the world's fastest growing market for petrochemical derivatives and during the next 10 years is likely to require several new ethylene crackers to meet this demand," said Pieter Eijsberg, general manager of SEPC. "Singapore offers us a business-friendly environment, where we have excellent experience from previous investments."

In addition to the proposed ethylene plant, Shell will commence work on another new plant - this one dedicated to Mono-Ethylene Glycol (MEG), with a capacity of 750,000 tpa. When completed, the facility will boost Shell's MEG capabilities to 1.3 million tpa, and raise its profile to the third-largest MEG producer in the world. The MEG from the facility will be exported to countries around the region, as well as the large-scale China market.

"The world-scale MEG plant being planned for Jurong Island as part of the investment will consume a significant share of new ethylene capacity and is an integral part of the project," Eijsberg said.



Asian MTBE values slip $5/mt from crude oil, gasoline plunge Posted Friday, October 13, 2006 - 4:03 by hydrocarbonasia

Asia's MTBE FOB Singapore price benchmark slipped about $5.00/mt on
Tuesday to $595/mt, softened by a $2.03/barrel plunge in gasoline prices
overnight and a near-$2/barrel dive in crude oil values.
October and November MTBE values were backwardated by $7.50/mt as the
region's tight supply of October cargoes was widely anticipated to ease in
November. Asia's MTBE prices have been consistently above US and Europe for at
least two weeks, a phenomenon which would usually attract incremental exports
from the Middle East.
On Tuesday, October MTBE buying and selling interest was pegged at
$600/mt and $605/mt FOB Singapore, while November values were at $590/mt
against $600/mt.
Singapore's 97 RON unleaded gasoline prices settled at $66.82/barrel, 95
RON at $64.12/barrel and 92 RON at $63.47/barrel. The $2.70/barrel spread
between 97 and 95 values was noticeably wide, which would generally make for
favorable blend economics, although other variable factors such as existing
MTBE content also affect blend value.
Europe's MTBE market closed Monday at $549.50/mt FOB Amsterdam/Rotterdam
and the US at $591.08/mt FOB US Gulf and New York Harbor. US MTBE margins have
been negative for several weeks, but came close to breaking even on Monday.
November crude futures settled $1.88/barrel lower Monday on the New York
Mercantile Exchange Monday at $61.03/barrel. November futures continued to
weaken on Tuesday, touching $60.93/barrel on Access at 0700 GMT.


IOC plans to almost double crude oil refining capacity Posted Wednesday, October 11, 2006 - 11:57 by hydrocarbonasia
Indian Oil Corp, the nation's biggest refiner, plans to almost double its crude oil refining capacity to 80 million tonnes by 2011-12, the year by when it is targeting to scale $60-billion in turnover.
IOC Chairman Sarthak Behuria, while presenting a dividend cheque of Rs 1,197.60 crore for 2005-06 to Petroleum Minister Murli Deora, said, "IOC aspires to grow from a $41-billion-turnover company today to $60-billion by the year 2011-12 with well-co-ordinated strategic plans, including clear blueprints for investments to the tune of $12 billion (Rs 50,000 crore) mainly in integration and diversification projects, refinery expansions, product quality upgradation and retail operations."

"By that year (2011-12), Indian Oil plans to have about 80 million tonnes per annum refining capacity under its fold," he said.

IOC has seven refineries with a combined capacity of over 41 million tonnes. It plans to build a new 15-million-tonne refinery at Paradip in Orissa as well as double the capacity of the Panipat refinery to 12 million tonnes. Expansions are also planned at Haldia, Koyali and Mathura refineries.

IOC in a release said it paid a total dividend of 125 per cent to its shareholders amounting to Rs 1,460 crore for 2005-06. The government, which owns 82 per cent in IOC, got Rs 1,197.60 crore in dividend.

This was the 40th consecutive year of dividend declaration by IOC, which has so far paid out Rs 11,602 crore as dividend to its shareholders.



Oman: Sohar Refinery to start commercial operations by month-end Posted Wednesday, October 11, 2006 - 11:56 by hydrocarbonasia
Sohar Refinery is set to start commercial operations by the end of October, a senior official of the company has said. "It is expected to start commercial operations by end-October, after successful completion of the performance test," said Yacoub Bilal, Chief Executive Officer of the refinery, said.

The start-up operation of the $1.25 billion refinery in general was as good as expected. "Some operational hick-ups were encountered and rectified; however, these types of problems are quite normal for a grass-root refinery with this complexity. Currently, the refinery is continuing the performance tests of the individual units of which it is showing good progress," he noted.

The refinery project, which was built by Japan's JGC Corporation on an EPC contract basis, has a crude unit with a capacity of 116,400 barrels per day (BPD) and a residue fluid catalytic cracking unit with a capacity of 75,260 bpd. The major products of the new refinery include propylene, LPG, straight run naphtha, regular unleaded gasoline, premium unleaded gasoline, aviation fuel, diesel, fuel oil and sulphur, noted Bilal. "It was planned to export 80 per cent of the products and supply the local market with the remaining 20 per cent. However, the priority will be given to the local market," he said.

Due to significant growth in domestic demand for petroleum products in the last one year, there could be a change in the earlier export allocation. SRC recently started shipment of refined products on a small scale, following the trial run. It exports refined products through a joint venture oil trading firm - Oman Trading International (OTI).

The refinery not only helps diversification programmes but also encourages downstream petrochemical industries by providing necessary feed stocks. "SRC will boost the national economy of the Sultanate in all aspects including financial returns and employment," Bilal added. The SRC complements the state-owned Oman Refinery's Mina al Fahal plant in refining petroleum products on a toll processing basis.

ORC, which owns the feedstock and the refined products processed at SRC, supplies crude oil to the new refinery through a 260-km-long pipeline. It is jointly owned by two government entities - the Ministry of Finance (80 per cent) and Oman Oil Company (20 per cent). But as much as 90 per cent of the project cost was funded by way of term loan.

The Japanese Bank for International Co-operation provided $261.9 million term loan, while ten regional and international banks undertook to provide a loan of $907.8 million. SRC operates on a maximum olefin mode to produce around 327,000 metric tonnes per day of propylene, which will be supplied as feedstock to Oman Polypropylene (OPP). Also, the refinery will supply naphtha and gasoline as feedstock to Aromatics Oman, which is coming up near SRC.



Singapore trader Hin Leong ships gas oil to S.Africa Posted Wednesday, October 11, 2006 - 11:55 by hydrocarbonasia
Singapore oil trader Hin Leong, who has been aggressively buying up gas oil over the past four months, has booked a medium-ranged (MR) tanker for a rare shipment to South Africa next week, shipbrokers said on 6 October.

Demand for gas oil in South Africa is supported by refinery maintenance and the harvesting season, while supplies in Asia are abundant, traders said.

Hin Leong's shipping arm, Ocean Tankers, booked the 47,000 deadweight tonne Panagia Lady for $1.3 million. The tanker is slated to load the gas oil cargo in Singapore on October 9 for the voyage to the South African port of Durban.

The Singapore trading firm has bought more than 12 million barrels of gas oil in the spot market since June, helping to support a market overwhelmed with supplies of middle distillates.

"Moving it to South Africa makes a lot of sense particularly since the refineries there are either on maintenance or are just coming out of maintenance," said a shipping source based in South Africa.

Traders here said that gas oil exports moving from Singapore into South Africa are rare, but do happen occasionally.

"On top of the maintenance season there, typically in the summer, you find demand for diesel healthy because it is also the peak of the agricultural season," a middle distillates trader said.

Shipbrokers said that Hin Leong were heard inquiring in the market about a second clean MR tanker for a prompt October loading. However no firm booking had been made.

The move could be a sign Hin Leong plans to offload some of its stockpiles west, though traders are unsure if Hin Leong has other outlets for its supplies, or is looking to stockpile to take advantage of a market contango as winter looms.

Hin Leong habitually does not comment on trading activities. Hin Leong typically uses its oil tanker fleet as floating storage.

Despite Hin Leong's strong buying, the regional distillate market has been weighed down by kerosene stocks in key winter consumer Japan climbing 16 percent above last year, while distillate stocks in the United States are at seven-year highs.




HPCL offers 50 pc stake for Bhatinda refinery to OIL Posted Wednesday, October 11, 2006 - 11:23 by hydrocarbonasia
Hindustan Petroleum Corp Ltd, the country's second biggest refinery, has offered upto 50 per cent of promoter stake in its proposed 3.3-billion dollar Bhatinda refinery to state-owned Oil India Ltd (OIL).

"We have offered OIL to become equal partners in the Bhatinda refinery," HPCL Chairman and Managing Director M B Lal said here on Wednesday.

Promoters had held a maximum of 50 per cent in the Guru Govind Singh Refineries Ltd, the company implementing the project. "OIL can have as much equity as HPCL in the project," he said.

Lal said OIL's initial response to the offer was 'encouraging' but the final numbers would depend on their due diligence of the project.

Promoters have to pump in about Rs 6000 crore equity in the Rs 14,144 crore project. After the promoters equity is tied up, GGSRL would make an Initial Public Offering (IPO) for the rest of the equity.

Besides the project cost, another Rs 2,790 crore has to be spent on laying a 1,011-km pipeline from Mundra port in Gujarat to Bhatinda for transporting imported crude oil.

In March this year, British Petroleum walked out of the project as it found investing in refining and marketing in India unattractive. Prior to BP, Saudi Aramco of Saudi Arabia had walked out of the refinery project in 1998.

Separately, HPCL was also looking at a partnership with OIL to buy oil and gas assets abroad, Lal said.

He said HPCL would invest about Rs 800 crore to set up a delayed coker unit at its Viskhapatnam refinery to produce more clearner fuels.

The Bhatinda refinery project was conceived as a Joint Venture project and HPCL was looking for partners for long.

Sources said, Petroleum Minister Murli Deora had recently written to Congress president Sonia Gandhi to lay the foundation stone of the receiving terminal of the crude oil pipeline at Bhatinda.

Bhatinda refinery is configured in a manner that allows it the flexibility to process diverse varieties and qualities of crude. This gives the company a significant advantage of flexibility in refining and purchase in international markets.


China's petrochemical sector posts 22.5% jump in Jan-Aug profits Posted Wednesday, October 11, 2006 - 11:22 by hydrocarbonasia
China's petrochemical industry racked up profits of close to 300 billion yuan (US$37.9 billion) in January-August, according to China's State Development and Reform Commission (SDRC).

Statistics from the SDRC's Bureau of Economic Operations show that the sector's profits of 296.9 billion yuan represented a surge of 22.5 per cent year on year.

In the first eight months, China produced 122.93 million tons of crude oil, up 1.8 per cent on the same period of last year, according to the statistics.

India offers Qatar up to 12.5% stake in Petronet Posted Friday, October 6, 2006 - 2:08 by hydrocarbonasia
India has offered Qatar a stake in Petronet LNG Ltd of up to 12.5 per cent, and is seeking more liquefied natural gas from the Doha from 2010, sending Petronet's shares surging 20 per cent, their upper limit.

Petronet's managing director, Prasado Dasgupta, said Qatar could buy a stake in the company by subscribing to a $100 million foreign currency convertible bonds issue, to be floated soon.

"We have approvals for the bond issue and Qatar can buy a 7.5 to 12.5 per cent stake in the company stake through it," Dasgupta said after meeting Qatar's finance minister, Yusuf Hussain Kamal.

Oil secretary M.S. Srinivasan said a team from the Qatar Investment Agency would be in India next week to carry out due diligence for buying a stake in Petronet.

Indian Oil Minister Murli Deora said the country was seeking an additional 10 million tonnes of LNG from Qatar annually, up from the present supply of five million tonnes, beginning in 2010.

"Their response was very positive and the LNG will be used for Kochi, Ratnagiri and Mangalore LNG terminals," Deora said.

Petronet had previously signed a 25-year contract to buy 7.5 million tonnes of LNG from Ras Laffan Liquefied Natural Gas Co. Ltd II (RasGas II), a joint venture between state-run Qatar Petroleum and oil major ExxonMobil.

The extra 2.5 million tonnes will begin arriving from 2009. Opec-producer Qatar is home to the world's third-largest gas reserves and is expected to ship some 77 million tonnes of LNG by 2011, making it the world's top exporter.

More supplies from Qatar will help India restart gas-fired power plants that are shut because of lack of the fuel. Almost half of India's 10,000 megawatts of gas-fired power generation capacity is lying idle, according to the power ministry.



Japanese firms go head to head with Sasol and Shell Posted Friday, October 6, 2006 - 10:51 by hydrocarbonasia
Inpex Holdings and five other Japanese companies are joining to develop gas-to-liquids (GTL) technology, aiming to cut plant building costs and enabling them to beat GTL frontrunners Royal Dutch Shell and South Africa's Sasol.

The Japanese companies would build a demonstration plant and develop GTL capability by March 2011, they said in a statement yesterday. The partners want to make the technology to build commercial plants available in 2012.

Sasol has established itself as the leader in the conversion of gas and coal to fuels such as diesel and petrol. The company was formed 1950 by the then apartheid government to convert coal to crude oil so as to reduce South Africa's dependence on oil imports.

Sasol has built the $1 billion (R7.8 billion) Oryx natural GTL project in Qatar in a joint venture with the Qatari government. However, Sasol, the world's largest producer of fuel from coal, delayed output from the project after technical problems. The plant was now set to commission about one year behind schedule, the company said last month.

The first products from the Oryx plant would likely be produced in the fourth quarter of 2006 and be ready for market by the first quarter of 2007, Sasol said. The company initially planned to start selling the plant's products in the fourth quarter of this year.

At Escravos in Nigeria, a GTL plant is being built using the Sasol's slurry phase distillate process. Sasol is also conducting a GTL feasibility in Australia and a coal-to-liquids (CTL) study in China. The company is looking at further CTL opportunities in the US and India.

Japan, which imports almost all its oil, wants to develop technology to rival Shell and Sasol, which are planning GTL projects in countries including Qatar, the owner of the world's largest natural gas fields. Rising oil prices and environmental concerns have increased the incentive for companies to convert natural gas into diesel and other fuels with lower sulphur content.

The Japanese technology "could be about 10 percent cheaper" than current GTL plants, said Ikutoshi Matsumura, a managing director at Nippon Oil, one of the project partners. "We need to be more competitive than Shell and Sasol."

The project partners, including Japan Petroleum Exploration, Cosmo Oil, Nippon Steel Engineering and Chiyoda, are investing ?12 billion (R790 million) in the project.

Japan Oil, Gas and Metals National Corporation, a state-run energy researcher known as Jogmec, is providing ?24 billion, or about two-thirds of the costs, including outlays to build the demonstration plant.

The six Japanese companies were entitled to use the technology to build plants overseas, using natural gas from fields where the companies held stakes, said Inpex managing director Kunio Kanamori.

Inpex was studying the possibility of building a GTL plant that would tap Indonesia's deep-water Abadi structure in the Masela Block, lying in the Timor Sea, along with a possible liquefied natural gas (LNG) plant, the company said.

"There are no specific plans we have at this moment for applying the GTL technology," Kanamori said. "Gas feasible for our technology is available in Indonesia and Thailand."

GTL plants using the Japanese technology could process gas with a carbon dioxide content of 40 percent, higher than the level feasible for LNG conversion, Kanamori said. "There are many discovered but untapped fields and these can be used for GTL."

Shell, Europe's largest oil company, said in July that it had made a final investment decision to press ahead with the Pearl GTL plant, also in Qatar.

Company documents show the project's costs will range between $12 billion and $18 billion, compared with an estimate of about $6 billion given earlier this year by Qatari energy minister Abdullah bin Hamad al-Attiyah.

Samsung Total to raise output Posted Thursday, October 5, 2006 - 4:57 by hydrocarbonasia

Samsung Total, the group's chemical company, said it will expand the output of its four flagship products _ ethylene, styrene monomer, para-xylene and polypropylene _ to 1 million tons each per year by 2010.

Chief executive Ko Hong-sik vowed to boost the company's production capacities and make Samsung's Daesan plant in South Chungchong Province one of the world's top-tier companies.

``Chemical producers in the Middle East and China are enlarging their production size. But prospects of the global economy are uncertain,'' said Ko at a ceremony to mark Samsung Total's 18th anniversary held at its petrochemical plant.

``Certain external factors such as high oil prices among others are casting a shadow over our company and global supply and demand of petrochemicals. I believe the stakes are going to be higher in the coming years.''

Samsung Total, a 50-50 joint venture between Korea's largest conglomerate Samsung Group and French chemicals producer Total S.A., needs to put past failures behind and start anew with fresh ideas and visions to open a new chapter in the company's 18-year-long history, Ko added.

Prior to the Korea-France partnership in 2003, the Korean chemical maker was under heavy debt that led the firm to rationalize its workforce and facilities.

``We must go back to square one and begin afresh with a feeling of purity in our hearts,'' Ko told some 200 executives and employees at the event. ``We must look back on our past and innovate, while continuously reforming management.''

Ko also said the company will heavily invest in human resources and develop an all-new corporate culture for the company to prosper for the next 100 years.




KNPC set to invite tenders for refinery Posted Thursday, October 5, 2006 - 12:26 by hydrocarbonasia
Kuwait City: Kuwait National Petroleum Company plans to award a tender to build a new $6 billion, 615,000 barrels per day refinery by year-end, a senior KNPC official said.

"We are planning to reach December that we send out the award fax, and within one month after that there will be a signing agreement for all four packages," Hatem Al Awadi, KNPC deputy managing director for projects, said.

Eleven companies are bidding for the new refinery which is due to be completed by 2010.

Al Awadi said the cost of the refinery would increase a slide cost overrun.

He also said the deadline for the bids is October 29, after which a KNPC delegation will review the bids for one and a half months with project management consultant, Fluor in Houston, Texas.

Al Awadi expected the actual works on the refinery to start by mid-2007. The refinery will produce mainly low sulphur fuel oil to be used for Kuwait's power stations.

Al Awadi said the tender would require final approval by central tenders committee, the government body that has final say on the award of tenders.

Sakhalin Energy signs crude tanker deals with Russian partner Posted Wednesday, October 4, 2006 - 3:53 by hydrocarbonasia
A ceremony was held earlier today between Sakhalin Energy Investment Company Ltd Company (Sakhalin Energy) and Primorsk Shipping Corporation (PRISCO) for the Heads of Agreements (HOA) for the five year timecharters of two crude oil tankers the Sakhalin Island and Governor Farkhutdinov.

PRISCO was well positioned to be awarded these contracts.

The company had installed a bowloading system during the construction of the tankers intended to be suitable for loading oil from the Tanker Loading Unit, which is undergoing commissioning in Aniva Bay and designed for year-round operations from the Oil Export Terminal in the south of Sakhalin Island.

PRISCO has provided tankers to Sakhalin Energy since 2000 for export from the Company’s Vityaz Complex.

This experience has demonstrated the value of working closely with world-class Russian companies particularly when Sakhalin is developing into a new Asia Pacific energy province, and Russia is becoming a global energy supplier.

This deal signifies a further commitment by Sakhalin Energy to a Russian owned and operated contractor although the Sakhalin II PSA commitments do not apply to oil shipping.

The 108,000 tonne deadweight tankers will be used to ship the crude oil produced from the Sakhalin II facilities.

The tankers were built to international standards in Croatia in 2004 and are both double-hulled in line with Sakhalin Energy’s commitments to the environment.

Both ice-class tankers were also designed to operate in low-temperatures and are ice-strengthened to manage the Sakhalin environment typically between January and March.

Sakhalin Energy and PRISCO agreed an innovative charter hire that floats with the shipping market. Such a concept demonstrates a real partnership between the Company and PRISCO making this contract attractive for both parties and allows Sakhalin Energy to remain competitive to its Customers.

Sakhalin Energy Chief Executive Officer Ian Craig said: "We are proud that these first two crude oil tankers, in this new charter agreement, bear the names of the Governor Farkhutdinov, who died in a tragic accident, and of Sakhalin Island, our home. We are especially pleased that the five-year charter contract for the two tankers has been signed with the company, which has been our long-term reliable partner and which gives HSE the same priority as Sakhalin Energy. We are convinced that Sakhalin Energy will continue to benefit from the vast navigation experience of the Primorsk Shipping Corporation in the harsh arctic climate”.

Governor Malakhov said: "The Far-East region is an area, where PRISCO has traditionally provided effective shipping services for over 35 years. These new tankers, of which both PRISCO and the Russian Federation have every reason to be proud, will ensure reliable transport of Sakhalin oil to the new high-potential markets of the Asia-Pacific region".

Mrs.Rybak, representing the Department for Innovation and Investment Policy of the Ministry of Industry and Energy, said: "this contract is signed between the operator of the largest integrated oil and gas project, which is strategic for the Russian Federation, and the largest oil shipping company in the Far East. This contract will help increase shipments of Russian hydrocarbons to the Asia-Pacific markets".


Gulf is new home of petrochemicals industry Posted Wednesday, October 4, 2006 - 12:09 by hydrocarbonasia

Gulf Arab countries will account for about 20 per cent of the world's ethylene production by 2010 as they expand petrochemical output capacity, the secretary general of a Gulf petrochemicals lobby said.

The Gulf Arab region now produces about 8 per cent of the world's ethylene the basic feedstock for petrochemical plants.

"The Gulf is the new home of the petrochemical industries and 50 per cent of the world's ethylene projects are in the area," Abdullah Bin Zaid Al Hagbani, secretary-general of the Gulf Petrochemicals and Chemicals Association (GPCA) said.

"In 2010 production will reach 30 million tonnes, which is about 20 per cent of the world's total ethylene production," Hagbani told Reuters.

GPCA, established in Dubai last March, is a non-profit organisation which acts as a regional lobby for the petrochemical industries and a platform for information exchange.

Demand for ethylene mainly produced by cracking crude oil derivative naphtha is accelerating around the world, particularly in Asia, Hagbani said.

"If there is are more doors open for petrochemical investment, Gulf production will reach 40 per cent of the world's total in 10 years," he said.

In May, Qatar, the home to the world's third largest reserves of natural gas after Russia and Iran, started work on an $800 million ethylene cracker. Officials said it would be the world's largest.

Last week, Saudi Arabian Basic Industries, the largest listed company in the Arab world, said it will buy the UK division of US chemicals manufacturer Huntsman.

The Saudi company is the world's fourth-largest producer of polyolefins, the raw material for plastics, producing more than 5 million tonnes per year, according to its website.

Hagbani said that the petrochemical industry in the Gulf could double its output in a few years.

"But there we will see some challenges as feedstock prices are escalating and the availability of some feedstock is also diminishing. There is definitely a shortage of methane and ethane," Hagbani added.

NPRC Selects Badger Technology for New Cumene Plant in Japan Posted Thursday, September 28, 2006 - 11:32 by hydrocarbonasia
NPRC plans to construct a new cumene plant with a capacity of 170,000 metric tons per annum at their Muroran Refinery in Hokkaido, Japan, as previously announced. As part of the license, Badger will also supply the Basic Engineering Package, startup services and training for NPRC. Work has begun on the Basic Engineering Package, and the plant is scheduled for mechanical completion and startup in 2008.
The output from this plant will help meet demand in China, and other Asian countries, which have seen strong growth for cumene, a precursor to phenol, bisphenol-A, and polycarbonate production. Frank Demers, president, Badger Licensing LLC, stated “We are extremely pleased that NPRC has selected Badger Cumene Technology for this project. This recent award will further add to Badger’s leading market share in the supply of zeolite based cumene technology.”
Badger Licensing LLC, headquartered in Cambridge, MA, is a joint venture of affiliates of the Shaw Group Inc. (NYSE:SGR) and ExxonMobil Chemical Company (NYSE:XOM). Badger Licensing is principally engaged in marketing, licensing, and developing technologies for the production of ethylbenzene, styrene monomer, cumene, and bisphenol-A.
The Private Securities Litigation Reform Act of 1995 provides a “safe harbour” for certain forward-looking statements. The statements contained herein that are not historical facts (including without limitation statements to the effect that Badger or its management “believes,” “expects,” “anticipates,” “plans,” or other similar expressions) and statements related to financial matters are forward-looking statements based on Badger's current expectations and involve significant risks and uncertainties (some of which are beyond our control). Actual results may vary in material respects from those projected in the forward-looking statements. Badger, Shaw, and ExxonMobil undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. A description of some of the risks and uncertainties that could cause actual results to differ materially from such forward-looking statements can be found in Shaw's reports and registration statements filed with the Securities and Exchange Commission, including its Form 10-K and Form 10-Q reports, available from the Securities and Exchange Commission or from the Investor Relations department of Shaw.
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Indian Oil says its $5.75bn refinery is on Posted Tuesday, September 26, 2006 - 12:54 by hydrocarbonasia

Indian Oil Corp, the nation’s biggest refiner, reiterated plans first announced a decade ago to build a new refinery and a chemical plant on the country’s eastern coast.

Indian Oil will invest Rs264bn ($5.75bn) in the facility in Paradip, chairman S Behuria said at the company’s annual shareholders meeting in Mumbai yesterday.

Indian Oil’s board on March 30 approved an increase in the size of the refinery to 15mn metric tonnes a year from 9mn tonnes.

India was short on oil refining capacity when the state-run company first planned to build the refinery in 1996, a situation that changed when Reliance Industries Ltd started the world’s third-largest refinery in western India in 1999.

"The project has been delayed because approvals took a long time,’’ said Jaspreet Singh, assistant vice president at Mumbai-based stock brokerage Prabhudas Lilladher Pvt. "Today this project makes sense if it exports its products.’’

State-run oil companies are expanding capacity to retain share in India’s 118mn metric tonnes-a-year market, where private companies such Reliance Industries and Essar Oil Ltd were allowed to build refineries after the economy was liberalised in the early 1990s.

Indian Oil plans to invest $1.5bn on expansion and new businesses this fiscal year, director of finance S Narasimhan said in an interview on September 7. The company is considering diversifying into piped gas distribution to households in some cities, Behuria said.

Indian Oil is in talks with Reliance Industries, which has made a gas discovery in eastern India, and Gail (India) Ltd, a state-run distributor of gas, he said, without giving details.

Indian Oil completed a doubling of capacity at its refinery in Panipat in northern India to meet fuel demand in the region. The refiner increased output at the plant to 12mn tonnes a year, or 240,000 bpd, the company said on May 30.

Indian Oil’s seven refineries can now process a combined 47.3mn tonnes of crude oil a year. The company’s two refining units, Bongaigaon Refinery & Petrochemicals Ltd and Chennai Petroleum Co, have the capacity to process 12.85mn tonnes annually.













S Korea in talks for extra LNG if Sakhalin delayed Posted Tuesday, September 26, 2006 - 12:53 by hydrocarbonasia
South Korea is in talks to secure extra liquefied natural gas as new Russian hurdles threaten to delay supplies from Royal Dutch Shell's $20 billion Sakhalin project, a company official said yesterday.

Importers in Japan, which is due to take the lion's share of LNG from Sakhalin-2 beginning in mid-2008, said they were on alert after Russia revoked key environmental permits and Shell warned of potential further set-backs. Sakhalin gas will meet around five per cent to six per cent of Japan and South Korea's energy demand.

Signs that customers are looking elsewhere may put operator Shell and its Japanese partners under additional pressure to sell a stake to state gas giant Gazprom, whose interest is seen as part of a Kremlin campaign to tighten its grip on the sector.

Shell has already been forced to push back the production date for the 9.6 million tonnes per year project from late-2007 amid a doubling in costs announced in July last year. The latest potential set-back has caused more anxiety.


Indonesia's 25-year LNG supply to E. China province to begin from 2009 Posted Friday, September 22, 2006 - 2:45 by hydrocarbonasia

East China's Fujian Province will begin receiving 2.6 million tons of liquefied natural gas (LNG) a year as from 2009 over the next 25 years from Indonesia.

The LNG supply for Fujian will be provided by Indonesia's Tangguh gas project, managed by a BP-led consortium.

The contract, worth 8.5 billion U.S. dollars, was signed between China and Indonesia in 2002, which originally said the LNG supply would begin in 2007.

The construction of stations and pipelines began in April 2005. It is jointly invested by the Zhonghai Natural Gas Company Ltd. of Fujian, a company jointly invested in by the China National Offshore Oil Company Ltd. and the Fujian Investment and Development Corporation.

The LNG will mainly be supplied to Fuzhou, Putian, Quanzhou, Xiamen and Zhangzhou, five coastal cities of Fujian.

China's first shipment of imported LNG arrived from Australia on May 26 this year.

Northwest Shelf Australia LNG venture project will supply 3.7 million tons of LNG annually to the terminal during a 25-year contract.


BP refinery upgrade to cost US$3B Posted Friday, September 22, 2006 - 2:42 by hydrocarbonasia
BP PLC was the first out of the gate yesterday to capture a piece of new output from the Canadian oilsands, unveiling a US$3-billion investment to upgrade its refinery in Whiting, Ind., to handle the heavy crude.

The British oil major is one of several big U.S. refiners jockeying to get their hands on growing Canadian heavy oil production. Also in the running are Marathon Oil Corp. ConocoPhillips and smaller players such as Arizona Clean Fuels Yuma LLC.

The battle to firm up deals is fuelling rumours about which Canadian partners they will end up with. The deals could mean a secure home for Canadian oil and enhance the market's view of the producers' value.

BP Canada spokeswoman Hejdi Feick said her firm has locked up supply agreements with several heavy oil companies. Some of the deals are firm, others are close to being finalized and some are still in discussion. BP's refineries in Cherry Point, Wash., and Toledo, Ohio, may also be reconfigured to process more Canadian heavy oil, Ms. Feick said. Ms. Feick wouldn't reveal the names of BP's suppliers.

Only a week ago, EnCana Corp., Canada's largest oil and gas producer, said it was close to signing a multi-billion-dollar deal with a major U.S. refiner to swap a working interest in its oilsands properties in Alberta for a piece of a Chicago-area refinery, beside which it would also build an upgrading facility.

EnCana spokesman Alan Boras said his firm is still finalizing the pact and expects to announce its oilsands strategy in the third week of October, coinciding with the release of its third-quarter results. EnCana, a natural gas producer, plans to become a large oilsands developer in the next decade.

ConocoPhillips and Marathon Corp. have been talked about as other potential partners for EnCana, while companies with growing heavy oil production such as Total SA, Canadian Natural Resources Ltd., Imperial Oil Ltd., Husky Energy Inc., may be partners for BP.

"EnCana has said its solution may incorporate a number of players," said Tom Ebbern, analyst at Tristone Capital Inc. "You may find they do a deal with BP, Marathon, ConocoPhillips, even some of the local third-party processors such as BA Energy or Northwest Upgrading."

BP's plan calls for expanding its Whiting refinery, the fifth-largest in the United States, on the south shore of Lake Michigan near Chicago, so it will process 350,000 barrels a day of Canadian heavy oil, 260,000 b/d more than it currently handles.

Already, 800,000 b/d of heavy oil produced in Western Canada is upgraded in the United States by Koch Industries Inc., BP, Valero Energy Corp. and ConocoPhillips, among others.

The Alberta government has criticized Canadian oil companies looking to upgrade their heavy oil outside the province, because it wants jobs to stay within its borders.

Pierre Alvarez, president of the Canadian Association of Petroleum Producers, said a massive amount of investment is already staying in the province, with 18 upgraders in operation, under expansion or being planned.

Foster Wheeler undertakes development study for Browse LNG in Australia Posted Wednesday, September 20, 2006 - 4:40 by hydrocarbonasia
Foster Wheeler's subsidiary Foster Wheeler Energy Limited, part of its Global Engineering and Construction Group, has been engaged by Woodside Energy Ltd. to undertake a study for a liquefied natural gas (LNG) development that will process gas from the Browse gas fields, off the coast of Western Australia.
The Foster Wheeler contract value was not disclosed and the project was included in the company's second-quarter 2006 bookings.

Foster Wheeler, together with WorleyParsons Services Pty Ltd, its joint venture partner, is leading this study to evaluate the technical considerations for an offshore LNG facility.

"We are delighted to assist Woodside in this significant development opportunity," said Steve Davies, chairman and chief executive officer of Foster Wheeler Energy Limited. "The combination of our experience from our current involvement on the world-scale North West Shelf Venture Phase V LNG expansion project at Karratha, Western Australia, our in-depth technical and project execution expertise in natural gas liquefaction and our knowledge of the global LNG industry will add value for Woodside. We are pleased to assist Woodside in realizing its plans for the development of the Browse LNG project in the Browse Basin."

The Browse gas fields comprise the Torosa, Brecknock and Calliance gas fields which were discovered in 1971, 1979 and 2000, respectively. These offshore fields are in water depths ranging from 35 meters to 700 meters. The Browse LNG project comprises the East and West Browse joint ventures operated by Woodside Energy.




China's CNOOC inks major deal with Petronas Posted Monday, September 18, 2006 - 4:01 by hydrocarbonasia

China National Offshore Oil Corp (CNOOC) said it has wrapped up a deal with Malaysia's Petronas that could set a pricing benchmark for natural gas in Asia, it was reported on Monday.

China's largest offshore energy group concluded an agreement with state-owned Petronas to supply liquefied natural gas (LNG) to a terminal in Shanghai, the newspaper said, citing chairman and chief executive of CNOOC Fu Chengyu.

Fu did not reveal the terms of the first LNG supply agreement signed by China since 2002, but said the contract could become the new standard for the region if Petronas treated the deal as a benchmark.

The report cited industry officials as saying the price of the deal would be set at around five to six dollars per million British thermal units.

That is above the price paid by CNOOC with Australian and Indonesian suppliers in 2002, but well below the nine to 11 dollar market price for gas delivered to north Asia.

A report by Chinese industry website China Petrochemical Infonet said that the initial deal to supply Shanghai with 30 million tonnes a year of LNG between the CNOOC and Petronas was signed several months ago.

The price of six dollars per million British thermal units was still on the negotiating table, it said.

It was not clear why Petronas would agree to sell LNG to CNOOC at a price below the market rate, but it could signify a longer-term relationship between the countries.

A spokesman with CNOOC declined to comment.

Exxon still pursuing GTL project in Qatar Posted Friday, September 15, 2006 - 10:51 by hydrocarbonasia

ExxonMobil Corporation, the world’s largest publicly traded oil company, is still pursuing a multi-billion dollar gas-to-liquids project in Qatar and is looking at ways to cut costs, its chief executive said.
Exxon’s plans call for a plant that would convert natural gas into 154,000 barrels a day of low-sulphur, liquid fuels. Two months ago, Royal Dutch Shell announced a similar project in Qatar that may cost as much as three times its original estimates and take several years to build.
“It’s really a cost issue now in this environment,” Exxon’s Rex Tillerson said in an interview in Vienna yesterday. “The idea is to bring the cost down into something that’s acceptable to us and that’s more acceptable to the Qataris. The reserve dedication has already been made on that project.”
Exxon and other major oil companies are spending more because surging oil prices are increasing competition for equipment, labour and materials.
Qatar, which is using gas-to-liquids technology, or GTL, to diversify its gas exports, has said it is studying how best to use its gas reserves, the world’s third-largest.
Irving, Texas-based Exxon isn’t falling behind Shell in GTL, Tillerson said. “In terms of the technology, we are far from being left behind,” he said. “If anything, we think our technology is further advanced than others, particularly in terms of the finished products that come out.”
Exxon’s GTL process will produce a “much higher percentage of lubricants, which have a higher value,” he said.
Shell already sells GTL fuels from an existing plant in Bintulu, Malaysia. The fuel is more expensive than normal diesel and its low-sulphur properties make it a useful blending component for new brands of cleaner-burning motor fuels.
Exxon has told the Qatari government it’s re-examining ways of configuring the planned GTL plant to cut costs, Tillerson said.
“We continue to work and see where we are over the course of this coming year,” he said. Tillerson was in Vienna today to attend an energy conference hosted by the Organization of Petroleum Exporting Countries.
GTL is one of several types of “non-conventional oil,” new methods of producing oil, or similar oil-like fuels, from sources such as rocks, coal, gas and plants.
Most forecasts show resources will still contribute relatively little over the next 20 years or so to the world’s total oil supply, which is currently about 85mn barrels of oil a day.
Tillerson predicted gas-to-liquids supply and coal-to-liquids supply are both expected to rise to 2.1mn barrels a day each in 2030 from about 200,000 barrels a day combined last year, Guy Caruso, head of the US Energy Department’s Energy Information Administration said in Vienna yesterday.
Meanwhile, a spokesman for South Africa fuels company Sasol Ltd said yesterday that technical problems have delayed commissioning of the Oryx gas-to-liquids plant in Qatar and the plant’s output would not reach the market until the first quarter of next year.
Previously, the plant had been scheduled to start selling fuel this year but problems with a super-heater have caused delays.
Oryx is the world’s first commercial-scale gas-to-liquids (GTL) plant. The plant will produce 34,000 barrels per day of liquid fuels from natural gas.
The plant is operated in partnership with Qatar Petroleum, while oil major Chevron will do most of the marketing in Europe and North America under the joint Sasol Chevron brand.
Royal Dutch Shell is developing what will be the world’s biggest GTL project in Qatar, which is expected to start around the end of the decade.

Vietnam may locate third oil refinery in south - Official Posted Wednesday, September 13, 2006 - 4:29 by hydrocarbonasia
Vietnam may build its third oil refinery, which it intends to start work on before 2010, in the Long Son area in the south, an official at state-owned Vietnam Oil & Gas Corp., or PetroVietnam, said Tuesday.

The government may allow foreign companies to take a 100% stake in the project, although various options are still being considered, the official said.

Located in Ba Ria-Vung Tau province, the Long Son area is near Vietnam's largest commercial hub. Long Son is about 100 kilometres east of Ho Chi Minh City.

"Vietnam will certainly need to build a third oil refinery, and the government has completed studies for its location, and Long Son is the most preferred place," the official at PetroVietnam's headquarters in Hanoi said.

"The Long Son area was previously picked by Vietnamese officials to build the first oil refinery as it is near Ho Chi Minh City, a large consumption market," the official said.

"Plans later changed, but it remains a premier location for an oil refinery in the south."

The output capacity of the refinery is expected to at least match that of the first refinery, which is being built at Dung Quat district in Quang Ngai, the official said.

The $2.5 billion Dung Quat refinery will have a crude oil processing capacity of 6.5 million metric tons a year, and is slated to come on-line by early 2009.

"There are three options for building and operating the Long Son plant: It can be 100% domestically owned, or a joint venture with foreign investors, or 100% foreign-owned," he said.

"Right now the government hasn't made a decision yet on those options, because there are foreign firms interested to invest in it," he added, without giving more details.

The authorities are in the midst of planning the country's second refinery, in Nghi Son district, Thanh Hoa province. The $3 billion refinery is expected to have an annual processing capacity of 7 million tons, and is slated to be operational by 2012, the official said.


Shell Global sees more deals in energy management Posted Tuesday, September 12, 2006 - 2:06 by hydrocarbonasia
SHELL Global Solutions, a unit of the multinational oil major that specialises in technology consulting, expects business in the region to improve this year as more companies seek to address energy saving and environmental concerns.

Its hottest selling service is an energy management programme that provides technical, managerial support and advice to companies in an effort to save energy.

Shell Global offers this programme mainly for refining, petrochemicals, gas and liquefied natural gas processing firms.

Chief executive officer Mike Pitt said energy savings are conducted in process units like adjusting distillation targets, changing heat integration, or improving the operation of rotating equipment.

He said the energy management programme combines process and utility technology skills, operational experience, tools and techniques to help companies cut their energy cost and reduce carbon dioxide emissions.

Up till last year, Shell Global's energy-efficiency methodology was conducted at some 29 refining and petrochemical complexes worldwide.

"Our experience shows that energy was reduced in the range of between 2 and 7 per cent for oil refineries and 3 and 5 per cent for petrochemical plants," he told Business Times in a recent interview.

The programme also improves environmental performance as a result of the reduction of carbon dioxide emissions which is achieved over 800,000 tonnes per annum.

"Optimising energy use through a structured programme not only provides financial benefits but also improves proficiency in energy use, management and commitment," Pitt added.

Shell Global was incorporated eight years ago when it decided to commercialise its services to others. It currently has three hubs in Kuala Lumpur, which is the headquarters for Asia Pacific, Houston in the US and The Hague Netherlands.

ExxonMobil's Sakhalin-1 ready to ship oil to Asia Posted Tuesday, September 12, 2006 - 2:01 by hydrocarbonasia

ExxonMobil-led Sakhalin-1, a vast oil and gas project in Russia's far east, will begin shipping oil to energy-hungry Asian markets later this month, ExxonMobil's Russian subsidiary said in a statement.

"Construction has been completed on a 24-inch-wide (61-cm-wide) pipeline that runs 225 km (140 miles) and will carry oil from a well in Sea of Okhotsk though the Chayvo offshore processing complex and to the west across Sakhalin Island," Exxon Neftegaz said in a statement Monday.

Oil production is expected to reach 30,000 tons (250,000 barrels) per day by the end of 2006, the company said.

The Sakhalin-1 consortium began extracting oil in October 2005, producing 6,300 metric tons (50,000 barrels) per day, which was sold to consumers in Russia's far east.

Shipments will now focus on neighbouring markets in Asia, the company said.

Exxon owns a 30-percent stake in the consortium, which it shares with Russian state oil major Rosneft (20 percent), India's ONGC (20 percent), and an investment group of four Japanese companies (30 percent).

The announcement came as Russia's increasing state control over the energy sector is squeezing both Exxon and Shell, which heads the 20-billion-dollar (16-billion-euro) Sakhalin-2 oil and gas project.

Exxon is in talks with the Russian government over whether its license for Sakhalin-1 extends to newly discovered oil deposits in the region, which Russia wants to auction off independently.

Shell is facing a lawsuit from the Russia state service for natural resources use to halt work on Sakhalin-2 over alleged environmental violations.

A report by the ministry of natural resources in May attacked both Shell and ExxonMobil for cost overruns at the Sakhalin sites and said Russian companies should be given majority control of both projects.


PTT Group to build $283m phenol plant Posted Monday, September 11, 2006 - 4:21 by hydrocarbonasia
PTT Plc and its two petrochemical subsidiaries, PTT Chemical Plc (PTTCH) and Aromatics (Thailand) Plc, will jointly build a US$283.4-million phenol plant for a new joint venture.

PTT will hold a 40-per-cent stake in PTT Phenol, while Aromatics and PTT Chemical will take 30 per cent each, according to a report the company filed with the Stock Exchange of Thailand (SET) yesterday.

The national oil and gas company will invest $56.7 million in the project, while Aromatics and PTT Chemical will invest $42.5 million apiece.

The rest of the funds will come from loans, which mature in 13 years. The funding includes $158 million in long-term loans and $50 million in working capital facilities, according to the statement.

Construction will likely start late this year or early next year and the plant is scheduled to start operations in 2008, a PTT investment relations official told Dow Jones Newswires.

The plant, in the eastern province of Rayong, would have an annual production capacity of 200,000 tonnes of phenol and 125,000 tonnes of acetone. Acetone is a by-product of phenol production.

"This project is expected to generate satisfactory returns and fits PTT's strategy to add value to its petrochemical value chain [upstream and downstream], by using propylene and benzene products from PTT's petrochemical affiliates as feedstock to produce phenol," the company said.

The three firms have entered into a "shareholders' support agreement", which requires shareholders to provide financial support to the project according to their stake should there be any cash deficiency during construction.

Tuas Power partners Gas Supply Pte Ltd to introduce trigeneration technology in Singapore Posted Monday, September 11, 2006 - 4:18 by hydrocarbonasia
Tuas Power Ltd and Gas Supply Pte Ltd (GSPL) recently entered into a Joint Venture (JV) to form TPGS Green Energy Pte Ltd (TPGS). The new company will introduce the energy-efficient and environment-friendly trigeneration technology in Singapore.

Leveraging on the expertise of both companies in the power and gas industries, TPGS will develop cogeneration and trigeneration facilities that deliver cost-effective, energy-efficient and environment-friendly solutions to businesses with high energy consumption.

Unlike conventional systems which convert part of the fuel energy into electricity while the rest is lost in the form of heat, a trigeneration system can produce three types of utilities – electricity, steam and chilled water from a single integrated system. This combination enhances energy efficiency by more than 20% and results in reduced costs. In a trigeneration system, the “waste heat” produced from electricity generation is harnessed to generate steam, which is also channelled to steam absorption chillers to produce chilled water.

More significantly, trigeneration’s reduced rate of emission as compared to conventional electricity generation bodes well for companies seeking to enhance their environment-friendly operations.

Mr Lim Kong Puay, Chief Executive Officer, Tuas Power Ltd, said: “The introduction of trigeneration marks a key milestone in the local utility industry. With volatile fuel costs and rising global demand for energy, new energy-efficient technologies such as cogeneration and trigeneration are opportune solutions that help businesses reduce operational costs and enhance their competitiveness. By utilising clean fuel such as natural gas and channelling waste heat for effective use, trigeneration also caters to the growing worldwide concern on issues pertaining to environmental protection and conservation.”

Elaborating on the key objectives of the JV, Mr Lim said: “We hope to raise awareness on the benefits of trigeneration to industry users and lead the way for the development and widespread use of such energy-saving, and environment-friendly technologies in Singapore.”

Highlighting the advantages TPGS can bring to customers, Mr Tan Chin Tung, Chief Executive Officer of GSPL, said: “Customers can benefit from having natural gas piped directly to their premises. Besides producing electrical power, steam and chilled water at high efficiency, they will be able to enjoy the advantages of using natural gas for process heating; emissions are lower and heater efficiencies are higher. This is a growing trend we see in the market which will contribute to Singapore’s competitiveness as well as a cleaner environment.”



The JV will embark on its first major project to develop and build a new trigeneration facility for Pfizer Asia Pacific Pte Ltd. The company will be the first in Singapore to use the newly-launched technology under a deregulated energy market. In addition, TPGS will work closely with its existing and potential clients to reap the benefits of switching from conventional power systems to cogeneration or trigeneration technologies for all their energy needs.



PTT on lookout for fresh LNG sources Posted Monday, September 11, 2006 - 4:17 by hydrocarbonasia
PTT Plc plans to aggressively invest in exploration and production of liquefied natural gas (LNG) in the Middle East and Asia Pacific to enhance supply reliability after 2011, according to Chitrapongse Kwangsukstith, senior vice-president of the energy conglomerate.

"It is not a worthwhile investment for PTT to lay its fourth gas pipeline network in the Gulf of Thailand, since the company has not discovered any explicit signs of reasonable reserve volume in the area," said Mr Chitrapongse, who oversees the gas exploration and production business.

He said Thailand's natural-gas consumption was projected to increase by 8% annually from approximately 3,100 million cubic feet per day (mcfd) this year to 5,000 mcfd in 2010. Around 70% of the volume comes from the Gulf of Thailand and the rest from Burma.

Consumption would increase to around 6,700 mcfd in 2015, but new meaningful reserve volumes in Thailand had yet to be found, added Mr Chitrapongse.

According to the Department of Mineral Fuels, Thailand has proved reserves of 12.44 trillion cubic feet (tcf), probable reserves of 22.68 tcf and possible reserves of 33.42 tcf.

"LNG imports are considered an alternative natural-gas source that will not only enhance supply reliability to cover growing natural-gas demand in the transport and industrial sectors, but also preserve existing indigenous gas reserves in Thailand to support the demand of the petrochemical sector," he said.

PTT recently announced a plan to invest about 25 billion baht to build an LNG depot and receiving terminal in Map Ta Phut, Rayong. It is scheduled for completion in 2011, with an initial capacity to handle five million tonnes of gas a year. Capacity could be raised to 13 million tonnes in the future, said Mr Chitrapongse.

PTT has already signed a contract to purchase three million tonnes a year of LNG from Iran, which could be shipped starting early in 2011. The company was also in talks with other countries including Australia, Malaysia and Indonesia for further supplies, said Mr Chitrapongse.

"We also expect to join a venture with LNG manufacturers in those countries, aiming to secure supply reliability and strengthen price-bargaining power."

In fact, there are potential gas reserves in the Cambodia-Thailand Joint development area near Koh Kut, but PTT has not been able to start production due to unresolved demarcation disputes between the Thai and Cambodian governments.


PTT is also developing the M7 and M9 blocks in Burma. Subsidiary PTT Exploration and Production Plc had drilled six exploration wells in M9 and found that the first one contained reasonable gas reserves, said Mr Chitrapongse.

PTT also planned to buy natural gas from Exxon Mobil, which had a concession for the East Natuna field in Indonesia, if the price was good, said Mr Chitrapongse.

PTT participated in the International Gas Technology Exchange Meeting and Exposition of Western Pacific Region in Asia 2006 (GASEX) last week in Beijing.

Asia oil refiners cut back as margins fall to decade lows Posted Thursday, September 7, 2006 - 6:43 by hydrocarbonasia
Major oil refiners in Japan and South Korea have curbed operations this week in an effort to revive deeply negative simple margins by limiting fuel output, industry and company sources said yesterday.

The cuts, the first broad reductions since a brief spate of curbs last November, may help boost prices of petrol and other fuels, but could do little to rescue the ailing Asian market for fuel oil, the price of which has slumped to about US$20 a barrel below the Middle East benchmark crude price, the widest gap ever.

Simple plants that produce more residual fuel are losing US$3.21 a barrel and slumped last week as low as US$5 a barrel, the weakest since data began in 1997.
Japan's top refiner Nippon Oil Corp, which operates a quarter of the country's capacity, will cut back operations by about 23,000 barrels per day (bpd) to 816,000 bpd this month, versus its previous plan after a domestic fuel oil-fired power plant broke down.
That is 16 per cent less than September last year and about a third lower than its full capacity, partly due to planned maintenance on several units this month.

GS Caltex Corp - a 50:50 joint venture between South Korea's GS Holdings Corp and US major Chevron Corp - has cut its planned refinery runs this month by 20,000 bpd to 600,000 bpd, an industry source said.

Top Korean refiner SK Corp, which produces large volumes of fuel oil, may follow suit, traders say.

Those cuts may help rebalance an oil market that dealers say is in danger of an extended autumn slump, with petrol losing its premium to crude oil as the summer driving season ends and stocks of winter heating fuel already brimming in Asia.











Foster Wheeler awarded technology consultancy contract for new petrochemicals complex in India Posted Friday, September 1, 2006 - 1:07 by hydrocarbonasia
Foster Wheeler Ltd. announced that its UK subsidiary, Foster Wheeler Energy Limited,
part of its Global Engineering and Construction Group, has been awarded a contract by India's Oil and Natural Gas Corporation Limited (ONGC) to provide technology consultancy services for a planned new petrochemicals complex at Dahej, Gujarat, northwest India.

The terms of the contract were not disclosed, and the project was included in Foster Wheeler's first-quarter 2006 bookings.

"This award further extends Foster Wheeler's long-standing relationship with ONGC," said Steve Davies, chairman and chief executive officer of Foster Wheeler Energy Limited.

"We were actively involved in the development of Petronet's new LNG receiving terminal at Dahej (an ONGC joint venture), and have worked with ONGC to develop
new facilities for the extraction of petrochemicals feedstock from LNG for use at the new petrochemicals complex. With our in-depth technical expertise, we will now assist ONGC in developing the optimum technical solution for their planned petrochemicals facility."

The new petrochemicals complex will comprise various petrochemical plant units, including an ethylene unit. Foster Wheeler will support ONGC in the selection and appointment of technology licensors and the appointment of an engineering, procurement and construction (EPC) contractor for the ethylene unit. The company will also be involved, on behalf of ONGC, in the selection, appointment and management of the
EPC contractors for the development of site infrastructure.

LNG project gets govt approval Posted Thursday, August 31, 2006 - 4:39 by hydrocarbonasia

The Regional Development Council (RDC) of Region IV-A has approved the proposal of Hong Kong-based Energy World International Ltd. (EWI) to construct a liquefied natural gas (LNG) power plant in Quezon province.

Severino C. Santos, officer in charge of the National Economic and Development Authority (NEDA) Region IV-A, or Calabarzon, said the council adopted the firm’s proposal for the construction of a 300-megawatt (MW) power plant fuelled by LNG in Quezon province.

“By adopting EWI’s project proposal, RDC IV-A thus welcomes and supports the firm’s intent to explore the possibility and legality of investing in power generation using LNG in the region. The council and its member agencies extend support as EWI prepares the project’s feasibility study and secures local development council endorsements, environment compliance certificate and other requirements before approval and implementation,” said Santos, who is also the vice-chairman of RDC IV-A.

The LNG project is consistent with the country’s program of developing the natural-gas industry and promoting private-sector investment in the energy sector.

It is also in line with Calabarzon’s Regional Energy Plan for 2005-2014 and its Regional Development Plan 2005-2010, according to the council’s resolution.

The project will involve the construction of a new 300 MW combined cycle gas turbine power plant in two phases of 150 MW each, construction of a central LNG terminal, and development of a network of storage and distribution facilities throughout the country, among others.

The Department of Energy will evaluate the project and will send it to the NEDA Investment Coordination Committee for approval before its eventual implementation.


Korea’s petrochemical exports jump 50% Posted Tuesday, August 29, 2006 - 5:34 by hydrocarbonasia
Korea’s petrochemical exports have jumped 50 percent from a year ago due to recent price hikes in plastics and a soaring global demand for them.

The Korea Petroleum Association (KPA) said yesterday local refineries and petrochemical makers have shipped around $11 billion worth of products abroad in the first seven months of the year, compared to $7.4 billion last year.

The gain mostly comes from the ever-rising costs of fuels and petrochemical products.

The average price for petrochemical products rose almost 37 percent year-on-year, according to the KPA data.

The fast-growing demand from sizzling Asian markets such as China and India partly fuelled the export jump.

The KPA noted that the total export volume during the January to July period also rose nearly 10 percent, while oil companies suffered stagnant demand at home.

Experts widely expect the annual petrochemical export to hit a record high level of $20 billion this year.

Thanks to brisk exports and widening profit margin, oil and petrochemical companies saw better bottom lines in recent months.

SK Corp., the nation's largest oil refiner, saw its second-quarter operating income rise nearly 30 percent from a year ago.

As fast-growing demand from major offshore markets like China continues to widen the profit margin, the Seoul-based company posted 307 billion won ($320 million) in operating profit for the second quarter of the year.


Chinese refiner Sinopec posts 14.6% jump in first-half net profits Posted Tuesday, August 29, 2006 - 5:34 by hydrocarbonasia
China Petroleum & Chemical Corp., Asia's largest oil refiner, said Monday its net profits for the first six months of the year rose 14.6 percent year on year on rising crude prices and expanded market sales.

Net profits reached 20.68 billion yuan (2.6 billion U.S. dollars), while revenues rose 34 percent to 482 billion yuan, the company, commonly known as Sinopec, said in a statement.

Sinopec said its major business grew by big margins as its resource holdings increased, benefiting from crude price hikes on international markets. The company also reported robust sales of oil and petrochemical products.

The company is joining a nationwide shareholder reform plan to shift its non-tradable shares, held by the China Petrochemical Corp., its state-owned parent company, to the market.


CNOOC unit plans 3.8b yuan boost for chemicals Posted Tuesday, August 29, 2006 - 5:33 by hydrocarbonasia
China BlueChemical, the third business unit to be spun off by China National Offshore Oil Corp, plans to invest 3.8 billion yuan (HK$3.71 billion) in its new chemical business, which will produce methanol and polyoxymethylene, to boost profitability.
It plans to raise US$400 million (HK$3.12 billion) through an initial public offering and the roadshow has been set for September 11, a source said.

Investment banks JPMorgan and UBS are arranging the share sale.

UBS estimates China BlueChemical's fair valuation could range between 8.6 times and 10.4 times 2007 earnings, lower than its fertilizer business, which traded at an average of 11.9 times 2007 forecast earnings.

During the first half this year, China BlueChemical's net profit more than doubled to 1.09 billion yuan, boosted by newly acquired Tianye Chemical. Stripping out the profit contributed by Tianye, its net profit was 507 million yuan, compared with 437 million yuan a year ago.

Hainan province-based China BlueChemical has an annual capacity of 1.84 million tonnes to produce urea and its market share was estimated at 3.6 percent last year. Fertilizer was its major contributor, accounting for 96 percent of all sales last year. The firm plans to diversify into chemicals, which will become the key sales driver in future.

China BlueChemical plans to invest 2.4 billion yuan to build a third methanol plant in Hainan with an annual capacity of 1.13 million tonnes by 2008. It also plans to produce poloxymethylene. Capital expenditure is estimated at 1.4 billion yuan for 60,000 tonnes of annual capacity by 2008.

China is the largest methanol consumer in Asia and the second-largest globally. Last year, the mainland used 6.7 million tonnes, accounting for 19 percent of global consumption.

Tianye Chemical, which was acquired by China BlueChemical last year, posted a net profit of 173 million yuan in 2005, as a result of foreign exchange gains of 237 million yuan, implying a loss of 64 million yuan from its recurrent urea operations.





Reliance to gain edge over competition with $6bn refinery Posted Tuesday, August 29, 2006 - 2:36 by hydrocarbonasia
Reliance Industries Ltd, which turned India into a fuels exporter seven years ago, plans to gain an edge over rivals such as Valero Energy Corp with a new $6.1bn refinery that will process the cheapest crude oil.

An expected shortage of the so-called lighter varieties of crude used by most refineries means Reliance’s facility will give it access to the US and European diesel and gasoline markets, executive director Hital Meswani said in an interview this month at the refinery’s site in Jamnagar, western India.

“There is a fundamental shift in the global dynamics of the energy market,’’ Meswani, said. “Most incremental oil is heavy oil and there are few refineries that can process that.’’

New oil finds in easily accessible fields are mostly of the so-called heavier varieties, which contain a higher proportion of sulphur and cost more to process into cleaner-burning fuels.

To seek the lighter oils, explorers worldwide are drilling in remote places such as Sakhalin in Russia’s far east. Of the approximately 660 refineries in the world, only 20 can convert ultra-heavy oil into fuels, Meswani said.

“Their new refinery will have very high technical specifications that many refineries that are coming up probably won’t have,’’ said Jon Thorn, who manages about $250mn in Indian equities at India Capital Fund Ltd in Hong Kong.

Reliance Petroleum Ltd, a unit of Reliance Industries, is building the plant. The company’s first refinery was built by the late Dhirubhai Ambani, founder of the Reliance group, who started his career as a gas station attendant in Aden, Yemen.

“Product specifications are becoming stringent,’’ Meswani said. “In most markets, only Euro IV fuels are accepted.’’

The so-called Euro standards, which are enforced by governments to improve air quality, require sulphur and benzene in fuels to be below specified levels.

More than 95% of the refineries in the US and Europe are about 25 years old, Meswani said. There is a “tremendous strain on the worldwide refining system.’’

The last refinery constructed in the US opened in 1976, a plant in Louisiana now operated by Marathon Oil Corp. The number of US refineries has dropped by more than half in the past 25 years as tougher anti-pollution rules forced closures.

Valero and other US refiners are expected to spend a combined $18bn over the next five years on projects that will increase crude processing capacity by about 11% from current levels, according to the National Petrochemical & Refiners Association.

Construction of refineries in the US is delayed because of the time it takes to secure permits, Glenn McGinnis, chief executive officer of Arizona Clean Fuels Yuma, told a Senate panel on July 13. McGinnis said it took his company five years to get its main air quality permit from Arizona regulators.

Reliance’s new plant will replicate the existing refinery, which has a jetty pointing 4km into the Arabian Sea, where tankers holding 2mn barrels of oil unload cargoes.
“We’re building facilities with the deepest possible draft to bring the largest possible parcels,’’ Meswani said. “We’re building a refinery for the world, though it’s based in the East.’’

Aramco to buy stake in Showa Shell Posted Tuesday, August 29, 2006 - 2:31 by hydrocarbonasia
Saudi Aramco, the state-owned oil conglomerate, plans to buy up to 14.95 per cent in Japan's fifth-largest refiner Showa Shell Sekiyu K.K., it was reported yesterday.

The transfer of a 9.96 per cent stake in Showa Shell, a Royal Dutch Shell affiliate, would be completed in August, subject to regulatory approval.

Under the agreement, Saudi Aramco will supply a minimum of 300,000 barrels per day (bpd) of Arabian crude to Japan.

Showa Shell has a crude oil processing capacity of 515,000 bpd.

Japan cut crude imports from Iran more sharply than from other major suppliers in the second-quarter as Tehran's nuclear stand-off with the West dragged on.


Indonesia: Pertamina beefs up refinery capacity to cut imports Posted Tuesday, August 29, 2006 - 2:31 by hydrocarbonasia

Indonesia's state oil and gas company Pertamina plans to boost the capacity of its oil refinery plants by about 5 percent, or about 53,000 barrels per day, next year from the current level of about 1.06 million bpd, in a bid to reduce fuel import.

The company's processing director Suroso said that the increase in the plants' capacity would enable the company to reduce the country's fuel imports by 300,000 bpd.

"We cannot increase the processing capacity by more than 5 percent because the existing refineries have been operating at their installed capacities," Suroso said.

An increased processing capacity would not only result in a rise in fuel production but the production of other oil derivative products such as lubricants and aromatics, he said.

Indonesia imports about a third of its oil products because its daily refining capacity of 1.06 million barrels is not sufficient to meet domestic demand.

Pertamina had to increase imports in July after its Dumai refinery shut down for two days in June and operated at as low as 60 percent capacity after that.

The crude distillation unit at the 170,000 bpd refinery in Dumai in Riau province is running at 90 percent capacity. Pertamina will restart an 8,000 bpd gasoline-making unit at the refinery on Sept. 1 after shutting it for 20 days for maintenance.


Joint oil refinery awaits gov't nod Posted Thursday, August 24, 2006 - 5:00 by hydrocarbonasia
PetroChina and Sinopec, the nation's two leading oil firms, are awaiting final government approval to jointly construct a US$1.6-billion refinery to process Sudanese oil in Southwest China's Guangxi Zhuang Autonomous Region.

PetroChina, which initially proposed the refining project in Qinzhou, a port city of Guangxi, will have a 70-per-cent stake in the new plant, with the remaining 30 per cent going to Sinopec, according to a PetroChina official, who wished to remain anonymous.

The Guangxi project will be the first time the rivals have come together to work on a joint project.

A senior official at PetroChina's refining and marketing division confirmed the partnership with Sinopec, but told China Daily yesterday that the two firms were still awaiting the final nod from the National Development and Reform Commission to proceed with the construction work.

"It is difficult to predict when the government will approve the project," he said, without elaborating.

Pan Wenfeng, a local government official in charge of Guangxi's industrial projects, last month revealed that the Qinzhou refinery would involve a total investment of 13 billion yuan (US$1.6 billion) and was likely to win the NDRC's approval within four to six months. It satisfied the government's environmental requirements in June.

Sinopec, which enjoys a stronger marketing presence in the south than PetroChina, wanted to build a separate 8-million-ton-per-annum refinery in Beihai, a port city 100 kilometres from Qinzhou. Sinopec already operates a small refinery at Beihai with an annual crude-processing capacity of 600,000 tons.

But amid concerns about overlapping investments, the authorities ordered both companies to compromise on a joint plant in Qinzhou, which has a designed capacity of 10 million tons a year, a Sinopec official SAID.

The new refining facility in Qinzhou will process oil from Sudan, where PetroChina's parent company produced 16.38 million tons of crude oil and found new reserves of 78.6 million tons last year.

Expected to come online by 2010, the jointly invested refinery will benefit from the huge market demand in southwestern China, as well as the possibility of domestic oil product prices being brought closer to the international level, analysts said.


Sasol talks with Iran over GTL advanced Posted Wednesday, August 23, 2006 - 2:29 by hydrocarbonasia

Sasol Ltd, the world’s biggest producer of motor fuel from coal, is in talks with Iran’s government over the construction of a gas-to-liquid fuel plant, South Africa’s foreign minister said.

“Negotiations between Sasol, PetroSA and the Iranian government for a gas-to-liquid plant in Iran are far in advance,’’ Foreign Minister Nkosazana Dlamini Zuma said in Pretoria, South Africa, yesterday.

Sasol, based in Johannesburg is taking advantage of increased interest in its technology to turn coal and natural gas into motor fuel as the price of crude oil trades near a record.
Sasol is considering building two coal-to-fuel plants in China at a cost of $5bn each. It may expand its coal and gas-to-fuel production in South Africa by 20% over the next 10 years and plans to complete a gas-to-fuel plant in Nigeria and expand one in Qatar.
Sasol also plans to expand its Mozambican gas production unit.

Dubai Government and LNG Impel develop LNG storage facility Posted Tuesday, August 22, 2006 - 7:20 by hydrocarbonasia
The Dubai Multi Commodities Centre (DMCC), and Techno Park reported that they had tied up with LNG Impel to develop a world class LNG storage facility, to be located at Techno Park in Dubai, UAE.

The total cost of developing the storage facility is estimated to be US$1 billion.

Envisioned as a massive infrastructure facility, Dubai LNG Storage Hub will be the first of its kind in the world and is expected to have a total storage capacity ranging from 40 – 65 billion cubic feet (bcf).

The storage hub will offer customers the ability to store, trade and plan supplies of LNG in addition to providing other services such as LNG loans and LNG quality blending. Over time, it will also offer financial derivatives around LNG and shipping.

DMCC and IMPEL will begin the Open Season bid process for storage capacity at the Dubai LNG Storage Hub with an initial non-binding bid round commencing August 28th, 2006. Interested parties may register their interest and request further information about the Dubai LNG Storage Hub and the open season by visiting www.lngimpel.com.

The announcement follows the signing of a Memorandum of Understanding between LNG Impel and the DMCC in June 2006 to jointly pursue this project.

"This project is a signal achievement for DMCC’s objective to make Dubai the energy hub of the Middle East, and is in keeping with our key role as a promoter of commodity trade and its requisite infrastructure," said Ahmed bin Sulayem, Chief Operating Officer of DMCC.

"We plan to work closely with LNG Impel and Techno Park to ensure that all stakeholders will be able to leverage the facilities offered by Dubai LNG Storage Hub to their best advantage," he said.

"Techno Park, with its core focus built around Oil & Gas, Energy & Alternate Energy and Water Desalination projects, presents the ideal location of choice for such a venture," said Ms Salma Hareb, CEO of JAFZA and Economic Zones World, where Techno Park is located.

"We are committed to the successful implementation of such innovative projects, which will greatly enhance and strengthen Dubai’s role in regional energy distribution," she said.

Thom Dawson, President of LNG Impel said: "We are very pleased and excited about the Dubai LNG Storage Hub which will help meet the demands of the industry as LNG transitions into a globally traded commodity. It will provide industry participants with choices and options not accessible to them before."

"The launch of this facility would offer greater flexibility to both buyers and sellers and would release them from being tied to strict and inflexible supply schedules over long periods of time," said Dr. Tilak K. Doshi, the Executive Director for Energy at DMCC.

"The Dubai-based storage facility will enable core LNG suppliers and buyers to capture value by storing and trading across different months, as seasonal price variations are a key attribute of global LNG pricing. It will also allow a multiplicity of buyers, sellers and traders to arbitrage across several regions, and support derivatives trading as a spot market emerges around the storage facility," he said.

Abdelkader Elrahal, Managing Director of LNG Impel Middle East, said: "Dubai is ideally positioned to host this storage facility as it is centrally located between the natural gas rich supply area of the Middle East and the demand driven global markets. Dubai also offers a business climate and a host of services that are unparalleled in the Middle East."



Iraq plans to build more refineries Posted Tuesday, August 22, 2006 - 7:19 by hydrocarbonasia
Iraq plans to build several new oil refineries and upgrade existing ones to start exporting gasoline and other by-products by 2010, the oil minister said yesterday, but acknowledged that insurgent attacks on pipelines remain a serious problem.

Oil minister Hussain Al Shahristani also said Iraq plans to increase the production of crude from about two million barrels per day to the pre-war level of three million barrels per day by the end of this year.

The largest of the new refineries to be located in central Iraq will be completed by 2009 or 2010, Al Shahristani said during a meeting with members of parliament.

He said the plant will have a capacity to produce 140,000 barrels of by-products such as gasoline, diesel and kerosene every day.

Another refinery will be built in Koya near Kwysengeq in north Iraq with a production capacity of 70,000 barrels per day.

The pipelines supplying crude to the refineries are often attacked by insurgents. "These pipelines should be protected from north of Baghdad till south of Samarra. these pipelines should be protected to solve the [fuel] crisis," Al Shahristani said.


Chevron chief lobbies for Gorgon LNG nod Posted Tuesday, August 15, 2006 - 4:00 by hydrocarbonasia
Intensive high-level lobbying is taking place in a bid to accelerate government approvals for the Gorgon LNG project to be sited on sensitive Barrow Island in Western Australia.
The lobbying effort involves the most senior levels of US giant Chevron Corporation, including the group's executive vice-president upstream and gas, George Kirkland.

The project, which was costed three years ago at around $US11 billion, has been subject of an adverse finding from Western Australia's Environmental Protection Authority.

In June, the EPA said the project to produce up to 10 million tonnes of LNG a year from the huge Gorgon gas reserves offshore had not provided adequate provisions for nesting sites for the flatback turtle.

The EPA was also concerned about quarantine provisions for Barrow Island, which has been a Class-A nature reserve since 1911, during the construction phase which will attract a workforce of 2500. It was also worried about the effects of dredging for a load-out berth on the marine environment close by.

The Gorgon LNG development is among the top five projects Chevron has under consideration around the world.

Mr Kirkland, who has responsibility for Chevron's half stake in Gorgon, met Premier Alan Carpenter in Perth yesterday and is scheduled to meet federal Resources Minister Ian Macfarlane tomorrow.

Chevron is known to be concerned that unless it obtains "timely" approvals for the project, it may not meet its recently revised shipping schedule for Japanese customers of 2011-12.

While Mr Carpenter has said he is a very strong supporter of the project, the appeals process on the EPA decision is not completed and a formal decision from the state Government is still some months away.

Reliance Petroleum to raise $1.5b loan to build refinery in Gujarat Posted Monday, August 14, 2006 - 3:33 by hydrocarbonasia
India's Reliance Petroleum Ltd, a unit of Reliance Industries Ltd, said yesterday it is raising $1.5 billion in syndicated loan in the international market.

The funds will be used to build a 580,000-barrels-a-day refinery and a unit to make 0.9 million tonnes of polypropylene a year in the western state of Gujarat.

The loan consists of $950 million for seven and a half years, and $550 million for 10 years, the company said in a statement.

Syndication is expected to be closed in October, the company said.

Reliance Petroleum, earlier this year raised $600 million in an initial public offering selling a 10 per cent stake to build the refinery complex.

It also sold a 5 per cent holding to Chevron Corp for $300 million with an option to sell another 24 per cent.

The new refinery is expected to take about 2 years to begin operations.



Iran, Indonesia to build JV refinery, petrochemical plant Posted Monday, August 14, 2006 - 3:32 by hydrocarbonasia
A high-ranking Indonesian oil delegation led by the representative of the Indonesian President Susilo Bambang Yudhoyono met in Tehran on Saturday, with Iranian Oil Minister Kazem Vaziri-Hamaneh. The two sides discussed the development of joint economic cooperation particularly, in the energy sector.

The Indonesian delegation is interested in cooperation in the petrochemical, oil and gas exploration sectors as well as taking part in the National Iranian Oil Company IT (information technology) projects, Hamaneh said, adding “We have held a series of negotiations in this regard.”

The Iranian minister also referred to the Indonesian side’s call for the supply of its chemical fertilizers from Iran. Given the unique situation of Iran’s Assaluyeh Special Energy Zone, the Indonesians are interested in investing in the energy zone to produce their required fertilizers there and then deliver it to their country, said the minister adding, therefore, they are going to pay a visit to the region.

Commenting on the joint investment in the building of a petrochemical plant and a refinery in Indonesia, the Iranian minister said that based on the earlier agreements, Iran will invest in building of a heavy crude oil refinery in Indonesia.

He also announced that, Indonesian oil officials have also expressed their interest for the establishment of a gas condensates refinery in Iran. The two sides also emphasized the joint investment of Iran, Indonesia and Singapore in setting up a petrochemical plant in Iran.

Indonesia to buy LNG from Oman Posted Friday, August 11, 2006 - 7:58 by hydrocarbonasia
Indonesia's PT Pertamina plans to buy 600,000 tons of liquefied natural gas (LNG) from Oman to meet local demand, an executive said on Friday.

"Oman's LNG factories can produce 10.5 million tons and they have excessive output of some 600,000 tons. We ask Oman to sell the excessive output to Indonesia," Pertamina president Ari Soemarno said.

The purchase from Oman will cover only a little part of additional LNG supplies sought by Pertamina at some 4.2 million tons.

Besides Oman, Pertamina also is approaching Qatar to buy 200,000 tons of LNG, said Soemarno, adding that the company is in intense talks with Qatari officials.

Adnoc and CPC to invest $1b in facility Posted Friday, August 11, 2006 - 4:11 by hydrocarbonasia
Chinese Petroleum, Taiwan's state-owned refiner, and Abu Dhabi National Oil Company (Adnoc) are planning to jointly invest $1 billion in a downstream petrochemical facility in Abu Dhabi.

Pan Wenent, CPC chairman, said that CPC would establish a $1 billion joint-venture to manufacture petrochemical intermediates.

"We are doing a feasibility study on this right now and will sign an agreement in one or two months," said Wenet. The plan fits the UAE's strategy of building a local petrochemical production base and is in line with CPC's goal of expanding production outside the fuel-oil segment to increase profitability.

The two companies held talks on a potential $6 billion joint investment in Abu Dhabi including a refinery, a cracker and downstream facilities.

Last year, Ipic, Adnoc's international investment arm, expressed interest in buying 20 per cent of CPC for $5 billion. Wenent said this or a potential investment by the Middle Eastern company in CPC's affiliate, Kuo Kuang Petrochemical Technology, was also now off the agenda.

Taiwan's government has said before that it could not sell a stake in CPC to Ipic unless it started an overall privatisation of the state-owned oil company, which would have to be conducted through an open tender. As an alternative, CPC had offered Ipic a stake in Kuo Kuang, a joint venture in which it holds a 40 per cent stake and which is to build a T$400.5 billion ($12.2 billion) refining and petrochemicals complex on Taiwan's west coast.

Pan Wenent, CPC chairman, said it expects to report a T$35 billion loss for full-year 2006 because the government restricts it from raising domestic retail fuel prices in line with soaring global crude prices.


Titan set for better H2 results on stronger polymer demand Posted Thursday, August 10, 2006 - 2:22 by hydrocarbonasia
Titan set for better H2 results on stronger polymer demand

Malaysia’s largest producer of olefins and polyolefins, Titan Chemicals Corp Bhd, sees a better performance in the second half of the year on stronger demand and limited supply, said managing director Thomas P. Grehl.

“The second half is traditionally a stronger time for us as it is the holiday season. On top of that, there are competitors shutting down plans and no additional capacity coming forth.

“We are in a period which favours our business,” he said after releasing the company's second quarterly results yesterday.

He said as polymer prices were increasing and naphtha costs were likely to remain at present levels, margins should improve in the following quarters.

For the second quarter ended June 30, Titan's net profit dropped to RM30.3mil from RM378.1mil in the preceding quarter although sales were higher at RM1.4bil against RM1bil previously.

During the first quarter, the company recorded RM341mil in non-recurring income arising from the consolidation of its acquisition of PT Titan of Indonesia.

Net profit for the first six months came in at RM408.3mil against RM249.4mil in the same period last year. Turnover rose to RM2.4bil from RM2.1bil a year ago.

Grehl said while market conditions were challenging given the high oil prices in the second quarter, Titan was still able to record a stronger operating profit of RM86mil or 25% higher compared with the first quarter.

He attributed this to improvements in production and sales after the successful turnaround in the company's plants, as well as higher polymer prices. Sales volume and selling prices rose 29% and 5% respectively.

Naphtha consumption costs increased 13%, resulting in lower profit margin, but was partly offset by a 15% rise in selling prices of its aromatic products, benzene and toluene.

Grehl said as demand improved and supply tightened, Titan was likely to be able to pass on the higher raw material costs to customers.

On Indonesian operations, he said PT Titan's market share had jumped to 20% in the second quarter from 8% as at end of last year.

A third production line would be operational by year-end, thus increasing capacity by another 200 thousand tonnes per annum (KTA), he said, adding that the present two lines produced about 125 KTA each.

Chief financial officer Fauzi Ghani said Titan expected to reduce its debt to 40% of total assets by year-end from 46% as of end-June.



Hyundai, Shell sign Letter of Intent for GTL project in Qatar Posted Tuesday, August 8, 2006 - 4:24 by hydrocarbonasia
Hyundai Heavy Industries Co., Ltd. (HHI) said that it has signed a letter of intent with Qatar Shell GTL Limited, a Royal Dutch Shell plc subsidiary, for the engineering, procurement, and construction (EPC) for the feed gas preparation works of the Pearl GTL Project. HHI will perform the work in a consortium with Chiyoda Corp. called CHC.
The project for two trains of gas processing units, with a capacity of 850 MSCFD and a total of 1,700 MSCFD of natural gas (equivalent to 8 MMTPA of LNG), will send feed gas to the GTL core unit to produce 140,000 barrels per day of GTL products. The project will be completed around the end of the decade in a staged sequence for phases 1 and 2.

The GTL plant will produce virtually sulphur-free, clean liquid products and fuels. With lower emissions at point of use, it can play a major role in reducing local air pollution in cities and provide a strategic diversification of liquid transport fuel for importing countries. As evolving technology, various GTL projects are being planned worldwide and HHI, by participating in this GTL project, has created a major milestone for future GTL projects.

HHI aims to get more orders while focusing on oil and gas projects by consolidating its position as major EPC contractor in the western African region. Amid continuing high oil prices, major oil companies are actively developing natural gas and crude oil by keeping investing in upstream sector. HHI will focus its business resources on areas with high prospects for future orders, such as Nigeria, southwestern Africa, and the Middle East.


Singapore to go ahead with LNG imports to meet demand Posted Tuesday, August 8, 2006 - 4:23 by hydrocarbonasia
Singapore has decided to go ahead with liquefied natural gas (LNG) imports to meet future energy demand and ease its dependence on piped supplies from Indonesia and Malaysia, the trade minister said yesterday.

"We need to diversify our energy sources in order to ensure that we are not over-reliant on a single source for our energy needs," Lim Hng Kiang told an energy forum organised by the Energy Market Authority (EMA).

"As such, the government has decided to import liquefied natural gas to meet future rising demand for energy as our economy expands and our population increases."

A study prepared by Tokyo Gas Engineering commissioned by the EMA has recommended building an LNG terminal to receive 3 million tonnes per year (tpy) by 2012.

The EMA said in a report released yesterday that it sees the politically stable Australia as the preferred supplier. This would help to strengthen the hand of LNG marketers such as Australia's Woodside Petroleum and US major Chevron that have found it tougher to sell LNG to China and India due to higher prices. Other potential suppliers are Qatar and Iran, the EMA said.

The terminal is expected to cost about $500 million, Lim said. Industry sources said the funding could partly come from the city's power plants that dominate Singapore's natural gas consumption and the overall project would cost more if investments in LNG tankers were taken into account.

"This is a very big investment. There is some uncertainty over the demand. This is a very lumpy investment. If the market feels core investment is needed from the government, we will seriously look at it," Lim said.

Singapore, whose economy is forecast to grow five to seven per cent this year, has long sought to diversify its gas supplies, all of which come via three pipelines from Indonesia and Malaysia to fuel 80 per cent of the island's power generation that is growing at more than four per cent a year.


Foster Wheeler to proceed with EPC phase of Shell's Posted Friday, August 4, 2006 - 1:13 by hydrocarbonasia
Foster Wheeler Ltd. announced today that its UK subsidiary, Foster Wheeler Energy
Limited (FWEL), and its Singapore subsidiary, Foster Wheeler Asia
Pacific Pte. Ltd. (FWAPPL), both of which are part of its Global
Engineering and Construction Group, have been instructed by Shell
Eastern Petroleum (Pte.) Ltd. (SEPL) to proceed with the initial
engineering, procurement and construction management (EPC) for a
world-scale ethylene oxide/mono-ethylene glycol (EO/MEG) plant and a
significant refinery modification project in Singapore.
   
The Foster Wheeler contract values for this initial work, which
were not disclosed, will be included in the company's third-quarter
2006 bookings. The company expects to make further bookings in 2006
upon signature of the contracts for the full EPC scope.
   
FWEL has already completed the basic design and engineering
package (BDEP) for the new EO/MEG plant, which utilizes Shell's
proprietary "Omega" technology. Foster Wheeler's Asia Pacific
operations have completed the BDEP for the modifications to the Bukom
Refinery and project specification for the sulphur recovery and high
vacuum unit. Foster Wheeler will now carry this work through into the
implementation phase of the project.
   
"We are pleased to have appointed Foster Wheeler as our EPC
contractor and look forward to the successful outcome we expect," said
Pieter Eijsberg of SEPL, general manager for the project.
   
"As one of the leading engineering, procurement and construction
contractors in Singapore, Foster Wheeler has a 30-year track record of
delivering safe and successful projects," said Umberto della Sala,
chief executive officer, Foster Wheeler Global Engineering and
Construction Group. "We are proud to assist Shell in realizing their
investment objectives and intend to build on our own demanding high
standards and our excellent working relationship with Shell to deliver
this new EO/MEG plant and the refinery modifications safely and
successfully."
   
The new 750,000 tonnes per annum EO/MEG plant, to be located on
Jurong Island, will use feedstock from an ethylene cracker to be built
by others on Bukom Island, Singapore. Both the cracker and the EO/MEG
plant are part of a project known as the Shell Eastern Petrochemicals
Complex (SEPC), which includes in its scope the construction and
integration of the new facilities with Shell's existing refinery at
Bukom to capture the benefits of oil-chemicals integration.

PTTEP encounters petroleum bearing formations offshore Myanmar Posted Thursday, August 3, 2006 - 1:53 by hydrocarbonasia
PTTEP reports that the exploration well Zatila-1 was drilled to a total depth of 2,912 metres and encountered several petroleum bearing formations. Drill stem tests will now be performed to verify commerciality of the well.

The well was spud on June 28, 2006 in the Gulf of Martaban offshore Myanmar. Block M9 is located approximately 250 - 300 kilometres south of Yangon. PTTEP International Limited is the operator of Block M9 and holds a 100% interest.




Kuwait looks for foreign partners for new refinery Posted Tuesday, August 1, 2006 - 7:48 by hydrocarbonasia
The Kuwait National Petroleum Company (KNPC) is looking for a foreign partner for the new refinery, whose share will be 40 percent maximum, it was reported on Monday.

KNPC Chairman Sami Al-Rasheed was quoted as saying that the company has been contacting international companies regarding the project.

He, however, noted that the project would not give the foreign investors more than 40 percent of the total shares.

Al-Rasheed pointed out that KNPC will carry out the project whether it found a foreign partner or not, adding the foreign partner could join the project at any of its phases.

The new refinery, which will process 615,000 barrels of crude oil per day, will cost 1.85 billion Kuwaiti dinars (about 6.29 billion U.S. dollars) and is expected to be operational in 2010.


BP-Led Tangguh consortium to sign $2.6B loan pact Posted Tuesday, August 1, 2006 - 4:14 by hydrocarbonasia
A consortium led by BP PLC (BP) will sign an agreement Tuesday with international lenders for loans totalling $2.6 billion for its Tangguh liquefied natural gas facility, a government official said Monday.

"There will be more loan signings in the future as we need $6.5 billion in total," Kardaya Warnika, the chairman of the upstream oil and gas regulating body BP Migas said.

Warnika said that the lenders include Japan Bank for International Cooperation and several international commercial banks.

Though the loan agreement doesn't involve the government, BP Migas will witness the signing of the loan on behalf of the government in its capacity as a regulatory body.

Officials with BP in Indonesia declined to comment when contacted.

The Tangguh LNG facility, located in Indonesia's Papua province, is to have an annual output capacity of 7.6 million metric tons a year. Commercial production is set to begin in late 2008.

The construction of the facility commenced in March last year.

The facility will consist of two LNG production facilities, and a third is being considered.

BP and its partners have agreed to supply 2.6 million tons of LNG a year from the facility to China, 1.15 million tons a year to South Korea and 3.7 million tons a year to Mexico.


Shell gives green light to US$3b S’pore petrochemical plant Posted Tuesday, August 1, 2006 - 4:10 by hydrocarbonasia
Oil giant Shell yesterday took the wraps off its hush-hush Houdini project – giving Singapore a multi-billion-dollar present just a fortnight from National Day on Aug 9.

Shell flashed the green light to build another petrochemical cracker estimated to cost about US$3 billion that will be the fourth of its kind here.

Houdini now known as Shell Eastern Petrochemicals Complex (SEPC) includes a world-scale 800,000 tonnes per annum (tpa) ethylene cracker that will supply products to downstream, or secondary, plants, including a new 750,000 tpa MonoEthylene Glycol (MEG) Plant. There will also be modifications and additions to Shell’s existing Bukom refinery on Pulau Bukom to allow full integration with the adjacent new cracker and MEG plant.

“Detailed engineering design and procurement work is progressing well, with construction on the ethylene cracker due to begin later this year, and start-up of the new and modified facilities anticipated by 2009/2010,” Shell said. Some 8,000 workers are expected to be employed at the peak of construction.

“It’s exciting days. We are happy to have reached this key milestone, which has taken time to get to,” Shell’s vice-president for Ventures and Developments Tan Ek Kia said.. “SEPC will play an important part in the growth of Singapore’s petrochemical hub, adding about a one third increase in capacity.”

It will add to Petrochemical Corporation of Singapore’s two existing crackers with a total ethylene capacity of 1.4 million tpa, in which Shell has a half-stake, with a Japanese consortium led by Sumitomo Chemicals owning the other half. The other existing cracker is operated by ExxonMobil, which is beefing up the 800,000 tpa unit to 900,000 tpa and planning a second comparable or slightly larger cracker.

Mr Tan said SEPC’s cracker, the MEG plant and the Bukom refinery upgrade will be 100 per cent funded by Shell. In addition, “expansions and new investments by our affiliates and customers on Jurong Island” can be expected, he added, with these projects expected to account for off take from SEPC’s cracker.

Mr Tan declined to specify the ultimate number and type of downstream plants connected to SEPC, as both Shell and its project collaboration partner, the Economic Development Board, are still in talks with potential investors.

Shell’s MEG plant alone will account for about half the 800,000 tpa of ethylene produced by the cracker, which will also supply feedstock like propylene and C4 to the other downstream plants.

The bulk of the MEG plant’s output will be exported to the region, especially China where there is considerable demand growth for MEG by products like polyester, Mr Tan said.


“It’s happy news and a big boost for the Singapore industry,” EDB’s Chemicals Cluster director Aw Kah Peng said. She said EDB had been working for the past four or five years to secure the Shell project and “we are still going to have to work hard to continue to grow the industry”.

Ms Aw said EDB and Shell hope to tie up investors for SEPC’s other downstream plants in the next 6-12 months.

“We don’t pursue cracker investments for their own sake, but use these to build an entire industry including, for example, downstream plants for high-end polymers, which can provide diversity and value-add,” she said, when asked how many crackers EDB is ultimately aiming for on Jurong Island.

But Singapore is surely getting there, as Shell’s latest cracker will bring total ethylene capacity here near 3 million tpa, with ExxonMobil’s second cracker investment expected to be confirmed next year taking the total to 4 million tpa. This will bring output to about more than half of Japan’s ethylene capacity of 7 million tpa, Ms Aw said.

China looking at 25-year LNG deal with Petronas Posted Friday, July 28, 2006 - 5:13 by hydrocarbonasia
China’s top economic planning agency is considering the approval of a 25-year supply agreement for liquefied natural gas (LNG) with Petroliam Nasional Bhd (Petronas), it was reported yesterday.

A framework agreement for Petronas to supply LNG to a Shanghai terminal had been reached but a final deal can only be realised after a price for the gas is agreed upon.

The National Development and Reform Commission was considering approval of the contract but the final price would be a key factor, it said.

The Shanghai terminal, currently under construction, is being built in two phases with the first slated to go into operation in 2008 with capacity to process three million tonnes of LNG annually, the report said.

Phase two of the project will increase capacity to six million tonnes.

The Shenergy Group, a state-owned energy company based in Shanghai, holds a 55% stake in the project, while China National Overseas Oil Corp, China’s largest offshore oil company, holds the other 45%.

PetroChina seeks government approval for LNG facility Posted Thursday, July 27, 2006 - 6:54 by hydrocarbonasia
China's biggest oil producer PetroChina will submit a feasibility study to the government this month on building a liquefied natural gas (LNG) terminal in Northeast China, whose fuel supply may come from Australia, Iran or Qatar.

PetroChina has completed a feasibility study to construct 6.8-billion-yuan (US$850-million) LNG receiving facilities in Dalian of Liaoning Province, to supply the imported cleaner fuel to local consumers, Xiao Desheng, vice-president of PetroChina's Dalian LNG project, told an industry forum yesterday.

"We will submit the study to the National Development and Reform Commission (NDRC) for final approval within the month," Xiao said.

It normally takes several months for the government to wrap up the approval procedures, said Xiao, adding that he could not predict an exact date for the Dalian project.

When asked about gas supplies, Xiao said talks with global suppliers from Australia, Iran and Qatar were still under way.

"We have entrusted the PetroChina International Co Ltd (Chinaoil) to conduct negotiations with the foreign sellers, but a final supply agreement has yet to be finalized," Xiao said.

To market the liquefied gas, PetroChina has already inked agreements or memoranda of understanding with as many as 22 consumers from five cities in Liaoning Province, Xiao said.

Natural gas demands from the 22 are expected to reach 6.8 billion cubic metres (bcm) by 2010, accounting for 60 per cent of the total consumption of the province, according to the PetroChina official.

The Dalian LNG first-phase project was originally planned to come on stream by 2011, annually supplying 3 million tons of liquefied gas, or 3.9 bcm of un-liquefied gas.

The capacity would double in the second-phase development, Xiao said.

Domestic oil majors, which also include Sinopec and China National Offshore Oil Corp (CNOOC), are vigorously seeking fuel supplies for planned LNG terminals along the eastern coast, although the rising global gas prices have prolonged talks.

Another PetroChina senior official said earlier last month that the country's biggest oil company was in negotiations with more than 10 international suppliers to source fuel for its three terminals, including the one in Dalian.

PetroChina has got the initial governmental go-ahead to conduct feasibility studies to build LNG facilities in Dalian, Tangshan of Hebei Province and Rudong of Jiangsu.

China National Offshore and its partner Shanghai-based Shenergy have secured LNG supplies from Malaysia's national oil company Petroliam Nasional Bhd for their planned Shanghai terminal, a source who did not wish to be named said yesterday.

The companies are awaiting central government approval for the supply contract, and they may announce details of the deal later this year, the source said.

The Shanghai terminal will cost 4.6 billion yuan (US$575 million) and is expected to start supplying 3 million tons of LNG a year by 2008. China National Offshore owns 45 per cent of the terminal and Shenergy the rest.

China National Offshore has received governmental approval for two LNG terminals, one each in Guangdong and Fujian.

The Guangdong venture has already received its first shipment of 60,000 tons of LNG from Karratha in Australia.

Heather R. Ting, president of BP Gas China, at the end of last month said that the global oil giant had reached an agreement with China National Offshore to supply 2.6 million tons of LNG annually for 25 years to its Fujian terminal, and they were waiting for final approval from the Indonesian Government.


Sinopec refinery project gets initial go-ahead Posted Thursday, July 27, 2006 - 6:51 by hydrocarbonasia
Sinopec's proposed US$5 billion joint refinery project with Kuwait Petroleum Corp has gained government approval for preliminary work.

The two companies are allowed to conduct preliminary studies, including a feasibility study, jointly with the Guangdong provincial government, according to a source with the government of Guangzhou, capital of Guangdong Province.

If given the go-ahead the Guangzhou project would become the largest Sino-foreign joint venture in the country so far, overtaking the US$4.3 billion petrochemical complex in Huizhou, Guangdong, co-invested by CNOOC and Shell.

The annual processing capacity of the Sino-Kuwaiti refinery mentioned in the approval is 12 million tons of crude, instead of the previously reported 15 million tons.

The proposed site for the project is in Nansha District, said an executive from Sinopec's Guangzhou branch.

He added that a top priority of the feasibility study will be to gauge the impact on the environment, and the feasibility study will include details on how to meet environmental standards.

Although he did not predict how long the study would take, he said the eventual construction of the project should be quick given the high demand for refined products in the region.

Guangdong Province experienced a tight supply of fuels again in the first half of this year, the provincial economic and trade commission said earlier this week.

Fuel consumption grew by 8.3 per cent to 9.67 million tons during the period.

Guangdong is estimated to demand 20.5 million tons of fuels this year, including 7.2 million tons of gasoline and 13.3 million tons of diesel. Yet the supply planned to be allocated to the province by the two Chinese oil majors, Sinopec and PetroChina, adds up to only 19.25 million tons.

The proposed Sino-Kuwaiti project is an extension to Sinopec's Guangzhou refinery. Initial plans are for it to have new ethylene facilities with an annual capacity of 1 million tons.

Sinopec Guangzhou is expanding its annual refining capacity to 13 million tons by the end of this year from its current 8 million tons. Ethylene production capacity is set to rise to 800,000 tons from 200,000 tons.

Sinopec accounts for more than 60 per cent of sales of refined products in Guangdong.

Refineries in Guangdong were capable of processing 20.6 million tons of crude and producing 12.33 million tons of petroleum, kerosene and diesel in 2003, both of which accounted for 10 per cent of the nation's total, according to the provincial government.

China and Kuwait signed a memorandum of understanding on the refinery last December.


Qatar and Shell launch integrated Pearl GTL project Posted Thursday, July 27, 2006 - 6:50 by hydrocarbonasia
Qatar Petroleum and Royal Dutch Shell plc today announced the launch of the world-scale integrated Pearl Gas to Liquids (GTL) project in Qatar.

The Pearl GTL project includes the development of offshore natural gas resources in Qatar's North Field, transporting and processing the gas to extract natural gas liquids and ethane, and the conversion of the remaining gas into clean liquid hydrocarbon products through the construction of the world's largest integrated GTL complex in Ras Laffan Industrial City.

Upstream, some 1.6 billion cubic feet per day of wellhead gas will be produced from the North Field and transported and processed to produce approximately 120,000 barrels of oil equivalent per day of condensate, liquefied petroleum gas and ethane. The North Field is considered to be the largest single non-associated gas reservoir in the world with estimated recoverable resources in excess of 900 trillion cubic feet. Over its lifetime the integrated project will produce upstream resources of approximately 3 billion barrels of oil equivalent.

Downstream, dry gas will be used as feedstock for a new onshore integrated GTL complex which will manufacture an additional 140,000 barrels per day of liquid hydrocarbon products. The Pearl GTL complex will consist of two 70,000 b/d GTL trains and associated facilities. The plant will produce a range of clean liquid products and fuels, comprising naphtha, GTL fuel, normal paraffins, kerosene and lubricant base oils. GTL fuel is the largest component of the product slate and can be used in existing light and heavy-duty diesel engines. With lower emissions at point of use, it can play a major role in reducing local air pollution in cities and provide a strategic diversification of liquid transport fuel for importing countries. GTL blended fuels can also enhance engine performance as demonstrated by the historic Audi R10 TDI win at this year's Le Mans 24-hour race.

The fully integrated Pearl GTL project is being developed under a Development and Production Sharing Agreement with the government of the State of Qatar, covering offshore and onshore costs, with Shell providing 100 per cent of project funding.

The award of various engineering, procurement, construction and management contracts for execution of the project has now begun. Production from the first Pearl GTL train is anticipated to begin around the end of the decade, with the start up of the second train following within a year.

His Excellency Abdullah Bin Hamad Al-Attiyah, Second Deputy Premier and Minister of Energy and Industry of Qatar said today: "His Highness the Emir, Sheikh Hamad Bin Khalifa Al-Thani, has set a wise strategy for the optimal utilisation of Qatar's natural resources for the benefit of Qataris, now and in the future. GTL opens a new global market for Qatari natural gas and allows Qatar to contribute constructively to improving the local environment by supplying a cleaner alternative transport fuel. Shell has extensive expertise in all aspects of the GTL value chain and I am pleased to have them as partners on our journey to become the GTL capital of the world."

Jeroen van der Veer, Chief Executive of Royal Dutch Shell, added: "Today's announcement is another clear demonstration of our long-term commitment to partnering with the State of Qatar to deliver Qatari natural gas and GTL products to markets around the world. It is also evidence of our commitment to leverage leading Shell technology in order to increase the world's supply of cleaner and more diverse liquid hydrocarbon products. Pearl GTL is just one example of Shell's strong portfolio of growth opportunities, opportunities that offer scale, long producing life, exposure to commodity price upside and attractive returns for shareholders."

CNOOC, Shell to expand joint petrochemical capacity Posted Monday, July 24, 2006 - 3:35 by hydrocarbonasia

CNOOC and Shell Petrochemicals Co Ltd, China's biggest Sino-foreign partnership deal, plans to expand its current capacity by 10 to 20 per cent within the next four years, to meet surging domestic demand.

The US$4.3 billion joint project, launched in March between Royal Dutch Shell and China's biggest offshore oil company China National Offshore Oil Corp (CNOOC), yesterday disclosed plans to further expand its capacity.

"We are now looking at a 10 per cent to 20 per cent expansion of our existing production facilities within the next four years," Jean-Louis Bilhou, the joint venture's manufacturing director, told reporters yesterday at Daya Bay of South China's Guangdong Province.

The plant is currently able to annually produce 80,000 tons of ethylene and 2.3 million tons of other petrochemicals widely used in plastics production.

"We could easily expand the current capacity by 10 per cent, without incurring much expenditure," Bilhou said.

For long-term development, the petrochemical complex also has intentions of constructing additional green-field facilities in the second-phase expansion, which might be more than 20 per cent, the director said.

Simon Lam Chun Kai, chief executive officer of the joint plant, said the company had already reserved empty land for the new facilities, but decisions on its timescale and investment has yet to be finalized.

"It normally takes six months for us to do a feasibility study on expansion," Lam said, without providing further details.

More than half the plant's output is marketed around the Pearl River Delta region in South China, said Zhai Hongxing, deputy chief executive officer of CNOOC-Shell Petrochemicals.

Even at full capacity, the plant can only supply less than 10 per cent of local market consumption in China, Lam said.

"We foresee very good market prospects in the Chinese petrochemical industry, and we want to increase production of some products with good economic returns," Zhai said.

Seeing the enormous market potential in China, Shell is diverting investment to Asia from Western nations, Liu Xiaowei, a senior Shell official, said. Shell may almost double investment in China's petrochemical market by 2010, according to Liu.

At a media briefing yesterday, Liu dismissed previous reports that the Anglo-Dutch oil giant had interest in taking a stake in a new 12-million-ton-per-year refinery that CNOOC plans to build beside the joint petrochemical complex.

Construction has already started on the 19.3-billion-yuan (US$2.4-billion) CNOOC refinery, which is expected to come on stream by 2008.

Lam yesterday refused to disclose how long it would take to see the multi-billion investment returned on the joint petrochemical plant but said its cutting-edge technology, management and global marketing would give it a competitive edge among rivals.

CNOOC-Shell Petrochemicals is a 50-50 joint investment between Shell and CNOOC, China's third biggest oil company.


India plans to liquefy Sakhalin gas Posted Monday, July 24, 2006 - 3:35 by hydrocarbonasia
Flagship Indian energy firm Oil and Natural Gas Corp. is in talks over exporting its share of natural gas from Sakhalin-1 via Royal Dutch Shell's nearby LNG terminal, an Indian oil ministry official said.

The move to make liquefied natural gas at Sakhalin-1, a multibillion-dollar project on the Pacific Coast, runs counter to operator ExxonMobil's long-held plan to sell the gas via a pipeline to nearby Japan.

"We are keen on getting LNG from Sakhalin-1," the ministry official, who did not wish to be identified, said Friday. "India needs LNG desperately. Shell has a liquefaction facility for Sakhalin-2 and we can use that. We have had some discussions and will meet them again on July 31."

Exxon said it still planned to supply Sakhalin-1 gas by pipeline to North East Asian markets like China and Japan. Still, the company said it was exploring all "reasonable opportunities to maximize the value" of the gas resource.


India may sign deal for Australian gas Posted Friday, July 14, 2006 - 2:26 by hydrocarbonasia
India expects to sign a deal for the supply of 2.5 million tonnes of liquefied natural gas from Australia's North West Shelf, an oil ministry official says, to meet demand in Asia's third-largest economy.

India produces barely half the gas it uses and has been negotiating deals to secure supplies ever since it started importing gas from Qatar in 2004.

"It is for a supply of 2.5 million tonnes of LNG per year, and believe me when I say this, the pricing is extremely affordable," MS Srinivasan, petroleum secretary, said.

"We might sign the agreement by September."

The gas will start arriving in September 2009 at a LNG terminal in Kochi, southern India, run by Petronet, a company promoted by state-run firms.

The terminal has a capacity of 2.5 million tonnes annually.

The North West Shelf joint venture is owned by Woodside, BHP Billiton, Chevron, BP, Japan Australia LNG (MiMi), a joint-venture of Mitsubishi Corporation, Mitsui and Company and Woodside's 34 percent shareholder, Royal Dutch Shell.

India is promoting LNG imports and is also in talks to build pipelines to bring natural gas from Iran, Turkmenistan and Myanmar as gas usage increases in the energy hungry economy.

It plans to import 7.5 million tonnes of LNG a year from Iran, starting in 2009 and running for 25 years.

Shell’s Sakhalin venture in $2.4bn LNG deal with Japan’s Chubu Posted Friday, July 14, 2006 - 2:25 by hydrocarbonasia
Royal Dutch Shell Plc’s Sakhalin venture signed an initial agreement to sell liquefied natural gas to Chubu Electric Power Co, giving Japanese utilities about half of the supply from Russia’s first LNG project.
Chubu Electric will buy about 500,000 metric tonnes of LNG a year from Sakhalin Energy Investment Co starting in 2011, the Nagoya-based utility said in a statement yesterday. The 15-year agreement may be worth about ¥276bn ($2.4bn), based on Finance Ministry data.
The Shell-led project on Sakhalin Island is almost sold out after buyers in Japan and the US snapped up its gas amid forecasts of shortages in LNG supplies in the next few years. Those contracts will help ensure the viability of the $20bn project, which cost more than double Shell’s original estimates after raw material prices and contractor fees rose.
“The project, Russia’s first-ever LNG production plant, will help us diversify our LNG supply sources, and strengthen our supply security,’’ Chubu Electric said in the statement.
Shell owns 55% of Sakhalin Energy, operator of the Sakhalin-2 project. Mitsui & Co, Japan’s second-largest trading company, holds 25% and Mitsubishi Corp, the country’s biggest trading company, has a 20% stake. The plant will produce 9.6mn tonnes of LNG a year.
Japanese power and gas utilities including Tokyo Electric Power Co and Tokyo Gas Co have agreed to buy a combined total of about 4.5mn tonnes of LNG a year from Sakhalin-2, which will be the closest LNG project to Japan, which currently imports gas from countries including Indonesia and Australia.
“Russian gas will add to Chubu Electric’s variety of LNG supply sources and help the company raise its bargaining power in future negotiations with other producers,’’ Tatsuya Tsunoda, an analyst at Mizuho Securities Co in Tokyo, said before Chubu Electric made the announcement.
Indonesia has failed in the past three years to meet commitments to supply customers in Japan, South Korea and Taiwan as falling reserves cut natural gas supplies to its LNG plants. Australia’s North West Shelf venture will reduce exports to Japan as it increases sales to China.

Saudi Aramco selects Dow for negotiations on new petrochemical complex at Ras Tanura Posted Friday, July 14, 2006 - 2:23 by hydrocarbonasia
The Saudi Arabian Oil Company (Saudi Aramco) has selected The Dow Chemical Company as its potential partner to engage in exclusive negotiations concerning a joint venture company to construct, own and operate a world-scale chemicals and plastics production complex at Ras Tanura, in Saudi Arabia's Eastern Province.

This joint venture would encompass an array of world-scale facilities producing a very broad portfolio of plastics and chemical products.

The proposed petrochemical project would be integrated with the existing Ras Tanura refinery complex, which is one of the world's largest refinery complexes. When fully operational, the new petrochemical complex would be one of the largest plastics and chemicals production complexes in the world and be ideally situated to access most major world markets. The joint venture would produce an extensive and diversified slate of chemicals, and introduce new value chains and specialty products to the Kingdom. The availability of these chemicals in the Kingdom would facilitate the development of downstream conversion industries and the further industrialization of the Kingdom.


PetroChina’s oil refinery likely to go ahead Posted Thursday, July 13, 2006 - 6:58 by hydrocarbonasia
The nation's biggest oil company PetroChina is likely to get the final go-ahead to build a US$1.6 billion oil refinery in Southwest China's Guangxi Zhuang Autonomous Region within four to six months.

The new refinery, designed to process Sudanese oil with a capacity of 10 million tons a year, received approval from the State Environmental Protection Administration on environmental requirements two weeks ago, said Pan Wenfeng, a division chief in charge of industrial projects at the Guangxi Development and Reform Commission.

The new refining project aims to meet local market demand and highlights PetroChina's aggressive expansion into the south where its domestic rival Sinopec already has a strong presence, analysts said.

A senior official from PetroChina's refining and sales division yesterday confirmed the project's latest development to China Daily.

"PetroChina and industry experts have to undergo various procedures including a feasibility study before getting final approval from the National Development and Reform Commission, and that process will possibly take four to six months," Pan said yesterday.

The refining facility, to be set up in the coastal city of Qinzhou in the southwestern autonomous region, will involve a total investment of up to 13 billion yuan (US$1.6 billion), the official said.

It is expected to come on stream by 2008 and realize a sales volume of 28.3 billion yuan (US$3.5 billion).

Sudan is so far one of the most important overseas markets for Hong Kong-listed PetroChina's parent company China National Petroleum Corp (CNPC). The oil firm last year produced 16.38 million tons of crude oil from its assets in Sudan and found new reserves of 78.6 million tons, CNPC said on its website.

Consumers in Guangxi now use oil products such as gasoline and diesel from Sinopec's refineries in neighbouring Guangdong Province.

"With huge local demands, PetroChina's refinery in Guangxi has a very good market prospect," said Liu Gu, a senior oil and gas analyst with Shenzhen-based Guotai Jun'an Securities (Hong Kong) Ltd.

To meet surging domestic demand and banking on speculation that the central government will continue raising domestic oil product prices to move closer to the international level, China's oil majors are vying to expand their refining facilities with ambitious long-term targets.

An industry plan issued by the National Development and Reform Commission in March called for the addition of at least 90 million tons annually of new refining capacity by 2010, up 31.6 per cent from the 285 million tons of crude oil refined in 2005.


Chiyoda: Award of Gas Processing Plant in Qatar Posted Tuesday, July 11, 2006 - 7:08 by hydrocarbonasia

Chiyoda Corporation has signed a contract for the engineering, procurement and construction (EPC) of Al Khaleej Gas Phase 2 Project (AKG-2) with RasGas Company Limited, which is acting on behalf of and as agent for ExxonMobil Middle East Gas Marketing Limited. This contract for the gas processing train, with capacity to
support gas sales of 1,250 MSCFD of natural gas, was awarded on an
exclusive negotiation basis and will be executed by a joint venture
led by Chiyoda Corporation with Technip France (CTJV). The Front End
Engineering and Design (FEED) work for the AKG-2 Project was also
performed by Chiyoda.

After its completion in 2009, AKG-2 Project will produce sales gas
to satisfy the increasing domestic gas demand in Qatar and eventually
contribute to the further development of the infrastructure for Qatari
industry. The AKG-2 train will also have the capability for ethane
recovery. The value of the contract exceeds US $1.6 billion.

Chiyoda has extensive experience and expertise in processing acid
gas coming from the North Field, Qatar, the world's largest
non-associated gas reserve. In 2005, Chiyoda successfully completed
the Al Khaleej Gas Phase 1 Project (AKG-1) with a gas sales capacity
of 750 MSCFD which supplies feed gas to Qatar's first GTL project
executed by Technip. CTJV is currently executing the world's 6 largest
LNG trains, each with capacity of 7.8 MMTPA per train, in Ras Laffan,
Qatar. The lessons learned from the AKG-1 Project and the ongoing LNG
projects in the region will contribute to the success of the AKG-2
Project, thus realizing the earliest monetization of the gas reserve
by fast-track project execution and the synergy effect afforded by
simultaneous execution, in particular, with RasGas (3) LNG Trains 6
and 7. In addition, AKG-2 Project will enjoy the maximum benefit
generated by CTJV's innovative execution approach of employing its
Reliability Program.

BASF, Sinopec sign deal to expand joint chemical site in China Posted Tuesday, July 11, 2006 - 6:16 by hydrocarbonasia
BASF, Sinopec sign US$500M deal to expand joint chemical site in China Canadian German chemical maker BASF AG (NYSE:BF) and Sinopec Petrochemical Co. signed a $500-million-US deal Monday to expand their joint chemical production site in the eastern Chinese city Nanjing.

The agreement was formalized by Chen Tonghai, Sinopec's president, and BASF chairman Juergen Hambrecht. "The expansion of BASF-YPC Co. Ltd. is the result of our continuous successful cooperation during the first phase of the project, and fits the development of both parties, while further strengthening the cooperation between Sino-German enterprises," Chen said.

The $2.9-billion Nanjing plant, a 50-50 joint venture with Sinopec, is BASF's biggest single investment in its 140-year history.

Ludwigshafen, Germany-based BASF has invested some $7.2 billion in Asia since 1990. It plans to spend another $1.3 billion in the region by 2009.

Among other chemicals and polymers, the Nanjing plant makes ethylene, a chemical used in a wide range of products that is in short supply in China.

BASF is among many international chemical companies vying for bigger shares of the booming China market.

Chinese energy official announces rapid development of oil reserve bases Posted Tuesday, July 11, 2006 - 12:29 by hydrocarbonasia
The construction of oil reserve bases in China will be accelerated between now and 2010 to meet rising market demand for energy, according to a leading Chinese energy official.

Ma Kai, minister in charge of the National Development and Reform Commission and director of the newly-built National Energy Office, said four petroleum bases, located in Zhejiang, Shandong and Liaoning provinces respectively, will be completed this year, with a total storage capacity of between 10 million and 12 million tons.

The government is considering the location of new bases for the second phase of the project, which are expected to store 28 million tons of petroleum. The third phase, also with a storage capacity of 28 million tons, is still under planning.

China set up a task force earlier this year to draft the energy law which can ensure national economic security, energy exploitation and international energy cooperation.

Ma said energy conservation is a fundamental way for China to resolve its energy-shortage problem. The minister urged local governments to explore renewable energy resources.

Overseas cooperation in crude oil production will also be strengthened in future, said Ma.


Aramco in talks to enter China oil products sector Posted Friday, July 7, 2006 - 4:47 by hydrocarbonasia
Saudi Arabian Oil is in talks with China Petrochemical, or Sinopec, to gain access to China's wholesale oil products market, which the government will open to foreign investment at the end of this year, according to a Sinopec official.

In exchange, Sinopec, China's largest refiner and retailer by volume, is seeking to build a large refinery in Saudi Arabia with an annual processing capacity of up to 12 million tonnes or 240,986 barrels a day, the official said.

The news comes after Beijing confirmed Tuesday it will work with Saudi Arabia on developing China's strategic oil reserves as part of efforts to deepen energy ties between the two countries.

If the talks are successful, Saudi Aramco will be a new player among other large international oil giants to take up slices of China's huge and growing fuel distribution market, now around 90 percent dominated by Sinopec and China National Petroleum.

Aramco has been actively expanding its business in China by jointly investing to expand a refinery in Fujian province with Sinopec and Exxon Mobil at a cost of US$3.5 billion (HK$27.3 billion) and is in talks to acquire a stake in another refinery in Shandong province.

Aramco and Sinopec recently agreed to establish a marketing joint venture in Fujian this year which may oversee the distribution business.

Sinopec is also highly interested in the talks, as "it's an opportunity to strengthen relations with Saudi Arabia and export our refinery engineering technology to the Middle East," he said, adding the refined products may be partly sold to China.

"We may bid for more refinery projects there," he said.

Sinopec entered Saudi Arabia's gas sector in 2004 by acquiring rights to explore for natural gas in the country. "The talks [on wholesale oil product market entry] are still in the initial phase, with no details fixed yet," he said.

The talks may produce some results around the end of the year, when the mainland government will unveil the access criteria for the domestic wholesale oil products market. China is the world's third largest oil products consumer, with consumption expected to rise to around 177.24 million tonnes this year, up about nine million tonnes from last year.

Meanwhile Sinopec Group has signed a contract worth at least US$19.6 million with Iran's state- owned National Iranian Oil to explore and develop an oil block in Semnan province, east of the capital Tehran.

The Garmsar contract may serve as a prelude to further deals with Sinopec. The Tehran Times reported on June 18 Iran will "likely" sign contracts with China over the development of Yadavaran, Jofeir and North Azadegan oil fields "in the coming days," citing Mehdi Bazargan, managing director of state- owned Petroleum Engineering and Development.

China is set to lift restrictions on wholesale fuel distribution by foreign companies on December 11 as part of its World Trade Organization commitments.

Global oil giants, including Royal Dutch Shell, United Kingdom-based BP and France's Total have been preparing to enter China's wholesale market after setting up joint refineries and retail ventures with the country's oil companies.

They are also penetrating the retail gasoline market by building up to 2,000 service stations over the next few years.

PetroChina’s oil refinery likely to go ahead Posted Friday, July 7, 2006 - 11:36 by hydrocarbonasia
The nation's biggest oil company PetroChina is likely to get the final go-ahead to build a US$1.6 billion oil refinery in Southwest China's Guangxi Zhuang Autonomous Region within four to six months.

The new refinery, designed to process Sudanese oil with a capacity of 10 million tons a year, received approval from the State Environmental Protection Administration on environmental requirements two weeks ago, said Pan Wenfeng, a division chief in charge of industrial projects at the Guangxi Development and Reform Commission.

The new refining project aims to meet local market demand and highlights PetroChina's aggressive expansion into the south where its domestic rival Sinopec already has a strong presence, analysts said.

A senior official from PetroChina's refining and sales division yesterday confirmed the project's latest development to China Daily.

"PetroChina and industry experts have to undergo various procedures including a feasibility study before getting final approval from the National Development and Reform Commission, and that process will possibly take four to six months," Pan said yesterday.

The refining facility, to be set up in the coastal city of Qinzhou in the southwestern autonomous region, will involve a total investment of up to 13 billion yuan (US$1.6 billion), the official said.

It is expected to come on stream by 2008 and realize a sales volume of 28.3 billion yuan (US$3.5 billion).

Sudan is so far one of the most important overseas markets for Hong Kong-listed PetroChina's parent company China National Petroleum Corp (CNPC). The oil firm last year produced 16.38 million tons of crude oil from its assets in Sudan and found new reserves of 78.6 million tons, CNPC said on its website.

Consumers in Guangxi now use oil products such as gasoline and diesel from Sinopec's refineries in neighbouring Guangdong Province.

"With huge local demands, PetroChina's refinery in Guangxi has a very good market prospect," said Liu Gu, a senior oil and gas analyst with Shenzhen-based Guotai Jun'an Securities (Hong Kong) Ltd.

To meet surging domestic demand and banking on speculation that the central government will continue raising domestic oil product prices to move closer to the international level, China's oil majors are vying to expand their refining facilities with ambitious long-term targets.

An industry plan issued by the National Development and Reform Commission in March called for the addition of at least 90 million tons annually of new refining capacity by 2010, up 31.6 per cent from the 285 million tons of crude oil refined in 2005.


Thailand begins developing major gas source in south Posted Wednesday, July 5, 2006 - 12:14 by hydrocarbonasia

PTTEP, Thailand's petroleum giant, could begin to produce natural gas to serve domestic demand from the gas source, named Greater Bongkot South (GBS), by 2010, it was reported on Tuesday.

The company has explored and successfully discovered abundant natural gas from the gas well and will begin to construct a gas rig to develop the well in July, according to a PTTEP source.

The major local gas source is located in the Gulf of Thailand, about 225 kilometres off shore in Nakhon Si Thammarat Province.

PTT is also expanding its petroleum exploration overseas, particularly in Oman, to help boost national energy security amid continued global oil price hikes.


Major boost to Oman’s petrochemicals industry: $1.6 bn aromatics project deal signed Posted Tuesday, July 4, 2006 - 7:47 by hydrocarbonasia
Aromatics Oman LLC (AOL) announced yesterday the signing of the Engineering, Procurement and Construction (EPC) contract with LG International Corporation and GS Engineering and Construction Corporation. AOL is a joint venture owned 60 per cent by Oman Oil Company SAOC (OOC), with Oman Refinery Company LLC (ORC) and LG International Corporation each having a share of 20 per cent. The total project cost is estimated at $1.6 billion.

The EPC contract was signed on behalf of Aromatics Oman LLC by its Chairman, Dr Mohammed bin Hamed al Rumhy, Minister of Oil and Gas and Vice Chairman of Oman Oil Company, and K R Kim, President and Chief Executive of GS Engineering and Construction Corporation, and J I Yang, Executive Vice President of LG International. “This project is another important step in achieving Oman Oil's continuous efforts to develop a petrochemicals industry,” said Dr Al Rumhy. “We believe this opens up tremendous opportunities for the private sector to develop downstream businesses in Oman, creating in turn employment opportunities for qualified Omanis in highly technical jobs.”

“This contract for the aromatics project is solid recognition of our success in the projects market in the Middle East,” said K R Kim, President and Chief Executive of GS E&C. “As contractors for similar aromatics plants in Thailand, China, and so on, GS E&C has gained a worldwide reputation for competitiveness,” he added. J I Yang, Executive Vice President of LGI, stated: “We at LGI are very proud to be a part of another successful chapter in the development of the petrochemical business in Oman, following on from the success of the Oman polypropylene project. We are confident that our long-term relationship with Oman will contribute to the successful implementation of this esteemed project and we look forward to further co-operation in potential future projects.”

Located in the Sohar Industrial Port, the project involves the construction of a world scale plant utilising state of the art process technology to produce aromatics — para-xylene and benzene. The plant will process naphtha from Sohar Refinery Company using Axens technology. With a production capacity of 814,000 tons of para-xylene and 210,000 tonnes benzene per year, the project will be shaped up to be the world’s largest grassroots para-xylene plant.

Para-xylene is a key raw material in the production of polyester fibres and PET plastic bottles, while benzene is used to produce a wide range of plastics (polystyrene, nylon), detergents and other chemicals. The project is expected to create around 200 jobs. GS E&C, a leading Korean EPC contractor, is currently executing industrial projects of a total value in excess of $1 billion in the GCC, including the 340,000-tonnes per year plant of Oman Polypropylene at Sohar. HSBC acted as the financial adviser and structuring bank, while Allen & Overy and Al Alawi Mansoor Jamal are the international and Omani legal advisers. Financial close is slated for sometime this month. Construction of the aromatics complex is expected to begin in August 2006, with completion set for June 2009.

BP to supply LNG to China’s Fujian terminal Posted Tuesday, July 4, 2006 - 12:02 by hydrocarbonasia

BP Plc, a majority stakeholder in the Indonesian Tangguh gas project, is close to finalizing a deal to supply liquefied natural gas (LNG) to China's second LNG terminal in East China's Fujian Province.

"We have reached an agreement (with China National Offshore Oil Corp) on the company level, and we're waiting for final approval from the Indonesian Government," Heather R. Ting, president of BP Gas China, said on Friday in Beijing.

The deal could be finalized "in months," said Ting, who refused to comment on prices, agreed on the supply of LNG.

Rising gas prices have prolonged talks between China's biggest offshore oil producer China National Offshore and the BP-led Tangguh project, with its rich gas reserves, which is set to supply 2.6 million tons of LNG annually for 25 years to the Fujian terminal invested by the Beijing-based oil firm.

China National Offshore expected to reach an agreement with Indonesia by the end of July, and the final price could be US$5-10 per million British thermal units, said the company President Fu Chengyu as saying.

State-owned China National Offshore is leading the race to build LNG terminals along the eastern coast of China as the government aims to diversify energy supplies and reduce its heavy reliance on coal and oil, instead pushing the use of cleaner natural gas.

Beijing so far has approved the construction of two terminals, one each in Fujian and South China's Guangdong Province. Both are owned by China National Offshore.

The State-owned company's Guangdong LNG terminal received the second shipment of liquefied gas on Wednesday from Australia's North West Shelf venture under a A$25 billion (US$19 billion) 25-year contract.

Construction of China National Offshore's Fujian LNG facilities is expected to be completed by 2007, with an initial capacity of 2.5 million tons a year.

The Tangguh project, located in Papua of Indonesia, is scheduled to come on stream by late 2008, drawing its gas supplies from six fields in the Bintuni area.

China's top three oil companies, PetroChina, Sinopec and China National Offshore, plan to build a string of LNG terminals in coastal areas such as Shanghai, Shandong and Jiangsu, but the current high price of gas is prohibitive.

Xu Dingming, vice-chairman of the nation's leading energy group set up last year, on Friday said that China has its own solutions to secure gas supplies for these LNG terminals, but "would not import an enormous quantity of the fuel if prices remain high."

Vietnam seeks foreign invest in second crude oil refinery Posted Monday, June 26, 2006 - 11:12 by hydrocarbonasia

Vietnam is seeking foreign investors to help build its second crude oil refinery, in which they will be permitted to own a stake, representing a significant shift from the country's previous stance.

PetroVietnam is sending a delegation of senior officials to the U.S. this week to gauge potential investment interest, with talks to be held in Houston, Texas, an official at state-run PetroVietnam said.

"So far our offer for the Nghi Son (refinery) project is open: foreign firms can hold 70% stakes or more than that," she said.

Vietnam's first refinery is currently being built at Dung Quat, in Quang Ngai province, 850 kilometres south of Hanoi.

The $2.5 billion refinery is 100% Vietnam-owned.

A consortium comprising France's Technip S.A., Japan's JGC Corp. and Spain's Technicas Reunidas is building Dung Quat, which is expected to turn operational in early 2009.

The Nghi Son refinery project, to include a petrochemical complex, will cost $ 3 billion, and is slated for operations by 2010, said the official, who declined to be named.

"Because Vietnam's energy demand is rising fast, the country needs to speed up its investment plans for the energy sector, therefore PetroVietnam is urged by the government to soon find foreign investors for the Nghi Son refinery," said the official.

State media have cited PetroVietnam's Chief Executive Tran Ngoc Canh as saying Vietnam is looking at companies based in the U.S., Japan and Russia.

According to PetroVietnam officials, Mitsubishi Corp and Idemitsu Kosan Co. have separately expressed interest in a partnership with PetroVietnam.

To be located about 200 kilometres south of Hanoi in Thanh Hoa province, the Nghi Son refinery is expected to have a processing capacity of 7 million tons a year. It will be processing crude imported from the Middle East, and its petroleum and the products will be sold domestically.

Similarly for the 6.5-million-ton-a-year Dung Quat refinery, 1 million tons of crude will be imported from the Middle East annually, while PetroVietnam will supply 5.5 million tons.

Vietnam at present doesn't have any major refining facilities, and has to import almost all of its refined oil products for domestic consumption. Vietnamese firms operate a few small processing facilities, which supply small amounts of fuel to the domestic market. Output figures aren't available.

The Dung Quat and Nghi Son refineries are expected to be able to meet 65% of Vietnam's petroleum demand from 2010. Domestic demand is forecast to rise by more than 40% to 20 million tons by the end of the decade, from 14 million tons this year.


PetroVietnam plans JV to develop US$3-bil petrochemical complex Posted Monday, June 26, 2006 - 11:11 by hydrocarbonasia
State oil and gas giant PetroVietnam said on Monday that it could establish a joint venture (JV) next year to develop a US$3-bil petrochemical complex in the country's north, including the long-planned Nghi Son oil refinery.

Japan's Idemitsu Kosan Co., Ltd. is emerging as a major potential foreign partner in the JV.

PetroVietnam president Tran Ngoc Canh said that the company was also looking at foreign consortiums from other countries like the United States and Russia. A working group of PetroVietnam on Monday left for the US where they will organize a workshop to introduce Vietnam's oil refinery and petrochemical development strategy, including the promotion of the Nghi Son complex."

"We are now in talks with companies in Japan and the Middle East," he said. "The Middle East will be the supplier of crude oil for the planned complex."

Idemitsu Kosan and PetroVietnam are reviewing the feasibility study for the complex in Nghi Son Industrial Zone in Thanh Hoa Province, about 200 kilometres south of Hanoi.
The Nghi Son refinery will have an annual output capacity of seven million tons, with most of the crude oil input imported from the Middle East and the remainder from Su Tu Den (Black Lion) oilfield off the country's southern coast.

Su Tu Den, which is turning out around 70,000 barrels per day, is the third largest oil producing field in Vietnam.

The field is in Block 15-1, about 1,200 kilometres from the Nghi Son complex, and the block has total proven oil reserves of 420mil barrels or 60mil tons.

The petrochemical plant is designed to churn out 300,000 tons of polyester and polypropylene a year.

The Nghi Son and Dung Quat refineries will contribute 70% of the country's demand for oil products by 2010 after they are in place. The Nghi Son petrochemical plant and the 150,000 ton-capacity Dung Quat polypropylene plant will satisfy around 40% of the national demand.

PetroVietnam is also working on another plan to develop the third oil refinery in the country's south. "We have completed a report on our plan to build the third refinery in the south," Canh said.

Two years ago, PetroVietnam conducted a geological survey of Long Son Island off the coast of Ba Ria-Vung Tau Province for the construction of the third refinery.
The location was previously suggested by foreign investors for the first refinery but the Government decided to choose Dung Quat in the central province of Quang Ngai for the facility to create an impetus to develop the central region.

PetroVietnam plans to have three oil refineries in the country's three regions after 2010.
The Nghi Son petrochemical complex, if materialized, will become the country's biggest downstream project in the oil and gas industry.

Vietnam produces more than 17mil tons of crude oil a year but still has to import all petroleum products to meet domestic demand due to the lack of major oil refineries.

ONGC to embark on petrochemical projects Posted Wednesday, June 21, 2006 - 7:46 by hydrocarbonasia
ONGC to embark on petrochemical projects

Oil and Natural Gas Corp (ONGC), India's largest oil producer, will kick-off its petrochemical foray this week when Prime Minister Manmohan Singh lays the foundation stone for its Rs 4,900 crore Aromatic Complex at Mangalore.

"Prime Minister will on June 23 lay foundation stone of ONGC's one million tonnes per annum capacity Aromatics (Petrochemicals) Complex at Mangalore," a top company official said.

The Petrochemicals Complex would be executed through a Special Purpose Vehicle (SPV) of ONGC. ONGC would hold 46 per cent stake in the SPV while its subsidiary Mangalore Refinery and Petrochemicals Ltd would have 3 per cent. The balance 51 per cent would be with financial institutions and banks.

The Aromatics project would be completed in 3 years after finalisation of the process licensor and engineering, which is expected in a years' time, he said.

Naphtha produced at MRPL, which is being expanded to 15 million tonnes a year from its present nameplate capacity of 9.69 million tonnes per annum at an estimated cost of Rs 8000 crore, would be the feedstock for producing petrochemical building blocks Paraxylene and Benzene.

The official said MRPL also proposes to set up an Olefin complex, for which state-owned Engineers India Ltd (EIL) has been asked to prepare a detailed feasibility report.

The two projects are part of ONGC's over Rs 35,000 crore investment in Mangalore Special Economic Zone, which will house a new 15 million tonnes refinery, power, LNG and petrochemical plants. M-SEZ would be the first Petroleum, Chemicals, Petrochemicals Investment Region (PCPIR) of the country.

India scouts LNG supplies in Australia Posted Wednesday, June 21, 2006 - 1:38 by hydrocarbonasia
PETRONET LNG, India's first liquefied natural gas importer, is seeking additional supplies from planned projects in Australia in addition to the fuel it expects to buy from the Chevron led Gorgon venture.

Petronet may buy as much as 10 million tonnes a year of LNG from Australia within a decade, according to SC Sharma, chief commercial officer of Petronet.

Mr Sharma was attending the South East Asia Australia Offshore Conference in Darwin.

The extra LNG shipments could come from projects such as ConocoPhillips's proposed Darwin expansion, an enlarged North-West Shelf venture off Western Australia, and Woodside's planned Pluto and Browse ventures.

Petronet began importing LNG into India in January 2004 with shipments from Qatar's RasGas, with which it has a 25-year agreement to buy 7.5 million tonnes of LNG annually. It may conclude an agreement by the end of July to buy 2.5 million tonnes a year of Gorgon gas for the Kochi terminal, Petronet managing director P. Dasgupta said in May.

"We would like to sign the agreement with Gorgon as quickly as possible," Mr Sharma said. "We would love to get LNG sourced from any of these other new projects when any of them start. Australia can be one of the largest energy suppliers to India." Petronet is also looking to Oman, Nigeria and Malaysia for future LNG supplies, Mr Sharma said.

India's LNG consumption may rise from 6 to 7 million tonnes a year now to 30 million tonnes by 2013, driven by economic growth and increasing demand from power generation companies.

Rising prices for LNG are unlikely to crimp growth in demand in India and Indian domestic gas prices are set to match international market prices within two or three years, Mr Sharma said.

Exxon Mobil and Royal Dutch Shell own stakes in Chevron's Gorgon project. Shell and Chevron have already announced agreements to sell most of their share of Gorgon gas.

Singapore: ExxonMobil awards new design contracts Posted Wednesday, June 21, 2006 - 1:37 by hydrocarbonasia
Energy giant ExxonMobil is moving closer towards giving the go-ahead to build a second “world-scale” steam cracker on Jurong Island – in what would be a multi-billion dollar investment.

ExxonMobil Asia Pacific announced the awarding of new engineering design contracts yesterday for derivative units associated with the possible second cracker.

Various contracts for front-end engineering design were awarded to Aker Kvaerner, Mitsui Engineering and Shipbuilding, Foster Wheeler, WorleyParsons and Mustang Engineering.

ExxonMobil also reported “good progress” on its ongoing feasibility study for the cracker.

“Our project team is working with contractors to define a competitive world-scale steam cracker and derivative units to be integrated with our existing refinery and chemical plant in Singapore,” said ExxonMobil’s project executive here, Mr Georges C.Crosliere.

Bids for the design, engineering, procurement and construction for the proposed steam cracker have been invited from Shaw Stone & Webster and a Technip and Chiyoda joint-venture, said the chemical giant.




China, Saudi Arabia in oil talk Posted Wednesday, June 21, 2006 - 1:36 by hydrocarbonasia
The Chinese government said earlier that it's in talks with Saudi Arabia on importing oil to fill its strategic reserves. The deal would involve large volumes of Saudi crude, with the first shipments unlikely to come before year's end.

The agreement comes after Saudi Arabia earlier this month said its oil output has dropped in recent months, as demand was hurt by high prices.

It was also reported that China and Saudi Arabia may develop a 10 million-ton oil storage facility as well as a refinery -- likely located in southern China's Hainan province, citing a Monday report.

"This could have a major impact on prices going forward," said Phil Flynn, a senior analyst at Alaron Trading, because China had said about a year ago that it "was interested in building an SPR even larger than the United States'," he said.

Kuwait to set up oil refinery in Pakistan Posted Wednesday, June 21, 2006 - 1:35 by hydrocarbonasia
Kuwait has agreed to set up an oil refinery in Pakistan involving a $1.2 billion investment, officials said yesterday.

The two countries signed an agreement after the visiting Kuwaiti Emir Sheikh Sabah Al-Ahmad Al Sabah met President Pervez Musharraf on Monday.

The refinery will be set up at Port Qasim in the southern city of Karachi, the officials said.

“This will be a huge Kuwaiti investment, drawing $1.2 billion and contributing significantly to bolstering oil-refining facilities in the country,” junior minister for privatization, Omar Ahmed Ghuman was quoted as saying.


ConocoPhillips May Spend $10 Billion on Australian LNG Plant Posted Wednesday, June 21, 2006 - 1:34 by hydrocarbonasia

ConocoPhillips, the third-largest U.S. oil company, said Monday that it may spend as much as $10 billion to more than double capacity at its liquefied natural gas plant in Northern Australia to meet an estimated 40-percent surge in world demand.

The company may build a second production unit at the Darwin plant by 2013, using natural gas from either the Sunrise or Caldita fields, off Australia's northern coast, Laura Sugg, president of ConocoPhillips' local unit, told reporters Monday at the South East Asia Australia Offshore Conference. It may then look at a third unit, she said.

ConocoPhillips and partners, which include Santos and Eni, started their US$1.2-billion Darwin LNG plant earlier this year to supply fuel to two Japanese utilities. The Wickham Point site at Darwin has approval for as much as 10 million metric tons a year.

"We have ambitions for going beyond 10, but we would have to go through due process to be able to do our environmental homework and secure the needed permits," Sugg said. The cost of expanding the project, including offshore gas field development and a pipeline to Darwin, could cost between $6 billion and $10 billion, she said

The Sunrise gas field is owned by Woodside Petroleum, ConocoPhillips, Royal Dutch Shell, and Osaka Gas. The Caldita field is owned 60 percent by ConocoPhillips and 40 percent by Adelaide- based Santos.

ConocoPhillips and Santos may outpace rivals in increasing LNG gas output because of their lead in getting environmental approvals to expand. A rival project by Chevron, the second-largest U.S. oil company, in Western Australia may be delayed as a regulator raised concern earlier this month about possible harm to rare turtles.

"Getting expansion approved on an existing site is a lot easier than doing something greenfield," said Frank Harris, co-head of global LNG at Wood Mackenzie Consultants. "ConocoPhillips and Santos just have to find the gas."

A head start may enable ConocoPhillips to benefit from Asian LNG demand, which is forecast by Wood Mackenzie to jump 40 percent to 137.8 million tons in 2010 and gain a further 43 percent to 197.4 million tons by 2015.


China’s first oil reserve facility set for August Posted Monday, June 19, 2006 - 10:59 by hydrocarbonasia
China will complete construction of its first strategic oil reserve facility in August, state press reported yesterday.

The plant, which will have the capacity to hold 5.2mn cu m (32.7mn barrels) of crude oil is located in the coastal city of Zhenhai in China’s eastern province of Zhejiang, it was reported.

Huge tanks are also being constructed at three other sites. There will be a second facility built in Zhejiang and one each in the eastern provinces of Liaoning and Shandong, Xu Dingming, an energy official at the National Developmental and Reform Commission said.

“A lot of people ask what China should do (with the tanks) as global crude prices are soaring,” the paper quoted Xu as saying. “We have our own solutions but I won’t disclose them.”

Pertamina pumping US$11b into refineries Posted Wednesday, June 14, 2006 - 12:14 by hydrocarbonasia
PT Pertamina, Indonesia's state oil company, plans to spend as much as US$11bil building and expanding refineries in the next five years to increase fuel output and reduce imports.

The company wanted to raise refining capacity by 50% to 1.5 million barrels a day by 2011, Pertamina president director Ari Soemarno said yesterday in an interview.

Indonesia imports about a third of its oil products, because its daily refining capacity is insufficient to meet domestic consumption. Rising crude oil prices and the weakening of the rupiah against the US dollar have increased the country's fuel import bill.

Indonesia bought about 450,000 barrels of fuel products a day last year and will import 375,000 barrels a day this year, as demand falls after the government more than doubled domestic fuel prices in October last year, according to Pertamina's estimates.

Pertamina would invite partners to participate in the new refineries as well as revamping existing ones, Soemarno said.

Pertamina, an Indonesian investor, and Kuwait Petroleum Corp would build a 250,000-barrels-a-day refinery on Selayar island in South Sulawesi, he said. Another project is planned in Tuban in East Java province, with a capacity to process 250,000 barrels a day.

The state oil company plans to modify its refineries to process so-called heavy crude, which is cheaper than sweet crude produced in Indonesian fields.

Explore other producers, buyers of LNG told Posted Wednesday, June 14, 2006 - 12:13 by hydrocarbonasia
The world's liquefied natural gas (LNG) industry is entering a new phase and traditional buyers like Japan, South Korea and Taiwan should explore options with producers like Malaysia to narrow the commodity's price gap in regional markets, says Malaysia LNG Sdn Bhd managing director Ahmad Nizam Salleh.

He said the new phase was characterised by the price of crude oil soaring to US$60 to US$70 per barrel and higher growth in demand for LNG due to the depletion of existing gas supply.

“If we examine the LNG supply and demand scenario in the next five years and beyond, the global supply and demand situation is projected to be balanced to tight.

“Even as I speak, there are already indications of some projects facing some delay due to various issues, including environmental concerns and the availability of material, equipment and cost escalation,” he told the conference.

Ahmad Nizam said the tightness in the LNG market was also due to higher demand from emerging markets like China and India.

He said the tightness had compelled some buyers to source the commodity at high premiums beyond their traditional sources, adding that the price differential would encourage existing suppliers to leverage on these opportunities and enhance value creation.

“I believe that to compete with emerging LNG demand from the West, there needs to be a narrowing of LNG price differential between the Far East and Atlantic markets,” he said.

Ahmad Nizam said Malaysia LNG, a subsidiary of Petroliam Nasional Bhd, realising its responsibility in the current tight market, had imposed “timely interventions'' on its marketing officers and traders to balance temptations with longer-term obligations.

Senior consultant of Britain-based Gas Strategies Consulting, David de Ledesma, said traditional LNG buyers from the Far East might agree to narrowing the price differential if they could secure higher volumes.

“In return for the higher price, they may seek higher volume and more flexible contracts from suppliers like Petronas,” he added.





Chevron eyes more projects in Qatar Posted Wednesday, June 14, 2006 - 11:16 by hydrocarbonasia

Chevron Phillips Chemical Company, which has committed over $2bn in Qatar’s petrochemical sector, is eyeing more opportunities in the energy-rich country, even as it said shortages, high energy prices and hardening global interest rates have affected petroleum projects.

“(Our investments) would have been close to $2bn by the time we are through with this (Q-Chem II) project,” Chevron Phillips Chemical Company president and chief executive officer Raymond Wilcox said on the sidelines of a function to mark the stone laying of Q-Chem II.

Asked whether Chevron Phillips has any plans to further scale up its investments from the already committed $2bn, he said perhaps by the end of this decade, when its projects are over by that time, it may look to more opportunities.

“We had broken ground on Ras Laffan on the cracker part of it and we laid the stone now here (Q-Chem II). So we will continue to manifest that part of the project completion. Later this decade, then we will be able to look for more opportunities here (in Qatar)” but it all depends on how the feed stock supplies are going to be, he said.

Asked to elaborate on the opportunities that Chevron, which has a strong base in the US, is eyeing at, Wilcox said it looks all over the world.

“We are here in a big way”, he said, adding that it has also investments in Saudi Arabia, Far East, Singapore, Korea and China.

Finding much potential for the petrochemical sector in the Middle East, he said these projects, usually bigger in scale and magnitude, need hydrocarbon feed stocks, particularly gas resources being a major player.

This comes in the backdrop of Qatar, sitting on the world’s third largest gas reservoir with 900trn cu ft, is aiming to be a key player mainly in the Gas-to-Liquids segment.
“I see the expansions going on here (in Qatar) as being a big part of the state strategy to universalize the natural resources and stretch out to the international markets to do business,” he said.

Asked whether the hardening of international interest rates has made any dent on its projects, Wilcox said it has always been the case since it affects the cost of money.
“Investments are huge and we have financing behind them (projects) and we use banks and other investment vehicles to help us put the money forward. So for both us and Qatar, if interest rates get higher then it just costs us to do our business,” he said.

“I think the biggest challenge that we have regards the project cost is that everybody (not only petrochemicals but also refineries) is fighting for the same resources, same people and same materials,” Wilcox added.
Stressing that it is working hard to keep the costs down to make its projects as economic as possible, he however, said but there are lots of activities with high prices of oil and gas across the world.

Yemen likely to build new LNG project Posted Wednesday, June 14, 2006 - 11:15 by hydrocarbonasia
Yemen's oil minister said yesterday that an assessment of total gas resources in the country may lead to the expansion of an existing $3.7 billion liquefied natural gas project being led by France's Total or the creation of a new LNG project.

"We are in the process of evaluating the total resources of gas in Yemen," Yemen's Oil and Minerals Minister Khalid Mahfoudh Bahan said at the World Gas Conference in Amsterdam.

"We have a lot of expectations in this process that may lead us to add more trains on the same project, or add a new project by itself."

The Yemen LNG project, one of the main growth projects for French energy giant Total, is due to start by the end of 2008 with 2 trains and produce 6.7 million metric tonnes per year, Bahah said.

Disruptions in Russian gas pipeline supplies early this year have raised concerns over the constraints on gas supplies in Europe, and LNG has been identified as a key source for future energy needs.

The survey of Yemen's resources would take another year and a decision on adding trains or launching a new project will be made at the time, Bahah said.

The main factor in deciding the scale of expansion will be the location of newly identified gas resources, he said.


Qatar: Oryx GTL eyes output of 100,000 bpd: Sasol chief Posted Thursday, June 8, 2006 - 12:11 by hydrocarbonasia

Sasol chief executive Patrick Davies has said there are plans to boost Oryx GTL’s output to 100,000 bpd from the present 34,000 bpd.

“Further planned expansions of Oryx GTL will be in conjunction with SasolChevron. This includes increasing the capacity of the Oryx GTL to about 100,000bpd and exploring prospects for a greenfield integrated GTL plant with a capacity of about 130,000bpd at Ras Laffan,” he told Gulf Times yesterday.

Davies, however, said no timeframe had been set for Oryx expansion.
“Our first task was to ensure Oryx GTL start up successfully. We have done that. Once we gear up we will think about expansion. We are very keen to do it and will do it,” he said.

Davies rejected the argument that GTL diesel was expensive. GTL project is capital intensive but the cost of producing gas-to-liquids diesel is not particularly high.

“It depends on what one pays for the feedstock. In Qatar we will be using natural gas from Qatar’s North Field, which is the world’s largest single non-associated gas reservoir in the world with proven reserves of 900tn standard cu ft,” he said.

Oryx GTL, he said, was the manifestation of the “extraordinary vision, dauntless courage and a strong, solid partnership, particularly with Qatar Petroleum.”

South Africa, home to Sasol, had the foresight to advance a technology to produce environment-friendly transportation of fuels from hydrocarbons other than crude oil.
Pioneers of the coal-to-liquids (CTL) industry, South African scientists evolved the Fischer-Tropsch technology to levels where the country could significantly reduce its dependence on crude oil, he pointed out.

This vision, he said, resulted in the creation of Sasol more than 50 years ago. Since then, Sasol has generated thousands of jobs and created substantial wealth for South Africans. Significant wealth has also been created for Sasol shareholders worldwide.

“Now as we carry forward this vision of alternative fuels, we intend to create similar wealth for our partners. By advancing our gas-to-liquid (GTL) technologies we can help unlock wealth in Qatar and other regions, which are blessed with significant natural gas resources,” he said.

Having produced well over 1.5bn oil equivalent barrels of fuel over the past 50 years using Fischer-Tropsch, CTL and GTL technologies, Sasol is today the most experienced in commercialising this technology.

By opting for a newer, better version of Sasol technology, with natural gas as the feedstock, Qatar had gone one step further, Davies said.
“Agreeing to construct a plant with a capacity of 34,000 bpd, took great courage, vision, confidence, especially when one contemplates that Oryx GTL is the first of its kind and the world’s largest GTL plant by far,” he said.

“It took courage for Qatar Petroleum to have faith in Sasol and accept the risks. Many people present here today were initially sceptical, but our partner, in particular al-Attiyah, is a man of great courage. I thank him and the people of Qatar for this,” Davies said.

Oryx GTL, he said, was a defining moment in the growth of a new industry. GTL will grow in Qatar and in many other parts of the world.

“Sasol is proud to partner Qatar Petroleum and Chevron in defining this exciting new industry. We are at the threshold of providing the world with a better alternative to crude-derived transportation fuels. Already independent tests have shown that our GTL diesel is superior in quality and very environment-friendly,” he said.




Inpex seeks partners for big LNG project Posted Thursday, June 8, 2006 - 12:10 by hydrocarbonasia
Tokyo Inpex Holdings, Japan's largest exploration company, is seeking investors in Japan to join a $6 billion liquefied natural gas project in Australia, the company said.

The company's chairman, Kunihiko Matsuo, said that gas and power companies would gain assured supplies of LNG by taking part in Inpex's Ichthys project, although he declined to identify potential investors. Inpex will also seek participation by global oil and gas companies, he said.

In May, Royal Dutch Shell said it was studying a tie-up with Inpex.

"We need partners who can share any financial and technical risks," Matsuo said. "We definitely want Japanese power and gas utilities to buy LNG from our plant."

Japan's gas utilities and trading houses are stepping up field acquisitions after earning record profits in recent years because of rising energy prices.

Demand for LNG is gaining as power producers switch to the fuel because it burns cleaner than oil or coal. Ichthys holds an estimated 863 billion cubic meters, or 9.5 trillion cubic feet, of gas - enough to supply Japan for three and a half years.

Satoshi Abe, a power and gas analyst at Daiwa Institute of Research in Tokyo said that the project, with its vast estimated reserves, "will be attractive to Japanese utilities. The utilities look keen to take part, not only in the Ichthys project, but also in other oil and gas projects abroad."

Inpex started seeking environmental approval for the venture last month, under which it will tap the Ichthys's offshore field, 850 kilometres, or 527 miles, west of Darwin.

Asian LNG demand is forecast to surge 40 percent to 137.8 million tons in 2010, and gain a further 43 percent to 197.4 million tons by 2015, Wood Mackenzie estimates.

Tokyo Gas and Osaka Gas, Japan's two biggest distributors of the fuel, may be interested in the venture, Abe said. Tokyo Gas is expanding pipeline capacity to meet increasing demand from industrial customers who are switching to gas because of record high crude oil prices.

Tokyo Gas is interested in overseas LNG projects, even though the company has not done any feasibility study on joining Inpex's Australian project, said a spokesman for Tokyo Gas, Naoyoshi Ogake.

Tokyo gas said it plans to raise capital spending by 9 percent to ¥94.9 billion, or $850 million, in the year starting April 1 to build four new pipelines so it can meet increased demand from industrial clients.

Tokyo Gas and Osaka Gas last year agreed to buy LNG from Chevron's Gorgon venture in Australia, which has a start-up date of 2010. Both companies are also negotiating to take a stake in the project. The project was stalled on Tuesday when Australian regulators questioned its environmental impact.

Ichthys will initially produce six million metric tons a year of LNG.

Japan is the world's biggest buyer of LNG. The venture will also tap an estimated 312 million barrels of condensate, a type of light crude oil, in the reservoir.



Ichthys will initially produce six million metric tons a year of LNG.

World’s largest GTL project set to open Posted Tuesday, June 6, 2006 - 7:49 by hydrocarbonasia
The $1bn Oryx gas-to-liquid (GTL) project, the world’s largest commercial GTL plant, will be formally inaugurated at Ras Laffan today.

Oryx is a 51:49 joint venture between QP and Sasol.Oryx GTL will have an installed capacity of 34,000 barrels per day (bpd) of high performance and low emission GTL diesel, high-grade GTL naphtha and LPG.

The plant’s products slate carries a predominance of GTL diesel with GTL naphtha (at a ratio of around 3:1) and a small quantity of LPG.

The EPC contract to build the Oryx GTL plant was awarded to Technip Coflexip.
The technology suppliers to Oryx GTL are Air Products (air separation), Haldor Topsoe (synthesis gas production), Sasol (Fischer-Tropsch technology), ChevronTexaco (product work up) and Technip KTI (hydrogen production).

The plant would use a three-stage Sasol Slurry Phase Distillate (SPD) process.
The Heir Apparent HH Sheikh Tamim bin Hamad al-Thani laid the foundation stone for the project in December 2003.

The economic prospects of GTL are excellent. This is because of two major reasons - the high quality of GTL products and a growing worldwide diesel market.

From the environment point of view GTL diesel is the best bet. It is almost sulphur-free and low in particulates and aromatics.

In a recent issue of Majlis, Oryx GTL’s newsletter, the Second Deputy Premier and Minister of Energy and Industry HE Abdullah bin Hamad al-Attiyah said, “The startup of the Oryx GTL project would shape and influence the future of both the GTL technology and industry as a whole. After all, the project is the first major commercial GTL project”.

Vietnam petroleum demand may hit 20.1 million MT by 2010 -Report Posted Monday, June 5, 2006 - 10:57 by hydrocarbonasia

Vietnam's demand for petroleum products is forecast to rise by more than 40% to 20.14 million metric tons by 2010, compared with 14 million tons this year, state media reported Friday.

Citing the Ministry of Planning and Investment, or MPI, the report stayed that by 2010, the region southeast of Vietnam will consume about 10.38 million tons of petroleum products. It gave no comparative figures.

Ho Chi Minh City is expected to need 6.142 million tons, it said.

MPI officials weren't immediately available for comment.

An official at the Ministry of Trade declined to comment on the 20.14-million- ton forecast, but said the figure is "likely."

He also said Vietnam's future petroleum demand is calculated based on the country's projected economic growth of between 7.5% and 8% a year from 2006 to 2010.

In the first five months of this year, Vietnam is estimated to have imported 4.524 million tons of petroleum products valued at $2.3 billion, down 10.6% on year in volume but up 17.8% in value, according to government figures.


Toyo, L&T win order $670 mn for India ethylene plant Posted Thursday, June 1, 2006 - 11:18 by hydrocarbonasia
Japan's Toyo Engineering Corp and India's Larsen & Toubro Ltd (L&T) have received a 75 billion yen ($670 million) order from state-owned Indian Oil Corp to build an ethylene plant in India, Toyo Engineering Corp said on Tuesday.

Shares in Toyo rose as much as 6 per cent in morning trade. A Toyo spokesman said the company will take a 60 per cent share in the facility, which will have annual output capacity of 800,000 tonnes. Operations are slated to begin in 2009, he added.

Toyo has had an Indian joint venture for more than 30 years, whose approximately 950 workers are all locals except for its Japanese president.

Under its new mid-term business plan, the company planned to boost its sales by one-third in the next three years to 260 billion yen by strengthening its overseas businesses. Toyo also said earlier this month that it would increase its work force overseas while maintaining the size of its staff in Japan.

Iran to build refinery for sour crude Posted Thursday, June 1, 2006 - 11:17 by hydrocarbonasia
Iran is set to build a 120,000 barrel-per-day refinery by 2009 to process its low-quality sour Soroush and Nowruz crude as the OPEC member works to double refining capacity by 2011, an Iranian official said yesterday.

A plan by the Oil Products Export (Opex) Development Fund of Iran to oversee construction of the refinery has been approved by the government, Ped-ram Soltani, managing director of Opex Fund, said in Singapore. "This will be the first fully private refinery. Work should start in not more than six months and we are hoping that we can finish it in two years."

Engineering contracts have yet to be awarded.

Iran has been struggling to find takers for the heavy-sour crude produced at its Soroush and Nowruz fields, which pump up to 190,000 bpd of heavy-sour crude with a high-sulphur content and yielding lower-quality products.

The fields came onstream over the past two years, but the national oil company has been forced to charter tankers to store the oil due to a dearth of buyers, sources have said.

The Opex Fund of Iran is a consortium of 61 oil products producing and exporting companies from the private sector.

Soltani also gave some details on Iran's plans to almost double its refining capacity by 2011 in an attempt to satisfy local fuel demand and curb gasoline imports. Iran is a major importer of gasoline, burning through about 60 million litres a day, almost half of which is imported.

Agenda

All new projects will be launched in a year
Pedram Soltani, managing director of the Opex Fund, said Iran hoped to expand its refining capacity to 2.126 million bpd by 2011 through a $13.7 billion programme. He put current capacity at 1.122 million bpd.
Almost all projects will be launched within a year, he said.
Plan calls for building two new refineries at Bandar Abbas, a 360,000-bpd gas condensate plant and a 180,000-bpd unit for heavy crude. The existing 232,000 bpd refinery at Bandar Abbas will be expanded.
Other existing refineries will also be upgraded, including the Arak refinery, which will see its throughput raised from the present 150,000-170,000 bpd to 250,000 bpd, Soltani said.



Iran oil & gas delegation seeks participation from Posted Wednesday, May 31, 2006 - 12:42 by hydrocarbonasia
The Singapore Business Federation on 30 May hosted 20-strong oil and gas delegation from lran, here to seek Singapore based partners in (1) trade and distribution of lranian petrochemical exports, (2) investment and technology partners for '12 down-stream petrochemical projects. The total value of these investments is estimated to be approximately USD2.6 billion.

Today's briefing attended by 60 SBF members followed a business-matching
session with Singapore companies the previous day. The lranian delegation
comprises private sector representatives from the lranian Oil, Gas and
Petrochemical Products Exporters' Union (OPEX).

Mr. Law Peng Keat, Senior Director of Markets for Global Business Division of
Singapore Business Federation was pleased to note that through these frequent
meetings and interactions, it was clear that both lran and Singapore are working
towards creating a favourable climate for our business communities to forge
stronger business and economic partnerships. (The SBF hosted a visit by a
delegation from the lranian Chamber of Commerce, Industry & Mines to
Singapore in May 2005, and reciprocated with a business mission to lran in
November 2005)

Singapore's excellent infrastructure and vibrant economy could serve as a
springboard for lranian companies to expand into ASEAN and the rest of the
region. lts excellent connectivity within the region and the rest of the world, and
existing free trade agreements with India, US, Australia, New Zealand, Japan,
the European Free Trade Association, the Hashemite Kingdom of Jordan, Korea,
Panama amongst others, facilitates smoother access to these markets through
Singapore.

OPEX Fund was established in 2001 by more than 60 major private sectors
lranian oil products producing and exporting companies. The Fund aims to
synergise the private sector for collective investments in downstream oil and gas
industries, as well as seek joint venture investments with foreign investors,
particularly Asian countries.

The Investment Seminar, which is centred on developing business opportunities
in Oil and Gas Industries, highlighted the investment opportunities & policies, and
characteristics of lran. Some concrete projects of the oil and gas industry
including feed stock of Natural Gas, Methanol, propane Sulphuric Acid, Toleune,
styrene Monomer, were presented for take up by potential partners.


The oil, gas and petrochemicals sector is an important contributor to the lranian
economy. lran is the second largest crude oil producing OPEC country. lts
natural gas reserves are the second largest in the world and amount to 15% of
proven world reserves. Reserves include associated and non-associated gas.
and occur in both offshore and onshore fields.

Faced with the overriding need for finance and technical knowledge to stimulate
production from old fields and to develop new reserves, lran opened its oil and
gas sectors to foreign participation. ln terms of export income, oil and gas
generated US$19.4 billion in 2001-02, representing 81.5% of all export revenue.





Kuwait eyes Dow, BP, Shell, for possible China plant Posted Tuesday, May 30, 2006 - 11:23 by hydrocarbonasia
Dow Chemical Co. (DOW) and either British Petroleum or Shell may be partners in a joint-venture refinery project in China that Kuwait is considering to help build, a Kuwaiti official said on Saturday.

Kuwait said in December it agreed with China to study setting up the joint venture refinery and petrochemical complex between PetroChina (PTR) and a unit of state-run Kuwait Petroleum Corp. (KPC).

The plant is estimated to cost about $5 billion.

"It will probably involve Dow as well as one of the international oil companies," KPC's CEO Hani Hussain said.

Hussain said Dow was a strategic partner to Kuwait in the EQUATE Petrochemical Company in the Gulf Arab state. Last year, KPC signed a deal with Royal Dutch Shell to work together in China while KPC's overseas unit Kuwait Petroleum International (KPI) penned a deal with BP for investments in China.

"We have an MOU (memorandum of understanding) with Shell and BP for cooperation worldwide but the major areas will be in the Asian markets," Hussain told reporters on the sidelines of an energy forum hosted by National Bank of Kuwait (NBK).

Kuwaiti Energy Minister Sheikh Ahmad al-Fahd al-Sbah said in December that the refinery's capacity would likely be 300,000 to 400,000 barrels per day and it will process mainly Kuwaiti crude.

Hussain said on Saturday the plant's capacity would be 200,000-300,000 bpd.

"It's a joint-venture refinery as well as petrochemical complex and we are looking at details ... the location is probably going to be in Guangdong (province)," Hussain added.

KPC said in December project studies and approvals will be completed in 2006 while the building will need four years.

Asked when he sees final approvals, Hussain said: "Hopefully as soon as possible. We have a high (level) Chinese delegation visiting us next week and we continuously have trips. We'd like to do this as soon as possible."

KPC oversees the upstream and downstream sectors in Kuwait, which controls nearly a tenth of global oil reserves and has three domestic refineries with a total crude refining capacity of up to 930,000 barrels per day.


First LNG shipment arrives in Guangdong Posted Tuesday, May 30, 2006 - 11:22 by hydrocarbonasia
China's first shipment of imported liquefied natural gas (LNG) arrived from Australia at the LNG terminal in south China's Guangdong Province on Friday.

The 60,000-ton cargo came from the Northwest shelf of Australia, said a source with the China National Offshore Oil Corporation (CNOOC), China's largest offshore oil and gas producer and the project's largest shareholder.

The terminal in Shenzhen city will be connected to a trunkline for distribution. The project is scheduled to begin operation in June.

Guangdong Dapeng LNG Company Limited will construct and operate the project, which has 11 foreign and domestic shareholders, including CNOOC with 33 percent and BP with 30 percent.

Northwest Shelf Australia LNG venture project will supply 3.7 million tons of LNG annually to the terminal under a 25-year contract.

Phase one of the project has been completed at a cost of 7.1 billion yuan (887.5 million US dollars).

Besides the terminal and trunkline, phase one also comprises four gas-fired power plants, two Hong Kong user projects, one oil-to-gas conversion project, four city gas pipeline networks, an LNG transportation project and an LNG carrier construction project.

A CNOOC statement said 65 percent of the LNG would be used for power generation and the other 35 percent was allocated to domestic users in Shenzhen, Dongguan, Guangzhou, and Foshan cities of Guangdong, and Hong Kong.

The project was expected to change China's energy supply and consumption structure, which had been based mainly on coal, said experts.

The second shipment is due to arrive on June 27, said CNOOC.

The government plans to build 10 or 11 LNG terminals by 2010, increasing imports to 30 million tons in the year.

New refinery in Yemen Posted Friday, May 26, 2006 - 7:41 by hydrocarbonasia
Yemeni and Saudi investors plan to build a 45,000 barrel-per-day (bpd) refinery in Yemen, it has been reported.

It said a deal was signed with Indian firm Furnace Fabrica India to build the refinery in Ras Issa in Hodeidah on the Red Sea coast. The project will be owned by a company set up by the Yemeni and Saudi investors.

'The first phase, which is expected to cost $200 million, will involve production of diesel, furnace oil, LPG, kerosene and naphtha. It will be completed by June 2007,' an official from Furnace Fabrica said. 'Construction work started today.'

He said a second stage to expand the refinery could involve an additional investment of $500 million.

Another private Yemeni firm plans to build a 60,000 bpd refinery in Ras Issa. The $450 million refinery, to be 50 per cent owned by HoodOil Ltd and 25 per cent by India's Reliance Industries, is due to start up by the third quarter of 2007.

Ras Issa is home to a terminal which handles exports of crude oil pumped by pipeline from the Marib oilfield.

Saudi Aramco seals US$6bn Yanbu Refinery deal Posted Friday, May 26, 2006 - 11:41 by hydrocarbonasia
Saudi Aramco and ConocoPhillips yesterday signed a major agreement to establish a full-conversion refinery in the industrial city of Yanbu on the Red Sea coast at a cost of SR22.5 billion ($6 billion).

The refinery would be designed to process 400,000 bpd Arabian heavy crude and produce high-quality, ultra-low-sulphur refined products that meet current and future US and European product specifications. The refinery is scheduled to start operations in 2011.

This is the second such deal signed by Saudi Aramco within a week. The two refinery deals, valued at a total of SR45 billion ($12 billion), are part of plans by Saudi Arabia, the world’s largest oil exporter, to become an increasingly important supplier of gasoline and heating fuel to global markets.

Last Sunday, Aramco signed a landmark accord with France’s Total to build another 400,000 bpd, heavy crude refinery in Jubail on the Kingdom’s Gulf coast. The Jubail facility will also start operation in 2011.

Yesterday’s deal signed in Dhahran sets forth the agreement between the two oil giants regarding the parameters of the project, the project configuration, and a broad range of the major technical, commercial, legal and financial terms.

The project offers an opportunity for the world’s largest producer of hydrocarbons and ConocoPhillips to work together to construct a refinery to serve multiple markets with high quality refined products, Aramco said.

“For Saudi Arabia, this project would not only add value to the Kingdom’s petroleum product exports, it would also be a platform for increased industrial development in the Kingdom,” the oil giant said. In addition to attracting foreign investment to the Kingdom, the project is expected to expand its economy and provide increased job opportunities for Saudi nationals.

“For over 70 years, Saudi Aramco has been committed to providing the world with reliable energy to fuel its prosperity,” said Abdallah S. Jum’ah, Saudi Aramco president and chief executive officer. “This proposed venture with our industry colleagues at ConocoPhillips is a proud moment for us all, and will allow us to expand our role to downstream exports in addition to the upstream.”

Jim Mulva, chairman and chief executive officer of ConocoPhillips, who signed the deal with Jum’ah, said his company welcomed the opportunity to work with the Saudi Arabian oil company to add needed capacity to the international refining system.

“The Yanbu project fits well with the company’s overall strategy to invest in projects that expand our global refining presence, and would provide significant new supplies of refined products to help meet growing requirements around the world,” Mulva said.

Saudi Aramco and ConocoPhillips will form a joint venture company with equal ownership interests to own and operate the proposed new refinery. Subject to required regulatory approvals, the parties may offer up to 30 percent stake in the project to the Saudi public. Saudi Aramco would supply the project with 400,000 barrels per day of Arabian heavy crude oil.

“Saudi Aramco and ConocoPhillips would each be responsible for marketing one half of the refinery’s production,” the Aramco statement said.

Aramco, with its international partners, plans to spend $50 billion in the next five years to boost refining capacity at home and abroad. Saudi Arabia and other OPEC producers have said concern over oil product shortages due to a global refining crunch has fuelled a rally that has taken oil prices to record highs.

The Organization of Petroleum Exporting Countries (OPEC) aims to add some four million bpd of refining capacity by 2010, gaining greater access to lucrative markets for gasoline and other high value products in the United States and Europe.

Saudi Arabia holds the bulk of OPEC’s spare oil output capacity, but most of its unused capacity consists of heavy sour crude that refiners find difficult to process into transport fuels.

The Kingdom is working to boost its crude output capacity to 12.5 million bpd by 2009. Analysts say a further expansion would depend on building refineries to handle the heavy crude.

Titan first quarter profit up 149% to RM378m Posted Thursday, May 25, 2006 - 4:00 by hydrocarbonasia
Titan Chemicals Corp Bhd posted a net profit of RM378.1mil for its first quarter ended March 31, an increase of 149% compared with RM151.6mil recorded in the same period last year.

Its revenue stood at RM1bil compared with RM1.1bil last year while earnings per share was at 21.6 sen compared with 11.5 sen before.

According to managing director Donald M. Condon Jr, Titan’s underlying performance was in line with that of its regional peers, helped partly by some improvement in polymer prices and margins during the quarter.

“The quarter was marked by a successful turnaround of Cracker One, two polypropylene plants and the linear low-density polyethylene/high density polyethylene plant,” he told a press conference yesterday.

Condon said the first quarter net profit exceeded that of RM362mil recorded for the whole of 2005. This is mainly due to the inclusion of a RM341mil non-recurring income from consolidation of its acquisition of PT Titan and improvement in margins during the quarter.

On rising oil prices and other external factors such as inflation, Condon said: “Titan’s business remains on track amidst these uncertainties.”

He said the company had adequate cash and control systems and, with the debt reduction that it had undertaken over the last three years, Titan was well positioned to do well in comparison with its industry peers.

On the impact of the electricity tariff hike announced yesterday, Condon said the impact would be minimal as the company would reduce its utilisation of electricity supplied by Tenaga Nasional Bhd (TNB) and rely more on its own generator.

Titan vice-president, corporate development Francis Pereira said: “Currently, we have an agreement with TNB on electricity offtake.

“What we will be doing now is to reduce slightly the offtake and run our coal-generator harder. So, the impact will be minimal.”

Australia’s Woodside aims at No2 in LNG Posted Wednesday, May 24, 2006 - 5:47 by hydrocarbonasia
Woodside plans to be the world's second-largest LNG producer within four years and to hold that position well into the next decade.

Chief executive Don Voelte has said that Woodside's operated LNG capacity in 2010 would be about 23 million tonnes a year, exceeding BP, Chevron and ExxonMobil but behind Shell.

By 2015 Woodside aims to operate plants producing about 45 million tonnes a year, well ahead of BP and only 7 million tonnes a year behind Shell.

Mr Voelte recently gave an investor briefing in New York, which showed that 2015 output would include its share of train five from the North West Shelf project and Woodside's 18-19 million tonnes a year equity share in output of proposed developments at Pluto, the Browse Basin and Greater Sunrise in the Timor Sea.

This is the first time Woodside has ranked itself for potential future output in the next decade.

The Australian Government believes that by the middle of the next decade Australia will be supplying 50-55 million tonnes of LNG a year through the NW Shelf, Darwin LNG, Gorgon, and the Pluto, Browse and Timor Sea developments.

Woodside's ranking includes major listed players in the LNG business but not government-owned oil corporations.

Indonesia, Algeria, Malaysia, and the United Arab Emirates, all with government-owned producers, are ahead of Australia as major LNG suppliers.

Mr Voelte's presentation, released to the stock exchange yesterday, also disclosed that Shell had won the competition to supply the technology for Pluto, beating off a challenge from ConocoPhillips.

Pluto is targeting first LNG production by the end of 2010 with Mr Voelte telling analysts that consultants Foster Wheeler Worley Parsons, using Shell Global Solution International LNG technology, were undertaking additional onshore studies before a front-end engineering and design contract, expected be awarded by the end of the year. This means Pluto will use one production train with a capacity of 5-7 million tonnes a year, based on the NW Shelf's train five, which is under construction, rather than two trains similar to that at ConocoPhillips's Wickham Point plant at Darwin.

Pluto, discovered in April last year, is being fast-tracked to meet an expected shortfall in world LNG supplies after 2010.

Mr Voelte also disclosed that Woodside had signed option agreements with Samsung for constructing four LNG tankers.

The design and ownership of the four - each of which could cost between $US200-300 million - has to be determined.

But Woodside officials said later the tankers would be 145,000-217,000 cubic metres in capacity, substantially larger than those owned by the NW Shelf joint venturers, and were being planned to service customers in Japan and North America.

Samsung built the Nganhurra floating production storage and offtake vessel for the Woodside-operated Enfield oil development on the NW Shelf, scheduled to start production next month.

Shell wants stake in first CNOOC oil refinery Posted Tuesday, May 23, 2006 - 7:51 by hydrocarbonasia
Royal Dutch Shell, Europe's second- largest oil company, said it's in talks about investing in a 19.3 billion yuan (HK$18.67 billion) oil refinery being built by China National Offshore Oil Corp in southern China.

Royal Dutch Shell, Europe's second- largest oil company, said it's in talks about investing in a 19.3 billion yuan (HK$18.67 billion) oil refinery being built by China National Offshore Oil Corp in southern China.

Shell wants to invest in the refinery to integrate the facility with an adjacent US$4.3 billion (HK$33.54 billion) chemical joint venture with CNOOC, Lim Haw Kuang, chairman of Shell's companies in China, said Monday at Daya Bay in Nanhai, Guangdong.

Shell and CNOOC, the nation's third largest oil company, started operating the petrochemical venture in Huizhou city in January.

CNOOC is building its first refinery to process as much as 12 million tonnes a year of crude oil into fuel from June 2008. It will also supply naphtha to the chemicals joint venture.

"We want to be an integrated chain in the downstream business," Lim said. "We want to participate in the value when it makes economic sense."

CNOOC, the parent company of Hong Kong-listed CNOOC Ltd, in December began work on the refinery to benefit from increasing demand for fuels and chemicals. The company said it will use mostly its own oil pumped from offshore China at the refinery.

China's oil consumption is rising, partly because of increased demand for oil products such as naphtha, used as a raw material in chemicals. Companies including BASF are expanding output in China.

BASF said Monday it is targeting sales growth of at least 20 percent in China this year after a record increase in 2005.

This year's expansion follows a 43 percent jump in sales in 2005 to 2.8 billion euros (HK$27.72 billion), said Martin Brudermueller, a member of BASF's board of executive directors, in Beijing Monday. China is BASF's third largest market after Germany and the United States.

Shell wants to reduce the cost of naphtha that the joint venture processes into chemicals, said Tan Ek Kia, vice president of ventures and development for Shell Chemicals in Asia Pacific and the Middle East.

The chemicals venture is testing various types of condensate as feedstock at the plant, which is also designed to process naphtha, gasoil and liquefied petroleum gas, Simon Lam, chief executive of CNOOC & Shell Petrochemicals Co, which operates the chemicals plant at Daya Bay said. Government curbs on fuel prices have prevented refiners from passing on higher costs to consumers. China Petroleum & Chemical Corp, Asia's largest refiner, lost US$1.03 processing each barrel in the first quarter, and losses will extend into the second quarter, said chief financial officer Zhang Jiaren on April 28.

Saudi, Total sign $6bn Jubail refinery deal Posted Monday, May 22, 2006 - 6:35 by hydrocarbonasia
Saudi Aramco and French oil firm Total signed an agreement yesterday to build a 400,000 barrel per day (bpd), export-oriented refinery in the kingdom at a cost of around $6 billion. The full-conversion refinery in Jubail on the Gulf coast is designed to process Arabian heavy crude oil and is scheduled to start up in 2011, state oil firm Aramco said in a statement.

According to the memorandum of understanding, Aramco and Total would form a joint venture firm, with each holding a 35 per cent stake. Up to 30 per cent ownership in the project is planned to be offered to the Saudi public in the future. Aramco officials put the project’s cost at $6 billion. The state oil firm will supply 400,000 bpd of Arabian heavy crude and both Aramco and Total will market the refinery’s production.

Aramco and Total said they would carry out a joint front-end engineering and design study and that documents to implement the project would be negotiated in parallel with the study. The deal is one of two joint venture export refineries which Saudi Arabia wants to build in the kingdom, the world’s top oil exporter.

Australia: Gorgon LNG plant likely to miss its 2010 start-up Posted Monday, May 22, 2006 - 6:34 by hydrocarbonasia
Chevron Corp said the proposed A$11bn ($8.4bn) Gorgon liquefied natural gas project in Australia is likely to miss its scheduled 2010 start-up because of planning and approval delays.

Chevron and its partners in the project, Royal Dutch Shell Plc and Exxon Mobil Corp, can’t give a revised estimate of the timing, Scott Walker, a spokesman for Chevron in Perth, said.

The 10mn metric-tonnes-a-year venture hasn’t updated its three-year-old budget, he said. Gorgon, which has supply contracts in Japan, North America and India, was originally due to start up in 2008.

Norway’s Statoil ASA said its Snohvit LNG project may start up later than planned, while Shell last year delayed the start of Sakhalin-2.

Asian supply is already set to fall short of demand through 2011, according to Wood Mackenzie Consultants Ltd.

“Every time one of these situations happen, it just tightens the market that bit further,’’ said Frank Harris, co-head of global LNG at Edinburgh-based Wood Mackenzie. “It’s not as if it’s isolated to one or two projects any more, it seems to be happening across the board.’’

CNOOC to receive first cargo of Australian LNG this month Posted Tuesday, May 16, 2006 - 4:11 by hydrocarbonasia

After losing to Japan on purchasing liquefied natural gas (LNG) from the Gorgon project in March, China will see the first cargo of LNG from Australia's North West Shelf project to arrive in Guangdong this May.

The gas supplier, North West Shelf Venture, which accounts for 40 per cent of Australia's oil and gas production, says it would commit itself to an agreement signed with China National Offshore Oil Corporation Limited in October 2002 and supply 3.3 million tons/year of LNG to Guangdong for 25 years.

The first cargo, measuring 50,000 tons in volume, will be shipped to Guangdong's Dapeng Bay, where the country's first LNG terminal, which will start operation in June 2006, is located.

Peter Cleary, president of North West Shelf Venture, says his company will focus on ensuring the supply of the Guangdong terminal before considering supply contracts with other Chinese LNG terminals.

Cleary declined to reveal related gas price, citing it "commercially confidential". But industry watchers generally hold that the profit margin will be "razor thin" and the deal is largely a "strategic" one.

CNOOC and the Australian company signed the agreement when the world was experiencing a buyer's LNG market and CNOOC was reported to have fetched a "very handsome" price.

Things changed fast over the past a couple of years, during which world gas prices soared with rising oil prices. Hardly changed were China's gas prices, which are still controlled by the government out of concerns to ensure civil affordability.

Caught between the lopsided international-domestic gas prices, CNOOC lost in March a 25-year 100-million-ton gas purchase contract signed with Australia's Gorgon project in October 2003 because of higher offer from Japan.


Titan sees RM1b sales from new products Posted Monday, May 8, 2006 - 2:23 by hydrocarbonasia
Titan Chemicals Corp Bhd sees its two new products, butadiene and propylene, generating RM1bil (approx. US$270 mil.) in annual revenue for the company.

Executive chairman James Chao said Titan expected to record the earnings from its financial year 2008.

“Demand for these products is on the uptrend, both in the domestic and international markets,” he said yesterday at the groundbreaking ceremony for the company's new butadiene and propylene plants in Pasir Gudang Industrial Estate.

The two new plants are located next to Titan's two existing naphtha crackers, which were the first of their kind in Malaysia.

Chao said Titan would invest RM171mil in the butadiene plant and RM209mil in the propylene plant.

He said the plants would be ready by the end of next year and would probably be commissioned in the first quarter of 2008.

“By then, we hope to be able to meet the surging demand for butadiene from local manufacturers and assure them of constant supply,” he said.

Chao said with butadiene and propylene produced locally, manufacturers could now reduce their dependency on imported materials, mostly from Singapore and Thailand.

He said Titan would market 50% of its butadiene and propylene for local consumption and the balance for export markets.

Butadiene is mainly used in the manufacture of tyres and dipped rubber goods, while propylene is a key chemical building block for a multitude of derivative products, including polypropylene.



Middle East's refining capacity to rise Posted Friday, May 5, 2006 - 11:34 by hydrocarbonasia
The Middle East's refining capacity is projected to increase by 3 million barrels per day to above 9.6 million barrels per day by 2012, an energy expert said.

"There is significant refining capacity additions in almost all Middle East countries between now and 2012 to above 9.6 million barrels per day over the next six years," Dr. Fereidun Fesharaki, Chairman and Chief Executive of FACTS Global Energy, said at the Middle East Petroleum and Gas Conference.

"The joint implication of upcoming refining and GTL (gas to liquids) projects is that the Middle East's product's exports will grow by 1.3 million barrels per day between now and 2011-12."

The Middle East's current refining capacity stands at 6.65 million barrels per day with Saudi Arabia having the region's largest capacity of more than 2 million barrels per day followed by Iran and Kuwait.

"The UAE has seen remarkable refining expansion with capacity doubling between 1995 and now."

But the region still lags significantly behind US, Europe and even Asia in terms of fuel quality, he added.

Fesharaki said Saudi Arabia is expected to emerge as a refining powerhouse by the next decade with two major export-oriented grassroots refineries planned at Yanbu and Jubail with capacities of 400,000 bpd each.

In Iran, three new condensate splitters of 120,000 bpd each will come online between 2009 and 2011 while in the UAE, Adnoc is building a 300,000 bpd refinery in Fujairah. "It could even be 500,000 bpd," he said.

Sino-Russian crude oil trade via railway hits new high Posted Thursday, March 23, 2006 - 10:07 by hydrocarbonasia
In the past five years, the crude oil trade via rail transport between China and Russia has continued to grow, said Chen Geng, General Manager of China National Petroleum Corporation (CNPC) on Wednesday.

Chen made the remark at a high-level Sino-Russian economic forum, which was seen as an opportunity for the two countries to discuss detailed trade issues.

In 2005, CNPC imported 5.18 million tons of crude oil of from Russia through the eastern railway, 4.4 million tons of which were from the Russian oil company Rosneft, Chen said.

In July 2005, CNPC and Rosneft signed an agreement for long-term cooperation, and on Tuesday the two sides signed three deals on oil and natural gas cooperation, including an agreement, in principle, between the CNPC and Rosneft for forming joint ventures on further oil cooperation.

Meanwhile, a memorandum of understanding between CNPC and Russia's natural gas company Gazprom for natural gas supply to China and a summary of negotiations between CNPC and Transneft, a Russian pipeline transport company, were also signed.

The oil and natural gas cooperation between the two countries serves the fundamental interests of the two peoples and has a bright future, Chen said.

The two sides should grasp the current opportunity to boost bilateral cooperation in this field, he said.

Russia has become one of China's major energy suppliers. As Chinese economy has been growing fast, it has been importing more crude oil from foreign countries.

Woodside wins new Japanese deal Posted Thursday, March 23, 2006 - 10:05 by hydrocarbonasia
Woodside Petroleum has signed another deal with a Japanese utility for the supply of liquefied natural gas (LNG) from the Pluto gas field in Western Australia.

Under the heads of agreement, Woodside Energy will supply Kansai Electric Power Company with between 1.75 million and two million tonnes of LNG a year for 15 years.

Woodside said on Wednesday it was the second agreement for Pluto LNG in the past four months.

Chief executive Don Voelte welcomed Kansai as one of the foundation customers for the Pluto project.

"As one of Japan's major electricity suppliers, Kansai Electric is an ideal customer," Mr Voelte said.

"Woodside and Kansai Electric have enjoyed a long and beneficial relationship through the North-West Shelf venture and we look forward to furthering this relationship through Pluto."

Kansai also has an option to buy a 5 per cent equity stake in Pluto.

Kansai is one of the biggest electric power companies in Japan and in 2005 had revenue of more than US$22 billion.

The Pluto gas field, 190 kilometres north-west of Karratha, was discovered last April and is due to start production in 2010, with an investment decision expected midway through next year.

In December, Woodside signed a similar deal with Tokyo Gas, which signed on to buy between 1.5 million tonnes and 1.75 million tonnes of LNG a year for 15 years.



Philippines: Petron’s profits shoot up to record amid rising oil prices Posted Wednesday, March 22, 2006 - 3:00 by hydrocarbonasia
Amid soaring fuel prices, Petron Corp., the Philippines’ biggest and only publicly listed oil refiner, on Monday said its profits last year rose to their highest in a decade.

In a disclosure to the Philippine Stock Exchange, Petron said its unaudited net income of P6.04 billion last year was its highest since 1996, or two years before the government opened the downstream oil industry to more competition.

The company’s record earnings comes as rising fuel prices worldwide risks slowing the economy and bidding up prices of goods and services.

Partly-owned by the government and Saudi Arabian Oil Co. (Aramco), Petron however said its record earnings were due more to improving efficiencies and additional revenues accruing from its petrochemical business.

The company said it kept operating expenses to P5.34 billion in 2005, or 3 percent higher than P5.16 billion in 2004. Revenues increased by 29.8 percent to P191.49 billion in 2005 from P147.42 billion in 2004.

Khalid D. Al-Faddagh, Petron president and chief executive officer, said the company improved its operations through various initiatives such as the deployment of modern information technology software in its supply chain and the rationalization of depots across the country.

“Our success as a company has been supported by several initiatives that we started a few years ago. We continue to apply the latest technologies throughout our supply chain. Additionally, strategic investments to improve product yields and operating efficiencies in the past few years have given Petron a unique advantage over its competitors,” he said.

The Petron executive cited the commissioning of the isomerization unit and a gas-oil hydrotreater early last year, allowing the company to produce Clean Air Act—compliant gasoline and diesel to meet domestic requirements without resorting to imports.

Al-Faddagh also said Petron’s decision to invest in the mixed xylene unit a few years back has proven to be beneficial for the company.

To further improve its petrochemical business, Petron has allocated US$300 million to invest in new refinery units that will allow the company to double its production of mixed xylene as well as extract higher-value petrochemical streams such as benzene, toluene and propylene.

Petron also increased its export volume by 45.3 percent to 7.96 million barrels last year compared with 5.48 million barrels in 2004. Domestic sales however fell by about two percent to 51.67 million barrels from 52.76 million barrels due to sluggish demand.

“We will continue to leverage our refinery assets since we see these as the main driver for sustained growth over the long-term. Given the relatively mature fuels market, petrochemical feedstock production will be a significant revenue stream for Petron over the next few years,” Nicasio Alcantara, Petron chairman, said.

Parallel to these initiatives, the company is aggressively pursuing the expansion of its non-fuel business, which includes the construction of additional Treats stores and locators at service stations, Alcantara said.

Despite a 10 percent contraction in demand industry-wide, Petron continued to dominate the local oil industry as it increased its market share to 38.3 percent last year from 37.8 percent in 2004.

In the hotly-contested retail market, the company enjoyed a 34 percent share or a more than one percent lead over its closest rival, Pilipinas Shell Petroleum Corp. Petron also added 64 outlets to its network. As of end-2005, it had nearly 1,270 stations nationwide—the largest network in the country.

Titan completes acquisition of Indonesian PT PENI Posted Wednesday, March 22, 2006 - 11:48 by hydrocarbonasia
Titan Chemicals Corp Bhd announced yesterday the completion of its proposed acquisition of 100% of PT Petrokimia Nusantara Interindo (PT PENI) via its subsidiary, Titan Petchem (M) Sdn Bhd, making Titan Chemicals the largest polyolefins producer in South-East Asia.

PT PENI is the largest Indonesian polyethylene producer and owns a petrochemical complex in Cilegon, Banten Province, with three linear low-density and high-density polyethylene lines with a capacity of 450 thousand tonnes per annum (KTA).

In a statement, managing director Donald M. Condon Jr said: “The acquisition of PT PENI will give Titan Chemicals additional manufacturing capability and position it as the largest polyolefins producer in South-East Asia.”

Condon said the acquisition costing about RM75mil fitted into Titan Chemicals' business strategy and would result in many synergies.

“We can bring integrated solutions to a non-integrated operation,” he said, adding that more importantly, the purchase opened the door to a huge Indonesian domestic market of over 242 million people with a growing appetite for polymer-based products.

Condon said the purchase of PT PENI would help increase the company's polyolefins production capacity by 50%.

“It would cost us a lot of money and time, at least over five years, to build a complex of this scale and ability,” he said.

He also said the acquisition was modest in terms of expenditure and would save time, a major advantage to any petrochemical player like Titan Chemicals.

Moving forward, Condon said PT PENI would be re-branded to PT TiTan Petrokimia Nusantara, headed by president director Jay Diau.

Jay said the priority was to ensure adequate feedstock supply to the company's newly acquired plant from a combination of internal and external resources.

“We believe two lines are ready to start operating and this will bring us 125 KTA and 200 KTA respectively. We aim to be operational within eight weeks,” he added.

Jay said the Indonesian operations would be tapping the Malaysian business for the transfer of skills and expertise.





China to increase refinery capacity Posted Monday, March 20, 2006 - 3:14 by hydrocarbonasia
China plans to increase its refining capacity by one-third by 2010 as it races to keep up with surging demand for oil and refined products, the government said.

At the same time, it aims to double its production of ethylene, a chemical in short supply domestically that is used in a wide range of plastic products.

Meanwhile, oil producer PetroChina said it is stepping up exploration of both onshore and offshore oil fields and expects "major breakthroughs" in the next few years it was reported on Friday.

In the past decade, China's consumption of crude oil has more than tripled, to 2.2 billion barrels in 2005, from 644 million barrels in 1985. With crude oil prices surging, the government is encouraging domestic oil producers to boost production to help reduce demand for costly imports. It is also pushing refiners to boost capacity to help bridge shortages of fuel and other oil products.

The plan issued by the National Development and Reform Commission, which is in charge of industrial policy, calls for adding at least 90 million tons of new refining capacity annually by 2010, up 31.6 percent from the 285 million tons of crude oil refined in 2005.

New oil processing centres are to be built in Guangxi Zhuang Autonomous Region and Sichuan Province, in southwestern China, to handle domestic crude oil output, the commission said.

Small and inefficient refiners with an annual capacity of about 20 million tons will be closed, according to a version of the plan posted on the commission's Web site.

It described the domestic refining industry as "relatively backward and lacking in competitiveness compared with advanced world standards."

Ethylene output is to be boosted by up to 10.6 million tons annually, the commission said, with the construction of production bases in three industrial hubs: the Pearl River Delta; the Yangtze Delta, near Shanghai; and the Bohai region, east of Beijing.

Last year China produced 7.55 million tons of ethylene.

China National Petroleum Corp. (CNPC), the State-owned parent company of PetroChina, expects to develop offshore oil fields in the southern part of the South China Sea in the next five years, the China Daily reported, citing PetroChina vice president Hu Wenrui.

The project would be CNPC's first deep sea oil project, the report said.

It said the company had expected to install a well in the area by this year, but that the project might be delayed into 2007.

CNPC, China's biggest oil producer, hopes to find 2.5 billion tons of crude oil reserves in the next five years, both onshore and offshore, the report said.

New reserves are needed to replace stagnant output at older fields such as Daqing, in the northeast, it said.

Despite its exploration efforts, PetroChina expects its oil output to increase by only 1 percent from 2005 to 2010, to more than 107 million tons, Hu was quoted as saying. But its gas output is forecast to surge 92 percent from 2005 to 2010 to 70 billion cubic meters.


Saudi Aramco launches first petrochemical venture with Sumitomo Posted Monday, March 20, 2006 - 3:12 by hydrocarbonasia
The construction of the largest integrated refining and petrochemical complex in Saudi Arabia at a cost of $9.8 billion began yesterday in the town of Rabigh on the Kingdom’s west coast.

The presidents of the two main developers of the project — Saudi Arabian Oil Company (Saudi Aramco) and Sumitomo Chemical Co. Ltd. (Sumitomo Chemical) — broke ground for the Rabigh Refining and Petrochemical Company’s (PETRORabigh) project that is expected to be completed by the end of 2008.

Abdullah Jum’ah, president of Saudi Aramco, and Hiromasa Yonekura, president of Sumitomo Chemical, signed the final project financing documents in the presence of the Minister of Petroleum and Mineral Resources Ali Al-Naimi. Al-Naimi announced that PETRORabigh was the new driving force for the petrochemical industry in Saudi Arabia and for the overall economy.

The minister said that 25 percent of the project’s capital would be floated for public subscription. “This comes as a result of direct orders from Custodian of the Two Holy Mosques King Abdullah,” he added.

Through PETRORabigh, which is a joint venture between Saudi Aramco and Sumitomo Chemical, Aramco is launching its first petrochemical venture in Saudi Arabia. Due to the enormous size of the project, the two companies decided to involve several local and international financial institutions in funding the complex. The two companies raised a total of $5.8 billion from the Islamic Development Bank (IDB), Japan Bank of International Cooperation, the Saudi Public Investment Fund and 17 other financial institutions including French Calyon Bank, SABB, HSBC, Citibank N.A., Riyad Bank and BNP Paribas and the Bank of Tokyo-Mitsubishi UFJ Ltd.

Directly, the project is set to create third-party investment opportunities in Saudi Arabia’s private sector for utilities and other related infrastructure. In addition, the project is encouraging the participation of Saudi nationals in its ownership, thus benefiting them from its anticipated revenues.

Indirectly, the project will allow for the construction of an industrial complex to process all of PETRORabigh’s downstream products. “All infrastructure requirements for this industrial complex will be provided with enough capacity to accommodate more than 30 investment sites. We anticipate great success in attracting national and global investment for these downstream projects,” Al-Naimi said.

Plans for the project include, as the centrepiece of the expanded site of Aramco’s Rabigh refinery, a high olefins yield fluid catalytic cracker complex integrated with a world scale, ethane based cracker. The crackers will produce approximately 1.3 million tons of ethylene and 900,000 tons of propylene annually as well as 60,000 barrels of gasoline daily in addition to other refined products. Downstream petrochemical units will be included to convert all of the olefin production to downstream products.

Saudi Aramco currently owns and operates a topping refinery at Rabigh with a nominal crude distillation capacity of 400,000 barrels per day. The existing site and infrastructure will serve as the base platform for the development of the Rabigh project. Saudi Aramco has studied various upgrade alternatives for the refinery since the company became its owner in June 1995. These studies led to the conclusion that the best alternative to capture the synergies of the existing large crude capacity, together with significant investment in site and infrastructure, would be to expand the site into a large, fully integrated refinery and petrochemical complex.

Foster Wheeler to design and build new petrochemical plant in Kuwait Posted Monday, March 20, 2006 - 3:09 by hydrocarbonasia
Foster Wheeler Ltd reported Milan-based Foster Wheeler Italiana S.p.A., part of its Global Engineering and Construction Group, has been awarded an engineering, procurement and construction supervision contract by The Kuwait Olefins Company (K.S.C.C.), for a grassroots ethylene-glycol unit (EG2 Project) to be built at Shuaiba Industrial Area, Kuwait.

TKOC is a joint-venture company with the majority shareholders being Petrochemical Industries Company (K.S.C.), a wholly owned subsidiary of Kuwait Petroleum Corporation, and Dow Europe Holding B.V., a wholly owned subsidiary of The Dow Chemical Company.

The terms of the award were not disclosed and the contract will be included in Foster Wheeler's first-quarter 2006 bookings.

The new world-scale EG2 unit, with a total capacity of 600,000 metric tonnes per year, is part of TKOC's planned Olefins II ethylene and derivatives complex.

It will use Union Carbide's METEOR ethylene oxide/ethylene glycol process technology. It is scheduled to be completed by the second quarter of 2008.

"We successfully completed a 340,000 metric tonnes per year ethylene glycol plant, part of the EQUATE I project, at the same location during the late 1990s," said Umberto della Sala, chief executive officer, Foster Wheeler Global Engineering and Construction Group.

"With this important award, we are very proud to be able to include The Kuwait Olefins Company among our repeat clients and we intend to deliver the same excellent performance for the EG2 Project."

Saad Al Shuwaib, chairman and managing director, PIC, said, "The award of this contract builds on the success of the EQUATE I Project.

"We are committed to building, with the help of Foster Wheeler, one of the safest and most efficient ethylene glycol plants in the world."

India’s proposed Reliance refinery to be completed by December 2008 Posted Friday, March 17, 2006 - 3:55 by hydrocarbonasia
A proposed refinery by Reliance Petroleum Ltd in the SEZ at Jamnagar is scheduled for commissioning in December 2008. The refinery will have a capacity to process 580,000 barrels of crude oil per stream day, and will also include a plant to produce 0.9 million tonnes per annum of polypropylene. Upon completion, the refinery will be the sixth largest in the world based on current capacities.

The plant would be a highly complex refinery with significant secondary processing facilities designed to maximise the quantity of value added products such as alkylates, diesel, ATF, polypropylene, etc. The project is estimated to cost Rs 27,000 crore (US$6.092 bil) out of which Rs 15,750 crore (US$3.553 bil) will be funded through debts and the balance through equity.

Bechtel has been given the single point responsibility for the implementation of the project. It will provide detailed engineering, project management, site support, construction supervisory services and offshore supply of equipment and bulk materials



PTT Chemical to invest Baht44 billion in 2006-2010 Posted Friday, March 17, 2006 - 10:00 by hydrocarbonasia
PTT Chemical Plc said Thursday it plans to invest Bahtt44 billion during 2006-2010 to boost production capacity, company President Aditheb Bisalbutr said.

"The majority of the investment will be geared towards capacity expansion. We currently produce 1.5 million tons of olefins annually, and expect capacity to increase to 1.86 million in 2008," Aditheb added.

The investment will be financed by cash-flow from operations, he said.

PTT Chemical was formed late last year from the merger between National Petrochemical Plc and Thai Olefins Plc.

Concord Energy plans to invest US$200 million in a condensate splitter on Jurong Island Posted Monday, March 13, 2006 - 10:30 by hydrocarbonasia
Concord Energy Pte Ltd (“Concord”), a Singapore-based oil trader, plans to develop a US$200 million condensate splitter on Jurong Island, with a capacity of 75,000 barrels per day.

Incorporating the latest technology, the condensate splitter will handle a wide range of “sour” condensates to produce high specification refined products that meet or exceed international environmental and quality standards. These products will include Light and Heavy Naphtha, Jet Kero, and Ultra Low Sulphur Diesel.

Using its strong marketing network, Concord will source and secure the condensate feedstock and offtake all products from the facility via long term supply agreements. Synergies have also been identified to supply products to oil majors and some downstream petrochemical players on Jurong Island.

Detailed design and construction of the entire facility on a turnkey basis; as well as its initial operations, under a long term operation and maintenance contract, will be carried out by a major international oil and gas contractor.

A suitable 45 hectare site on Jurong Island has been reserved for the project, with adjacent land available for expansion. The facility is expected to employ about 60 people, the bulk of whom will be process and maintenance technicians.

To date, conceptual design and feasibility studies for the project have been completed, and the commercial operation of the condensate splitter is targeted for end 2007.

The condensate splitter project is a significant milestone for Concord, as it marks a strategic move downstream as part of its plans to invest in or acquire assets both in Singapore and globally that are synergistic to its current oil trading business.

Mr Nasrat Muzayyin, Managing Director of Concord said: “This project is a building block for our overall strategy to become a more integrated oil company in partnership with national and major oil companies.; and to provide added value to our customers and partners.”

The condensate splitter comes at an opportune time due to ever increasing demand in the Asia Pacific region for refined products, and feedstock availability. Furthermore, the excellent infrastructure, facilities and logistics in Singapore, as well as the strong support received from the Singapore government, were instrumental in selecting Jurong Island as the preferred site.

Dr Tan Boon Wan, Chairman of Concord Energy commented: “It made sense to locate this project in Singapore because of its strong position as a major oil refining and trading centre; coupled with the excellent support from government agencies like the Economic Development Board, IE Singapore, and JTC Corporation.”

"We warmly welcome Concord Energy's investment as they join the growing number of companies leveraging on Singapore to help meet Asia's growing demand for energy. Concord will be able to plug into Jurong Island's infrastructure, and benefit from integration synergies with other companies on the island. Singapore continues to work closely with industry players to extend our position as a major oil refining, trading and logistics centre for Asia." said Mr Teo Ming Kian, Chairman of the Singapore Economic Development Board.

China to build oil reserves in southern province of Guangdong, report says Posted Tuesday, March 7, 2006 - 9:48 by hydrocarbonasia
China will spend 5 billion yuan (US$620 million) to build oil reserves in the southern province of Guangdong over the next five years, the government said Saturday.

The reserves are expected to hold 10 million cubic metres (62 million barrels) of crude oil and 2 million cubic metres (12.4 million barrels) of refined oil.

Guangdong, an industrial export hub, uses almost one third of the country's annual oil imports, the report said. Last year, the province consumed 20 million tons (140 million barrels) of oil, amid a severe energy shortage.

The oil reserves are intended to ensure the province's energy security. By 2010, Guangdong's annual refining capacity is forecast to reach 63 million tons, it said without giving comparative figures.

China earlier announced plans to build a petroleum reserve to cushion against interruptions in foreign supplies, similar to one maintained by the United States. The plan calls for stockpiling 100 million barrels of fuel - the equivalent of almost a month's consumption - in four tank farms scattered throughout the country.




Sinopec plans to build oil facility in Hebei Posted Tuesday, March 7, 2006 - 9:47 by hydrocarbonasia
Sinopec, the nation's biggest oil refiner, plans to build two crude oil importing facilities in Tangshan, a city in North China's Hebei Province, involving a total investment of 6 billion yuan (739.8 million U.S. dollars), according to the company.

The project includes two oil berths and various supporting infrastructure facilities including pipelines and oil tanks.

The company has already submitted the proposal to build one berth to the central government, a director surnamed Liu was quoted by Saturday's China Daily as saying.

"We are still not sure when to expect the final approval, but shall be building the two berths one by one," Liu said.

The director said one oil berth and its supporting facilities would cost about 3 billion yuan (369.9 million U.S. dollars), but he added Sinopec has not decided to build the project on its own.

"It is still at a very preliminary phase," he said.

Wood Group awarded BP's Tangguh Gas Processing Facilities project in eastern Indonesia Posted Monday, March 6, 2006 - 10:48 by hydrocarbonasia
PT. Wood Group Indonesia (PT.WGI.), part of John Wood Group PLC ("Wood Group"), the international energy services provider, has been awarded the project and construction management support services contract by BP for the Tangguh Gas Processing Facilities in Papua, in the East of Indonesia. A multi-million dollar, two-year contract, with a one-year extension, the scope includes engineering, construction management and programme management services plus pipeline supervision. PT. WGI and its sister company, J P Kenny, will support BP in supervising the EPC contractor, PT. Saipem Indonesia, who has been awarded the upstream facilities and pipeline contract for Tangguh.

"We are delighted to have been awarded this prestigious contract by BP for such a high profile project," said Said Achmad, President Director of PT. Wood Group Indonesia.

Tangguh is a world class gas field in Indonesia, with proved reserves certified at 14.4 trillion cubic feet. The Tangguh Liquefied Natural Gas (LNG) project will play a crucial role in maintaining Indonesia's global leadership position in the LNG industry as it will significantly replenish the country's marketable LNG reserves. Operated by BP Indonesia, the Tangguh Gas Processing Facilities are located in Berau Bay, Papua. When completed, the plant will be capable of producing seven million tonnes of LNG per annum from two initial processing trains.

Bio-ethanol gasoline accounts for 20 pct of China's overall gasoline consumption Posted Friday, March 3, 2006 - 10:16 by hydrocarbonasia
China has gained a yearly output of bio-ethanol gasoline of 10.2 million tons, accounting for 20 percent of its overall gasoline consumption it was reported, quoting the State Development and Reform Commission.

China has unfolded a trial use of bio-ethanol gasoline, a mixture of ten percent ethanol and ninety percent gasoline, in five provinces and 27 cities.

Up to now, four provinces including northeastern Heilongjiang, Jilin and Liaoning provinces, and central Henan province have extended bio-ethanol gasoline province-wide.

According to its plan for the coming five years, China will build four major manufacturers of bio-ethanol with yield capacity of about one million tons one year, listed third after Brazil and the United States in the world, the paper said.

China first began trial use of fuel ethanol on June 30, 2002, in three cities in Henan province, central China, and some cities in Heilongjiang province, northeast China.

An official with the commission said the trial use proves the fuel ethanol is suitable for use in China with social and environmental benefits.

The use of fuel ethanol is a strategic move taken by the Chinese government to promote sustainable economic and social development and environmental protection.


MLNG Tiga to supply LNG to Toho Gas Posted Friday, March 3, 2006 - 10:14 by hydrocarbonasia
MLNG Tiga to supply LNG to Toho Gas

Malaysia LNG Tiga Sdn Bhd (MLNG Tiga), a subsidiary of PETRONAS, today signed a
Sale and Purchase Agreement (SPA) with Toho Gas Co., Ltd. (Toho Gas) to supply 520,000 metric tons per annum of liquefied natural gas (LNG) for 20 years beginning 2007.

The LNG will be supplied to Toho Gas from the PETRONAS LNG Complex in Bintulu, Sarawak and will be transported from Bintulu to Toho Gas receiving terminal in Chita, Japan on ex-ship basis by LNG tankers owned and operated by MISC Bhd., a subsidiary of PETRONAS.

Toho Gas, the third largest gas company in Japan, has been importing LNG from Malaysia since 1995 under a 20-year supply contract with Malaysia LNG Sdn Bhd
(MLNG), another PETRONAS subsidiary. The contract was signed in 1994 through a consortium of Japanese companies of which Toho Gas is a member. In 2002, the consortium signed a contract with MLNG Tiga for the supply of LNG for a period of 20 years from 2004.

Toho Gas currently receives more than 500,000 metric tons per annum supply of LNG from the Malaysia LNG companies under the existing long-term contracts. With the signing of today’s SPA, the total supply commitment to Toho Gas now stands at more than 1.0 million tons per annum (mtpa). The new SPA is also the first supply deal for Toho Gas as a single buyer.

The PETRONAS LNG Complex in Bintulu currently has a combined production capacity of approximately 23 mtpa. The Complex houses the three-train, 8.1 mtpa MLNG plant, the three-train, 7.8 mtpa MLNG Dua plant and the two-train, 6.8 mtpa MLNG Tiga plant.

At the SPA signing ceremony held in Kuala Lumpur today, MLNG Tiga was represented by its Chairman, Tan Sri Dato Sri Mohd Hassan Marican and Toho Gas by its President Mr. Koutarou Mizuno.




Indonesian LNG buyers may seek damages on supply shortfalls Posted Thursday, March 2, 2006 - 10:31 by hydrocarbonasia
A number of Japanese buyers are refusing to accept cuts to their shipments of liquefied natural gas from Indonesia and may seek damages for breach of contract, an executive of state oil and gas firm PT Pertamina says.

The world's biggest LNG plant in Bontang, East Kalimantan, can only supply 314 cargoes of 125,000 metric cubic meters each instead of the agreed 374 shipments this year as gas supplies dry up, Pertamina's trading and marketing director, Ari Soemarno, said Monday evening.

In earlier negotiations with Pertamina, which represents the state for the purpose of negotiating LNG sales, buyers from Japan, Taiwan and South Korea had agreed to accept 46 fewer cargoes, Ari said.

"There are 14 shipments that remain to be negotiated," he explained. "The Japanese have said they will claim damages in accordance with the contracts," he said, without detailing how much such damages might amount to. "We are trying to talk them out of claiming compensation," he added.

In January, the price of LNG supplied by Bontang was about US$8 per million British thermal units (mmBtu), which makes one shipment worth some $24 million. LNG prices are closely connected to global crude prices.

The Bontang plant is fed by the huge gas fields operated by Total SA, Chevron Corp., and Vico, a unit of Eni SpA and BP Plc. Only Total's local unit, Total E&P Indonesie, which supplies some 70 percent of the natural gas needed by the plant, is capable of increasing production. However, the additional output will not be enough to offset the faster-than-expected decline in output from the Chevron and Vico fields.

Last year, Bontang only managed to deliver 340 cargoes out of the 379 ordered, while in 2003 the plant was 41 shipments short of the 379 cargoes that it was supposed to send. Buyers, however, agreed to shipment cuts in the last two years.

Ari said that a smaller LNG plant in Arun, Nanggroe Aceh Darussalam, would also have to reduce its shipments this year to 62 cargoes from the previously committed 71 cargoes.

Pertamina may be able to secure three cargoes from Oman or Qatar to help meet its contracts, said Ari. "We are still evaluating whether these cargoes will make up for the shortfalls in the Bontang and Arun contracts," he added.

Pertamina will have to shoulder the difference in price between the Indonesian gas and that from Oman or Qatar, Ari admitted.

Indonesia, with gas reserves of 188.34 trillion standard cubic feet, has some of the most extensive reserves in the world. The country, however, is reconsidering its export-friendly policy as demand for gas at home increases from industry and for power generation after the government removed its subsidies from the oil-based fuels used by these sectors amid soaring global crude prices.

Korean firm bags Petron project Posted Thursday, March 2, 2006 - 10:29 by hydrocarbonasia
Petron Corp., the Philippines’ biggest oil refiner, has awarded a multibillion-peso project to South Korean Daemlin Industrial Corp.

In a disclosure to the Philippine Stock Exchange, Petron said on Tuesday that the company’s board of directors has approved Daemlin’s bid to construct the refiner’s PetroFCC project.

The project will cost US$178.4 million.

Petron, which enjoys 40 percent of the domestic oil company, said the project will convert Petron’s cracking technology from TCCY to PetroFCC, which is expected to increase the company’s operating efficiencies at its Bataan refinery, “enabling it to produce more white products and high-value petrochemical propylene which it can export to regional markets.”

The new facility is expected to be commissioned in early 2008.

The project is expected to provide Petron additional revenue stream from its petrochemical business. Petron earlier projected a 5-percent growth of petrochemical demand from 2005 to 2015.

The oil refiner will also spend another P450.4 million for its capital expenditures this year.

The amount will be used to replace the company’s corroded bulk plant receiving line and to acquire and install receiving line meters for accurate product volume monitoring.

Petron will also spend for the purchase of new equipment for service stations.

The board also approved an inter-company advance amounting to P125 million for a service station lot acquisition through its real-estate arm New Ventures Realty Corp.

Petronas awards EPCC contract for Malaysia’s first Group III Base Oil plant Posted Tuesday, February 28, 2006 - 4:45 by hydrocarbonasia
Petronas Penapisan (Melaka) Sdn Bhd, a subsidiary of PETRONAS, has awarded and Engineering, Procurement, Construction and Commissioning (EPCC) contract to build a base oil plant to a consortium of Lurgi AG of Germany, Larsen & Toubro Ltd of India, Kejuruteraan QKS Sdn Bhd, L&T-ECC Construction (M) Sdn Bhd and Lurgi (M) Sdn Bhd.

The EPCC contract was awarded to the consortium yesterday following an open bidding exercise last year.

The plant will be Malaysia’s first, and will be located within the Petronas Refinery Complex in Melaka. Upon completion by the middle of 2008, it will produce 6,500 barrels per day of mostly Group III base oil, a major component for the manufacture of top tier automotive and industrial lubricants. The products will be marketed to the domestic as well as international markets.


China’s natural gas import from Australia to help energy shortage Posted Monday, February 27, 2006 - 3:31 by hydrocarbonasia
China’s first liquefied natural gas (LNG) import project will kick off under trial operation in two months, when a large LNG shipment is set to arrive in Shenzhen from Australia.

Operation of the project at Guangdong Dapeng LNG Terminal is expected to help alleviate the pressure of energy short supply in Guangdong, where over 90 per cent of the energy depends on imports and inflows from other places.

Lu Jian, a senior manager with North West Shelf Australia LNG PTY Ltd in Beijing, said the first 138,000-ton LNG shipment should arrive April 28, and the project is "very likely" to become operational around June 27.

The Australian firm is expected to ship over 3 million tons of LNG annually after the project becomes operational, according to the contract signed in late 2004 between Guangdong Dapeng and North West Shelf Australia.

Related trunk lines run a total of 334 kilometres in length to deliver the environment-friendly fuel to the cities of Shenzhen, Dongguan, Guangzhou and Foshan in the Pearl River Delta, and Hong Kong, as well as five power plants in the Delta region at the initial phase.

Sources say gas consumption in the Chinese mainland is expected to reach up to 250 billion cubic metres annually by 2020. About half of the demand will have to resort to LNG imports.

Lu said her firm has been eying other LNG projects in China including Guangdong's second LNG project in Zhuhai, which kicked off construction late last year.

A handful of LNG projects are either under construction or waiting for the go-ahead in Hainan, Fujian, Zhejiang, Shanghai, Jiangsu, Hebei, Beijing and Liaoning. However, only two sale-and-purchase contracts have been signed so far.

The nation's second LNG sale-and-purchase contract was inked with an Indonesian LNG supplier for the project in East China's Fujian Province.

The massive Guangdong LNG project involves an investment of 7.3 billion yuan (US$900 million), in which the China Nation Offshore Oil Corp (CNOOC) occupies a dominant 33 per cent stake.

North West Shelf Australia LNG PTY Ltd, a leading LNG supplier in Australia, has six equal participants: BHP Billiton Petroleum (North West Shelf) Pty Ltd, BP Developments Australia Pty Ltd, Chevron Australia Pty Ltd, Japan Australia LNG (MIMI) Pty Ltd, Shell Development (Australia) Proprietary Ltd, and Woodside Energy Ltd.

The "take or pay" contract for the Guangdong LNG deal will be effective for 25 years.


Iran to build oil refinery in Indonesia Posted Monday, February 27, 2006 - 3:30 by hydrocarbonasia
Iran's foreign minister, on a visit to Jakarta, has confirmed his country's plan to invest $1.5 billion to build an oil refinery in Indonesia.

Indonesian Foreign Minister Hassan Wirajuda told reporters Thursday that his country's minister of energy would soon be visiting Tehran to follow up on the proposal, it was reported on Friday.

Wirajuda said that a meeting between Iranian Foreign Minister Manouchehr Mottaki and Indonesian President Susilo Bambang Yudhoyono had focused on the refinery project.

The plan was proposed by Iran and first discussed between the two countries' presidents at the United Nations in New York, he said.

Mottaki said his country was ready to invest between $1.5 and $2 billion on the energy project in Indonesia.


Oiltanking builds first deep water oil terminal in Indonesia Posted Wednesday, February 22, 2006 - 5:16 by hydrocarbonasia
The Oiltanking Group announces that it will build a storage terminal for petroleum products and gases at Merak, West Java, Indonesia. The terminal will serve the recently deregulated oil and gas market in Indonesia with highly needed logistical infrastructure.

The terminal is ideally located. With water draft of up to 18m and various berths up to 100,000 DWT, the terminal offers superior shipping economics. The Greater Jakarta markets are easily accessible via the close-by highway.

The 600,000 cbm oil terminal will be equipped to most efficiently handle the full range of petroleum products such as gasoline, diesel, fuel oil as well as jet fuel and LPG. It will serve as a distribution terminal to the Greater Jakarta markets as well as provide break of bulk services for Indonesia at large. The total investment is expected to amount to US$ 120 million.

The first phase of the terminal will be operational by the 2nd half of next year with an initial capacity of 200,000 cbm, part of which has already been reserved by the market. The next phase will add at least a further 150,000 cbm.

Oiltanking, a division of German Marquard & Bahls AG, is the second largest independent tank storage provider for petroleum products, chemicals and gases world-wide. Oiltanking owns and operates 71 terminals in 19 countries in Europe, North and South America, and Asia. The group has an overall capacity of 11.1 million cbm.

Qatar’s Pearl GTL project is on track for 2010 completion Posted Tuesday, February 21, 2006 - 6:24 by hydrocarbonasia
Andy Brown, country chairman and managing director of Pearl GTL, the second gas-to-liquids project being set up in Qatar, has said the 140,000 bpd plant was well on track for a 2010 start-up.

Making a presentation on the project, for which a development and production sharing agreement (DPSA) has already been signed by QP and Shell, he said Pearl GTL had achieved sustained progress in many areas and resources were in place to ensure this is maintained till the completion of the project.

Pearl GTL would be a world-scale plant, Brown said during a session at the 11th Middle East Gas Summit at the InterContinental yesterday.

The fully integrated upstream/downstream project, with a production capacity of 140,000bpd, covers all aspects of the value chain – from the reservoir in the North Field to the marketing of products, he said.

The project also includes the development of an area in North Field to produce some 1.6bn cu ft of gas daily.

Shell, he said, planned to invest in offshore facilities and an offshore plant that produces some 140,000bpd of GTL products, primarily naphtha and transport fuels with similar quantities of normal paraffin and lubricant base oils and associated condensate and LPG.
The construction of Pearl GTL at Ras Laffan will involve two 70,000bpd phases. They will be built back-to-back and completed within about a year of each other.

The project’s DPSA applies to both upstream and downstream facilities. Shell is the 100% investor in the project. Pearl GTL will employ the proprietary Shell Middle Distillates Synthesis (SMDS) technology.

Brown said already progress was made offshore with seismic acquisition of the vast North Field and two appraisal wells have been drilled to confirm gas compositions.
The onshore front-end engineering and design (Feed) phase, requiring almost half a million man-hours, is also complete. The plant covers area equivalent to 450 football fields.

Brown said with its establishment, the project would provide an attractive route for Qatar to monetise its vast gas reserves and create an entirely new and sustainable long-term industry. It will also create a lot of job opportunities for Qataris.

Singapore’s Senoko in talks with Petronas to extend gas deal Posted Tuesday, February 21, 2006 - 5:00 by hydrocarbonasia
With just two years remaining of Singapore’s pioneer 15-year gas deal with Petronas, Senoko Power is still negotiating an extension of piped supply from Malaysia’s national oil company.

“The talks are on-going to extend the deal, which expires in mid-2008,” Senoko president and chief executive Roy Adair said yesterday, who declined to disclose further details.

He would not give details, but all the signs point to electricity producer Senoko and Petronas continuing their “good working relationship”. Malaysian gas plays a “critical part” in Senoko’s fuel supply, Mr. Adair said.

Unlike the water pipeline to Singapore which may need to be relocated, pending the outcome of discussions on Malaysian plans for a new bridge to replace the Causeway, Mr. Adair said that the existing gas pipeline will not be affected.

“Malaysian gas comes via a submarine pipeline which is located away from the Causeway,” he said.

The same applies to the new Plentong –Senoko submarine pipeline, which will bring in Malaysian gas from the middle of this year for Keppel Energy’s new power station.

Petronas pipes 150 million standard cubic feet (mscf) of gas daily to Senoko Power and will supply 115 mscf daily to Keppel Energy under an 18-year deal struck last June.

The Plentong-Senoko pipeline will be able to handle 290 mscf of gas daily almost three times the volume Keppel has contracted to buy. It clearly signals Malaysia is interested in selling more gas to Singapore.

Petronas president and CEO Mohd Hassan Marican indicated as much at the signing of the Keppel deal last June, when he said the new pipeline “will ensure a secure and reliable supply of gas to Singapore, with the flexibility for further expansion”.

Malaysian gas is cheaper than Indonesian gas, which is piped in from two fields for use by Singapore generating companies.

The West Natuna field supplies 325 mscf daily of gas to Singapore, while Asamera in Sumatra supplies about 350 mscf daily.

Singapore is exploring the use of liquefied natural gas to fuel power stations. A consultant’s feasibility study on this is expected to be submitted to government this month.


Qatar: Oryx GTL’s first production by 2Q 2006 Posted Monday, February 20, 2006 - 6:20 by hydrocarbonasia
First product from the $1bn Oryx gas-to-liquid (GTL) project will be available in the second quarter of this year, according to Oryx GTL general manager Chris Turner.

The commissioning of the world’s largest commercial GTL plant at Ras Laffan will be done before March-end, he said at the 11th International Middle East Gas Summit.
Oryx GTL is a 51:49 joint venture between QP and South Africa’s Sasol.

Turner said 97% work at the project site had already been completed. Oryx GTL will have an installed production capacity of 34,000bpd of high performance and low emission GTL diesel, high-grade GTL naphtha and LPG. The commissioning of basic utilities such as water and electricity has been done.

The plant’s products slate carries a predominance of GTL diesel with GTL naphtha (at a ratio of around 3:1) and a small quantity of LPG.

The EPC contract to build the plant was awarded to Technip Coflexip. Turner said there are tremendous economic prospects for GTL fuel in a world concerned about environmental standards and emission norms.

GTL diesel is almost sulphur-free and low in particulates and aromatics.
“We are a reliable producer of superior and environmentally friendly fuels and feedstock,” Turner said.

The technology suppliers to Oryx GTL are Air Products (air separation), Haldor Topsoe (synthesis gas production), Sasol (Fischer-Tropsch technology), ChevronTexaco (product workup) and Technip KTI (hydrogen production). The plant would use a three-stage Sasol Slurry Phase Distillate (SPD) process.

Qatar to supply 77 mil tons of LNG to world market annually from 2011 Posted Monday, February 20, 2006 - 3:59 by hydrocarbonasia
Qatari Energy and Industry Minister Abdullah bin Hamad al-Attiyah said on Sunday that Qatar would supply 77-million-ton liquefied natural gas (LNG) annually to the global market as of 2011, the official Qatar News Agency reported.

Al-Attiyah revealed the target when addressing the 11th International Middle East Gas Summit held in the Qatari capital Doha, according to the report.

Citing a rapid development of Qatar's natural gas industry due to rising energy prices, al-Attiyah said that the country's daily gas supply to the United Arab Emirates and Oman was expected to reach 56 million cubic metres in 2007.

He also said that Qatar would begin to supply LNG to India soon, adding that the country had signed a number of agreements with European and U.S. companies on gas supply.

According to latest figures, Qatar's proven gas reserves stand at 25,780 billion cubic metres, ranking third in the world only after Russia and Iran.

At present, Qatar has an annual production capacity of 37.8 billion cubic metres.


Shutdown of Secco cracker hits naphtha production Posted Monday, February 20, 2006 - 3:57 by hydrocarbonasia
Shanghai Secco Petrochemical partially shut down its 900,000 tonne-per-year (tpy) cracker due to equipment problems and the outage is expected to last at least five days, Chinese industry officials said.

The unplanned shutdown took place about eight months after the launch of the Shanghai-based petrochemical complex, a joint-venture between BP and Sinopec.

The shutdown is potentially bearish for the naphtha market, which has firmed up recently on higher Chinese demand, even though Secco has relied on domestic production rather than on imports for supply of the feedstock.

Sinopec rarely exports naphtha but the outage could force China to ship excess supplies overseas, traders said.

The plant was one of three multi-billion-dollar joint-venture petrochemical projects that came on stream on China's east coast since mid last year.


Sinopec gets approval for cracker upgrade Posted Friday, February 17, 2006 - 4:35 by hydrocarbonasia

China's top oil refiner, Sinopec Corp yesterday said it had got final government approval to upgrade its ethylene production facility in Guangzhou, South China's Guangdong Province. This could involve an investment of up to 8.4 billion yuan (US$1.03 billion).

The Beijing-based refiner plans to increase production at the ethylene cracker to 800,000 tons annually, from the current 200,000 tons. Sinopec will be the only investor in the project.

"We got the go-ahead from the National Development and Reform Commission (the nation's top economic policy planner) a few days ago," a senior Sinopec official, who spoke on the condition of anonymity, said yesterday.

The oil giant will seek partners for technology, infrastructure construction and material supply, the source said. And he did not rule out the possibility of choosing foreign companies.

"It will take at least half a year before Sinopec inks all the contracts and kicks off construction," he said, adding it will be at most three years before the new facilities begin operations.

Sinopec spokesman said yesterday the expanded ethylene project would use raw material naphtha from its own refineries in the province.

At the same time, the State-owned oil refiner is increasing the capacity of its Guangzhou refinery to 200,000 barrels a day from 154,000 barrels a day, supplementing the ethylene facility expansion.

Both domestic and foreign oil majors are striving to increase presence in the petrochemical sector in Guangdong, to meet surging demand in one of the country's most developed and dynamic regional economies.

China National Offshore Oil Corp (CNOOC), the nation's third biggest oil producer, last week announced the start-up of its joint-venture petrochemical complex with Royal Dutch Shell at Huizhou. The CNOOC-Shell venture is able to process 240,000 barrels of crude oil a day and produce 800,000 tons of ethylene annually.

Domestic facilities for ethylene production in China fall far short of ever-increasing demand, fuelled by economic growth of at least 8 per cent annually.

Liu Gu, a senior analyst with Guotai Jun'an Securities (Hong Kong) Co Ltd, said China relied on imports for 62 per cent of its required ethylene products last year.

However Zhu Fang, a director of the China Petroleum and Chemical Industry Association, said risks still exist in the massive construction of ethylene projects in China.


Saudi Arabia to double oil refining capacity in five years Posted Thursday, February 16, 2006 - 10:14 by hydrocarbonasia
Saudi Arabia plans to double its oil refining capacity to six million barrels per day (bpd) within five years, Minister of Petroleum and Mineral Resources Ali Al-Naimi said yesterday.

Saudi Arabia's "main goal is the stability of world oil markets. It is currently working on huge oil projects, including raising crude oil production capacity and doubling the capacity of oil refineries to six million bpd within the next five years," the state SPA news agency quoted him as saying.

Naimi made his remarks during a meeting with visiting Dutch Foreign Minister Bernard Bot.

Riyadh's objective is to "meet the world's increasing demand for oil," Naimi said. Nawaf Obaid, managing director of Saudi National Security Assessment Project, a government consultancy, told an oil conference in September the Kingdom has earmarked $20 billion for the upgrade project.

The program would boost the capacity of eight refineries Riyadh owns inside and outside Saudi Arabia within the next five years, besides building new refineries locally and abroad, he said.

The Saudi and Dutch ministers discussed the importance of ensuring secure oil supplies and cooperation between their two countries in oil matters, including joint investments, SPA said.

Saudi Arabia currently has a refining capacity of around three million bpd through facilities both at home and overseas, of which around two million bpd are produced in the Kingdom.

Pertamina may scrap partnership with Sinopec in refinery project Posted Wednesday, February 15, 2006 - 3:42 by hydrocarbonasia
PT Pertamina, Indonesia's state oil company, may replace China Petroleum & Chemical Corp. as its partner in the construction of the nation's 10th refinery because the companies haven't agreed investment terms for the project.

Pertamina may cancel plans to cooperate with Asia's largest refiner amid "prolonged and complicated negotiation," said Suroso Atmomartoyo, Pertamina's director of processing. The company signed a July 24 preliminary accord with Beijing-based Sinopec, as China Petroleum is known, to build a US$1.5 billion plant in East Java.

"Sinopec receives offers from Africa, Vietnam and Middle East and it has doubled the price," Suroso said in a phone interview on Wednesday. "Sinopec is still having a long thought on building one with us and could not give us any commitment now. We can't wait too long."

The refinery in Tuban in East Java province will have capacity to process as much as 200,000 barrels of oil a day, Pertamina's President Director Widya Purnama said July 24. Indonesia, which imports a third of its fuel requirements, wants production from the plant to help the country cut its import bill.

The refinery is intended to process crude oil pumped from the Cepu field to be operated by Exxon Mobil Corp. and Pertamina and from a field further east operated by Santos Ltd. The government had expected Pertamina and Sinopec to start constructing the plant this year, Energy and Mineral Resources Purnomo Yusgiantoro said yesterday.

Indonesia has failed to proceed with previous plans to build a refinery at Tuban. In 2003, PT Pertamina said it was in talks with Mitsui & Co. and Mitsubishi Corp. to build a $1.6 billion plant. Last year, Pertamina invited Malaysia's Petroliam Nasional Bhd (Petronas) to invest in the project.

Indonesia, the second-smallest member of the Organization of Petroleum Exporting Countries by production, imports almost a third of the oil products it uses each year because its 1.06million barrels a day of refining capacity isn't enough to meet domestic demand. The country last year imported about 12 million barrels of oil products each month at cost of about $1.6 billion.

Indonesia: PGN gets $80 million World Bank loan to lay pipelines Posted Monday, February 13, 2006 - 10:32 by hydrocarbonasia
PT Perusahaan Gas Negara (PGN), Indonesia's gas utility, got an US$80 million loan from the World Bank, and plans to use the proceeds to lay pipelines to customers in the west of Java.

The company will pay an interest of as much as 6 percent on the 20-year loan, W.M.P. Simandjuntak, president of PGN, said in an interview in Jakarta today.

PGN, 59 percent owned by the Indonesian government, is spending $1.1 billion to build pipelines to boost sales and benefit from rising prices. Customers such as state power utility PT Perusahaan Listrik Negara are switching to natural gas from oil to cut costs after oil prices rose.

The pipelines will connect PGN's customers in the western part of Java island to the company's gas terminal in the area.

Indonesia: PGN gets $80 million World Bank loan to lay pipelines Posted Monday, February 13, 2006 - 10:26 by hydrocarbonasia
PT Perusahaan Gas Negara (PGN), Indonesia's gas utility, got an US$80 million loan from the World Bank, and plans to use the proceeds to lay pipelines to customers in the west of Java.

The company will pay an interest of as much as 6 percent on the 20-year loan, W.M.P. Simandjuntak, president of PGN, said in an interview in Jakarta today.

PGN, 59 percent owned by the Indonesian government, is spending $1.1 billion to build pipelines to boost sales and benefit from rising prices. Customers such as state power utility PT Perusahaan Listrik Negara are switching to natural gas from oil to cut costs after oil prices rose.

The pipelines will connect PGN's customers in the western part of Java island to the company's gas terminal in the area.

Indonesia: Government wants more use of gas Posted Thursday, February 9, 2006 - 10:30 by hydrocarbonasia
President Susilo Bambang Yudhoyono has issued a new presidential regulation on energy policy that prioritizes domestic gas consumption over export sales, says a minister.

Energy and Mineral Resources Minister Purnomo Yusgiantoro said Tuesday the regulation was issued after a Cabinet meeting and was aimed at emphasizing the country's new policy of reducing its dependence on oil-based fuels.

"With the issuance of the regulation, the government will have greater scope to allocate more gas supplies to the domestic market," said Purnomo during a press conference after the meeting.

He gave no further details.

As a result of the new policy, he said that Indonesia would no longer prioritize the planned construction of the trans-ASEAN (Association of Southeast Asian Nations) gas pipeline, at least until such time as it had constructed an integrated gas pipeline network serving the domestic market.

Indonesia's gas reserves of 188.34 trillion standard cubic feet are among the most extensive in the world. It has become one of the biggest liquefied natural gas suppliers to major economies such as Japan.

At present, the country sells 44 percent of its annual gas production domestically.

Taiwan’s Chinese Petroleum may invest in India Posted Wednesday, February 8, 2006 - 1:33 by hydrocarbonasia
State-owned oil company Chinese Petroleum Corp may invest in an Indian refiner, as the government bars it from investing in China.

Nagarjuna Oil Corp, a subsidiary of Nagarjuna Fertilizers and Chemicals Ltd, offered to sell a 26 percent stake to Chinese Petroleum, said Quentin Yao, a director at Chinese Petroleum's joint-venture business division.

"We need to target the global market, especially countries with big populations," he said yesterday.

Chinese Petroleum aims to expand overseas as its competition with Formosa Petrochemical Corp and government control limits the room for refiners to raise fuel prices.

Crude oil in New York is 46 percent higher than a year ago, about six times the rise in Chinese Petroleum's domestic gasoline prices.

Chinese Petroleum is assessing the Nagarjuna Oil offer, which may become its first investment in an overseas refiner, Yao said.

Chinese Petroleum may allocate funds for the project in 2008 if approved by the Cabinet and parliament, he said.

The government will encourage local manufacturers to invest in India to reduce the current emphasis on China, according to a report yesterday, citing Minister of Economic Affairs Hwang Ing-san.

India hopes to get 5 mt of contracted LNG from Iran Posted Monday, February 6, 2006 - 3:18 by hydrocarbonasia
India hopes to get 5 mt of contracted LNG from Iran

With the UN referral issue creating uncertainty about India's future relations with Iran, the Petroleum Ministry is fairly assured of the supply of five-million-ton contracted liquefied natural gas (LNG) from Iran.

Putting to rest speculations that the $20-billion LNG deal with Iran may be in trouble, a senior Petroleum Ministry official said the 5 mt per annum LNG deal was legally binding, and that there was no need to address it afresh. The ongoing negotiations with Iran are for the additional 2.5 mt per annum, which India wants to buy, the official.

He clarified that the issue of pricing for the contracted 5 mt LNG was not discussed during the recent high-level meeting between the two countries in Tehran.

While the Ministry feels that the contracted gas deal would come through, there is realization that the negotiations for additional 2.5 mt per annum would be tough, not just because of the way India finally votes on the referral issue but also because the new Government in Iran has some new ideas about gas exports.

As regards the delay in ratification of the contracted 5 mt from the economic commission of Iran, the official said there was a delay, but it was mainly due to internal discussions in that country. Since LNG supply is scheduled from the second-half of 2009-10, there is no cause of immediate concern, he said.

The LNG supply is also linked to ONGC Videsh Ltd getting 10 per cent interest in the development of the onshore Yadavaran oilfield and 100 per cent in the 30,000 barrels per day Juffair field.

Pricing issue: Recently, there were reports that Iran had sought an increase in the price, not only for the additional 2.5 mt per annum but also for the contracted 5 mt. These reports said that after having signed a Sale Purchase Agreement (SPA) last June to export five-mt per annum of LNG at a price linked to $31 per barrel crude, the National Iranian Gas Export Company (NIGEC) had now informed India that the price agreed to was no longer valid.

Three separate SPAs were signed in June 2005 between NIGEC and GAIL (India) Ltd, Indian Oil Corporation and Bharat Petroleum Corporation for export of five-mt of LNG. An agreement for an additional 2.5 mt could not be reached due to the higher price being sought by NIGEC than what was agreed for the 5 mt.

Thailand’s Bangchak Refinery to raise output Posted Friday, February 3, 2006 - 2:16 by hydrocarbonasia
Bangchak Petroleum Plc (BCP), the state-run oil refinery, aims to boost revenue by increasing refinery output, according to President Anusorn Saengnimnuan.

Last year, the company reported total revenues of 85 billion baht, including earning before interest, tax, depreciation and amortisation (EBITDA) of 4.57 billion baht, with a net profit of 2.92 billion.

The company produced an average of 62,000 barrels per day last year, lower than its target of 90,000 barrels due to unexpected higher costs. However, the company aims to increase its output to an average 70,000 barrels this year.

He said the company managed to produce at an optimum level, considering skyrocketing operating costs.

The company aims to raise capital of around 0-0 million via private placement shares to use for a production improvement project.

PTT, its parent company, agreed to inject 0-0 million to acquire the new shares, some - million would be acquired by the institute investors and 0 million would come from syndicate loans.

The project is scheduled to begin after April. He declined to give further details.

Although revenue is expected to climb, BCP is unable to forecast the margin, he said, due to continuing fluctuation of oil prices which have a direct impact on the industry, which is reflected directly to the industry's margin.

BCP earned an average gross refining margin (GRM) of 0.59 per barrel in 2005, sharply rising from 0.84 in 2004, due to a substantial increase in oil demand and limited competition in the market.

Mr Anusorn expected the GRM to increase gradually from last year with the momentum of increasing oil demand.

Mr Anusorn said BCP wanted to keep its leading status in the alternative fuel market, including gasohol, biodiesel and natural gas for vehicles by expanding distribution venues for fuels nationwide.

BCP shares closed yesterday on the Stock Exchange of Thailand at 13.20 baht, down 40 satang, in trade worth 9.3 million baht while its depository receipt shares, BCP-DR1, closed at 13.80, down 10 satang, in trade worth 31.3 million baht.

China's oil consumption, imports decreased in 2005 Posted Friday, February 3, 2006 - 2:15 by hydrocarbonasia
China's oil consumption and dependence on imports decreased last year as a result of the government's energy-saving efforts.

The National Development and Reform Commission said recently that China's dependence on oil imports was 42.9 per cent in 2005, 2.2 percentage points lower than in 2004. It also said China consumed 318 million tons of oil last year, 1.08 million tons less than in 2004.

"The government's effort at building a resource- and energy-saving society has paid off," a commission spokesman said.

Lin Yueqin, a researcher with the Chinese Academy of Social Sciences, attributed the decreased oil consumption and imports to soaring prices. "High oil prices forced users to consider saving measures, causing less imported oil."

Prices soared to a high of more than US$70 a barrel last year.

The State Council Development Research Centre, the highest think tank of the central government, forecast that domestic oil output would reach 184 million tons this year, which means that 44 per cent of China's oil demand will come from importation.

Pan Derun, deputy president of China Oil and Chemical Industry Association, said China would try to double its oil supply to meet its goal of quadrupling its economy by 2020.

Zhang Guobao, vice-minister of the National Development and Reform Commission, said China satisfies 94 per cent of its energy needs.

"Most people are not aware that China is also a big energy exporter," Zhang said.

Besides coal, China is also the top coke exporter in the world, supplying 56 per cent of the world's total demand in 2004.

Nearly 67 per cent of China's energy need is met by coal. The ratio of oil in its energy consumption structure is about 24 per cent.

In addition, statistics indicated that the oil import volume of China, with a population of 1.3 billion, was 117 million tons in 2004. By comparison, that of the United States was 500 million tons, Japan 200 million tons and Europe 500 million tons.


Malaysia’s Shell Refining to maintain its high dividend payout Posted Friday, February 3, 2006 - 11:27 by hydrocarbonasia
Shell Refining Co (Federation of Malaya) Bhd is expected to continue paying good dividends as its profits are at comparatively high levels, said Netresearch-Asia Sdn Bhd.

It said in a recent report that Shell had committed to pay 20 sen as special interim dividend each quarter over the next four to eight quarters from its current cash surplus. This is in addition to its normal interim and final dividends.

“Given its dividend plans, we have forecast a dividend payout of 70 sen for the financial year 2005 and a much higher payout of RM1.30 for the financial year 2006,” the report said.

The payout translates into an attractive dividend yield of 6.9% for the financial year 2005 and 12.9% for the financial year 2006, and the payout in the financial year 2007 is likely to normalise to around 70 sen.

“With its profit likely to remain high, albeit declining slightly amidst continuous strong crude oil prices and tight refining capacity worldwide, we expect the company's high dividend payouts, especially for the financial year 2006, to continue attracting investor interest.”

Netresearch-Asia predicts Shell's refining margins will remain flattish in the next two years.
The research house predicts Shell's refining margins to remain flattish in the next two years.

“We expect future supply of oil and refining capacity to remain tight due to the slow pace of new investments globally.

“We also predict crude oil prices to remain high within the US$50 to US$60 per barrel range in the medium term,” it said.

Shell's pre-tax profit is expected to decline slightly by a three-year compounded annual growth rate (CAGR) of minus 5% (financial year 2004 to 2007) from record earnings posted in the financial year 2004.

Net profit is also expected to fall by a higher 3-year CAGR of minus 12% due to higher effective tax rates.

Netresearch, which has a “buy” call on Shell, expects the company's revenue to grow by 17% in the financial year 2005 due to rising crude oil prices.

It forecasts the company's net profit for the financial year 2005 to reach RM527.2mil while revenue is estimated at RM8.79bil.



Malaysia Titan Chemicals to ride on booming polymer sector Posted Friday, February 3, 2006 - 11:26 by hydrocarbonasia
Malaysia’s largest petrochemical firm, Titan Chemicals Corp Bhd, hopes to improve its financial performance in 2006 as it rides on robust demand for its products and an expected upbeat sentiment on the polymer industry.

Managing director Donald M. Condon Jr said 2006 is set to be a good year for Titan.

"The supply-demand balance is positive and demand remains intact. Our business improvements are on track," he said via e-mail.

As the single-largest investor in Johor, it operates eight plants on two integrated sites in Pasir Gudang and Tanjung Langsat. Titan produces polyethylene (PE) and polypropylene (PP), chemicals used to make plastic products.

With an annual olefins production capacity of more than 1 million tonnes and an annual capacity of polymer of more than 900,000 tonnes, the company is building two more plants locally and has proposed to acquire Indonesia's largest polyolefins producer recently.

Analysts believe the polymer industry is poised to ride upwards again and have noted that the current upturn in the polymers cycle will continue to at least 2007-2008.

"In 2006, we hope to improve upon the financial achievements of 2005," Condon said.

In the third quarter ended September 30 2005, Titan posted a net profit of RM72 million on RM1.2 billion revenue.

Condon had announced earlier that the firm may exceed its turnover forecast of RM3.9 billion but is likely to achieve only about 75 per cent of its targeted net profit of RM604 million for 2005.

As crude oil and natural gas are naturally the source of petrochemical, their prices are related.


The uptrend in polymer industry was disrupted when hurricanes in North America pushed petroleum prices up and supply concerns led to sharp increases in petrochemical and polymer prices.

Though oil prices may affect Titan's earnings, the key determinant of Titan's success is still the balance of supply and demand for polymers, Condon said.


..









'Indonesia fits Titan expansion plan' Posted Friday, February 3, 2006 - 11:24 by hydrocarbonasia
Indonesia is viewed as the perfect piece for Titan Chemicals Corp Bhd's expansion puzzle and the company's proposed acquisition of PT Petrokimia Nusantara Interindo (PT Peni) may just be the start of more to come.

Titan executive chairman James Chao said the Indonesian government is committed not just in developing the economy, but also making it more business friendly and competitive in the petrochemical and high technology sectors.

"We believe the Indonesian government will deliver its promises," he said.

The country's large population base as well as low current plastics consumption makes it one of the most important future markets in Asia.

Its cultural affinity also makes it a logical fit for Titan's business, he added.

The Chao Group, which controls Titan, also controls Westlake Chemical Corp, a US-based chemicals maker.

With a population of 242 million people, Indonesia has a per capita polyolefin consumption of 6kg a year compared with 46kg a year in Malaysia, and 200kg a year in the US and Germany.

Titan has proposed to buy PT Peni by paying US$20 million (RM75 million), cash and another US$58 million (RM217.5 million), by either facilitating negotiation between PT Peni and its lenders to repay a debt of up of US$58 million (RM217.5 million) or by buying shares in Chemical Brothers, PT Peni's shareholder, with PT Peni continuing to service the debts.

The deal is also viewed by analysts as Titan's stepping stone towards other acquisitions in the country, especially Indonesia's second largest petrochemical firm PT Chandra Asri.

Many analysts think that PT Peni, the largest petrochemical producer in Indonesia, may not be able to contribute significantly to Titan's earnings in years to come.

PT Peni is also seen as a company that has been struggling financially, according to sources.

"It is inappropriate for us to comment on the past (of PT Peni). We intend to bring integration to PT Peni to improve its competitive position.”

"That is one of the key reasons it fits our strategy," Titan managing director Donald M. Condon Jr on said.

Chao said the acquisition reminds him of the start of Westlake Chemicals.

"It is a situation where good assets are purchased at attractive prices and then expertise is brought in to add significant value," he said.

The new Indonesian subsidiary will boost Titan's polyolefin capacity by about 50 per cent, superseding the current largest player, a Thailand-based group, in South-East Asia.

Titan has a current polymer capacity of about 945,000 tonnes per annum.

PT Peni is also Titan's first venture overseas and Condon said he will consider roping in local partners once the deal is sealed.

Though both Chao and Condon have expressed confidence in PT Peni's facilities, sceptics still voice concerns over one of PT Peni's biggest flaws - the lack of raw materials.

Condon has told the media that Titan will help in supplying the raw materials, or naphtha, to PT Peni.

"Titan is one of the largest direct buyers of naphtha in Asia, and we have considerable expertise in this area that can be brought to bear on the needs of our Malaysian business and this new acquisition.

"We are in the process of consolidating our procurement with a number of key suppliers who will work with us in longer-term arrangements over the next few years," Condon said.







Singapore’s Temasek closes in on US$700m petrochemical deal Posted Thursday, February 2, 2006 - 6:00 by hydrocarbonasia
Temasek signed a letter of intent a fortnight ago to acquire a majority stake in Indonesia’s biggest petrochemical producer, PT Chandra Asri.

The Chandra Asri move would be Temasek’s maiden foray into Indonesia’s petrochemical sector, and would take the Singapore company’s total investment in the country to almost US$3 billion since 1997.

It is reported that Temasek intends to buy Japanese trading house Marubeni’s 24.59 per cent interest in Chandra Asri, whose other major shareholders are Malaysian investment firm Glazers & Putnam with 25.86 per cent, and PT Inter Petrindo Inti Citra, a company controlled by Bargito Group’s Prajogo Pangestu. BT understands that Glazers and Putnam acquired its Chandra Asri stake from the Indonesia Bank Restructuring Agency,

“Temasek is serious to become a new partner at Chandra Asri replacing Marubeni. But there are other investors which expressed interest as well,” Chandra Asri’s corporate secretary Suhad Miyarso has been quoted as saying. Marubeni and Temasek are tight –lipped about the transaction.

The Chandra Asri plant is Indonesia’s biggest ethylene producer with annual capacity of 520,000 tonnes, as well as 240,000 tonnes of propylene and 300,000 tonnes of polyethylene.

The plant on the western tip of Java, cost US$1.6 billion to build. Marubeni led a consortium that lent the Indonesia—Japanese joint venture US$700 million in the early 1990s.


New Zealand refinery FEED study under way Posted Thursday, January 26, 2006 - 10:19 by hydrocarbonasia
Royal Dutch Shell PLC, UOP LLC of Des Plains, Ill., and construction-design contractor WorleyParsons Services Pty. Ltd. have begun the $25 million (NZ) front-end engineering and design (FEED) study for the expansion of New Zealand's sole refinery—Marsden Point at Northland on the North Island's east coast.

New Zealand Refining Co., which owns and operates the refinery, is embarking on a 3-year, $500 million expansion of the facility. If the FEED proves the project feasible, the Marsden Point facility could increase its intake by 20% from its current 100,000 b/d of crude oil.

Key aspects of the program include modification of an existing distillation unit to increase crude distillation capacity and the construction of new process units to increase total refinery output, particularly gasoline production.

Marsden Point currently produces 35 million tonnes/year of petroleum products. It supplies 90% of New Zealand's diesel demand and 60% of the country's gasoline. The balance of demand is imported from Australia and Singapore

MLNG selling gas to Shikoku Electric Posted Tuesday, January 24, 2006 - 10:16 by hydrocarbonasia
Malaysia LNG Sdn Bhd (MLNG), a subsidiary of Petronas, recently signed a confirmation of intent (COI) with Shikoku Electric Power Co Inc to supply up to 420,000 tonnes per annum of liquefied natural gas (LNG) for 15 years, beginning 2010.

In a statement, the company said the agreement with Shikoku Electric, which was a new addition to MLNG's list of Japanese customers, came with the option to extend for another five years.

MLNG said the deal would increase its customer base among Japanese power and gas utility companies to 13.

The LNG would be supplied to Shikoku Electric from the Petronas LNG complex in Bintulu. The LNG would be transported to the receiving terminal in Sakaide, Japan on ex-ship basis by LNG tankers.

The company said the receiving terminal, currently under construction and due for completion in 2010, was owned by Sakaide LNG Co Inc, a joint venture between Shikoku Electric, Cosmo Oil Co Ltd and Shikoku Gas Co Ltd.

Beginning 2010, Shikoku Electric, the sole supplier of electricity to the island would use LNG as fuel in its power plants.

CNOOC may pay more for Indonesian LNG Posted Monday, January 23, 2006 - 10:07 by hydrocarbonasia
CNOOC, China's third largest oil company, may pay more than earlier agreed for LNG from BP Plc's Tangguh project, said Kardaya Warnika, chairman of the state oil and gas regulator BPMigas.

CNOOC's original agreement to buy gas from the Tangguh plant in Indonesia's Irian Jaya province was based on a maximum oil price of $25 a barrel. Oil traded today at $67 a barrel in New York. CNOOC, which owns a 17 percent in the BP-led project, will use the gas for power generation in Fujian province. Deliveries are scheduled to start in 2008.

Indonesia in 2002 agreed a record-low price to supply LNG to China, matching the tariff under an agreement by Australia's North West Shelf. Since then, European and U.S. benchmark prices have risen more than sevenfold, prompting LNG producers to demand higher prices from Asian buyers under new contracts.

“The contract was negotiated at a time when it was a buyers' market and now it's a sellers' market,'' said Andy Flower, a U.K.-based independent LNG consultant and former BP executive. ``It would be quite unusual for a contract to be re- negotiated before delivery begins, but if it happens it will reflect the tightness of the market.”

China cut the annual volume to be delivered from Tangguh to 1 million metric tons, for 25 years, from 2.6 million metric tons under a provisional agreement in 2002, Indonesia's Energy Minister Purnomo Yusgiantoro said last month.

CNOOC, 70.6 percent controlled by state-run China National Offshore Oil Corp., earlier this year scrapped an accord to buy about A$25 billion ($18 billion) of LNG from Chevron Corp.'s Gorgon project in Western Australia because of a disagreement over the price of the fuel. The venture has since signed sales accords valued at A$18 billion with two Japanese buyers, while CNOOC seeks cheaper gas elsewhere.

CNOOC is building China's first LNG import project in Guangdong province. It will start importing LNG from Australia later this year. CNOOC will take the 1 million tons a year of LNG from Tangguh to a planned terminal in Fujian province starting in 2008.




Thai Gov't asks refiners to cut oil imports Posted Friday, January 20, 2006 - 9:52 by hydrocarbonasia
The Thai government has asked for cooperation from local oil refineries to reduce the country's oil imports by 10 percent this year to help the country's economy, the commerce minister said Tuesday.

Thailand imported 830,000 barrels of oil per day last year totalling 640 billion baht (US$16 billion, euro13 billion).

"The more we reduce the oil imports, the lower our trade and current account deficits will be," Deputy Prime Minister and Commerce Minister Somkid Jatusripitak said.

The 10 percent reduction in oil imports should be possible given the government's promotion of fuel alternatives such as gasohol and biodiesel, Somkid said.

High oil prices have helped curb oil consumption, he added.

Energy Minister Viset Choopiban said the ministry will hold talks with local oil concessionaire Chevron Corp. in a bid to revise its concession conditions. The move will allow the company to sell 40,000 barrels per day in Thailand instead of exporting it.

Local oil refineries have cooperated with the government to lower oil imports since last year. Imports fell from a peak of 1.29 million barrels per day in May to 760,000 barrels per day in November.

PetroChina to build two oil pipelines Posted Thursday, January 19, 2006 - 6:43 by hydrocarbonasia

China’s biggest oil producer, PetroChina, yesterday said it has obtained the government's final approval to build two cross-China pipelines.

These will pump refined oil, such as gasoline and diesel, from northeastern and northwestern areas to Central China.

The two pipelines will start from Lanzhou, in Northwest China's Gansu Province, and Jinzhou, in Northeast China's Liaoning Province, and converge in Zhengzhou, in the central province of Henan.

A further extension will reach Changsha, the capital city of Hunan Province, south of Henan, PetroChina sources yesterday said.

"We received final approval from the State Council a couple of weeks ago to start building the two pipelines," said a senior PetroChina official, who did not want to be identified.

Industry sources said Central China is expected to suffer from severe oil shortages, which could see it short of about 10 million tons of refined oil products in 2010.

Beijing-based PetroChina will be the only builder and will invest about 12 billion yuan (US$1.5 billion) in the construction, Zhu Shihou, an official overseeing energy projects at the Henan Development and Reform Commission, said.

The PetroChina offici

Foster Wheeler awarded contracts Posted Thursday, January 12, 2006 - 10:47 by hydrocarbonasia
Foster Wheeler Ltd. announced on 10 January that its UK subsidiary, Foster Wheeler Energy Limited (FWEL), and its Singapore subsidiary, Foster Wheeler Eastern
Private Limited (FWEPL), have been awarded contracts by Shell Eastern
Petroleum (Pte) Ltd. (SEPL) for two basic design engineering packages
(BDEP) associated with a world-scale ethylene oxide/mono-ethylene
glycol (EO/MEG) plant and a significant refinery modification project
in Singapore. FWEL is executing the BDEP for the new EO/MEG plant on
Jurong Island and FWEPL is executing the BDEP for the modifications at
Shell's Pulau Bukom Refinery, located on an adjacent island.
The terms of the awards were not disclosed and the BDEP phase of
both projects were included in the company's 2005 bookings.
"Shell intends to roll over from the BDEP phase to the
implementation phase with the appointment of Foster Wheeler as the
engineering, procurement and construction management contractor for
the EO/MEG plant and a significant part of the refinery modifications
later in 2006, when the final investment decision will be taken," said
Fang Yea Yee of SEPL, general manager for the project. "We are pleased
to be working with Foster Wheeler and look forward to the successful
outcome we expect. As Foster Wheeler was involved in the execution of
a similar EO/MEG plant in our joint venture complex in China, we
believe that we will be able to benefit from the expertise and lessons
learned for the Singapore project."
"We are able to deliver added value to Shell by combining
different strengths from within our Global Engineering and
Construction (E&C) Group," said Umberto della Sala, chief executive
officer, Foster Wheeler Global E&C Group. "We are one of the leading
engineering, procurement and construction (EPC) contractors in
Singapore with a 30-year track record of delivering safe and
successful projects. With this Singapore track record and our UK
operation's in-depth knowledge of the Chinese EO/MEG plant, we are
uniquely positioned to build on our own demanding high standards and
our excellent working relationship with Shell to deliver this new
EO/MEG plant and the refinery modifications safely and successfully."
The new EO/MEG plant, scheduled for completion in 2009, will use
feedstock from Shell's proposed ethylene cracker located on
neighbouring Bukom Island. Both the cracker and the EO/MEG plant are
part of an overall investment program, which includes integration of
the new facilities with Shell's existing refinery at Bukom to capture
the benefits of oil-chemicals integration.
The Bukom refinery modifications, which will provide feedstock to
the proposed ethylene cracker, are also due for completion in 2009.
The proposed modifications include revamp of existing units, addition
of new units, new and revamped tankage facilities, plus tie-ins and
interconnections.

Petronet to raise LNG import terminal capacity Posted Thursday, January 12, 2006 - 10:46 by hydrocarbonasia
India's Petronet LNG Ltd plans to raise its base capacity for liquefied natural gas (LNG) imports to 17.5 million tonnes at two terminals by 2014, from 2.5 million now, Managing Director P. Dasgupta said.

Petronet, which built India's first LNG import terminal at Dahej in Gujarat, was created by the Indian government to import the cleaner fuel for the energy-hungry economy.

"Of this 17.5 million tonnes, 12.5 million will be at Dahej and other 5 million at Kochi," Dasgupta said on the sidelines of an industry conference in Mumbai.

Petronet is building another LNG terminal, India's third, at Kochi in southern India with a capacity of 2.5 million tonnes. Dasgupta said the new terminal, along with an initial expansion of Dahej to 10 million tonnes, would be complete by 2009-10.

"Storage tanks at Kochi will be equipped to store 5 million tonnes of LNG, however our initial plan is to operate the terminal at initial capacity of 2.5 million," he said.

Petronet, which started operations at Dahej in 2004, imported 2.5 million tonnes of LNG in the year to March 2005 and has tied up about 5 million tonnes of imports this year.

Petronet was actively looking at building another LNG terminal in Mangalore in the southern state of Karnataka for one of its shareholders, Oil and Natural Gas Corp. Ltd.


Singapore’s Shell awards basic design for proposed cracker Posted Friday, January 6, 2006 - 6:56 by hydrocarbonasia
Shell is drawing closer to a final decision on its planned US$1 billion world-scale petrochemical cracker here.

It said yesterday that it had awarded the basic design engineering package for the sole downstream or secondary plant linked to the ethylene cracker.

The deal, which went to Mitsubishi Chemical Engineering Corporation (MEC) and Foster Wheeler Energy Limited (FWEL), follows its award of a similar contract for the cracker last November. This will help it nail down the project’s final design and cost, before it gives the go-ahead.

While the new cracker is slated to be sited next to its 500,000 barrel Bukom refinery, the proposed 750,000 tonne per annum (tpa) mono-ethylene glycol (MEG) downstream plant will be located on Jurong Island. It will be near the ethylene glycol downstream plant linked to Petrochemical Corporation of Singapore (PCS).

MEG - for which there is growing Chinese demand is an intermediate used to make products from polyester fibres to plastic water bottles and engine coolants.

Shell said that FWEL is likely to provide engineering, procurement and construction management for the MEG plant, following final investment decision for the cracker expected later this year.

The oil giant, which is collaborating with Singapore’s Economic Development Board on the new cracker, has never specified which part of 2006 this would be. But sources have indicated that the greenlight could possibly come by mid-year.

Both the new cracker and MEG plant are targeted to begin operations in 2009.

Shell said that the MEG plant will use both its proprietary ethylene oxide technology, as well as Mitsubishi’s glycol technology.

Fang Yea Yee, Shell’s general manager for the project, said: “Shell’s project engineers are pleased to be working with both MEC and FWEL, and look forward to the successful completion of this phase.”

“We are confident that Foster Wheeler’s experience in executing a similar EO/MEG plant for Shell’s Nanhai joint venture complex in China will prove invaluable for our project here in Singapore.”

He was referring to the US$4.3 billion Chinese cracker which Shell completed late last year. This allows the company to focus on its Singapore project.

Shell yesterday said that it had also awarded a separate basic design engineering package to another Foster Wheeler subsidiary, Foster Wheeler Asia Pacific, for modifications to the existing Bukom refinery. The modifications are a key aspect of the overall project, it said, as it will allow for integration of the new cracker with the refinery.

Shell’s latest Bukom cracker will be its third here.

Singapore’s Shell awards basic design Posted Friday, January 6, 2006 - 6:53 by hydrocarbonasia
Shell is drawing closer to a final decision on its planned US$1 billion world-scale petrochemical cracker here.

It said yesterday that it had awarded the basic design engineering package for the sole downstream or secondary plant linked to the ethylene cracker.

The deal, which went to Mitsubishi Chemical Engineering Corporation (MEC) and Foster Wheeler Energy Limited (FWEL), follows its award of a similar contract for the cracker last November. This will help it nail down the project’s final design and cost, before it gives the go-ahead.

While the new cracker is slated to be sited next to its 500,000 barrel Bukom refinery, the proposed 750,000 tonne per annum (tpa) mono-ethylene glycol (MEG) downstream plant will be located on Jurong Island. It will be near the ethylene glycol downstream plant linked to Petrochemical Corporation of Singapore (PCS).

MEG - for which there is growing Chinese demand is an intermediate used to make products from polyester fibres to plastic water bottles and engine coolants.

Shell said that FWEL is likely to provide engineering, procurement and construction management for the MEG plant, following final investment decision for the cracker expected later this year.

The oil giant, which is collaborating with Singapore’s Economic Development Board on the new cracker, has never specified which part of 2006 this would be. But sources have indicated that the greenlight could possibly come by mid-year.

Both the new cracker and MEG plant are targeted to begin operations in 2009.

Shell said that the MEG plant will use both its proprietary ethylene oxide technology, as well as Mitsubishi’s glycol technology.

Fang Yea Yee, Shell’s general manager for the project, said: “Shell’s project engineers are pleased to be working with both MEC and FWEL, and look forward to the successful completion of this phase.”

“We are confident that Foster Wheeler’s experience in executing a similar EO/MEG plant for Shell’s Nanhai joint venture complex in China will prove invaluable for our project here in Singapore.”

He was referring to the US$4.3 billion Chinese cracker which Shell completed late last year. This allows the company to focus on its Singapore project.

Shell yesterday said that it had also awarded a separate basic design engineering package to another Foster Wheeler subsidiary, Foster Wheeler Asia Pacific, for modifications to the existing Bukom refinery. The modifications are a key aspect of the overall project, it said, as it will allow for integration of the new cracker with the refinery.

Shell’s latest Bukom cracker will be its third here.

Foster Wheeler awarded PCS contract for Posted Thursday, January 5, 2006 - 1:50 by hydrocarbonasia
Foster Wheeler Ltd. announced on 4 January that ExxonMobil Asia Pacific Pte. Ltd. has awarded the team of Foster Wheeler and WorleyParsons a project coordination and services contract for a potential new project at ExxonMobil's Singapore Chemical Plant site. This project, known as the Singapore Parallel Train (SPT), would include the possible construction of a new world-scale ethylene cracker, as well as downstream plants for production of ethylene/propylene derivatives.

Foster Wheeler and WorleyParsons would also undertake the front-end engineering design and the potential engineering, procurement and construction of some facilities if the project proceeds to the next stage. The Foster Wheeler contract value was not disclosed.

"Foster Wheeler is proud to be leading the joint venture team providing support to ExxonMobil for this planned major petrochemical facility in Singapore," said Steve Davies, chairman and chief executive officer of Foster Wheeler Energy Limited. "This confirms our position as one of the leading engineering, procurement and construction contractors in Singapore, where we have been safely and successfully completing projects in the chemical, refining and pharmaceutical sectors for more than thirty years. We will bring the full depth of this experience to our joint venture to assist ExxonMobil."

The work for this planned, world-scale project support will be undertaken on a global basis utilizing staff resources located in the UK (Reading), USA (Houston) and Singapore.


GT-Styrenesm agreement reached between SINOPEC and GTC Technology Posted Thursday, January 5, 2006 - 1:48 by hydrocarbonasia
Pinti Wang, President and CEO of GTC Technology today announced that agreement has been reached with Yanshan (a SINOPEC affiliate) for GTC to provide GT-Styrenesm process technology for a grassroots styrene facility at Yanshan, China. The new unit at Yanshan will produce 27,000 tpa styrene by extraction from pyrolysis gasoline. Start-up is slated for 1Q/2007.

Feedstock for styrene production will come from the Yanshan olefins plant, one of the largest in the SINOPEC system. Yanshan has made a series of expansions to its ethylene capacity, and finds it advantageous to now recover more of the by-products. GTC will provide the Technology License; Process Design Package; and Engineering Services for this unit. Design and construction will be provided by SINOPEC Engineering Institute (SEI).

According to SUN, Zheng Ping, Senior Engineer and Plant Manager for the new styrene unit, “GT-Styrene is a simple, lower-cost alternative for styrene manufacture. Production at Yanshan will allow us to take advantage of the strong styrene market with a low-cost, high-quality product.”

Additionally, Mr. Wang announced that GTC and SINOPEC have reached a technology cooperation agreement relating to GT-Styrenesm. The agreement is in place to promote the commercialization, improvement and widespread licensing of GT-Styrenesm in China and throughout the world.

“Our confidence in the technology and its creators is very high,” states Mr. Yuqing Wang, Executive Vice-President of Petrochemicals at SINOPEC Technology. “We are impressed with GTC’s understanding of the market and its focused development of this innovative technology.”

“We are very pleased to work with a progressive organization like Yanshan Petrochemical Company,” says Mr. Joseph Gentry, Director of Technology in GTC’s Houston, TX Headquarters. “Their grasp of the marketplace and application of technology makes them a leader in the field of petrochemical production.” This will be the first application of GT-Styrenesm process technology in China.



Chinese petrochemical complex approved Posted Thursday, January 5, 2006 - 10:42 by hydrocarbonasia
China’s biggest oil refiner Sinopec got the government's go-ahead to build a US$3.1-billion petrochemical complex in North China's port city of Tianjin.

"We received the approval from the State Council on December 21," an official responsible for Sinopec's corporate planning said yesterday, declining to be named.

The Tianjin project, to be completed by 2008, includes a 1 million ton per year ethylene cracker, a refinery able to process 12.5 million tons of crude oil a year, and other facilities to produce petrochemical products such as polyethylene and polypropylene.

Total investment of the project is expected to exceed 25 billion yuan (US$3.1 billion), which will be wholly owned by Sinopec, said an unnamed official from the Tianjin Municipal Development and Reform Commission.

Sinopec officials yesterday refused to further comment on the investment. Zhang Dongsheng, a director in charge of petrochemical projects at the local industrial investment planner, said construction of the new complex is projected to start in the first half of this year, but "it is difficult to predict which month."

Industry analysts say the big capacity of Tianjin port will facilitate the new petrochemical complex to import crude oil and ship its products to markets.

The Tianjin port handled 240 million tons of commodities last year, among the world's top ten ports.

The huge market potential in China's petrochemical sector is attracting both domestic and foreign oil majors including BP, Royal Dutch Shell and Saudi Aramco, to scale up investment in the country.

China in 2004 consumed 16 million tons of ethylene which is widely used in the production of everyday articles from liquid soaps to car components. Domestic production of the petrochemical product stood at 6.27 million tons for the same period, meaning China relies on imports for more than half of its ethylene consumption.

"The current ethylene production facilities under construction are far from enough to meet demand," said Hou Jixiong, a senior oil and gas analyst with Beijing-based Guotai Jun'an Securities Co Ltd.

To cash in on the market, Sinopec's domestic rival PetroChina is also talking with Tianjing city to build a similar-sized petrochemical complex including refining and ethylene production facilities near Sinopec's plant, said Zhang from the Tianjin Development and Reform Commission.

"The talks with PetroChina are still at the very preliminary stage and we can not foresee a timetable to start building another petrochemical complex here," he said.

In the southeastern areas of the country, more refining and petrochemical plants are under way.

The intense investments into the petrochemical sector, however, have also triggered concerns among some market observers that risks still exist for these large-scale capital injections. "A good government censorship and regulation is necessary in the new petrochemical investment, especially when the crude oil prices are high while the domestic prices for refined oil are still capped by the government," said He Jun, a senior analyst with Beijing Anbound Consulting Co.


Singapore’s homegrown oil trader builds one of the world’s largest independent oil terminals Posted Wednesday, January 4, 2006 - 3:23 by hydrocarbonasia
Singapore’s homegrown oil trading company Hin Leong Trading (Pte.) Ltd. broke ground today for its 2.3 million cubic metre (cbm) oil storage terminal on Jurong Island. The approximately S$750 million (approx. US$441 mil.) facility, known as Universal Terminal (S) Pte Ltd, is the Company’s first onshore tankage in Singapore.

Besides being one of the largest independent oil terminals in the world, Universal Terminal will also be the first independent oil terminal in the region with two very large crude carrier (VLCC) berths.

In Asia, the demand for more terminalling capacity comes from increased trade. Over time, traders will increasingly value the availability of tankage and will also find larger cargo unloading spots attractive as they can use the most efficient ships and avoid lightering as well as reduce demurrage costs.

Mr Lim Chee Meng, Executive Director of Hin Leong Trading, said: “Built from an oil trading perspective, this new terminal signals a paradigm shift in the business. Instead of merely providing storage capacity to our customers, we are building a large scale, high volume facility that creates a supply, storage and distribution hub which offers oil traders a comprehensive range of services that meets all of their needs in a time- and cost-efficient manner. Universal Terminal will manage its facilities as an independent operator serving the needs of third-party customers.”

The design of Universal Terminal was developed about two years ago and it incorporates considerations such as operational efficiency and market requirements including changes in trading activities and customer demand.

The new terminal will house 73 storage tanks with sizes ranging from 2,000 cbm to 100,000 cbm for crude and petroleum products. It will also comprise 12 berths, including two VLCC berths built side by side, that can accommodate vessels as large as 320,000 dwt. This unique feature allows for active bulk-breaking of larger cargoes into smaller parcels.

“Expanding our expertise to the business of oil terminalling enhances our total business capability. Universal Terminal is a strategic fit with our Group’s capabilities in oil trading and logistics and will translate into greater benefits for our customers. This project will significantly strengthen our market position,” added Mr Lim.

The construction of the terminal and jetties has been awarded to Rotary Engineering Ltd and Penta-Ocean/McConnell Dowell Joint Venture respectively. The construction of Universal Terminal will start in January 2006 and the facility will be fully operational by the end of 2007.




Qatar Petroleum in deal to build $2.6bn petrochemical plant Posted Tuesday, January 3, 2006 - 4:18 by hydrocarbonasia
A Memorandum of Understanding (MoU) has been signed between Qatar Petroleum (QP) and South Korea’s Honam Petrochemical Corporation for setting up a $2.6bn joint venture petrochemical complex in Mesaieed Industrial City.

The MoU was signed by Second Deputy Prime Minister and Minister for Energy and Industry HE Abdullah bin Hamad al-Attiyah, who is also the QP chairman, and Lee Young-il, chief executive and president of Honam Petrochemical Corporation, at a ceremony at Sheraton Doha Hotel on Thursday.

The plant will be commissioned in the year 2009.

Speaking at the ceremony, HE al-Attiyah said the new company “will reflect QP policy to comply with the guidance of HH the Emir Sheikh Hamad bin Khalifa al-Thani to establish intermediate industries to enhance and promote other medium and small industries in private sector.”

The energy minister said the MoU would organise “in broad terms the relationship between the parties for a specified period of time as well as the general features of the fully integrated joint venture agreement the parties intend to sign in the near future.”

QP’s subsidiary, Qatar Holding Inter-mediate Industries Company (Waseeta), will acquire a 70% stake in the plant with Honam owning the remaining share.

The plant’s output capacity of propylene and polypropylene will total 900,000 tonnes per year. Production of styrene and polystyrene will be 600,000 tonnes per year and aromatics output will be 150,000 tonnes, with another 50,000 tonnes of by-products.

Honam chief Lee Young-il said the plant would be the first joint venture being set up by his company in the region. He called Qatar an important partner to South Korea and said his country was looking forward to more active participation in Qatar’s economy in future.

Honam owns three petrochemical complexes with an aggregate annual production capacity of 7mn tones of various products, representing 22% of the overall production in the petrochemical sector in South Korea.

The products made in Qatar, he said, would constitute the foundation base for new intermediate industries that would eventually open the door for the creation and evolution of medium and small industries for the benefit and furtherance of the private sector in Qatar.

Qatar, holder of the world’s third-largest gas reserves, is investing billions of dollars to build petrochemical plants to take advantage of surging demand for plastics, solvents and ethylene in China and India.


PetroChina gets nod for petrochemical plant Posted Thursday, December 29, 2005 - 9:37 by hydrocarbonasia
Oil giant PetroChina has won Beijing’s approval to build a US$2.5 billion petrochemical complex in the landlocked southwest, and is considering a refinery nearby, a company source said today.

The 800,000 tonne-per-year (tpy) ethylene plant, to be completed by 2010, in Chengdu, capital city of Sichuan province, will be the second-largest such project in China’s remote western regions, the country’s economic backwaters.

PetroChina will hold a 51 per cent stake in the project, while a local firm, Chengdu Petrochemical Co Ltd, will take the other 49 per cent.

It had submitted the plan for approval in May.

PetroChina, Asia’s biggest oil firm, is also considering building a new refinery at the same site to supply feedstock to the petrochemical plant, aiming to process Kazakh oil set to flow into northwest China via a newly-opened Kazakh-China pipeline.

“A firm plan of a new refinery depends on how much crude we get from Kazakhstan,” said the company official from Beijing.

He didn’t give the size of the refinery, but experts say it would need to have a capacity of about 200,000 barrel per day (bpd) in order to feed an 800,000 tpy cracker.

There is no crude pipeline connecting the Kazakh-China line with the Chengdu plant, which means PetroChina would need to ship the crude by rail or lay a new pipeline.

Qatar: Chiyoda, Technip win $4bn LNG deal Posted Tuesday, December 27, 2005 - 10:28 by hydrocarbonasia
Chiyoda Corporation and Technip France Joint Venture (CTJV) have won the $4bn Engineering Procurement and Construction (EPC) contract for the large-scale onshore Qatargas 3 and 4 projects, which have export destinations mainly to the United States and North America.

Qatargas will have the responsibility for the upstream and midstream operations of these two giant projects at Ras Laffan Industrial City, each having a capacity of 7.8mn tonnes a year and shipments are expected to start from 2009-10.

The contracts have been awarded by Qatar Petroleum, ConocoPhillips and Royal Dutch Shell - the joint venture partners in the projects.

Qatargas 3, an integrated project jointly owned by Qatar Petroleum (68.5% stake), ConocoPhillips (30%) and Mitsui (1.5%), comprises upstream gas production facilities with a capacity to produce 1.4bn cu ft of natural gas a day including an average 70,000 barrels of LPG per day and condensate combined from Qatar’s North Field over the 25-year life of the project.

Indonesia: Oiltanking to build storage facility in Cilegon Posted Thursday, December 22, 2005 - 10:06 by hydrocarbonasia
Indonesia: Oiltanking to build storage facility in Cilegon


The world's second largest petroleum-products storage company Oiltanking will start construction of a 300,000-metric-ton fuel storage facility in Cilegon, Banten, in January next year, a government official says.

Oiltanking Singapore Ltd., a unit of the giant storage operator, will start operating the facility in 2007, the Ministry of Energy and Mineral Resources' director of oil and gas Erie Soedarmo said on Tuesday.

"The groundbreaking will take place in January and the facility will be completed within (between) one and one-and-a-half years," Erie said on the sidelines of a seminar on the prospects for the downstream sector after Pertamina's monopoly ended.

The storage facility, estimated to cost between US$150 million and $200 million, will be the first to be constructed in the country since the government opened up the sector in November, as stipulated by the oil and gas Law No. 22/2001.

Another multi-national company that is also interested in setting up similar facilities of relatively similar size is the Dutch Royal Vopak NV, said Erie.

"Vopak is currently looking for a local partner and a location to build the facility," said Erie.

He further said that storage operators preferred areas near major ports, such as the Tanjung Priok harbour in Jakarta. "Unfortunately the land prices are high and the (available) areas small," he added.

According to the company's website, Oiltanking owns and operates 71 terminals with a total storage capacity exceeding 11.1 million-cubic-metres in 19 countries.

Vopak operates 79 terminals in 29 countries. In Asia, its businesses are spread out in Singapore, Malaysia, Thailand, Korea, China, Japan and Pakistan, with services including tank storage for oil products, gases and chemicals.

According to government data, up to November, 17 companies have requested licenses to build and operate crude and fuel storage facilities. The government has awarded preliminary licenses to ten of them and a business license to one firm.

Aside from storage, the new oil and gas law also liberalizes other parts of the sector, namely refining, transportation, and retailing.

Titan buying top Indonesian polyethylene producer Posted Thursday, December 22, 2005 - 9:36 by hydrocarbonasia
Titan Chemical Corp Bhd is expected to sign an agreement in Jakarta today for the acquisition of the entire equity interest in Indonesia's largest polyethylene producer, PT Petrokimia Nusantara Interindo, sources said yesterday.

The acquisition is estimated to cost Titan between US$23mil and US$50mil (RM190mil). It was announced earlier that Titan's shares were suspended from trading at 2.30pm yesterday pending an announcement.

The acquisition would propel Titan into the ranks of the largest producers of polyethylene in South-East Asia, the sources said.

The plant in Indonesia will give Titan an additional 450,000 tonnes of capacity for the production of polyethylene, a plastic film used to wrap products.

The acquisition will quickly bring the group closer to its stated corporate vision of becoming the leading olefins and polyolefins in South-East Asia within the next five years.

Titan managing director Donald M. Condon said recently that the management was poised “to move Titan into its next phase of growth”.

“We operate in a highly cyclical industry where fortunes are determined by the interplay of supply and demand.

“The supply/demand dynamics remain positive and industry analysts are of the view that the current upcycle will extend into 2007 and beyond,” he said.

He also said the company's share price did not quite reflect the underlying value of Titan and the top priority in the coming year would be to try to correct this.

Titan plans to better on three fronts: improve the way it procures feedstock, add greater depth to its business and diversify into related areas.

“We will see more investments next year and this will be both from the implementation of plans announced earlier and growth plans we are currently considering,” Condon said.

The group, which has plants in Johor, is said to be the largest integrated producer of olefins and polyolefins in Malaysia, and the second largest polyolefins maker in South-East Asia.

The group reported revenue of RM3.35bil and a net profit of RM342.5mil for the nine months ended June 30, 2005.

Titan was started in Malaysia as a joint venture between the Chao group and Permodalan Nasional Bhd. It was listed on Bursa Malaysia main board in June.



CNOOC building key new refinery Posted Friday, December 16, 2005 - 6:52 by hydrocarbonasia
China National Offshore Oil Corp (CNOOC), the country’s top offshore oil producer, yesterday laid the cornerstone of a 19.3 billion yuan (US$2.35 billion) refinery in Guandong province.

The project is key to CNOOC’s plans to move into the downstream sector to become an integrated oil company. The refinery, located adjacent to a petrochemical complex by CNOOC and Royal Dutch Shell in Huizhou city, will be able to process 12 million tonnes annually or 240,000 barrels per day of mostly sour crude from CNOOC’s offshore fields.

China cuts LNG purchases from BP's Tangguh project Posted Friday, December 16, 2005 - 10:19 by hydrocarbonasia



China has cut the amount of gas it will buy from BP Plc's Tangguh LNG project in Indonesia.

China had pledged to buy 2.6 million metric tons of liquefied natural gas a year to supply the country's second import terminal in Fujian province. That's been cut to 1 million tons a year, Indonesia's Energy Minister Purnomo Yusgiantoro told reporters on Thursday in Jakarta.

"What will happen to the remaining 1.6 million tons?" Purnomo said. "We are in talks with them on the possibility of diverting the gas."

BP, Europe's biggest oil company, owns a 37 percent stake in Tangguh, situated in Papua in eastern Indonesia and set to start production in 2008. Chinese oil company, CNOOC Ltd., is the second-largest shareholder with 17 percent of the project. Tangguh, Indonesia's third LNG project will produce 7.6 million tons of gas a year. Its other customers include Korean steelmaker Posco and Sempra Energy Corp. in the U.S.



Woodside and Tokyo Gas sign deal for Pluto LNG Posted Thursday, December 15, 2005 - 11:42 by hydrocarbonasia



Woodside Energy Ltd. and Tokyo Gas Co., Ltd. have signed a heads of agreement for the supply of between 1.5 and 1.75 million tons of LNG a year on an ex-ship basis from Woodside's 100%-owned Pluto gas field in Western Australia.

The heads of agreement provides for the supply of LNG for 15 years with an option to extend for a further 5 years, with deliveries starting from the end of 2010. The final LNG sales and purchase agreement is expected to be negotiated by the end of 2006 and will be conditional on a final investment decision by Woodside. The heads of agreement also provides for Tokyo Gas to purchase a 5% equity interest in the Pluto project.

Woodside's final investment decision is due by mid-2007.

The President of Tokyo Gas, Norio Ichino, and Woodside's Chief Executive Officer, Don Voelte, signed the agreement in Sydney on 13 December.

Mr. Voelte said Woodside was delighted to welcome Tokyo Gas as a foundation customer for Pluto.

"Woodside, as operator of Australia's largest resource project, the North West Shelf Venture, has had a long relationship with Tokyo Gas in the supply of LNG and we look forward to extending that relationship with Pluto," he said.

"We are delighted to have signed this agreement with one of the world's most established LNG customers."

Tokyo Gas distributes city gas to more than 9.6 million customers in Tokyo. It is the largest gas utility in Japan, accounting for more than 40% of total Japanese gas sales. The company bought about nine million tons of LNG in 2004-051 from suppliers around the world.

The Pluto LNG development is based on the Pluto discovery, 190km north-west of Karratha in permit WA-350-P. The field was discovered in April this year.

It is anticipated that the next heads of agreement will be finalized by the end of first quarter 2006.





Osaka Gas to buy LNG from Chevron's Gorgon-Australia Posted Thursday, December 15, 2005 - 11:37 by hydrocarbonasia
Japanese gas distributor Osaka Gas Co. has agreed with Chevron Corp. to buy 1.5 million tonnes of liquefied natural gas (LNG) annually from the Gorgon field, the Australian government said on Thursday.

Osaka Gas would start buying the LNG -- worth about A$10 billion ($7.5 billion) -- from Gorgon, off the coast of Western Australia state, in 2011, Trade Minister Mark Vaile said in a statement.

The contract runs for a period of 25 years.

"Osaka Gas and Chevron Australia are also discussing purchase of an equity stake in the Gorgon project by Osaka Gas," Vaile said.

Sources said on Monday that Chevron was also negotiating with companies in South Korea, among others, for what would be its last 800,000 tonnes of sales from Gorgon.

Chevron had secured buyers for nearly all its share of the Gorgon project, helping clear the way for the U.S. energy major to press on with the investment despite losing a Chinese backer.

Chevron has a 50 percent-share in Gorgon, which will have a total liquefaction capacity of 10 million tonnes a year. Shell and Exxon Mobil Corp. hold 25 percent each.

The Gorgon partnership is expected to make a final investment decision on the project, which claims certified gas reserves of 12.9 trillion cubic feet, by the middle of next year.

Chevron has already signed sales deals with Chubu Electric Power Co. or 1.5 million tonnes a year and with Tokyo Gas Co. for 1.2 million tonnes a year.

Both Chubu Electric and Tokyo Gas are also in talks to buy an equity stake in Gorgon from Chevron.

Shell has committed its share of Gorgon LNG to a new terminal to be built in northern Mexico. Exxon Mobil has not yet said how or where it intends to sell its supplies.

Japan and South Korea, the two biggest LNG importers in the world, are set to renew a spate of LNG purchase deals over the next few years as legacy contracts with big exporters such as Indonesia and Australia expire.

Foster Wheeler awarded EPC contract for Posted Tuesday, December 13, 2005 - 11:12 by hydrocarbonasia
Foster Wheeler awarded EPC contract for
PETRONAS' LNG debottlenecking project in Malaysia

Foster Wheeler Ltd. announced on 6 December that its subsidiary, Foster
Wheeler E&C Malaysia Sdn Bhd, and its partner, OGP Technical Services
Sdn Bhd, have been awarded a contract by Malaysia LNG Dua Sdn Bhd
(MLNG Dua), a PETRONAS subsidiary, to execute the front-end
engineering design (FEED) and engineering, procurement and
construction (EPC) phases of a project to debottleneck production
capacity at the existing MLNG Dua LNG facility at Bintulu, East
Malaysia. The Foster Wheeler contract value was not disclosed and the
project was included in the company's third-quarter 2005 bookings.

The MLNG Dua plant facility is part of Malaysia's PETRONAS LNG
Complex located in Bintulu, Sarawak. The LNG Complex comprises MLNG
Satu (completed in 1983), MLNG Dua (1995) and MLNG Tiga (2003) plants.
The MLNG Satu and MLNG Dua plant facilities, each comprising three
independent process trains, are capable of delivering 7.6 and 7.8
million metric tons per annum (mtpa) of LNG, respectively. The
expansion of the complex in 2003 with MLNG Tiga added two more trains,
bringing the total capacity to about 23 million mtpa. The three plants
are being operated as one integrated site, which is currently the
world's largest LNG producer at a single location.

"We were selected by MLNG Dua to lead and implement this strategic
project due to our technical expertise in LNG and our in-depth
knowledge, developed over the last ten years, of both the MLNG Tiga
and Dua LNG facilities," said Roberto Penno, senior vice president,
global sales & marketing, and director, Foster Wheeler E&C Malaysia
Sdn Bhd. "We were involved in both developments, which were
three-train expansions at the existing LNG facility. This award
further enhances our position in the LNG liquefaction business, a
strategic market for Foster Wheeler, where we have proven specialist
technical and project execution expertise."

Foster Wheeler will lead the debottlenecking of the MLNG Dua
facility, which will increase LNG production capacity by 1.3 million
mtpa from 7.8 million mtpa. Work on each train will be timed to
coincide with planned shutdown periods. The project is scheduled for
overall completion in October 2009.

New Aromatics complex in Japan Posted Tuesday, December 13, 2005 - 11:10 by hydrocarbonasia
Japan Energy Corporation will construct a new 580,000 metric ton per year (tpy) aromatics complex at the Kashima Oil Refinery based on Axens’ ParamaX™ technologies. The new complex is set to start-up in early 2008.

The ParamaX complex will be fed by 20,000 barrels per standard day (bpsd) of heavy naphtha from imported condensate and produce approximately 410,000 tpy of paraxylene and 170,000 tpy of benzene. The estimated investment cost for the total project, including a 60,000 bpsd condensate splitter is 70 billion Yen.

The ParamaX technologies to be implemented in Kashima are:
• Naphtha hydrotreating – for feedstock purification
• Aromizing™ – continuous catalyst regenerative (CCR) reforming
for aromatics production from naphtha
• Morphylane® – aromatics extractive distillation
• Eluxyl® – High-purity paraxylene separation from mixed C8
aromatics
• XyMax – C8 aromatics isomerization with ethylbenzene
dealkylation
• TransPlus – toluene and C9+ aromatics transalkylation to
produce C8 aromatics.

Paraxylene is the principal feedstock in the polyester production chain. Polyester is used in the fibre and resin industries. Benzene is the starting block of a large set of polymeric materials such as nylon fibres, polystyrene for plastic packaging, polycarbonates for impact resistant glass substitutes and compact disks. The demand growth rates for paraxylene and benzene are expected to be sustained by the growth in Asian economics.

Osaka Gas to buy LNG from Chevron's Gorgon-Australia Posted Tuesday, December 13, 2005 - 11:08 by hydrocarbonasia
Japanese gas distributor Osaka Gas Co. has agreed with Chevron Corp. to buy 1.5 million tonnes of liquefied natural gas (LNG) annually from the Gorgon field, the Australian government said on Thursday.

Osaka Gas would start buying the LNG -- worth about A$10 billion ($7.5 billion) -- from Gorgon, off the coast of Western Australia state, in 2011, Trade Minister Mark Vaile said in a statement. The contract runs for a period of 25 years.

"Osaka Gas and Chevron Australia are also discussing purchase of an equity stake in the Gorgon project by Osaka Gas," Vaile said.

Sources said on Monday that Chevron was also negotiating with companies in South Korea, among others, for what would be its last 800,000 tonnes of sales from Gorgon.

Chevron had secured buyers for nearly all its share of the Gorgon project, helping clear the way for the U.S. energy major to press on with the investment despite losing a Chinese backer.

Chevron has a 50 percent-share in Gorgon, which will have a total liquefaction capacity of 10 million tonnes a year. Shell and Exxon Mobil Corp. hold 25 percent each.

The Gorgon partnership is expected to make a final investment decision on the project, which claims certified gas reserves of 12.9 trillion cubic feet, by the middle of next year.

Chevron has already signed sales deals with Chubu Electric Power Co., for 1.5 million tonnes a year and with Tokyo Gas Co., for 1.2 million tonnes a year.

Both Chubu Electric and Tokyo Gas are also in talks to buy an equity stake in Gorgon from Chevron.

Shell has committed its share of Gorgon LNG to a new terminal to be built in northern Mexico. Exxon Mobil has not yet said how or where it intends to sell its supplies.

Japan and South Korea, the two biggest LNG importers in the world, are set to renew a spate of LNG purchase deals over the next few years as legacy contracts with big exporters such as Indonesia and Australia expire.

China and Kuwait to launch refinery and petrochemical project Posted Tuesday, December 13, 2005 - 10:59 by hydrocarbonasia
Kuwait and China have taken a step towards jointly building a refinery and an integrated petrochemical complex in China's Guangdong province, the Kuwaiti energy ministry revealed.

The project is between Chinese refiner PetroChina and Kuwait Petroleum Corp's subsidiaries Petrochemical Industries Company (PIC) and Kuwait Petroleum International. The total investment could amount to $5 billion the ministry said in a statement.

Kuwait's energy minister Shaikh Ahmad Al Fahed Al Sabah was quoted as saying both parties had signed a memorandum of understanding (MoU) on the project.

A feasibility study has been started, and the refinery is expected to have a capacity of up to 400,000 bpd, he added.

A start-up date was not mentioned, but reports said the project could come on stream in 2010.

A PetroChina spokesman confirmed that discussions were underway, but he declined to give further details.

The integrated project is part of Kuwait's plans to seek more markets and increase its crude oil production, according to Sheik Ahmad.


Petron plans $5bn second refinery in Philippines Posted Tuesday, December 13, 2005 - 10:57 by hydrocarbonasia
Petron Corp, the largest Philippine oil company, may spend $5bn to build a second refinery in the Southeast Asian nation, a lawmaker said in Manila on 7 December. Saudi Aramco, which owns 40% of Petron, has instructed its Philippine unit to study the possible expansion, House of Representatives Speaker Jose de Venecia said in a statement.

The Philippine government owns 40% of Petron through Philippine National Oil Co, while the Saudi Arabian company is a state venture.

Saudi Aramco President Abdalla Jum’ah wants the facility built in the southern island of Mindanao, according to de Venecia who said he met Jum’ah on an official tour of Saudi Arabia. Another refinery would make sense “if there is a strong export market demand’’ especially in Asia, Eduardo Manalac, Philippine National Oil president, said in the statement.

Global refining capacity needs to increase by 42% to 118mn bpd by 2030 to meet demand, the International Energy Agency, an adviser to 26 nations, said on November 7. Capacity must increase 1.8% a year through 2010 to reach 93mn barrels a day, it said.
The refinery would sell fuel to the region and to the US, de Venecia said.

Albemarle announces breakthrough in FCC catalyst technology Posted Tuesday, December 13, 2005 - 10:55 by hydrocarbonasia
Albemarle Corporation (NYSE: ALB) announced on 9 December the development and commercialization of a breakthrough in FCC catalyst technology with its new proprietary ADZT-100 zeolite. Coinciding with this announcement, Albemarle announced the launch of its new ACTION family of FCC catalysts, which is based upon the innovative ADZT-100 zeolite.

“The refining industry has been waiting for more than 20 years for the next step change improvement in FCC catalyst zeolite technology,” said Harm Scheepstra, Albemarle’s FCC global business director, “so this breakthrough represents a significant event for the industry. The proprietary ADZT-100 zeolite used in our new ACTION family of FCC catalysts will provide refiners a significant improvement in the performance from their FCC units. This new technology can be used by refiners to maximize the total volume of transportation fuels and other feedstocks they produce, maximize the octane of their gasoline, or some combination of the two. Regardless of how a refiner chooses to utilize this technology, the additional value it will provide will be substantial. Several of our customers are already reaping the rewards from this new technology.”

FCC catalysts are used in virtually all petroleum refineries and are essential for the production of transportation fuels.

Kuwait, China to build refinery, petrochemical plant Posted Tuesday, December 6, 2005 - 10:45 by hydrocarbonasia
Kuwait and China signed a memorandum of understanding (MoU) to jointly build a refinery and petrochemical plant in China's Kuan Shu province.

Although financing and technical details of the project have not been negotiated yet, Kuwait's energy minister Sheikh Ahmed Fahed al- Sabah said in a statement to KUNA that the processing capacity of the refinery would most likely range between 200,000 and 400,000 barrels per day (bpd). He did not offer any details about the petrochemical project.

The MOU signing came as a result of a visit to China in 2004 by Kuwaiti Prime Minister Sheikh Sabah al-Ahmed al-Sabah, he said.

Building the two plants would come in line with Kuwait's strategy to enter more oil markets that could use his country's crude oil, which is mainly sour, the minister added.

The project would also be in tandem with Kuwait's strategy to increase capacity oil production from around 2.7-million bpd to between 3.4 and 4-million bpd over the next 10 years.

China's current imports of Kuwaiti oil were less than desired, Sheikh Ahmed said noting however that they would be expected to increase after Kuwait Petroleum Corporation opened an office in China that would facilitate more supply contracts as well as potential investments projects in oil supply, oil refinement, the petrochemical industry, and infrastructure.

China's energy use has been increasing by around 10 per cent each year and it consumed about 300-million tons of crude oil in 2004, half of which came from the Middle East, KUNA said.

Malaysia: Refining margin poised to rebound Posted Monday, December 5, 2005 - 10:27 by hydrocarbonasia
HWANG-DBS Vickers Research said Shell Refining Co (Federation of Malaya) Bhd’s results for the first nine months of the year came within consensus estimate and its earnings forecast.

Group net profit for the nine months fell 11.4% to RM427.6mil compared with the same period last year, while revenue rose 30.5% to RM6.95bil.

“Post-Katrina, global refining margin has shown some retracement, in line with the weakening of global oil prices.

“Nevertheless, going forward, margins are expected to rebound in view of cold winter months in the northern hemisphere,” Hwang-DBS Vickers said in a research note.

In terms of dividends, Shell Refining Co declared a special gross interim dividend of 20 sen per share in the third quarter (in addition to its special interim dividend of 10 sen and 12 sen of normal dividend declared in the first half of the year).

The research house noted that Shell had plans to continue with this special 20 sen per share for every subsequent quarter until its surplus cash has been exhausted to reward shareholders.

“Note that this is on top of Shell’s ongoing yearly targeted total interim plus final dividend of 50 sen per share. Based on the management’s forecast, these special interim dividends would be paid out over the next four to eight quarters.

“On conservative grounds, we have only factored in four successive quarterly special gross interim dividend of 20 sen, as we think current global oil prices is unsustainable and will continue to retrace post-winter months,” Hwang-DBS Vickers said.

Hence, the research house has adjusted dividend payment for the years ending Dec 31, 2005 and 2006 to 100 sen (50 sen special + 50 sen normal) and 90 sen (40 sen special + 50 sen normal), respectively.

“This will raise dividend yields for financial year (FY) 2005 and FY2006 to 9.9% and 8.9% respectively.

“However, FY2006’s overall dividend yields could be potentially stretched to 12.9% if maximum special dividend of 80 sen were paid out,” it said.

A local research house is maintaining a “neutral” call on Shell.

“The cumulative nine months' net profit is in line with our expectations, achieving 82% of our full-year forecast. “However, stripping out stockholding gains, the nine-month core net profit (RM171.9mil) made up only 35% of our full-year core net profit forecast (RM488.8mil),” it said in a recent research note.

According to the research house, the FY2004 gross refining margin used as a benchmark had included stockholding gains, which went unreported; hence, the substantial deviation from its FY2005 core net profit estimate.

“Given the latest trends in crack spreads, we believe fourth quarter refining margins will be lower quarter-on-quarter after an exceptional third quarter, which benefited from Hurricane Katrina.

“We are downgrading our FY2005 to 2007 earnings per share by 2%-3%, primarily for 3%-27% cuts in our gross refining margin assumption. However, this is mitigated by RM220mil stockholding gains for FY2005,” it noted.

In light of the new dividend policy, the research house is raising its FY2005 to FY2006 dividend per share estimates by 12-30 sen to 62-80 sen.





Dubai: Enoc unveils Dh1.8b expansion Posted Friday, December 2, 2005 - 4:48 by hydrocarbonasia
A Dh1.8 billion expansion of Emirates National Oil Company's (Enoc) Jebel Ali refinery has been unveiled.

The Dubai Government-owned diversified energy group announced it will arrange an Islamic facility as a Sukuk Al Ijarah structure to finance the project.

The revamp project will involve the installation of 70,000 barrels per stream a day (bpsd) of liquefied petroleum gas and naphtha hydrotreater, and a 36,000 bpsd crude catalytic reformer and ancillary processing units.

In addition, associated facilities such as sulphur recovery, tail gas treatment units as well as power and steam generation will be installed.

Once in operation, the refinery will produce approximately 1.2 million metric tonnes a year of high octane reformate, the major component of gasoline.

The new facilities will allow the refinery to upgrade its existing naphtha product, as well as operate the plant at full capacity using sour condensates. An additional by-product will be sulphur. Mechanical completion of the Jebel Ali refinery is planned for the end of 2007.

The Jebel Ali refinery was established as the refining arm of Enoc in 1996. The refinery, with a processing capacity of 120,000 bpsd, went on stream in 1999.

Its products are LPG, naphtha, jet fuel, diesel oil and fuel oil. The refinery has been operating efficiently meeting international standards on safety, and the environment.




China may expand LNG fleet to 30 Posted Thursday, December 1, 2005 - 4:46 by hydrocarbonasia
China may need to increase its fleet of vessels carrying liquefied natural gas to 30 in the next decade from five now as rising demand for cleaner-burning fuel boost imports, a China LNG Shipping Holdings Ltd official said.

The country may have as many as 10 LNG import terminals operating along its coast by 2015, and may build 25 ships to transport the fuel, Yan Weiping, general manager at China LNG Shipping, said at a gas conference in Beijing yesterday. Each vessel may cost about US$200mn, he said.

China, which relies on coal and oil for 90% of its fuel needs, wants gas to contribute 8% of its energy supply by 2010 from about 3% now. Natural gas use may more then double to 220bn cu m by 2020 from 100bn in 2010, the State Information Centre’s China Economic Information Network said in a November 12 report.

“The projection of the number of vessels needed is based on current demand estimates for LNG and the terminals to be built,” Yan told reporters. “We may need more than 30 vessels if demand accelerates.”

China LNG Shipping is leading construction of five LNG vessels to serve receiving terminals under construction in the southern Chinese provinces of Guangdong and Fujian, Yan said.

The ships will start operating between the end of 2007 through 2009. China LNG Shipping is an equal venture between China Ocean Shipping Group, the nation’s largest shipping company, and China Merchants Group.

China Ocean, China Merchants and China National Offshore Oil Corp, the nation’s third-largest oil company, are forming an LNG transportation group in southern and eastern China to manage trade in the fuel.

China's oil demand to rise 6% in 2006: Report Posted Thursday, December 1, 2005 - 12:25 by hydrocarbonasia
China's demand for crude oil will grow by around 6 percent next year from 2005, outpacing a slender 1.6 percent rise in domestic output, an official paper said on Wednesday, citing a forecast by a top government think-tank.

Combined demand for gasoline, diesel and kerosene alone is forecast to rise 6.27 percent to 177 million tonnes, compared with a 6.23 percent rise in 2005, the Development and Research Centre of China's State Council, or cabinet, said in an analysis of oil demand reported by the China Securities Journal.

China, which last year roiled oil markets with a 15 percent increase in demand but this year has shown tepid expansion of under 4 percent, will need around 328 million tonnes (6.56 million barrels per day) of crude oil next year, the report said.

However, the IEA is more bullish on transport fuels, predicting a demand increase of around 8 to 10 percent next year as the economy continues to expand.

Domestic output is expected to climb 3.3 percent to 181 million tonnes this year as China seeks to curb its growing dependence on imports. But next year that will rise only slightly more to 184 million tonnes, the report said.

Declining production at key mature fields and complicated conditions in some new fields could make it harder to crank up output so fast, and imports will likely account for around 44 percent of the country's oil needs in 2006.

High global oil prices have been a boon to the country's producers but have led to huge losses for its refiners because the government imposes controls on retail prices for diesel, gasoline and kerosene.

In the year through October refiners lost 21.45 billion yuan ($2.66 billion), but a downward trend in crude oil prices in 2006 will offer some relief, the report said. They are expected to average around $45 per barrel --- compared with an August high of over $70. ($1=8.075 Yuan)


Vietnam to raise petroleum import tax Posted Thursday, December 1, 2005 - 11:07 by hydrocarbonasia
Vietnam has just decided to increase import tariff imposed on petroleum products to 10 percent from 5 percent, according to the Tax Policy Department under the Finance Ministry on Wednesday.

The new tariff, to be applied from Friday, is partly because crude oil prices in the world have now declined to 55.7 US dollars per barrel from 58.9 dollars a week ago.

Vietnam imported over 9.6 million tons of petroleum products worth nearly 4.2 billion dollars in the first 10 months of this year, posting respective surges of 4.7 percent and 43.1 percent over the same period last year, according to the country's General Statistics Office.

Meanwhile, it exported roughly 15 million tons of crude oil worth over 6.2 billion dollars, down 7.2 percent in volume but up 33.5 percent in value.

To reduce reliance on petroleum imports, Vietnam on Monday started to construct its first oil refinery with annual refining capacity of 6.5 million tons in central Quang Ngai province. The refinery will go into operation in late 2008 or early 2009.


Esso Malaysia records higher net loss in Q3 Posted Thursday, November 24, 2005 - 1:37 by hydrocarbonasia
ESSO Malaysia Bhd (EMB) said it incurred a net loss of RM57 million (approx. US$15.2) in its third quarter to September compared with a RM36 million loss in the same period of last year.

For the nine months of 2005, its net loss has widened to RM97 million against a loss of RM35 million throughout the same period of last year.

The petroleum product retailer said rising crude oil and product costs severely impacted its margins.

“In the controlled petroleum products sector, margins were squeezed by adverse lag effects under the workings of the automatic pricing mechanism,” Esso said in a statement released yesterday.

It said the near-term business outlook remains uncertain given the current price environment, but the company will continue to focus on effective management of costs and other elements of the business that it can control.

Sales for the last quarter were 96 thousand barrels per day (kbd), up from 89 kbd in the same period last year, mainly reflecting healthy growth in the retail sector and higher supply sales.

Refinery crude throughput was up 15 kbd to 74 kbd in the current quarter mainly from the absence of a 25-day planned shutdown in September last year for maintenance work.

Third-quarter revenue increased to RM 2.24 billion compared with RM1.53 billion in the last comparable period due to higher product prices.

Esso said in the longer term, Malaysia’s strong economic outlook will continue to fuel demand for petroleum products.

Malaysia: Titan expects to beat turnover target Posted Wednesday, November 23, 2005 - 10:34 by hydrocarbonasia
TITAN Chemicals Corp Bhd expects to exceed its turnover and meet its sales volume forecast this year, but will likely only achieve about 75 per cent of its targeted net profit of RM604 million for 2005.

Titan managing director, Donald M. Condon Jr said the company would beat its 2005 turnover forecast due to robust demand for its products.

In its prospectus, the company forecast a RM3.9 billion turnover and RM604 million net profit for the financial year ending December 31 2005.

“We expect margins to improve in the fourth quarter.

However, based on the third-quarter results and forecast by Chemical Market Associates Inc for the remainder of the year, we expect to under-ride our 2005 after-tax earnings forecast by 25-30 per cent,” he said when announcing the company's third-quarter results in Kuala Lumpur yesterday.

Also present were Titan executive chairman James Chao and senior management team.

Titan produces a comprehensive portfolio of polyethylene and polypropylene, where half of its production is supplied to domestic market, 30 per cent to China and the rest to South-East Asian countries.

Titan, which will be included as one of the Kuala Lumpur Composite Index’s component stocks by end of this month, was listed on Bursa Malaysia Bhd on June 23 this year.

In the third quarter ended September 30 2005, Titan posted a net profit of RM72 million (approx. US$19.5 million), up 28 per cent from RM56 million in the same quarter in 2004. Revenue for the quarter was RM1.2 billion, up from RM804 million in the previous corresponding quarter.

Chao said Titan’s after-tax earnings for the third quarter are higher than last year’s despite lower earnings before interest, tax, depreciation and amortisation (EBITDA).

“Given the rough market conditions in the third quarter, our performance has been solid.

“We are experiencing more rapid debt reduction, our expansion projects are on track and we managed to renegotiate our term loans to reduce cost and improve covenants,” he said.

Titan’s net debt to equity improved 197 per cent as at December 31 2004 to 64 per cent as at September 30 2005, while total debt to total assets improved to 47 per cent from 70 per cent.

Chao said the third quarter saw hurricane disruptions in North America which had pushed petroleum prices up from mid-August and supply concerns led to sharp increases in petrochemical and polymer prices.

Looking forward, Condon said, a better margin is expected starting next month as improvements have been seen in the past few weeks, while next year would be a good year.

Condon said Titan’s share is greatly undervalued, which prompted the company to execute share buybacks.

Foster Wheeler starts work on Lucite International's new Posted Tuesday, November 22, 2005 - 5:39 by hydrocarbonasia
Foster Wheeler Ltd.announced on 21 November that its UK subsidiary, Foster Wheeler

Energy Limited, and its Singapore subsidiary, Foster Wheeler Asia
Pacific Pte. Ltd., have begun work for Lucite International UK Limited
on the basic engineering design (BED) associated with a new Methyl
Methacrylate (MMA) manufacturing facility in Singapore. Lucite
International is one of the world's leading manufacturers of acrylic
products and owner of the renowned Lucite(R) and Perspex(R) brands.

The terms of the awards were not disclosed and bookings for these
particular portions of the work currently being undertaken will be
included in the fourth-quarter.

The 120,000 tonnes per annum plant, which has a total investment
cost of circa US$150 million, will use Lucite International's
proprietary Alpha technology; construction is expected to commence in
2006 and the plant will be commissioned in 2008. According to Lucite
International, Alpha technology offers significant economic and
environmental benefits over conventional manufacturing routes, and is
set to revolutionize the production cost-base for MMA, the essential
building block for acrylic. The Singapore plant is the first in a
series of Alpha-based facilities planned by Lucite International. The
size of the new operations will progress in scale - the second plant
is planned to come on stream in 2011 and will have a capacity of
250,000 tonnes per annum.

"We are delighted to be chosen by Lucite International to lead
this important project involving new state-of-the-art technology,"
said Steve Davies, chairman and chief executive officer, Foster
Wheeler Energy Limited. Our involvement underlines Foster Wheeler's
pre-eminent position for the engineering and construction of major
investment projects in Singapore and also the quality of our technical
offering. We look forward to being an integral part of a new chapter
in MMA production."

"Lucite International intends to extend the BED phase through to
the implementation phase with the appointment of Foster Wheeler as the
engineering, procurement and construction contractor for this
project," commented Neil Sayers, vice president for manufacturing,
technology and SHE, Lucite International UK Limited. "Foster Wheeler
is one of the world's biggest and most respected engineering and
construction contractors. Their long experience of working in
Singapore, combined with strong operations in both the UK and locally
in Singapore, make them the ideal partner for Lucite International in
this groundbreaking new plant we are building."

Chevron and Japan’s Chubu in Gorgon LNG deal Posted Tuesday, November 22, 2005 - 11:02 by hydrocarbonasia

Chevron Australia has signed a deal to supply gas to Japanese power company Chubu Electric from the massive Gorgon project off Western Australia.

The two companies have signed an agreement for the sale of 1.5 million tonnes of liquefied natural gas (LNG) per annum from the project over 25 years, beginning in 2010.

Chevron said the two are also discussing the potential of Chubu taking a stake in Gorgon.

"Chubu Electric is one of the world's largest LNG consumers and this agreement is a significant step toward further commercialisation of the Gorgon Area gas resources," Chevron Australia managing director Jay Johnson said.

Chevron Australia's general manager of Greater Gorgon Area, Colin Beckett, said the agreement showed the demand for Gorgon LNG and support for the project.

"Chevron Australia now has agreements in place that provide a path forward to export more than 65 million tonnes of Australian LNG over 25 years from Chevron's share of the Gorgon project," Mr Beckett said.

"We continue to look at other opportunities in Asia and North America."

Chevron Australia has a 50 per cent operating interest in the Gorgon project, with other participants including the Australian subsidiaries of Shell and ExxonMobil which each hold 25 per cent.



China to invest 5.6 bln yuan for LNG project in southern province Posted Friday, November 18, 2005 - 3:05 by hydrocarbonasia

China's offshore oil giant and a local company will jointly invest 5.6 billion yuan (US$691 million) to build a liquefied natural gas project in Hainan, the country's southernmost province.

The deal was reached between China National Offshore Oil Corporation (CNOOC) and the Hainan Development Holding Co. which hold stakes of 65 percent and 35 percent, respectively, from the LNG project, according to the provincial source.

The first phase of the LNG project is expected to be completed by 2009, which will have production capacity of 2 million tons/yr by 2012, and further to 3 million tons/yr by 2015.

Theoretically, the LNG project is designed to meet gas needs by the island province for 25 years upon completion.

Presently, Hainan's annual demand for gas stands at 7.3 billion cubic metres, leaving annual gas shortage of 2.3 billion cubic metres, the provincial source said.

Qatar and Chevron Phillips Chemical sign $800mn petrochem deal Posted Friday, November 18, 2005 - 3:03 by hydrocarbonasia


QATAR Petroleum and US firm Chevron Phillips Chemical signed a US$800mn joint project on 16 November to produce petrochemicals, Second Deputy Premier and Energy Minister HE Abdullah bin Hamad al-Attiyah said.

“The Q-Chem II Project ... will cost more than US$800mn,” Attiyah said at the signing ceremony attended by visiting US Secretary of Energy Samuel Bodman.

The project “includes the ownership of a new 350,000 metric-ton-per-year polyethylene plant and a 345,000 metric-ton-per-year normal alpha olefins plant,” said a statement.

The two plants will be built in the Mesaieed Industrial City.

“The financing for Q-Chem II and its share of the ethylene cracker will be provided by a group of commercial banks and the Export-Import Bank of the United States, along with equity capital from Chevron Phillips Chemical and Qatar Petroleum,” it said.

The engineering, procurement and construction contract for the two plants was awarded to Italy’s Technimont and South Korea’s Daewoo Engineering and Construction Company, it said.

Technip France was selected for the engineering, procurement and construction for the ethylene cracker, it said.


Malaysia: Titan to build new plants, boost Pasir Gudang operations Posted Friday, November 18, 2005 - 10:29 by hydrocarbonasia
TITAN Chemicals Corp Bhd, Malaysia’s biggest petrochemicals company, is undertaking a RM600 million expansion project at its existing facility in Pasir Gudang, Johor, which is due to be completed by the middle of 2006.

Titan Chemicals managing director Donald M. Condon Jr said the company will build two new plants — a methathesis plant and a butadiene plant — and expand capacity at its existing polypropylene plant by an additional 20 per cent.

“The plan is well under way and we are granting procurement control to two Japanese contractors. The plants will add new revenue to the company as well as the country’s gross domestic product (GDP).

“The plastics business has been profitable and our revenue will be significant towards the end of 2007, and the profits will go back to the shareholders,” Condon said yesterday.

Established 16 years ago and controlled by the Houston, Texas-based Chao group, Titan Chemicals is the first and largest integrated olefins and polyolefins producer and second largest polyolefin producer in South-East Asia.

The butadiene plant will have a production capacity of 100,000 tonnes a year, of which half will be for the export market while the methadiene plant will have a production capacity of 130,000 tonnes a year.

Butadiene is a by-product of the cracking process and has a global demand of 9.1 million tonnes in 2004, driven primarily by the production of synthetic rubber and thermoplastic used in the manufacture of computer and electronic equipment.

The methadiene plant will convert ethylene into polypropylene which is one of the most versatile and low-cost polymers in the petrochemicals industry with a global demand of 38.6 million tonnes in 2004 used to make disposable cups and plates, film packaging, housewares and others.

Condon said Titan Chemicals also plans to buy back 10 per cent of its shares to allow it greater flexibility in managing its cash flow which is undervalued due to the disappointing stock market.

The shares were floated on Bursa Malaysia Bhd five months ago, the biggest initial public offering (IPO) in two years, raising RM950 million.

It is due to announce its financial results for the first six months ended June on November 22 2005. During its IPO, Titan Chemicals had forecast a net profit of RM604 million in 2005, more than double RM262 million made in 2004.









ExxonMobil and Qatar Petroleum launched LNG Project Posted Friday, November 18, 2005 - 9:39 by hydrocarbonasia


Qatar Petroleum and ExxonMobil Ras Laffan (III) Limited, a wholly owned subsidiary of Exxon Mobil Corporation launched Ras Laffan Liquefied Natural Gas Company Limited (RL3).

RL3 is a further expansion of the existing LNG production facilities operated by RasGas Company Limited (Qatar Petroleum 70 percent; ExxonMobil 30 percent) at Ras Laffan Industrial city in North Eastern Qatar. This project is planned to bring the total number of
trains operated by RasGas to seven (Trains 1 and 2 in RL, 3 through 5 in RL II and 6 and 7 in RL 3) and is expected to increase RasGas LNG production capacity by more than 70 percent.

Full-chain investment in RL 3 is estimated at near $14 billion. This includes the design, construction and operation of two 7.8 million-ton-per-year (MTA) LNG Trains 6 and 7, and all other facilities associated with the development, production, transportation, processing, treatment, liquefaction, regasification, storage, delivery and sales of approximately 15.6 million tons a year (MTA) of LNG along with associated by-products such as liquified petroleum gas, condensates, helium and sulphur.

The new LNG project, one of the largest ever announced, will be developed in two consecutive phases with Train 6 scheduled to begin production in the second half of 2008, and Train 7 anticipated to come on stream approximately one year later. Twenty-eight wells are planned to be drilled to supply the two trains with natural gas, sourced from Qatar's giant North Field, which is estimated to contain natural gas resources in excess of 900 trillion cubic feet. LNG from the project will be delivered to targeted markets, principally the United States.

Earlier this year, Engineering, Procurement and Construction (EPC) contracts for Trains 6 and 7 were awarded to J. Ray McDermott Middle East for the offshore facilities and to the Chiyoda Corporation and Technip France Joint Venture (CTJV) for the onshore work.

RL3 also has signed financing documents securing funds to proceed with execution of the project. In total, $4.6 billion was raised from 19 commercial banks, capital bond market offerings and loans from ExxonMobil. The capital markets portion of the financing ($2.25 billion) represents the largest energy project financing in the history of the capital markets. This was the initial tranche of a broader $10 billion debt program to underwrite the remaining expansions for RL 3 and RL II.

To deliver the LNG to its targeted markets, RL3 plans to lease 12 LNG tankers to support Train 6 to be constructed by Hyundai Heavy Industries, Daewoo Shipbuilding & Marine Engineering and Samsung Heavy Industries. Daewoo will build five tankers, Samsung four and Hyundai three. It is expected that an additional six LNG tankers will be required to support Train 7.





Foster Wheeler awarded Project Management Services Posted Tuesday, November 15, 2005 - 3:08 by hydrocarbonasia
Foster Wheeler Ltd. announced 14 November that its Thailand subsidiary has been selected as the Project Management Contractor (PMC) for The Aromatics (Thailand) Public Company Limited (ATC) Reformer and Aromatics Complex II Project to be located at Map Ta Phut, Thailand. The terms of the award were not disclosed, and the project will be included in the company's fourth-quarter bookings for 2005.

"Foster Wheeler is delighted to be awarded this contract by ATC,"
said Franco Anselmi, chief executive officer of Foster Wheeler Asia
Pacific. "This award consolidates our long-term relationship with ATC,
confirms our strong position in the petrochemicals sector in Thailand,
and reflects the quality and the depth of our technical and project
execution expertise."

"We are pleased to award this contract to Foster Wheeler," said
Khun Permsak Sherawattananon, president of The Aromatics (Thailand)
Public Company Limited. "We have selected Foster Wheeler as they are
recognized as the leading company, most capable of executing this
work, and this project will build on the successful working
relationship developed on many previous projects. The Reformer and
Aromatics Complex II Project is a sophisticated, world-scale
development and we require a project management contractor with a
proven track record of managing the implementation of such facilities
in Thailand, who will work with us to meet our long-term business
objectives. We are truly confident that Foster Wheeler meets these
requirements."

Foster Wheeler's role as PMC contractor covers the co-ordination
of the engineering, procurement, construction and commissioning phases
of the project, scheduled for completion in 2008. The EPC contract for
the Reformer and Aromatics Complex II Project has been awarded to a
consortium of Korean contractors and an EPC contract for the offsite
interconnecting pipelines has been let to a Thai company. The new
facilities will produce 565,000 tonnes per year (MT/Y) of paraxylene,
301,000 MT/Y of benzene and 60,000 MT/Y of toluene.

Peter Cremer GmbH to invest in Singapore Posted Sunday, November 6, 2005 - 4:19 by hydrocarbonasia
Peter Cremer GmbH is planning a multi million dollar investment in Singapore to produce biofuels and further downstream specialty chemical derivatives. This will be Singapore’s first biodiesel plant. Cremer, a multi billion dollar family business established in Hamburg Germany in 1946 have manufacturing operations in Europe, United States and Asia. The Cremer group manufactures a range of products including breakfast cereals, animal feeds, and oleochemicals and have been active in natural renewable fuels for several years having already made significant investments in new manufacturing facilities in Germany and South America in 2005.

The initial USD 20 Million project phase will produce up to 200 thousand metric tons of biodiesel and will be centered on Jurong Island where many of the chemicals required for processing are currently available. The majority of the biodiesel will be initially exported but the growing concern over global carbon dioxide emissions is making countries within Asia rethink their fuel policies.

John Hall, Global Director of CremerOleo said that the new investment is exciting and brings a new dimension to the natural renewable fuel market. We at Cremer have been active in biodiesel for several years and have participated in the growth of this green fuel in Europe and more recently in North America. We selected Singapore for our first biodiesel plant in Asia because of its excellent connectivity. From Singapore, we have easy access to abundant palm oil feedstock from the neighbouring countries of Malaysia and Indonesia. Singapore hosts major chemical logistics players providing terminalling services and shipping to our markets around the world.

The Singapore Economic Development Board (EDB) has been extremely helpful in bringing the project to Singapore and we can see this as the start of many such production units sited in Asia. We expect the initial phase to be in production by early 2007 with further plants becoming operational later in that year.

Mr Teo Ming Kian, Chairman EDB said, “Global trends are driving the development of agricultural products into new sources of energy and materials. EDB has identified these trends early and has been prepositioning and developing Singapore as a base for these activities that leverage on the renewable resources. The investment by Peter Cremer GmbH validates the attractiveness of Singapore for this fast-growing field. In choosing Singapore’s Jurong Island, the company can also capitalise on the deep industry integration in one location, to produce oleochemical derivatives.”

Indonesia to cut LNG exports by 10% next year Posted Monday, October 24, 2005 - 3:10 by hydrocarbonasia
Indonesia will reduce liquefied natural gas (LNG) exports by 10 percent next year due to lower production in the aging gas fields in Kalimantan and Aceh.

Buyers in South Korea, Taiwan and Japan have agreed to cut supply from the Bontang plant in East Kalimantan by 30 shipments -- equivalent to 1.8 million metric ton of LNG -- from the ordered 370 shipments, Upstream Oil and Gas Regulatory Agency's (BP Migas) deputy of marketing and finance Eddy Purwanto said.

"We are also trying to get nine shipments (of some 580,000 metric tons of LNG) adjusted from the shipments from Arun," said Eddy on Friday, referring to the smaller LNG plant located in Nanggroe Aceh Darussalam.

Arun was supposed to export some 75 shipments of LNG, he added.

Even with the reduced volume, Indonesia might lack between five to eight shipments to meet remaining orders, said Eddy.

LNG production is on the decline in the country as reserves in the gas fields, which have been operating for decades, are now becoming depleted.

Arun is supplied by ExxonMobil Oil Indonesia, which operates the gas field in Aceh. PT Badak NGL in Bontang receives gas from Unocal, Vico, and Total, the operators of a huge gas reserve there.

The government has been trying to reduce or reschedule LNG exports, particularly as fertilizer plants in Aceh have been forced to shut down due to lack of natural gas, a vital raw material for the industry.

Indonesia may only be able to offer as much as 6 million metric tons of LNG per year -- half of its current contract -- to Japan after its contract expires in 2010, said Eddy.

"The customers are requesting more shipments, but we won't be able to meet them.

"We are seeing quite a significant decline (in gas supply), while the new reserves discovered are not as big as we expected them to be," said Eddy.

The government may also give priority to domestic needs, particularly amid soaring oil prices, to provide LNG for state power firm PT PLN's planned receiving terminal in West Java, which is expected to start operating in 2008.

The government is also planning to put up for tender a pipeline project to connect gas-rich Kalimantan and densely-populated Java, where the use of the environmentally-friendly fuel has been hampered due to lack of supporting infrastructure.

Analysts have warned that there may not be enough gas reserves to supply the pipeline, which will span 1,200 kilometres from East Kalimantan to Central Java and is estimated to cost US$1.2 billion.

Indonesia, with gas reserves of 188.34 trillion standard cubic feet, has one of the most extensive reserves in the world.

Pertamina cuts Nov oil export allotments Posted Monday, October 24, 2005 - 3:08 by hydrocarbonasia
Indonesia’s Pertamina has cut its November export allocations of term crude and condensate by 10 per cent to 1.054 million barrels to keep supplies for domestic use and limit costly oil imports, traders said in Singapore today.

State-oil company Pertamina supplied term lifters, including its affiliates and Japanese trading firms, 1.176 million barrels in October, they said.

The allocations comprise Jatibarang, Cinta and Widuri crude as well as Bontang Return Condensate.

“Pertamina needs to keep its crude supplies for the domestic market. It is too expensive to import crude and oil product imports,” a Jakarta-based source said.

Pertamina will supply 387,000 barrels of Jatibarang crude to its Japanese affiliate Pacific Petroleum Trading (PPT) for November, down from about 60,000 barrels of Duri and 400,000 barrels of Jatibarang supplied in October, they said. PPT in turn supplies the crude to thermal power plants in Japan.

Indonesia slashed its crude oil imports in a tender for December arrival by as much as 60 per cent to 1.2 million barrels from the previous month.

It imports around 200,000 barrels per day (bpd) of crude through term contracts.

In the first nine months of the year, Indonesia exported about 366,000 bpd of crude, a scant 6,000 bpd more than it imported, Energy and Mines Ministry data show.

It also sharply raised oil product prices early this month to ease the burden of costly subsidies.

Hefty imports of oil at a time of record-high prices that hit US$70.85 a barrel in end-August, had helped push the rupiah to a four-year low of 11,750 per dollar and sending the economy to the brink of a crisis.

The rupiah has since recovered 14 per cent.

BP eyes Hindustan Petroleum refinery stake Posted Thursday, October 13, 2005 - 4:00 by hydrocarbonasia
Oil major BP PLc is set to sign a preliminary agreement with Hindustan Petroleum Corp. Ltd. to buy a stake in one of the Indian state-run company's new refineries, a Hindustan Petroleum source said yesterday.

BP Chief Executive John Browne is in India on Thursday and Friday, when he is expected to sign a memorandum of understanding (MoU) with Hindustan Petroleum Chairman M.B. Lal for equity participation in one of two new refineries in Bhatinda and Visakhapatanam (Vizag).

"We have offered BP both Bhatinda and Vizag refineries, now it’s up to them to select any one," said the source, which declined to be identified. The MoU may become a firm joint venture if BP shows interest in a proposed new 300,000-barrels-per-day (bpd) refinery in Visakhapatanam in the southern state of Andhra Pradesh, he said. "We have already offered BP a 26 per cent stake in Bhatinda," said the source at Hindustan Petroleum, which has set up a separate firm to run the 180,000-bpd Bhatinda refinery in the northern state of Punjab.

The Indian company had also offered the 26 per cent to firms such as Saudi Aramco, Malaysia's Petronas and France's Total, the source said.

An oil ministry official confirmed that BP was eyeing India's transportation fuels sector and may seek government permission to set up gas stations in the country. According to Indian government rules, companies wishing to set up petrol stations in India must invest 20 billion rupees in local energy infrastructure and the ministry official said it made sense for BP to invest this in a refinery. BP rival Royal Dutch/Shell has already received a government nod to set up 2,000 outlets in India.


Fluor wins $1b Persian Gulf gas plant contract Posted Monday, October 10, 2005 - 5:43 by hydrocarbonasia
Fluor Corp., the biggest publicly traded U.S. construction and engineering company, won a $1 billion contract to expand gas processing facilities in the Persian Gulf benefiting from a regional construction boom.

The work is for the Habshan Gas Complex in the United Arab Emirates and will finish in the middle of 2008, Abu Dhabi Gas Industries Ltd., or Gasco as it is also known, said in a statement.

Fluor, Technip SA and other international oil services companies are competing for business in the Persian Gulf region where oil producers including Saudi Arabia are using record revenue from oil sales to boost oil and gas production capacity, at a cost of more than $50 billion.

“Foreign companies are reaping the benefit as countries in the region earn record oil revenue, and invest in expanding their oil and gas capacity,” said Kamel al-Harami, former president of Kuwait's Q8 brand of gas stations in Europe and Thailand, said by telephone from Kuwait City.

In the six Arab monarchies that surround the Persian Gulf, oil earnings will increase 25 percent to $250 billion this year, according to London-based Standard Chartered, a bank that generates about two-thirds of its income in Asia.

Gasco, which is responsible for processing Abu Dhabi's onshore natural gas reserves, is spending about $4 billion on projects to expand facilities during the next three years, including Habshan, according to its Web site. Abu Dhabi, with a population of 1.6 million, is the world's fourth-largest holder of oil reserves.

Fluor Corp. last month reported a second-quarter net loss after recording $65 million in costs related to a lawsuit.

Royal Dutch Shell Group, Europe's second-biggest oil company, and Total SA, Europe's biggest oil refiner, each own 15 percent of 27-year-old Gasco, according to the company's Web site. It handles 4 billion cubic feet of gas a day, and 140,000 barrels-a-day of gas condensate, a light oil associated with gas production.

Habshan is one of four plants in the Abu Dhabi desert that processes gas, which is then used to power electricity generating and water desalination plants.

Gas demand in the U.A.E. could quadruple to 13.5 billion cubic feet a day during the next 25 years as the country builds more gas-fuelled power plants and develops domestic supply networks to cope with economic growth, Ahmed Ali Al Sayegh, chief executive of Dolphin Energy, told reporters at an energy conference in Abu Dhabi in October.

Sinochem, Total to explore oil product marketing in east China Posted Monday, October 10, 2005 - 4:47 by hydrocarbonasia
China National Chemicals Import and Export Corp. (Sinochem), one of China's four major oil firms, and France's Total have agreed to form a joint venture for establishing an oil product marketing network in east China, officials said Saturday.

According to officials of the State Council Commission for Supervision and Management of State-owned Assets, the two companies signed an agreement in Beijing on Sept. 29 for the establishment of the joint venture, Sinochem-Total Oil Co., Ltd.

Under the deal, the two companies will put nearly 100 million US dollars into the joint venture, with Sinochem holding 51 percent of the stakes, and Total, the remaining 49 percent.

A Sinochem official said that there is a market potential for finished oil products in China's economically-developed Yangtze River Delta area, and the joint venture will bring into full play the advantages of Sinochem and Total.

A decade ago, Sinochem and Total co-sponsored the Dalian West Pacific Refinery, the first of its kind in China. Last October, the two companies jointly invested 800 million yuan (nearly 1 million US dollars) to set up an oil product sales network in north China.



Elnusa to build $2.5b-$3b refinery Posted Thursday, October 6, 2005 - 4:13 by hydrocarbonasia
A subsidiary of state oil and gas firm PT Pertamina, PT Elnusa Harapan, is studying the possibility of building a refinery with a capacity of 300,000 barrels per day.

The refinery, which would be expected to start producing within four years, would cost between US$2.5 billion and $3 billion, Elnusa president director Rudy Radjab was quoted as saying on Wednesday.

Rudy said two-thirds of the fuel products from the refinery would be exported to China, while the rest would be used to meet domestic demand.

"We have signed contracts with Sinopec and CNPC," Rudy was quoted as saying, referring to the China Petroleum & Chemical Corp. and the China National Petroleum Company.

The refinery would process some 100,000 barrels per day of very heavy crude from Iran.

It is unclear from where the refinery would receive the rest of the crude.

Rudy said the company would conduct a preliminary feasibility study in the next two months and a more comprehensive one next year.

Among the possible locations for the refinery are Banten, Central Java and Riau.

The Ministry of Energy and Mineral Resources' director of oil and gas, Erie Soedarmo, said Elnusa had yet to submit a license application for the refinery.

"They need to provide data on the financing and location to get a permit," said Erie.

Indonesia will open the downstream oil and gas market to private investors in late November, after Pertamina's monopoly in the sector officially ends.

According to data from the energy ministry, PT Intanjaya Agromegah and PT Berkah Refinerindo Utama have secured principal licenses to build refineries capable of processing 300,000 barrels per day (bpd), in Parepare, South Sulawesi, and another in Trenggalek, East Java, respectively.

Pertamina also plans to build a refinery with a capacity of up to 200,000 barrels per day in Tuban, East Java.

That refinery, to be constructed in cooperation with Sinopec, will be used to process crude produced by the untapped oil-rich Cepu block, located on the border between East Java and Central Java.


Oiltanking’s new berth on Jurong Island to boost vessel turnaround rate by 25% Posted Monday, October 3, 2005 - 4:26 by hydrocarbonasia
Oiltanking Singapore has commenced operations of a new deepwater berth at Seraya Avenue on Jurong Island constructed for petroleum products. The S$20 million berth will accommodate vessels up to 150,000 dwt with a maximum length of 350 m and boost Oiltanking’s vessel turnaround rate by 25%, strengthening Singapore’s position as the oil transhipment hub in Asia.

With the increased capacity, customers will enjoy the enhanced efficiency of their vessels spend alongside the berth and reducing their exposure to demurrage. The new berth brings Oiltanking’s total number of deepwater berths for the petroleum sector to five.

The new berth is connected by pipelines to Oiltanking’s existing three terminals located on the eastern edge of Jurong Island. The construction of the berth, which commenced in November 2004, was undertaken by McConnell Dowell and Rotary Engineering and took 10 months to complete.

Mr Rutger van Thiel, Managing Director of Oiltanking Singapore, said: “We strive to improve the efficiency of our marine-shore interface alongside the growth of our transhipment business. The construction of the new berth demonstrates our commitment to ensure excellent accessibility of our terminals and that sufficient berth capacity is available at all times as shipping efficiency is crucial for our customers. The berth also enables Oiltanking to grow in tandem with Jurong Island and help strengthen Singapore’s position as a regional distribution and logistics hub for the global petrochemical industry.”

Since 1989, Oiltanking has actively developed its infrastructure and increased its overall storage capacity for petroleum and petrochemical products. Oiltanking currently owns and operates five deepwater berths, four barge berths and four chemical berths on Jurong Island.

Oiltanking recently announced the construction of a S$100 million, 240,000 cbm tank terminal for clean petroleum products at Seraya Place on Jurong Island. Upon its completion in August 2006, Oiltanking’s total tank capacity in Singapore will amount to 1.3 million cbm, with 1.1 million cbm allocated for petroleum products. Today, Oiltanking operates 900,000 cbm of storage capacity for petroleum products, of which 180,000 cbm is from a joint venture with neighbouring PowerSeraya.

Oiltanking, a division of German Marquard & Bahls AG, is the second-largest independent tank storage provider for petroleum products, chemicals and gases world-wide. Oiltanking owns and operates 71 terminals in 19 countries in Europe, North and South America, and Asia. The group has an overall capacity of 11.1 million cbm.



Singapore: Oiltanking’s new berth on Jurong Island to boost vessel turnaround rate by 25% Posted Monday, September 19, 2005 - 4:57 by hydrocarbonasia
Oiltanking Singapore has commenced operations of a new deepwater berth at Seraya Avenue on Jurong Island constructed for petroleum products. The S$20 million berth will accommodate vessels up to 150,000 dwt with a maximum length of 350 m and boost Oiltanking’s vessel turnaround rate by 25%, strengthening Singapore’s position as the oil transhipment hub in Asia.

With the increased capacity, customers will enjoy the enhanced efficiency of their vessels spend alongside the berth and reducing their exposure to demurrage. The new berth brings Oiltanking’s total number of deepwater berths for the petroleum sector to five.

The new berth is connected by pipelines to Oiltanking’s existing three terminals located on the eastern edge of Jurong Island. The construction of the berth, which commenced in November 2004, was undertaken by McConnell Dowell and Rotary Engineering and took 10 months to complete.

Mr Rutger van Thiel, Managing Director of Oiltanking Singapore, said: “We strive to improve the efficiency of our marine-shore interface alongside the growth of our transhipment business. The construction of the new berth demonstrates our commitment to ensure excellent accessibility of our terminals and that sufficient berth capacity is available at all times as shipping efficiency is crucial for our customers. The berth also enables Oiltanking to grow in tandem with Jurong Island and help strengthen Singapore’s position as a regional distribution and logistics hub for the global petrochemical industry.”

Since 1989, Oiltanking has actively developed its infrastructure and increased its overall storage capacity for petroleum and petrochemical products. Oiltanking currently owns and operates five deepwater berths, four barge berths and four chemical berths on Jurong Island.

Oiltanking recently announced the construction of a S$100 million, 240,000 cbm tank terminal for clean petroleum products at Seraya Place on Jurong Island. Upon its completion in August 2006, Oiltanking’s total tank capacity in Singapore will amount to 1.3 million cbm, with 1.1 million cbm allocated for petroleum products. Today, Oiltanking operates 900,000 cbm of storage capacity for petroleum products, of which 180,000 cbm is from a joint venture with neighbouring PowerSeraya.

Oiltanking, a division of German Marquard & Bahls AG, is the second-largest independent tank storage provider for petroleum products, chemicals and gases world-wide. Oiltanking owns and operates 71 terminals in 19 countries in Europe, North and South America, and Asia. The group has an overall capacity of 11.1 million cbm.



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Thailand: PTT scraps refinery-merger deal Posted Friday, September 16, 2005 - 5:00 by hydrocarbonasia
An ambitious plan to merge two oil refineries in Rayong has been scrapped amid differences on business strategy between PTT Plc, the owner of Rayong Refinery Co (RRC), and US-based Chevron Corporation, the majority owner of Star Petroleum Refining Co (SPRC).

''We have decided to end the deal after failing to agree on several policies such as sales of finished oil products and plans to list shares on the stock market,'' said PTT president Prasert Bunsumpun.

As a result, a preliminary agreement, signed earlier by PTT and Caltex Trading and Transport Corporation (CTTC), a wholly owned affiliate of Chevron, to swap shares after the merger, was automatically called off.

The merger, which was set to be completed in the third quarter of this year, would have created one of the largest refineries in the Asia-Pacific region, with total refining capacity of 300,000 barrels per day. PTT was to hold a 62% stake in the entity with the remaining shares to be held by CTTC.

The ownership of SPRC is currently divided between CTTC and PTT with the former holding a 64% stake.

Mr Prasert said PTT would now submit a filing to the Securities and Exchange Commission to list RRC on the Stock Exchange of Thailand, as pledged earlier to the government.

Meanwhile, he said, Chevron had told PTT that it was not ready to list SPRC on the stock market this year.

Energy Minister Viset Choopiban said that technically, the shares of both RRC and SPRC were supposed to have been listed on the stock market before they built their refineries.

But this rule was relaxed several years ago because they faced huge losses resulting from dwindling refining margins.

According to the Energy Business Department, RRC posted a profit of 10.89 billion baht last year, up from 5.72 billion in the previous year, while SPRC's profit rose to 14.35 billion baht from 3.75 billion.

Kiticharn Sirisukarcha, an analyst of Kim Eng Securities, said the scrapping of the merger would not hurt PTT's performance as it already had stakes in other refineries, including a 36% stake in SPRC.


Shell's China cracker on track for year-end start Posted Friday, September 16, 2005 - 12:24 by hydrocarbonasia
Royal Dutch/Shell Group's $4.3 billion joint-venture naphtha cracker in southern China is on track to start up by late this year, helping to meet booming demand for the chemical used in products ranging from fertiliser to diapers.

Downstream units to process the venture's 800,000 tons per year of ethylene output are slated to come online in early 2006, the project's manager said on Tuesday.

A condensate splitter would also be ready at the same time as the cracker, said Colin McKendrick, manager of Shell's Nanhai venture, allowing the complex to import either condensate or naphtha as feedstock.

"Today condensate is a bit more attractive than naphtha, but that's not necessarily the case in the future. You also have to keep in mind that condensate has no import duties, while naphtha does," McKendrick said.

Shell's venture with China's No. 3 oil producer, China National Offshore Oil Corp. (CNOOC) in Nanhai, southern Guangdong Province, would be the third world-scale cracker to start this year in China -- a country that still has to import about half its petrochemical needs.

It would follow two in eastern China -- one operated by BP Plc. and top Asian oil refiner Sinopec Corp., and another between BASF A.G. and Sinopec unit Yangzi Petrochemical Corp.

Their demand has helped strengthen naphtha premiums over Brent crude to about $110 a ton in Asia, compared with less than $4/ton in late June.

Some of the feedstock for Shell's venture plant could come from partner CNOOC nearby 12 million tpy Huizhou refinery, which McKendrick expects to begin operations in mid-2008.

The joint venture, half-owned by Shell and half by CNOOC and a Guangdong government investment arm will sell its output primarily in Guangdong and southern China, McKendrick said.

Shell is also forming a wholly owned chemicals marketing arm in China, to import and sell output from its plants in Singapore and the Middle East to eastern, central and north-eastern China.

One other cracker -- an Exxon Mobil Corp., Saudi Aramco and Sinopec joint venture under construction in the southern province of Fujian -- could spell the end of an era, McKendrick said.

"It's going to become increasingly difficult to be a joint venture partner" as Chinese partners develop their own expertise and access to capital, McKendrick said.

"The winning attributes in the future will be those companies that can bring access to crude oil, that can establish research and development centres in China, and offer opportunities to partner abroad."



RasGas-II signs LNG deal with Taiwanese company Posted Thursday, September 15, 2005 - 8:12 by hydrocarbonasia

Qatar will supply Taiwan with three million tonnes of liquefied natural gas per year starting from 2008, the Qatar News Agency has reported.

Ras Laffan Liquefied Natural Gas Company Limited (RasGas-II) and the Chinese Petroleum Corporation (CPC) signed here on Tuesday a long-term sales and purchase agreement for the supply of approximately three million tones per annum of LNG starting in 2008.

The 25-year agreement is to meet the expanding energy needs of Taiwan and the Ta-Tan power plant, the agency said.

Yusuf Hussain Kamal, Qatar's Minister of Finance and chairman of the board of RasGas, signed the agreement with CPC board chairman Ching Tsai Kuo at a ceremony held at the Ritz Carlton Doha.

RasGas managing director Alex Dodds and CPC vice-president (finance) Ching Hsung Chiu were also present at the agreement signing.

In a statement issued after the signing, the minister said that Qatar's LNG production would range between 20 and 21 million tonnes in 2006 and increase to 77 million tonnes by 2012.

Commenting on the financing of RasGas ventures, the minister said investment is expected to ultimately reach about $14 billion.

RasGas-II, which opened its third 4.7 million tonne-a-year LNG train last year, expects to bring its fourth and fifth LNG trains on stream in 2005 and 2007, respectively.

Gas supply under this agreement will come from Qatar's giant North Field, which has recoverable reserves of more than 900 trillion cubic feet, the world's largest non-associated natural gas field.


RasGas-II signs LNG deal with Taiwanese company Posted Thursday, September 15, 2005 - 8:09 by hydrocarbonasia

Qatar will supply Taiwan with three million tonnes of liquefied natural gas per year starting from 2008, the Qatar News Agency has reported.

Ras Laffan Liquefied Natural Gas Company Limited (RasGas-II) and the Chinese Petroleum Corporation (CPC) signed here on Tuesday a long-term sales and purchase agreement for the supply of approximately three million tones per annum of LNG starting in 2008.

The 25-year agreement is to meet the expanding energy needs of Taiwan and the Ta-Tan power plant, the agency said.

Yusuf Hussain Kamal, Qatar's Minister of Finance and chairman of the board of RasGas, signed the agreement with CPC board chairman Ching Tsai Kuo at a ceremony held at the Ritz Carlton Doha.

RasGas managing director Alex Dodds and CPC vice-president (finance) Ching Hsung Chiu were also present at the agreement signing.

In a statement issued after the signing, the minister said that Qatar's LNG production would range between 20 and 21 million tonnes in 2006 and increase to 77 million tonnes by 2012.

Commenting on the financing of RasGas ventures, the minister said investment is expected to ultimately reach about $14 billion.

RasGas-II, which opened its third 4.7 million tonne-a-year LNG train last year, expects to bring its fourth and fifth LNG trains on stream in 2005 and 2007, respectively.

Gas supply under this agreement will come from Qatar's giant North Field, which has recoverable reserves of more than 900 trillion cubic feet, the world's largest non-associated natural gas field.


Mangalore Refinery plans new plant Posted Thursday, September 15, 2005 - 3:45 by hydrocarbonasia
India’s Mangalore Refinery and Petrochemicals plans to build a new 250 billion rupee (US$5.7 billion) 800,000 barrels-per-day refinery, it was reported yesterday.

MRPL, a subsidiary of state-run oil exploration firm Oil and Natural Gas Corp, operates a 194,000 bpd refinery in Southern India, which is being expanded to 300,000 bpd.

The company had earlier said that it was considering to further expand the refinery to 600,000 bpd.

MRPL has now planned the new 800,000 bpd refinery and petrochemicals project, mainly aimed for exports, the newspaper said. It would be built with a foreign oil and gas major it added.

ONGC is also considering bidding for a 200,000 bpd refinery project in Angola, it said without giving details. Officials at MRPL and ONGC were not immediately available for comment.

Several Indian oil firms are planning to expand their refineries, hoping to take full advantage of good margins and global shortage of refining capacity, but analysts say some projects may be delayed.

India has a surplus refining capacity since the late nineties when Reliance Industries Ltd set up its refinery that now processes 660,000 bpd.

India’s refining capacity of 2.5 million bpd is expected to rise to 2.8 million bpd by 2007 and soar to 4 million bpd by 2008, after Reliance doubles its Jamnagar plant to 1.2 million bpd, industry officials said.

Deutsche Bank said in a recent report that it estimated India’s refining capacity would expand at a slower pace, from 2.577 million bpd this year to 3.053 million in 2008.

It expected China to become the major regional supplier within a decade.



Sabic concludes contract with Aker Kvaerner and Sinopec joint venture for the polyolefins plant at Sabic YANSAB affiliate Posted Thursday, September 15, 2005 - 2:05 by hydrocarbonasia
Saudi Basic Industries Corporation (SABIC) concluded, on Wednesday September 14, 2005 a contract with Aker Kvaerner and China Petrochemical Corporation (SINOPEC) Joint Venture for the engineering, procurement and construction of its world-scale Polyolefins complex at YANSAB, in Yanbu, Saudi Arabia.

Eng. Yousef Al-Zamel, Vice President, SABIC Basic Chemicals, signed the contract for SABIC, for Aker Kvaerner its President, Mr. Wim Van der, Zande and Mr. Wang Zhenan for SINOPEC. Subject to contract, the two companies shall carryout engineering, procurement and construction of a Linear Low Density Polyethylene (LLDPE) plant as well as a Polypropylene (PP) plant. The project also includes the supply and construction of shared offsite product handling facilities. The two new plants are integral part of the main Ethylene and Propylene manufacturing complex. The annual design capacity for each plant is 400K MT.

The Polypropylene plant utilizes Dow technology and the LLDPE plant will use SABIC owned and patented polyethylene technology.

Eng. Yousef Al-Zamel said that work on this project commenced in July 2005. It is a major stride towards the construction of one of the largest world-class petrochemical plants using the latest state-of-the-art technology. The plant's production will go on stream during April 2008.

YANSAB is the newest SABIC affiliate and is planned to produce 1.3 million tpa of Ethylene; 400,000 tpa of Propylene; 500,000 tpa of High Density Polyethylene (HDPE); 700,000 tpa of Mono Ethylene Glycol (MEG); and 250,000 tpa of Benzene, Xylene and toluene compound. The complex will manufacture a wide range of basic chemicals, intermediates and polymer products

US oil production and refining capacity to return to normal by November Posted Thursday, September 8, 2005 - 4:20 by hydrocarbonasia

US domestic oil production and refinery output should return to pre-hurricane levels by November, the Energy Department said on Wednesday.

The Energy Information Administration (EIA), the statistical agency of the US Energy Department, said that domestic oil production should return to just under 5.4 million barrels a day in November, or the level in August before Hurricane Katrina disrupted most of the Gulf production and knocked out ten Gulf coast refineries.

The EIA also said the US refining capacity should rebound with an anticipated output of gasoline and other fuels of nearly 16.4 million barrels a day in November, the same as the August levels.

Testifying before a US House committee examining the energy impacts of Hurricane Katrina, EIA director Guy Caruso said that the forecast will depend on the timing and pace of repairs to oil platforms and refineries. However, he said that "the infrastructure has been coming back more quickly" than had been expected.





CNOOC to buy LNG from Indonesia? Posted Tuesday, September 6, 2005 - 4:21 by hydrocarbonasia
CNOOC Ltd. is interested in buying 30 million metric tons a year of liquefied natural gas (LNG) from Indonesia starting in 2010 to meet China's rising energy needs from its robust economic expansion, an Indonesian official said Monday.

Iin Arifin Takhyan, director general of oil and gas at the Mines and Energy Ministry, said CNOOC indicated an interest to purchase the LNG. "CNOOC will also study the possibility of building an LNG plant in East Kalimantan," Iin said.


SHARQ signs Letter of Intent with Foster Wheeler to construct Utility Offsite Facilities Posted Tuesday, August 30, 2005 - 12:29 by hydrocarbonasia
SABIC affiliate, Eastern Petrochemical Company (SHARQ), signed a letter of intent on 24 August 2005 to award contracts to Foster Wheeler to construct Utility Offsite Facilities within its expansion project III.

Mohamed Al-Mady, SABIC Vice Chairman and CEO said, "SHARQ's expansion project will add a total of 2.8m MT annually to SABIC's production including 1.3 million MT of Ethylene, 700,000 MT of Ethylene Glycol, 400,000 MT of Linear Low Density Polyethylene (LLDPE), and 400,000 MT of High Density Polyethylene (HDPE). This will further enhance SHARQ's position as the world's largest single producer of Ethylene Glycol and will also enhance SABIC's global ranking.

The above mentioned arrangements will cover engineering, procurement and construction of the plants which will be erected at the SHARQ complex in Al-Jubail, Saudi Arabia, that will be completed by Q1 2008.

The letter of intent was signed by Mohammad Al-Jabri, SHARQ's company President and an executive representative from Foster Wheeler.

SHARQ is a joint venture equally owned by Saudi Basic Industries Corporation (SABIC) and SPDC Ltd, a Japanese consortium led by the government of Japan and a consortium of companies led by Mitsubishi.






CNOOC to build refinery in Huizhou Posted Tuesday, August 30, 2005 - 12:27 by hydrocarbonasia
A top Chinese oil company has entered a deal with a top Australian engineering firm to build a 17 billion yuan (approx. US$2.3 billion) oil refinery in southern Guangdong province, state press said on Saturday.

China National Overseas Oil Corporation (CNOOC) would build the refinery in Huizhou city in a move that should help alleviate oil shortage in Guangdong. China’s leading industrial powerhouse, the Beijing News reported. It would be CNOOC’s first foray into the refining business. The company has largely been engaged in offshore and onshore oil exploration and extraction.

A deal to build the refinery was signed late on Thursday with Worley Parsons, a leading Australian engineering company engaged in the energy sector.

Yemen LNG project cleared for construction Posted Tuesday, August 30, 2005 - 12:25 by hydrocarbonasia
SK Corporation and its partners Hunt and Total have received approval from the Yemen government and reached a final investment decision on the development plan for the Yemen LNG liquefaction plant at Yemen’s Gulf of Aden. The integrated project will develop, transport and liquefy, and sell the natural gas. Slated for completion by late 2008 with a 20-year production period, the facility will produce 6.7 million metric tons per annum (MMTPA).

This announcement marks another critical step toward commercial production for the Yemen LNG project. Earlier this year, Yemen LNG signed three long term (20 year) sale and purchase agreements with Suez LNG Trading (2.55 MMTPA), KOGAS (2 MMTPA), and Total Gas & Power Ltd. (2 MMTPA). The final stage before the commercial production process will be the development of the gas reserves at block 18, the construction of a liquefaction plant, and the laying of a 320 km pipeline linking two sites. The commercial production is expected to commence at the end of 2008.

Yemen LNG shareholders include the Yemeni government, represented by the Yemen Gas Company (23.10 percent), Total (42.90 percent), Hunt Oil Company (18 percent), SK Corporation consortium (10 percent including SK Corp. 7.22%, Samwhan 1.67% KNOC 1.11%), and Hyundai Corporation (6 percent). Under the agreements with KOGAS, the Korean utility will acquire 6 percent interest in Yemen LNG in the near future.

Currently engaged in 20 oil and gas blocks in 12 nations, as well as four LNG projects, SK Corp. is among Korea’s largest energy companies. SK is well-positioned for rapid growth and focused on exploration and production. SK recently announced the sale and purchase agreement of Peru LNG with Repsol YPF for the period of 18.5 years. It also recently announced plans to proceed with the development of Brazil BMC-8, with a preliminary estimated reserve potential of over 50 million barrels of oil.





Titan Chemicals clinches US$145m Seoul contract Posted Friday, August 26, 2005 - 5:25 by hydrocarbonasia
TITAN Chemicals Corp Bhd has won a US$144.95 million (US$1 = RM3.77) contract to supply butadiene for five years to South Korean petrochemical company Korea Kumho Petrochemical Co Ltd.

The annual contractual quantity to be supplied is 50,000 tonnes with a plus or minus 5 per cent variation amount.

This deal, entered into by Titan’s subsidiary, Titan Petchem Sdn Bhd, is conditional on the new butadiene plant of Titan Petchem being completed in 2007.

Titan plans to construct a butadiene plant to convert existing mixed C4 by-product streams into value-added derivative produce used in synthetic rubber.

Meanwhile, in a separate announcement, Titan said its net profit surged by 213 per cent to RM270.59 million for the first-half ended June 30 2005, driven by escalating price of oil and its derivatives.

Net profit in the corresponding period of 2004 was RM86.38 million.

Revenue, meanwhile, rose 35 per cent to RM2.15 billion from RM1.59 billion previously.

The board has declared a tax exempt dividend of 3 sen per share.

Its executive chairman James Chao said that the results demonstrate the strength of its business plans.

“The second quarter was highlighted by continued rapid deleveraging. Our June 2005 ratio of debt to total assets was 42.6 per cent down from 65.7 per cent at year-end 2004. We are thus well on our way to achieving our goal of having debt total assets ratio of 40 per cent by 2005,” managing director Don M Condon Jr said.

The company expects its performance will be about that forecast for the year 2005. Titan Chemicals forecasts profit to hit RM604 million this year from RM262 million in 2004, in its prospectus.

The company said that high feedstock costs and continuing petroleum volatility will be offset by the continued strong demand and improved selling prices for polymers, as well as sustained operating performance.

It added that lifting of the fixed ringgit peg to the US dollar could have a positive impact on its earnings, in the event the ringgit strengthens, as the company’s term loans are in US dollars.










Emerson digitally automates US$2.7 Billion Shanghai SECCO Petrochemical Complex Posted Tuesday, August 16, 2005 - 2:34 by hydrocarbonasia

Emerson Process Management, a business of Emerson (NYSE:EMR), announced on 27 July the completion of a digital automation project at one of the largest integrated petrochemical complexes in China. Shanghai SECCO Petrochemical Company selected Emerson in 2003 as its digital automation partner for the $2.7 billion, 10-plant ethylene cracker complex.

Located in the Shanghai Chemical Industrial Park about 30 miles (50 kilometres) from Shanghai, the complex will annually produce 900,000 tons of ethylene and more than 2 million tons of other related petrochemical products used in the plastics and synthetics industries. The ethylene cracker, SECCO’s core plant in the complex, is the largest in China, as well as one of the largest in the world.

SECCO used the engineering and project management expertise of Emerson to integrate and coordinate multiple suppliers, enabling completion of the complex – from bare ground to a fully functional world-class facility -- in just 27 months, three months ahead of schedule. Startup of the ethylene cracker plant in March 2005 took just 10 hours, 45 minutes, a world record, according to SECCO, for a project of this magnitude.

“Our facilities and expert personnel at Pudong enabled us to partner effectively with SECCO, shaping a cutting edge solution,” said Sweechee Lee, general manager, Emerson Process Management China. “We were also able to call upon Emerson experts among our more than 4,000 global engineering and technical service professionals, particularly from centres in India and Singapore.”

Emerson installed PlantWeb® digital architecture throughout the SECCO complex, which contains 47,000 control loops, 40,000 instruments, and some 13,000 intelligent devices networked in the world’s largest FOUNDATION fieldbus installation. Fieldbus is an all-digital, open communications approach that connects measurement and control equipment such as sensors, actuators and controllers in processing applications.

Rather than using a centralized project organization run by an overall project contractor, SECCO – a joint venture between BP, Sinopec, and Shanghai Petrochemical Corporation (SPC) – chose an integrated project management team approach, under which each key plant in the complex had a lead project contractor. As the main automation supplier, Emerson not only engineered and implemented the automation and control systems, but also helped manage multiple international and local suppliers for each of the 10 plants in the facility.

The Emerson-SECCO team wrote the engineering functional design specifications for the facility, which ensured that identical approaches were taken to engineering in each of the 10 plants. As Main Instrument Vendor (MIV), Emerson communicated and enforced conformance and standardization in all the processes in each of the plants, a vital step to maintaining long-term operating efficiency of the integrated complex.

“With so many contractors, SECCO realized that partnering with one main automation supplier early – that is, using the MIV approach – would be critical for the success of the project,” commented Danny McHugh, process control manager styrenics, SECCO.

The MIV approach provided integration and teamwork for the project, and helped facilitate communication and optimized operations throughout the construction and on into the operation of the facility.

SECCO also implemented a centralized control room – the command centre for all operations personnel in the facility – that oversees the main ethylene cracker and nine downstream derivative plants. Emerson’s PlantWeb® digital architecture with FOUNDATION fieldbus technology enables economical communications and wiring for the centralized control room, collecting, analyzing and sharing operations and diagnostics information for the 750 operations, engineering, and maintenance personnel staffing the SECCO site.

AMS™ Suite: Intelligent Device Manager, a key PlantWeb tool used during engineering and commissioning, enabled economies in setup and configuration of the intelligent devices. During regular operation, AMS Suite technologies will receive diagnostic information from the digital field devices and provide advanced information about the health of all components to maximize plant reliability and availability.

The AMS Suite software resides on ten DeltaV™ automation systems that operate as part of PlantWeb, coordinating the control strategies across the complex and communicating over the digital network to Emerson’s Fisher® valves with Fisher FIELDVUE® digital valve controllers, Rosemount® measurement and analytical devices, and Micro Motion® Coriolis flowmeters.

Emerson also integrated a safety instrumented system (SIS) into the open and flexible digital plant architecture, as well as a closed-circuit TV system between the control room and outstations.

“When you look at the complexity of building 10 units at one time, and asking all of them to start up in a short timeframe with minimum disruption, it’s pretty amazing,” said Jack Brinly, deputy project director at SECCO. “At the beginning, we saw no probability of finishing in early 2005, but we were able to finish three months earlier than originally planned, and Emerson deserves much of the credit for making that happen.”

“On such a massive and centralized scale, this is probably the first project of its kind ever,” said Zhang Ziliang, SECCO project director. “In practice, the performance of the complex is outstanding. We have achieved our objectives, and on the whole it is very satisfying.”

According to SECCO, the integrated complex project has a world class safety record, with no major accident and zero fatalities during construction, which included more than 50 million man hours of labour. The site also boasts leading environmental standards. Recognizing the key role of automation in the successful project, SECCO recently presented Emerson with the Excellent Supplier Award.

“We are honoured to be part of the partnership that has made the SECCO project successful,” said Mike Train, president of Emerson Process Management, Asia-Pacific. “It is gratifying that Emerson’s engineering and project management expertise and the technology of PlantWeb with FOUNDATION fieldbus played a key role in helping SECCO realize its vision.”

Hyperion to provide Support and Maintenance services to GS-Caltex in Korea Posted Thursday, August 11, 2005 - 2:27 by hydrocarbonasia
Hyperion Systems Engineering Ltd, which provides high quality custom made solutions and services to process industries worldwide, has announced a new contract to provide comprehensive Application Support and Maintenance Services for Operator Training Simulators (OTS) to GS-Caltex in Yeosu, Korea.

GS-Caltex, one of the leading refineries in Asia, has three OTS systems, which are used to ensure their entire operations team is able to operate the plant effectively. Recent plant changes have led to a requirement to update these OTS systems, by incorporating the changes and additions into the simulators. This will ensure that operators can continue to be trained to operate the plant confidently, safely, and to the highest efficiency

GS-Caltex has a goal to be "The Leader in Providing Energy Service" and consider OTS to be one of the key technologies to help them achieve this. Mr Jae-Cheol Ahn, Team Manager of GS-Caltex Corporation said, “Having the simulator maintained by highly skilled resources familiar with our OTS technology, is critical to the success of our program to continually improve operations performance using the investment we have made in OTS.”

Hyperion will be working with Hayoung Company Ltd of Korea, who provides GS-Caltex with a variety of maintenance services. Mr Young Woon Choi, President of Hayoung Co. Ltd. says, “We chose Hyperion as our partner because they are the only company with the depth of skill and experience in OTS that GS-Caltex need, and have a worldwide capability to provide this resource.”

Dr. Symeon Kassianides, CEO of Hyperion, said “The unique skills of Hyperion engineers, together with their familiarity with the GS-Caltex OTS technology and specific applications, is a valuable service which we are pleased to offer. We are very pleased to be working with GS-Caltex again to ensure their investment in OTS is protected.”

First gas enters Bayu-Undan pipeline Posted Wednesday, August 10, 2005 - 2:48 by hydrocarbonasia
The Northern Territory Chief Minister says the first gas has entered the Bayu-Undan to Darwin pipeline in the Timor Sea.

Clare Martin says the gas is being released at a reduced pressure and will be parked in the pipeline until it is required on a regular basis by the Darwin-based LNG plant.

She says it will take about a week to fill the 500-kilometre pipeline.

The LNG plant is expected to be operating early next year.

Reliance industries Limited: Towards exponential growth Posted Friday, August 5, 2005 - 10:52 by hydrocarbonasia
Reliance Industries Limited (RIL) will double its petroleum refining capacity at Jamnagar to 60 million tonnes per year.

It was announced by Shri Mukesh Ambani, Chairman of Reliance Industries Limited, who was addressing the company’s 31st Annual General Meeting at Mumbai on 3 August.

The refinery expansion will entail an investment of Rs 25,000 crore (US$ 5.7 billion), and will make the Jamnagar refinery the largest petroleum refinery at any single station in the world. It will result in 1.2 million barrels per day of crude throughput.

The increased output is primarily aimed at export markets.

For completion of the project, RIL has set for itself an aggressive schedule of the second half of the financial year 2008-09. The full benefit of the new capacity will be available from the year 2009-10.

Shri Ambani has completed three years as Chairman of RIL. He succeeded his father Shri Dhirubhai Ambani as Chairman on July 2, 2002.

In the Exploration and Production (E&P) sector, Shri Ambani announced that RIL made 10 more oil and gas discoveries since the last AGM.

These included three more discoveries in NEC 25, six more in KG D6 and one more in Yemen. The discoveries in NEC 25 and KG D6 have been named Dhirubhai 15, 16, 17, 18, 19, 20, 21, 22 and 23, in the memory of the late Dhirubhai H. Ambani, founder of Reliance.

“I look forward to the day when we will have a Dhirubhai 100 discovery. And that will be the day to celebrate", he added.

Over the next four to five years, investments in upstream oil and gas exploration and production will take up Rs 17,600 crore (US$ 4 billion).

For Coal Bed Methane (CBM), RIL has drilled 12 information wells, in addition to the seven last year. The commercial viability of these CBM blocks has been established and these resources are likely to be developed commercially by 2009-10.

Saudi Arabia: Sharq signs Letters of Intent to construct petrochemical plants Posted Thursday, July 28, 2005 - 1:39 by hydrocarbonasia

SABIC affiliate, Eastern Petrochemical Company (SHARQ), has signed letters of intent to award contracts on 27 July to:

1. Stone & Webster Ltd., UK, to construct an Olefins Plant with a
production capacity of 1,300,000 MT per annum of Ethylene;

2. Samsung Engineering Company Ltd., South Korea, to construct its
Ethylene Glycol Plant with a production capacity of 700,000 MT
per annum (increasing overall Ethylene Glycol production capacity
to more than 2,000,000 MT per annum).

3. Linde, Germany, to construct its Linear Low and High Density
Polyethylene plants with a production capacity of 800,000 MT per
annum, which will increase polyolefins production at SHARQ to
reach more than 1,600,000 MT per annum.

Mohamed Al-Mady, SABIC Vice Chairman and CEO said, "SHARQ's expansion project will add 2.8m MT annually to SABIC's production and will further enhance SHARQ's position as the world's largest single producer of Ethylene Glycol. This will also enhance SABIC's global ranking alongside the other global petrochemicals companies who produce this product. SABIC is currently ranked 2nd and is expected to become number one once this project comes on stream. SABIC is the world's 3rd largest producer of polyethylene and number four for polyolefins."

The agreements will cover engineering, procurement and construction of the plants at the SHARQ affiliate in Al-Jubail, Saudi Arabia. These will be complete by the first quarter of 2008.

The letters of intent were signed by Mr. Mohammad Al-Jabri, SHARQ President, with executive representatives from Stone Webster Ltd., Samsung Engineering Company and Linde.

SHARQ is a joint venture equally owned by Saudi Basic Industries Corporation (SABIC) and SPDC Ltd, a Japanese consortium led by the government of Japan and the Mitsubishi group of companies.

Pertamina to build Tuban refinery with Sinopec Posted Tuesday, July 26, 2005 - 11:02 by hydrocarbonasia
State oil and gas company PT Pertamina will work with the China Petroleum & Chemical Corp., Sinopec to build the country's tenth refinery in Tuban, East Java, Minister of Energy and Mineral Resources Purnomo Yusgiantoro says.

Pertamina and Sinopec will sign a memorandum of understanding (MOU) during President Susilo Bambang Yudhoyono's visit to China later this week, Purnomo said on Sunday.

Pertamina's president director Widya Purnama said that construction was expected to start as soon as possible, depending on further discussions between the two companies.

"We hope to start this year, or next year at the latest," said Widya. He declined to give a date for the coming on-stream of the refinery or the investment involved in the capital-intensive endeavour.

The refinery will have a processing capacity of between 150,000 barrels of crude oil per day (bpd) and 200,000 bpd, said Widya.

In order to prevent fuel shortages in the future, Susilo has ordered the development of a refinery in Tuban, which will process oil from the Cepu block, located between East Java and Central Java, and the Jeruk field, south of Madura island.

Cepu, which will be operated by a joint venture between Pertamina and U.S. energy giant ExxonMobil, is expected to produce 170,000 bpd at its peak, while it is estimated that Jeruk will produce at least 50,000 bpd.

At present, Indonesia has nine large and small refineries with a total processing capacity close to 1 million bpd.

With domestic fuel consumption rising by some 7 percent per year, the government, through Pertamina, has to import some 300,000 barrels of crude oil and 400,000 barrels of fuel products per day to secure supply.

ConocoPhillips' sulphur removal technology installed at China refinery Posted Monday, July 11, 2005 - 2:21 by hydrocarbonasia
ConocoPhillips recently announced that its proprietary S Zorb™ Sulphur Removal Technology (SRT) will be installed at Sinopec Beijing Yanshan Company’s Yanshan Refinery, Yanshan, Beijing, China. Sinopec Beijing Yanshan Company is a wholly owned subsidiary of Sinopec Corporation.

The 3,430 metric tons per day (approximately 30,000 barrels per day) S Zorb gasoline desulphurization unit, being designed to process full-range naphtha from the Fluid Catalytic Cracking (FCC) unit, is scheduled for startup in 2006. ConocoPhillips is working closely with Sinopec Beijing Yanshan Company to achieve an aggressive implementation schedule to ensure the unit is brought on-stream as soon as possible to meet the Beijing market’s high demand for ultra-low sulphur gasoline.

An advanced process technology that removes sulphur from gasoline streams through the use of a novel, regenerable sorbent, S Zorb SRT was developed to help refineries comply with increasingly stringent mandates for cleaner-burning fuels. The addition of the new S Zorb unit will enable the Yanshan refinery to cost-effectively achieve this compliance, as well as future low-sulphur requirements, while at the same time, minimizing refinery octane pool losses and hydrogen consumption normally associated with FCC gasoline desulphurization.

“In order to meet the daily increasing gasoline quality requirements in the Beijing market, S Zorb SRT is an optimal technology for both deep desulphurization and octane retention. We have chosen to adopt S Zorb technology to process FCC gasoline,” said Professor Yang Qingyu, vice president, Sinopec Beijing Yanshan Company.

“ConocoPhillips is pleased to be a contributor to the production of ultra-clean gasoline in the Beijing market,” said Brian Evans, manager, ConocoPhillips Technology Solutions Division. “This fast-track project is being developed to help reduce vehicle-generated emissions well in advance of the 2008 Olympic Games, which will be hosted in Beijing.”

Sinopec Beijing Yanshan Company’s Yanshan Refinery is one of China’s largest refiners of fuel, lubrication oil and raw chemical materials, with a crude oil processing capacity of 9.5 million metric tons annually. It is the first refinery outside the U.S. to commit to build an S Zorb SRT unit. ConocoPhillips recently announced that a new S Zorb SRT unit will be built at Pasadena Refining System, Inc.’s Pasadena, Texas, USA, refinery, which represents the second S Zorb SRT unit to be built outside of ConocoPhillips’ own refining system.

Other S Zorb units are located at ConocoPhillips U.S. refineries in Borger, Texas, and Ferndale, Wash., which have been successfully operating since 2001 and 2003 respectively. The company has a third S Zorb unit under construction at its Lake Charles refinery in Westlake, Louisiana, USA, with start-up scheduled for later this year.


Exxon Mobil eyes Chinese refinery Posted Monday, July 11, 2005 - 11:04 by hydrocarbonasia
Exxon Mobil Corp. has started work with China's third-biggest state oil company and a Saudi partner, Aramco on a $3.5 billion project to expand a refinery in southern China.

The project comes amid efforts by energy companies to tap China's market for fuel to drive its booming economy, already one of the world's biggest oil consumers, along with the United States and Japan.

A groundbreaking ceremony was held Friday by Exxon Mobil and its partners - Sinopec of China and Aramco of Saudi Arabia - in the southern city of Quanzhou in Fujian province.

The project will triple the refinery's output to 85 million barrels of petroleum products a year and equip it to process imported Saudi crude, the companies said.

The Chinese partner will own 50 percent of the venture and Exxon and the Saudi company will each hold 25 percent.

The refinery gives Exxon Mobil, the world's biggest oil company, and Aramco a major new foothold in China's state-dominated oil industry.

Booming economic growth that has topped 9 percent in recent years has strained China's energy supplies and driven official efforts to secure new oil and gas sources abroad.

China's third-biggest oil company, CNOOC Ltd., is in the midst of a takeover battle with Chevron Corp. for California-based Unocal Corp.

CNOOC has offered $18.5 billion for the U.S. company, saying it wants access to its Asian oil and gas reserves to serve Chinese customers.

The refinery project in Fujian will include facilities to produce ethylene, polyethylene, polypropylene and other petrochemicals, the companies said.

Irving, Texas-based Exxon Mobile said it was developing projects in China, Qatar, Singapore and Venezuela to ensure supplies for the refinery.


Axens to license SK Corporation’s Advanced Pyrolysis Gasoline Upgrading Technology Posted Thursday, July 7, 2005 - 12:31 by hydrocarbonasia
Axens (Rueil-Malmaison, France) has been selected by SK Corporation (Seoul, Korea) as the licensing partner for its Advanced Pygas Upgrading (APU) Technology. The APU process, developed by SK, enables the reduction of low valued pyrolysis gasoline by converting it into additional purified aromatics and into LPG, a steam cracker feedstock.
This selective catalytic technology increases BTX (benzene, toluene and xylenes) production via the hydrodealkylation of C9+ aromatics.

In addition, LPG (liquefied petroleum gas: propane and butanes) production is increased through selective cracking and hydrogenation of non-aromatic compounds into light paraffinic products. Through the recycling of the light ends to the steam cracker, additional ethylene and propylene are produced. Due to these reactions, the BTX stream does not require solvent extraction treatment. Benzene can be used as-is for the production of other building blocks, such as ethylbenzene-styrene. Toluene purity is ideal as a transalkylation feedstock, and the xylenes fraction does not require further extraction before separation to recover paraxylene.

The agreement was signed today by Tae-Won Chey, Chairman & Chief Executive Officer of SK Corporation and Jean Sentenac, President and Chief Executive Officer of Axens in Seoul, Korea.

Axens’ intention is to launch APU licensing immediately with particular interest in targeting naphtha crackers interested in debottlenecking their benzene, toluene and mixed xylenes production.

Malaysia LNG signs supply agreement with Hiroshima Gas Posted Wednesday, July 6, 2005 - 5:49 by hydrocarbonasia
Malaysia LNG Sdn Bhd (MLNG), a subsidiary of PETRONAS, signed on 4 July 2005 a Sale and Purchase Agreement (SPA) with Hiroshima Gas Co. Ltd. (Hiroshima Gas) to supply up to 82,000 metric tonnes of liquefied natural gas (LNG)) to the Japanese company for eight years beginning later this year. The deal increases MLNG’s customer base among the Japanese power and gas companies to 12.

The LNG will be supplied from the PETRONAS LNG Complex in Bintulu, Sarawak and will be delivered to Hiroshima Gas receiving terminal at Hatsukaichi in Japan on ex-ship basis. Hiroshima Gas is the seventh largest city gas company in Japan in terms of gas sale, supplying primarily to the Hiroshima Prefecture. The company currently imports LNG from Indonesia with an annual volume of 210 000 metric tonnes.

Earlier the same day, the two parties also signed a Memorandum of Agreement (MOA) with the City of Sendai that allows for the use of the LNG vessel Aman Sendai to deliver the LNG to Hiroshima Gas. The vessel is one of the medium-sized LNG ships dedicated to transport LNG from Bintulu to the City of Sendai, which is a customer of MLNG since 1997.

The MOA is very significant as it is the first time in the LNG industry that an LNG supplier and two customers agree to the mutual use of one dedicated vessel to transport LNG to the customers’ respective receiving terminals. It also reflects the trust and confidence of MLNG‘s customers of its delivery commitment and capability.

The PETRONAS LNG Complex in Bintulu is currently the world’s largest integrated LNG facility at a single location with a combined production capacity of approximately 23 million tonnes per year (mtpa). The Complex houses the three-train, 8.1 mtpa MLNG plant, as well as the three-train, 7.8 mtpa MLNG Dua plant and the two-train, 6.8 mtpa MLNG Tiga plant.

At the signing of the SPA and MOA held in Kuala Lumpur, MLNG was represented by its Managing Director/ CEO, Encik Ahmad Nizam Salleh, Hiroshima Gas by its President, Mr. Hideki Fukayama and the City of Sendai by its Managing Director of Gas Bureau, Mr Nobuyoshi Inaba. Present at both ceremonies was the Chairman of MLNG, Tan Sri Dato Sri Mohd Hassan Marican, and Mr Yoshio Kato, Deputy Mayor of the City of Sendai.

Petronas commissions Lurgi to construct its methanol plant Posted Wednesday, July 6, 2005 - 4:58 by hydrocarbonasia
PETRONAS, through its subsidiary, Petronas Methanol (Labuan) Sdn Bhd (PMLSB), has awarded Lurgi AG of Germany the contract to expand its methanol plant in Labuan.

Lurgi’s scope of work includes engineering and procurement services, construction, pre-commissioning and commissioning works for the plant’s expansion, which is expected to complete by the end of 2007.

The expansion will involve the construction of new plant that will utilize Lurgi’s MegaMethnol technology. The new plant will produce 1.8 million tonnes of methanol a year, or 5,000 metric tonnes a day, which is triple that of the existing plant’s current capacity of 660,000 tonnes a year.

The enlarged production capacity of 2.46 million tonnes per year will turn Labuan into a major producer of methanol in the world. Methanol produced from the plant will be marketed to the domestic market as well as the growing markets in Southeast Asia, North East Asia and India.

Methanol is a chemical building block used to produce formaldehyde, acetic acid and a variety of other chemical intermediates. Methanol is also used to make methyl tertiary butyl ether (MTBE), which is an oxygenate used in cleaner burning gasoline.

Other uses of methanol form the basis for many products including silicones, refrigerants, adhesives, speciality plastics and coatings, textiles and water treatment chemicals.



China's refining oil giants to trim output Posted Friday, June 21, 2002 - 2:51 by petromin

China's refined-oil product output rose slightly in the first five months of this year on strong demand, but the two biggest domestic producers plan to cut production rates in an attempt to bolster the sluggish price, analysts said.

China processed 89.2 million tonnes of crude oil January through May, up 1.9 per cent from the same period in 2001, the State Statistical Bureau said.

May crude runs totalled 19.3 million tonnes, up 1.4 per cent from the year-ago period, it said.

The production of diesel rose by 5.4 per cent, while gasoline production fell 3.8 per cent. Diesel and gasoline are major refined oil products.

The processing hike was mainly attributed to strong economic growth and sliding domestic stocks, said Gong Jingshuan, a consultant to the China National Petroleum Corp (CNPC), the nation's second largest oil refinery.

"Production controls set by the two refining giants have paid off, with their gasoline and diesel inventory cut to 9 million tonnes in May, down from over 10 million tonnes early this year," said Gong.

In previous months Sinopec and CNPC, who together control 90 per cent of the nation's refined-oil production, have joined hands to reduce processing of crude oil in response to the market glut.

Partly due to weak market demand and falling sales prices, Sinopec's net profit plummeted 86 per cent in the first quarter, compared to the same period a year ago.

Gong said the market is awash now with diesel and gasoline. Inventories built up to 10 million tonnes by late May.

"Demand has grown weak since the fishing ban in April," he added.

On April 1, the Chinese Government's annual ban on fishing in the Yangtze River began, cutting diesel consumption by fishing vessels.

To stimulate the market again, the two agreed to cut processing by 1.25 million tonnes to stabilize prices. PetroChina will slice 650,000 tonnes.

India: Reliance to increase refining capacity Posted Friday, June 21, 2002 - 2:50 by petromin

Reliance Petroleum is likely to increase capacity of its 27 million-tonnes/year Jamnagar refinery to about 30 million tonnes by 2004-05, senior company official said.

"We plan to rake up Jamnagar capacity to 590,000 barrels per day in the next two to three years through de-bottle-necking the present capacity of 540,000 barrels per day," the official told PTI.

Reliance expects petroleum product demand to increase to 125 million tonnes by the end of Tenth Five Year Plan Period (2006-07) from 103 million tonnes consumption in
2001-02.

"We are preparing ourselves to meet that demand," he said.

Reliance, which operated its Jamnagar refinery at 109.8 per cent of the capacity in
2001-02 would continue to operate its refinery above the prorated capacity, exporting the surplus products to US, Europe and Japan, the official said.

During 2001-02, export of RPL products accounted for Rs 8,476 crore in the Rs 33,117 crore total sales. RPL's mainstay export is diesel, despatching over 300,000 tonnes every month to destinations as far as Latin America.

RPL, which currently does not have a retail chain of its own, sells 13.1 million tonnes of its products annually to state-run oil marketing companies IndianOil, Bharat Petroleum and Hindustan Petroleum.

Of this IOC picks up 7.5 million tonnes while the other two market the balance equally, official said.

As per the deal, state-run oil companies would sell RPL products till March 31, 2002, time enough for the country's largest private sector oil company to set up its own retail outlet chain.

RPL has been given authorisation by the government to set up about 5,900 retail outlets in the country, the official said, but declined to give details of the company's investment plan in setting up the retail chain.

IOC would lift 1.54 million tonnes of superior kerosene oil from Jamnagar refinery for sale through its retail chain in 2002-03, 279,000 tonnes of petrol, 4.3 million tonnes of high-speed diesel and 1.36 million tonnes of liquefied petroleum gas.

During 2003-04, IOC would lift 1.58 million tonnes of superior kerosene oil, 272,000 tonnes of petrol, 4.28 million tonnes of high-speed diesel and 1.36 million tonnes of LPG.

"IOC will lift an average 23,000 tonnes of petrol a month, up to 116,000 tonnes of LPG, 128,000 tonnes of kerosene and 358,000 tonnes of diesel till March 2003," he added.

IOC has agreed to pay Reliance the same price, as it would have to pay if the products were imported (import parity), the official said adding Reliance has in turn agreed to classify IOC as most-favoured customer.

Talking about the refinery capacity, they said the Jamnagar refinery at present can produce up to 2.3 million tonnes of LPG, 0.7 million tonnes of propylene, four million tonnes of naphtha, 2.7 million tonnes of reformate, four million tonnes of gasoline, 3.6 million tonnes of jet fuel, 11 million tonnes of diesel, 0.5 million tonnes of sulphur and 0.25 million tonnes of petroleum coke.

CB&I WINS EPC CONTRACT FOR CLEAN FUELS PROJECT IN AUSTRALIA Posted Friday, June 21, 2002 - 2:48 by petromin


CBI Constructors Pty. Ltd., a subsidiary of Chicago Bridge & Iron Company N.V. has been awarded a lump-sum turnkey EPC contract valued in excess of A$90 million (approximately US$50 million) by Shell Refining (Australia) Pty. Ltd. for a new hydrodesulfurization (HDS) plant at Shell's refinery in Geelong, Victoria, Australia. The HDS 2 Plant, which has a design capacity of 6,000 tonnes per day, is designed to enable Shell to produce ultra-low sulfur diesel to meet the Australian Government's new clean fuels specifications that will become effective in January 2006.

CB&I will be responsible for the engineering, procurement, construction and pre-commissioning of the project. The company will mobilize on site in June 2002 and expects to complete the project in September 2003. The HDS 2 Plant will act as a reactor, removing sulfur from diesel by converting it into hydrogen sulfide, which is subsequently converted into solid sulfur for use as fertilizer. Lowering the sulfur content of diesel will in turn reduce particulate emissions from diesel engines, resulting in a significant improvement in air quality.

"We are pleased to continue our association with Shell in the further development of their Geelong Refinery," stated Gerald M. Glenn, CB&I's Chairman, President and CEO. "We have participated in major refinery development projects in Australia for more than 50 years. Our relationship with Shell is very extensive on a global basis and, in Australia, has included involvement in the most recent major projects undertaken at both the Geelong and Clyde refineries."

CB&I is a global specialty engineering and construction company offering a complete package of design, engineering, fabrication, construction and maintenance services. Our products include hydrocarbon processing plants, LNG terminals and peak shaving plants, bulk liquid terminals, water storage and treatment facilities, and other steel structures and their associated systems.

PetroChina, Shell To Sign W-E Gas Pipe Pact Jul 1 Posted Friday, June 21, 2002 - 2:47 by petromin

Dow Jones reported 19 June 2002 that PetroChina Co. and Royal Dutch/Shell Group expect to sign a commercial contract July 1 to jointly build a major natural gas pipeline project from Xinjiang in the West to Shanghai in the East, a PetroChina executive told Dow Jones Newswires Thursday.
"We are scheduled to sign the contract July 1," he said.
July 1 is also a red-letter day for China, marking the 81st anniversary of the founding of the Chinese Communist Party.
PetroChina plans to start the construction of the 3,900-kilometer pipeline July 3, he said.
The whole project, which involves the construction of the pipeline, gas development in Xinjiang and development of gas markets in the East will cost 460 billion yuan (US$1=CNY8.28).

Australia NWS LNG Train 4 On Track; Demand Growth Expected Posted Tuesday, June 18, 2002 - 4:13 by petromin

Dow Jones reported on 17 June that the fourth processing train at Australia 's North West Shelf liquefied natural gas export project is on track for first production by July 2004, just as demand for LNG starts to increase rapidly, Chris Haynes, the project's chief executive, said.
Haynes manages North West Shelf for operator Woodside Petroleum Ltd. (A.WPL), which holds a one-sixth share in the project.
He told the Southeast Asia Australia Offshore Conference the A$2.4 billion fourth train and second gas trunk line from offshore fields is overall 37% complete.
"I'm assured by the (expansion) project manager that we will be having first production at the end of the second quarter of 2004," he said.
Train 4 will have annual capacity of 4.2 million metric tonnes of LNG, which is now "fully committed," to take total annual capacity from the project to 11.7 million tonnes, he said.
North West Shelf sells its output to Japanese utilities under long-term contract.
Haynes told of "opportunities in Japan for further sales."
Japan is the biggest importer of LNG in the world and accounts for about 60% of Asian demand, he said.
"Under any demand scenario there are a lot of LNG sales to be fought for in the next few years in Japan," he said.
He also cited possible demand growth from other major importers like South Korea, Taiwan and potentially China, which is just about to award its first LNG supply contract for a 3 million tonnes a year import facility at Guangdong province.
Despite earlier optimism, India is just a "watching brief" at the moment, he added.
Even if Japanese demand doesn't grow in coming years, many existing supply contracts expire 2005 through 2011, including that for North West Shelf, he said.
"There'll be competition for our contracts," he said, with an increase in tendering likely, as per the Chinese contract.
The terms of future contracts will be less certain but "lowest cost best terms will win," he said.
The business is changing, he said.
"The lowest cost contract will always win, it's a very competitive market out there at the moment," he said.
The North West Shelf is competing to supply the Chinese contract with two other short-listed suppliers.
Of these, Haynes regards BP PLC's Tangguh project in West Papua, Indonesia, as the "principle competition." The other possible supplier is Qatar 's Ras Laffan Liquefied Natural Gas Co.
An announcement about the winning tenderer is imminent.
Woodside is an equal partner in North West Shelf with the Royal Dutch/Shell Group, ChevronTexaco Corp., BHP Billiton Ltd., BP and Japan Australia LNG, an equal joint venture between Japan 's Mitsubishi Corp. (J.MIB) and Mitsui & Co. (J.MIT).

Malaysia Makes Strides As Major Petrochem Player In Region Posted Monday, June 17, 2002 - 1:37 by petromin




Malaysia is well on track to becoming a major petrochemical supplier for the Asia-Pacific region, as seen in the rapid progress made by one of its key industry players, OPTIMAL, a joint venture between PETRONAS and US-based Dow Chemical Company.

The OPTIMAL Group of Companies, which runs a world-scale integrated petrochemical plant, located at the PETRONAS Petroleum Industry Complex (PPIC) in Kerteh, Terengganu, has already begun supplying its petrochemicals for local and regional consumption.

Barely four months into its phased start-up, OPTIMAL has already supplied more than 150,000 tons of derivative products to local and export customers in markets such as Thailand, the Philippines, Japan, China, Korea and Taiwan.

The derivative units that have been started up are all currently operating at or over 100% of capacity. The start up of the remaining units will be completed soon.

"The reason OPTIMAL is able to move quickly is because it is leveraging on the strength of its parents. We have taken advantage of our access to the cost competitive feedstock and excellent infrastructure facilities from PETRONAS.

"At the same time, we are using Dow's advanced manufacturing technology and their existing distribution network within the Asia-Pacific region," said Robert Kisker, chief executive of the OPTIMAL group at a media briefing.

Meanwhile, Majid Khalil, Deputy CEO added " What OPTIMAL accomplishes to do is to cut short the supply chain by supplying petrochemicals to existing Dow customers in the region, thus reducing dependence on supply from the US, while at the same time exploring new markets."

Kisker said the establishment of OPTIMAL is timely and its key objectives are in line with the country's vision of becoming a regional petrochemical player.

"In one go at national level, OPTIMAL exemplifies the success of foreign direct investment, transfer of technology, the ability to achieve self-sufficiency in the industry, add value to the nation's petroleum resources and further spur the growth of downstream petrochemical activities.

"On the local front, OPTIMAL contributes to the economic development of Terengganu, providing employment opportunities, and enhancing the skills of its people," he said.

Dubbed a complex within a complex, the multi-billion ringgit OPTIMAL plant has a workforce of approximately 700, of which 75 per cent are Malaysian.

Located on a 90-hectare site, and with a built-up area of almost 10 million square feet, the OPTIMAL petrochemical complex houses advanced glycol, butanol, ethylene and derivatives units, a laboratory and state-of-the-art waste treatment technology.

The plant is capable of producing more than one million metric tons of petrochemicals and derivatives, all of which are intermediate products that are commonly used in the manufacture of a wide range of consumer and industrial goods.

Of the more than 15 families of petrochemicals being produced at OPTIMAL, ethylene, ethylene glycol and ethylene oxide derivatives make up the bulk of total throughput.

Shell sees surge in LNG demand Posted Monday, June 17, 2002 - 1:35 by petromin




Royal Dutch/Shell Group said yesterday it expected global demand for liquefied natural gas (LNG) to jump by more than 50 per cent from now until 2010, hitting 230 million tonnes per year at the end of the decade.

Peter De Wit, Shell International Gas Director for Asia, said gas consumption had grown considerably with LNG demand currently at roughly 150 MMt/y.
"The whole energy mix has changed dramatically since the early 1900s when coal and wood alone met the energy needs of our world. Today, gas and coal are almost on par," De Wit told delegates at the recent Asia Oil and Gas conference in Kuala Lumpur.

"In 2010, we expect global (LNG) demand to be as large as 230 million tonnes per annum, with over 25 importing countries."

De Wit said that by 2010, there would be major new projects on stream in Africa, the Middle East, Asia-Pacific and possibly South America, with demand growth in the United States, Mexico, Brazil, China and India.

At the same conference, BP plc vice president for gas, power and renewables Anne Quinn told delegates that in order for the LNG sector to develop and for untapped gas reserves to be produced, there would need to be a mix of long- and short-term contracts.

"You need both types of contracts, one can't do without the other...Security of supply through long-term contracts is still important but having said that, there is a lot of room for contracts to be optimised on price and duration," Quinn said.

Asia is the biggest LNG market, with Japan, South Korea and Taiwan the biggest consumers. Indonesia, Malaysia and Brunei are among the top LNG producers.

LNG sellers prefer to tie customers in to long-term contracts of 20 years or more ensure returns on capital-intensive gas projects. Buyers, however, argue that there is a glut in supply and demand is uncertain so competing sellers should be more flexible in their terms and make contracts five to 10 years.

Quinn said the co-existence of long and short-term contracts in Europe was proof that a balance could be achieved.

"There is spot trade in Zeebrugge, but also long-term contracts in Spain and France," she said. A trading hub in Zeebrugge in Belgium allows buyers access to British gas after the 1998 opening of the UK/Belgium gas link.

Petronas gets stake in Indonesian oil and gas field Posted Monday, June 17, 2002 - 1:33 by petromin

PETROLIAM Nasional Bhd (Petronas), through its overseas exploration and production subsidiary Petronas Carigali Overseas Sdn Bhd, has acquired Kerr-McGee Indonesia Ltd (KMI) for US$170mil.
According to a statement from Petronas, KMI - a subsidiary of Kerr-McGee Corp, an Oklahoma City-based energy and inorganic chemical company - holds a 30% interest in the Jabung Block, which covers 5,339 sq km onshore South Sumatra in a prolific oil and gas producing area.
The Jabung Block has significant oil and gas reserves, with five fields producing about 24,000 barrels of oil per day. The block is also committed to supplying gas under a sales agreement to Singapore.
The gas supply is expected to start in the third quarter of 2003 at an initial rate of 68 million standard cu ft per day (mmscfd) with a plateau rate of 135 mmscfd by 2009.
The acquisition of KMI marks a significant extension of Petronas' activities in Indonesia, providing it with its first oil production in the country.
It also provides Petronas with the opportunity to play a more active role in the supply of gas to the growing markets within Indonesia and the Asean region.
The statement said the acquisition also signified Petronas' long-term commitment to investing in and actively pursuing commercial opportunities in Indonesia.
Petronas' other upstream interests in Indonesia include the Ketapang Block and Karapan Block located offshore East Java, and the Tanjung Aru Block located offshore Kalimantan.

BP, Sinopec Mull Expanding Capacity At Sinopec Chem Unit Posted Monday, June 17, 2002 - 1:31 by petromin

BP PLC and China Petroleum & Chemical Corp. (SNP), or Sinopec Corp., are in talks to expand a Sinopec unit in eastern China to meet the country's growing need for purified terephthalic acid (PTA), a Sinopec official told Dow Jones Newswires Thursday.
The companies are studying the technical and financial aspects of adding a new unit to produce PTA at Sinopec's Yangzi Petrochemical Corp. in Jiangsu province.
PTA is a feedstock for polyester fibers, he said, and China 's need for the chemical is outstripping production. Annually, China consumes more than 4 million metric tons of PTA, 50% of which must be imported.
The new unit, if built, would have an annual capacity of 400,000 tons and would utilize BP technology, the official said.
Last year, the government approved Sinopec's proposal to expand Yangzi's PTA capacity to 1 million tons/year from 600,000 tons/year without foreign investment. However, Sinopec now considers foreign investment and technology vital to the project.
BP is already building a 350,000-ton/year PTA project in southern China 's Zhuhai city. That project is slated to be commissioned in early 2003. BP holds 80% of the project, with Fuhua Group at 15% and China National Chemical Fiber Co. at 5%.

Petronas keen on Singapore Refining stake Posted Wednesday, June 12, 2002 - 1:36 by petromin

Petronas, Malaysia's state-owned oil and gas company, is interested in buying BP's stake in Singapore Refining Co, Petronas' chief executive said yesterday.
'Yes, if the opportunity exists, we'd be interested to do something,' Petronas’ chief, Tan Sri Hassan Marican, told reporters on the sidelines of the Asian Oil and Gas Conference in Kuala Lumpur on 10 June 2002.
BP, one of the world's largest petroleum and petrochemical companies, has been seeking buyers for its 30 per cent stake in Singapore Refining since 2000.
There is speculation that it is in talks with potential bidders, including Singapore Petroleum Co, Oman Oil and Indonesia's Pertamina. Another senior Petronas executive said that Petronas 'hasn't yet been approached with a firm offer from BP'.
Singapore Refining operates a 285,000 bpsd refinery on Jurong Island. Singapore Petroleum Co holds a 40 per cent stake while Caltex holds a 30 per cent stake in the company.

Asia likely to be world’s top oil importer by 2020 Posted Wednesday, June 12, 2002 - 1:34 by petromin

EXXONMOBIL Corp expects Asia to be the world’s largest net importer of oil by 2020, surpassing even Europe and North America, as the region’s economies grow at a faster rate than the rest of the world, according to chairman and chief executive officer Lee R. Raymond.

Speaking at the 7th Asia Oil and Gas Conference 2002 in Kuala Lumpur on 10 June 2002, Raymond said economic growth in Asia’s emerging countries was expected to reach an annual 5% or more in the next decade, outpacing that for the developing world, estimated at in excess of 4% a year. In comparison, economic growth in the industrial world was expected at 2% in the next decade.
As a result, the net import dependence of the Asian region will more than double in the next 18 years to 2020, although demand for imported energy in Europe and North America was expected to grow by 50% and 15%, respectively, during the same period, Raymond said.
“Looking at the combined needs of the US, Canada and Europe, by 2020, imports of oil will need to be more than 24 million barrels per day, versus about 18 million barrels per day today.
Raymond said: “But the largest change appears set for Asia. In fact, while the net imports of the Asia Pacific region are 30% smaller than Europe and North America today, by 2020 they could be more than 10% larger.’’
He also said while oil remained of greatest importance to the region, ExxonMobil was also seeing a continuing increase in natural gas demand and supply.
“In fact, natural gas use has been growing at about 6%, almost twice as fast as oil, in this part of the world. This demand has been driven by the need for clean burning fuel to supply the tremendous growth in power generation that is occurring,’’ said Raymond.
Hence, with the relatively rapid growth in regional demand for energy, the Asia Pacific area has a particular need to ensure that energy is developed in a timely manner, he said.
Raymond said: “Clearly, companies working in this region will need to find, and to produce, enough oil and gas to meet the growing needs of national economies in this region, and will need to do so while developing production elsewhere for export to this region.’’
He was also of the view that half of the oil and gas supply needed by the end of the decade was not being produced currently.
“Bringing the required amount of oil and gas into production will require the skill of everyone, significant industry investment, and the close cooperation of governments,’’ he added.
Raymond said ExxonMobil had ongoing and large investments in offshore gas fields in Malaysia, producing some 1.4 billion cu feet of natural gas each day from the South China Sea.
The company was also seeing renewed attention to a trans-Asean gas pipeline connecting the countries of region, he said.
Raymond added that ExxonMobil was also in discussions with the Indonesian government over a memorandum of understanding to develop its gas fields in the Natuna Sea in Indonesia.
“We’re hopeful that this project will one day proceed,’’ he said.

Philippines: Refineries cut back throughput Posted Thursday, June 6, 2002 - 1:51 by petromin

AFP reported on 4 June that Petron Corp has reduced refinery production by 30 percent to 126,000 barrels per day, against total capacity of 180,000 bpd, Petron president and chief executive officer Motassim Al-Ma'ashouq said.
"The market remains weak and we don't anticipate a strong recovery anytime soon. And with the impending full commercial operations of the Malampaya natural gas (field), demand for fuel oil is seen to go down further," he said.
Separately, Pilipinas Shell Petroleum Corp country chairman Eliseo Santiago said the company's refinery now runs at 80,000 bpd, against capacity of 165,000 bpd.
Both Petron and Shell said they are uncertain when they will go back to full production.

China set to open up refined oil products market Posted Thursday, June 6, 2002 - 1:49 by petromin


China's once tightly controlled market for refined oil products is likely to open wider with the establishment this month of a joint venture between major industry player Royal/Dutch Shell and Sinopec, China's second largest oil company, to operate petrol stations.

"We are working towards the target to establish the joint venture by June," said Tan Chongmeng, managing director of Shell China. "But the schedule is flexible, pending government approval."

The joint venture aims to build a retail network of 500 petrol stations in the coastal Jiangsu Province in three years.

This would be the first time China officially has allowed foreign companies into the lucrative retail market for gasoline and diesel fuel, although some have been already running a handful of petrol stations acquired from private owners.

Sinopec has also agreed with ExxonMobil and BP, to run similar ventures in Zhejiang and Guangdong provinces, as part of the deal in which the world's three largest oil companies backed Sinopec's overseas listing in 2000.

Tan said Shell and Sinopec submitted the feasibility study report to the State Council for final approval last December, ahead of the other two oil giants.

"We are confident to be the first one," Tan told China Daily on the sidelines of the third China/Asia Clean Fuels Symposium. "But it is more important for us to be on the top in four or five years."

Earlier reports said Sinopec would postpone the joint ventures with ExxonMobil and BP, which were scheduled to begin the first half of this year, to the second half because the Chinese Government only approved the plan for Shell's 500 petrol stations at that time.

Tan said Shell and Sinopec are interested in expanding the chain to 1,000 stations if the joint venture is successful.

"Better service in petrol stations is badly needed in China before the market is fully liberalized in five years," said Tan. But the current study does not involve the expansion plan.

Foreign companies are eager to slice into China's market for refined oil, where the demand is growing 4.5 per cent annually.

But they will not be allowed full participation in the retail market until three years after China's accession to the World Trade Organization.

Government officials have said Sinopec's joint ventures with foreign companies are "special cases" as part of the government's efforts to help Sinopec, one of the largest State-owned enterprises, float on the world financial market.

Sinopec sold 67.7 million tons of refined oil in 2001 or 65 per cent of the nation's total consumption.

Earlier, C K Albert Young, the China retail general manager of Shell Companies in Northeast Asia, has said among the 500 joint-venture stations, 80 per cent will comprise those now owned by Sinopec and the remaining 20 per cent will be jointly built by the two companies. Sinopec will hold a controlling 51 per cent interest while Shell will hold 49 per cent.

Young has said Shell plans to invest around US$100-200 million in petrol stations over 3-5 years, depending on the pace of the opening of the market and the implementation of the alliance with Sinopec.

China Studies Pakistan Refinery Project for Sudan Oil Posted Saturday, June 1, 2002 - 8:02 by petromin

China National Oil & Gas Exploration Development Corp. (CNOGEDC), a subsidiary of China National Petroleum Corp. (CNPC), is showing a strong interest in constructing a US$ 600 million refinery at Karachi, to process its Sudan crude oil.

The unit would be a possible alternative to the US$ 1.1 billion Iran-Pak refinery project, which has been planned since 1996 but its progress thus far seems to be far from encouraging.

CNOGEDC, looking at several other new avenues for potential downstream investment, is also investigating the possibility of acquiring an equity stake in Iran-Pak, should it move forward, or of setting up an independent oil refinery at a viable location in the country's financial hub.

Crude oil for the refinery would be imported from the US$ 2.3 billion Greater Nile Oil Project (GNOP) currently under development in southern Sudan. CNOGEDC, which has a 40% interest in GNOP, is partners with operator Talisman Energy Inc., Calgary, 25%, as well as the state oil companies of Malaysia and Sudan, which between them hold 35%.

Talisman said in March that crude production tagged for export from the six currently producing GNOP fields averaged 213,028 b/d in 2001, and several other GNOP fields are also scheduled for development.

CNOGEDC has a share of 60,000 b/d of GNOP production for export and is seeking a suitable location for refining it. In selecting Karachi as a potential refinery site, CNOGEDC wants the advantage of the coastal city's port facilities, which can also be used for exporting naphtha to China-a country with a high naphtha demand for its plastics industry.

CNOGEDC also is studying the petroleum products market in Pakistan with to view to sales there

India to build three more oil refineries Posted Saturday, June 1, 2002 - 8:01 by petromin

Reuters reported that despite slowing growth in petroleum product sales in India, the government has approved the building of three new refineries to meet demand from a projected surge in industry, refinery sources said Wednesday.
In July 2006, Hindustan Petroleum Corp Ltd, (HPCL) plans to open a new refinery with an annual capacity of 9 million metric tonnes (180,000 barrels per day) now under construction in Bhatinda in the northern state of Punjab, an official with an HPCL contractor said on Wednesday.
Growth in India's petroleum products sales slipped to five per cent last year after steadily increasing at six per cent annually, India's Minister of Petroleum and Natural Gas Ram Naik said on Tuesday in Singapore.
"This surplus refining capacity is a myth. Our refineries have been working one hundred per cent, and if there has been some slowdown in activity, it is due to the global recession," Naik told reporters on the sidelines of a roadshow soliciting foreign investment in upstream oil and gas assets.
"We are planning three major refineries to take care of our future requirements," Naik said.
The new state-owned HPCL refinery plans output of 55 per cent diesel, 12 per cent liquefied petroleum gas (LPG), and varying amounts of gasoline and superior grade kerosene, an official with HPCL's construction contractor Guru Govind Singh Ltd told Reuters via telephone from Bhatinda.

Pakistan signs trilateral gas pipeline agreement Posted Saturday, June 1, 2002 - 7:59 by petromin


Pakistan, Afghanistan and Turkmenistan on 30 May signed a landmark agreement to construct a two-billion-dollar gas pipeline.
"This communication will provide the shortest route for the transportation of natural gas resources from Central Asia to the Far East, Japan and the West", Pakistan President Pervez Musharraf said after signing the agreement.
The 1500-km pipeline, running through Afghanistan, connects Daulatabad gas field in Turkmenistan to Gwadar in Pakistan.
According to the agreement, international tender will be floated to invite companies to carry out the project and the three countries will later try to find out financier for the giant project.
Musharraf, Chairman of the Afghan interim administration Hamid Karzai and Turkmenistan President Supermurat Niyazov inked the agreement.
The leaders agreed to introduce modification in the feasibility study carried out on the project.
Musharraf said an LNG plant will be constructed at Gwadar for the conversion of gas and its export.
"With the gradual return of peace and normalcy in Afghanistan, we are confident that this mega project would be realized in the near future. It would bring economic progress and prosperity for the peoples and also enhance regional cooperation," he said.
Musharraf said the three countries have decided to form three working groups on the gas pipeline, road, rail, trade and economic links.

New Contract Award for a Syngas Plant in China Posted Saturday, June 1, 2002 - 7:58 by petromin

Technip-Coflexip has been awarded a contract by the BASF-YPC joint venture for a Syngas Plant to be located in Nanjing, PRC.
The investment is valued at about 60 million euros.
The syngas plant will produce oxo-syngas, carbon monoxide and hydrogen, with steam as by-product. The products from the syngas plant will be used as feedstocks for various downstream consumers in the complex.
The work will be carried out by Technip-Coflexip's engineering centres in The Netherlands and in China. The syngas plant will be ready for production in November 2004.
Technip-Coflexip is the recognized market leader in the design, engineering and construction of world-class on-purpose hydrogen and syngas production units. With this award, this position has been further strengthened.
BASF-YPC Company Limited is a 50/50 joint venture between the German world's leading chemical company BASF and SINOPEC (China Petrochemical Corporation) with a total investment amounting to USD 2.9 billion, and is to build and operate a world scale integrated petrochemical site in Nanjing. The integrated site is expected to be fully functional in 2005. The project, which includes a 600,000 metric tons per year steam-cracker and 9 downstream plants, is among the largest Sino-foreign petrochemical enterprises in China.

Australia's Woodside: NWS Signs Asian Deal Posted Thursday, May 30, 2002 - 1:31 by petromin

Dow Jones reported on 28 May 2002 that Australia 's Woodside Petroleum Ltd. (A.WPL) said Wednesday its North West Shelf liquefied natural gas operation in Western Australia has signed a five year deal to sell up to 3.7 million metric tons of LNG to Royal Dutch/Shell Group unit Shell Eastern LNG.
The agreement covers sales between 2004 and 2009, and follows the signing of key terms on May 15.
The volume is dependent on the amount of spare LNG the Shelf has after supplying its key long-term customers in Japan, Korea, China and Taiwan.
Woodside said Shell intends to use the supplies it buys from the Shelf to develop new markets.
The shelf is an equal joint venture comprising Woodside as operator, Shell, ChevronTexaco Corp. (CVX), BHP Billiton Ltd. (BHP), BP PLC (BP), and Japan Australia LNG, an equal joint venture between Japan 's Mitsubishi Corp. (J.MIB) and Mitsui & Co. (MITSY).
The LNG earmarked for Shell will be supplied as production builds from a new processing train, or unit, at the shelf. The A$1.6 billion fourth train is expected to be in production from mid-2004. It will boost production capacity at the shelf by over 30%, eventually adding 4.2 million tons to annual output.
"This is a very exciting time for the North West Shelf with a major expansion under way of our onshore gas processing facilities in Western Australia, continued support from our existing customers, and new LNG supply opportunities being sought in North Asia," Woodside Managing Director John Akehurst said in a statement.
The shelf is vying with rivals Ras Laffan Liquefied Natural Gas Co. (C.RLL) and BP Gas Marketing Co. to win a 3-million-ton-a-year LNG supply contract with China. A decision on the successful bidder is imminent.

Shell: China To Announce LNG Supply Tender Result Shortly Posted Thursday, May 30, 2002 - 1:29 by petromin

Dow Jones reported 28 May 2002 that Shell Gas & Power expects China will soon make a decision on the country's supply tender for liquefied natural gas, a senior company "My understanding is it's a matter of days or a few weeks away," Peter De Wit, director of Asia Pacific operations at Shell Gas & Power, a unit of Royal Dutch/ Shell Group, told Dow Jones Newswires.
"My understanding is they will try to reach a conclusion at the end of May," he added.
De Wit was speaking on the sidelines of the Gasex 2002 conference in Brunei.
De Wit said Australia LNG Pty., or ALNG, has a good chance of securing the contract.
In Mid-May, China issued a tender for the annual supply of 3 million metric tons of LNG to Guangdong province. ALNG is one of the three bidders. Ras Laffan Liquefied Natural Gas Co. (C.RLL) and BP Gas Marketing Co. are the other bidders.
"The Australia project offers a number of advantages, especially in terms of it being a stable supply source," he said.
Relations between China and Australia are very good, he added.
"We certainly think this Australia project offers substantial benefits for China," De Wit said.
On the possibility that China might split the contract among the bidders, he said, "anything is possible."
Recent talk both in China and among overseas LNG suppliers has pointed to the possibility of the contract being split.
However, De Wit said China hasn't informed bidders of that possibility and that under the current understanding, the Guangdong terminal will be supplied from one source.
Shell Development Pty., another Shell unit, is a member of a consortium that produces gas from the northwest shelf of Australia - the gas source for the Guangdong terminal.
Other members of the consortium are BHP Petroleum (North West Shelf) Pty., BP Developments Australia Pty., Chevron Australia Pty., Japan Australia LNG Pty., and Woodside Energy Ltd. ALNG is the consortium's marketing arm.

Engineering Begins on Al Jubail Normal-Paraffins and Linear Alkylbenzene Plants Posted Friday, May 24, 2002 - 3:32 by petromin
Des Plaines, IL USA - UOP LLC announced today that engineering has begun on a new 120 KMTA n-paraffins plant and a new 70 KMTA linear alkyl benzene (LAB) plant to be constructed in Al Jubail, Kingdom of Saudi Arabia for Gulf Farabi Petrochemical Company Ltd., a new company formed by the Al-Rajhi group of companies, Al Rajhi International Contracting (ARIC). The plants are expected to be on-stream by the last quarter 2004. Gulf Farabi has also appointed Foster Wheeler Energy Limited UK as their Project Management Contractor (PMC) for the duration of the project.

This selection represents Gulf Farabi's first venture into the petrochemical market and fits into the company's business plan to expand its portfolio into the petrochemical sector. The new plants will enable Gulf Farabi to meet world-wide growing demand for linear alkyl benzene while also supplying n-paraffins as feedstock to other linear alkyl benzene producers. Linear alkyl benzene is the key raw material used in the manufacture of LAS, the most widely used surfactant in the manufacture of household detergents.

The n-paraffins and LAB facility will utilise several process technologies from UOP, including the Distillate UnionfiningÔ, MolexÔ, PacolÔ, DeFineÔ, PEPÔ, and DetalÔ processes. The Molex process utilises adsorptive separation technology to extract n-paraffins from kerosene. The Pacol, DeFine, and PEP processes produce purified n-olefins from the n-paraffins. The Detal process produces linear alkyl benzene from the n-olefins and benzene.


Gulf Farabi Petrochemical Company Ltd. is promoted by the Al-Rajhi group of companies for manufacture of n-paraffin and linear alkyl benzene (LAB). Al Rajhi International Contracting (ARIC) is part of the Al Rajhi Group operating in the active Saudi business private sector. .

UOP LLC, headquartered in Des Plaines, Illinois, USA, is a leading international supplier and licensor of process technology, catalysts, adsorbents, process plants, and technical services to the petroleum refining, petrochemical, and gas processing industries.

East Timor, Australia signed treaty to tap oil reserves Posted Wednesday, May 22, 2002 - 12:30 by petromin

Reuters reported on 21 May 2002 that East Timor and Australia signed a landmark treaty yesterday to tap lucrative offshore oil reserves, an economic lifeline for the world's newest nation that could be worth billions of dollars.
Australian Prime Minister John Howard, in East Timor for the tiny territory's formal independence declaration overnight, signed the treaty with East Timor's new national leadership.
'The significance of this treaty and memorandum of understanding is the first symbolic and practical demonstration of the relationship between Australia and East Timor,' he said.
The two sides have agreed to divide royalties 90:10 in East Timor's favour from gas and oil reserves in the Timor Sea, although the treaty will need to be ratified. Officials had said some issues needed to be worked out before this could happen. These included possible changes to the two countries' boundaries.

PERTAMINA/ARCO Award Tangguh FEED Contract to CHIYODA - MITSUBISHI Posted Sunday, May 19, 2002 - 2:50 by petromin

It is learned that the Indonesian state owned PERTAMINA and Atlantic Richfield Berau, Inc. (ARCO) awarded the contract for Front End Engineering Design (FEED) for their LNG facilities to be constructed at Teluk Berau, Indonesia, to the Consortium of Chiyoda Corporation and Mitsubishi Corporation.

The selection of Chiyoda-Mitsubishi is based on Air Products and Chemicals, Inc's Propane Pre-Cooled-C3 / MR Technology.

After developments in Arun and Bontang, "Tangguh" which means 'strength and resilience' will become Indonesia's next multi-train LNG centre highly competitive due to its proximity to the market and its strategic location in Southeast Asia. This Tangguh project is said to be one of the multi billion project left in the globe when the actual construction starts.

Russia to abandon export reduction deal Posted Sunday, May 19, 2002 - 2:46 by petromin

Russia formally renounced its export reduction agreement with the Organisation of Petroleum Exporting Countries on 17 May, saying it would return to full capacity by the end of June.
The move, following a meeting between Russian oil companies and the government, was expected and may have little real impact on global supply but Brent crude for July delivery was 38 cents down at $26.00 in mid-afternoon trading on London's International Petroleum Exchange.
At the end of December, Russia along with other leading non-Opec oil producers Mexico and Norway, said it would cut exports by around 150,000 barrels a day, to support Opec's own export reduction programme aimed at supporting prices that began to slip in June.
Since then, dollar crude prices have recovered from the high teens per barrel to the mid-twenties.
Norway will review its agreement to trim exports in mid-June. In fact, Russia had a poor record of compliance with previous output cut pledges, so the market met its promise in December with a scepticism that appears to have been borne out.
The Russian government was under pressure to allow free rein to exporters, faced as it was with steadily rising production and complaints from oil companies that domestic prices were plunging because of a glut.
Russian oil production in March was 610,000 b/d higher than a year earlier at 7.16m b/d, according to the International Energy Agency, the OECD's energy watchdog.
The country's first quarter crude oil exports rose 710,000 b/d above the same period last year to 3.49m b/d, according to Russian customs data issued earlier this week.

India: Reliance bid for control of IPCL is highest Posted Sunday, May 19, 2002 - 2:44 by petromin

Reliance Industries has emerged the winner in the race to acquire the government's 26 per cent stake in the state-run petrochemical giant Indian Petrochemicals Corporation Limited (IPCL) and control over its management.

The bids were opened on Friday and the Cabinet Committee on Disinvestment (CCD) will formally announce the decision on Saturday.

Officials privy to the sell-off process said Reliance's bid was Rs 231 per share. This was way ahead of Indian Oil Corporation's (IOC) bid of Rs 130 and detergent-maker Nirma's bid of Rs 126 per share.

The disinvestment in IPCL was hotly contested. There were issues raised over whether Reliance should be allowed to bid with charges that it would have a monopoly in the sector if IPCL went to it.

IOC had made an issue of being allowed to bid for IPCL. The low bid that it finally made is seen as strange in industry circles.

When disinvestment minister Arun Shourie had earlier announced that oil PSUs would no longer be allowed to bid for each other because the government did not want to create monopolies, IOC had written to the oil ministry and the department of disinvestment (DoD) demanding that Reliance should not be allowed to buy IPCL since that would give the company a dominant position in the petrochemicals sector.

Until recently, IOC was understood to be putting in a very aggressive bid for IPCL and had even teamed up with ONGC for this purpose.

IOC officials, however, defended their bid. They said their bid was rational and added that Reliance had overbid so as to keep out IOC.

Shell may cut back refining capacity as margins shrink Posted Wednesday, May 15, 2002 - 2:03 by petromin
Reuters reported on 4 May 2002 that Royal Dutch Shell managing director Paul Skinner said that the Anglo-Dutch oil giant would look at shutting refining capacity or forming alliances to reduce its exposure to the depressed sector in Asia.
'We do feel that we are probably carrying a little more refining capacity than we would wish at the moment,' he told reporters at a conference organized by Insead, a global institution of business education.
He added that Shell was already closing a small plant in the Philippines.
Shell's Singapore refinery, which has a capacity of 430,000 barrels per day (bpd), ran at an average 350,000 bpd in the first quarter, Mr Skinner said.
The average profit margin on refining in Singapore in the first quarter of this year was 30 US cents per barrel, versus 80 US cents on average for all of last year.
'I think it is going to take some time before we see recovery in margins to an acceptable level in this region,' he said.
He added that he considered US$1.25 an acceptable margin.
Mr Skinner said Shell was considering making a bid for a stake in a second liquefied natural gas (LNG) import terminal in China, where demand is growing fast.
'We see China as a significant potential importer of LNG and are looking closely at bidding into all those opportunities,' he said.

CNOOC To Triple Gas Output by 2005 Posted Sunday, May 12, 2002 - 1:13 by petromin

CNOOC has set a target of 10.9 billion cubic meters for natural gas production by 2005. This number is almost 3 times last year's output of 4.1 billion cubic meters. The company's gas output is estimated to be approximately 20 billion cubic meters in 2010 and 30 billion cubic meters in 2015, Zhu Wenda, manager of CNOOC's business strategy and development department, said in a statement.
CNOOC has plans in the works to build several pipelines to ship offshore natural gas to nearby provinces and connect them to a trunk gas pipeline along the coast in 10-15 years, Zhu said. Natural gas from the Bohai Sea would be piped to the eastern province of Shandong and the northeastern province of Liaoning. Gas from the East China Sea's Pinghu and Lishui fields would supply booming coastal city of Shanghai and the eastern province of Zhejiang. Gas from the South China Sea's Dongfang 1-1, HZ21-1 and Ledong 22-1 fields would be piped to the southern provinces of Hainan, Guangdong and Guangxi.

Petronas wooing oil & gas MNCs Posted Saturday, May 11, 2002 - 3:47 by petromin

PETROLIAM Nasional Bhd (Petronas) will invite more multinational oil and gas companies to set up petrochemical operations in the multi-billion ringgit integrated Petronas Petroleum Industry Complex (PPIC) in Kerteh, Terengganu.
Its chairman Tan Sri Azizan Zainul Abidin, who did not identify the companies being approached, said there were still parts of the PPIC's development and expansion plans that had yet to be pursued.
"However, the PPIC has laid the foundation for the country's petroleum and petrochemical industry and has attracted the industry's best players to set up operations in Kerteh," he said after the official opening of the PPIC yesterday.
The complex, also the region's petrochemical hub, was opened by Prime Minister Dato Seri Dr Mahathir Mohamad.
Azizan said the PPIC had enabled the country to maximize its natural gas and petroleum resources and bring in value-added revenue and new technologies.
"The effort to add value to Malaysia's petroleum and gas resources has reduced the country's capital outflow, and strengthened the local plastics manufacturing industries by providing stable local feedstock supply," he added.
The PPIC, covering 4,000ha, is a world-class integrated complex housing more than 40 petroleum-based installations and supporting plants.
Facilities in the complex include an oil refinery with condensate splitter, six gas processing plants, 11 gas-based petrochemical plants and five ancillary facilities.
Since its beginning in the 1980s, the complex has drawn investments close to RM70bil, of which RM40bil was foreign direct investments.
Among the global petroleum and petrochemical companies that have invested in the PPIC are ExxonMobil, Dow Chemical, BASF, BP-Amoco, DSM, Mitsui, Mitsubishi, Idemitsu and Sasol.
Meanwhile, Petronas had confirmed it was undertaking a bond issue, but would not be drawn on the size or timing of the issue as it was still seeking out investor interest.
Earlier this week, media reports had quoted banking sources as saying that Petronas was proposing a "jumbo" bond offering of at least US$1.5bil to take advantage of the country's improving reputation among foreign investors.
The report said the offering would include US$1bil bonds with maturities ranging from 10 to 30 years, and 500 million euro worth of bonds with maturities from seven to 13 years.

CB&I Awarded Multi-Year Partnering Agreement to Maintain Two Thailand Refineries Posted Friday, May 10, 2002 - 4:54 by petromin

CBI/ST Limited, a subsidiary of Chicago Bridge & Iron Company N.V. (NYSE: CBI), has been awarded a three-year contract by the Alliance Refining Company Limited (ARC) of Rayong Province, Thailand to maintain its refineries and associated marine terminals at its North and South Production Units. The two refineries have a combined capacity of 300,000 barrels/day. CBI/ST's wide-ranging work scope will include refinery operational support, unit turnarounds, mechanical maintenance of process unit equipment, civil and piping construction, painting, tank repairs, building and grounds maintenance, and work planning.

ARC is an operating alliance between Star Petroleum Refining Company Limited (SPRC, a joint venture between Caltex Trading and Transport Corporation and the Petroleum Authority of Thailand) and Rayong Refinery Company Limited (a joint venture between Shell International Holdings Ltd. and the Petroleum Authority of Thailand). This new award builds on prior long-term maintenance agreements, but expands CBI/ST's scope to both of ARC's refineries and to their associated marine terminals, and also elevates the relationship to a Partnering Agreement. Goals of the agreement include incurring zero safety incidents and environmental emissions, lowering overall costs, maximizing the availability of ARC's refineries and terminals, and achieving Best in Class maintenance performance.

CB&I first worked in Thailand in 1970. CBI/ST Limited began working in Thailand in 1986 and has been established at SPRC since the facility's initial construction. CBI/ST designed and constructed 99 tanks and spheres at the site in 1993-95, built the facility's Crude Oil Process Unit piping in 1995, and has continuously provided maintenance services there since October 1995. Among CBI/ST's many achievements, it has used CB&I's highly regarded Safety Program to achieve a safety record of 3,500,000 work-hours without a lost-time accident.

IEA says Opec stand a threat to global recovery Posted Sunday, May 5, 2002 - 5:00 by petromin


The International Energy Agency, the industrialized world's energy watchdog, warned the pace of global economic recovery could be threatened unless the Organization of Petroleum Exporting Countries increased output this summer.
The warning came as oil prices strengthened on fresh fears about the impact of the Middle East crisis.
Robert Priddle, executive director of the IEA, told a conference in Paris that Opec might "stifle economic recovery" unless it agreed to increase production at its next scheduled meeting on June 26.
"We are in danger of an excessively tight market in the second half of the year if production is not restored," he added.
The cartel has cut its production by about 20 per cent over the last past 18 months to keep the price of oil within its target of $22-$28 a barrel.
Abdullah bin Hamad Al Attiyah, Qatari oil minister, reiterated Opec's position that it was unlikely to increase output in June. Prices were being kept high due to traders' concerns about oil disruption rather than a real tightening in the market.
Benchmark Brent crude oil rose 43 cents a barrel to $26.19 by mid-afternoon in London, while US futures gained 67 cents to $27.05. The rises were prompted by fears that Saudi Arabia's relationship with the US could be weakened if Washington failed to moderate its support for Israel

Asia demand likely to improve despite fall in Japan Posted Sunday, May 5, 2002 - 4:57 by petromin
Japanese oil market indicators released underlined shrinking petroleum demand in Asia's biggest economy but industry analysts said they saw signs of recovery elsewhere in the region.

As Japan's struggling economy recorded a 14th consecutive month of falling domestic refined product sales analysts said other parts of Asia's export-oriented economies were getting support from a fragile upturn in the United States.

Refinery margins for petroleum product sales in Asia that were negative at times in January and February showed some improvement in March and April, despite crude hovering at a high $26-$27 a barrel -prices not seen since September.

"This may be the first concrete proof that demand is picking up. If margins and downstream are improving with crude still relatively high, it can only be better demand driving recovery," said David Johnson, regional analyst at JP Morgan in Hong Kong.

Forecasts for overall Asian demand growth this year remain downbeat. Benchmark International Energy Agency projections are for Asian demand to rise just 80,000 barrels a day to 20.85 million bpd, just 18 per cent of growth worldwide projected by the IEA at 440,000 bpd on the 76 million bpd global market.

But China's Sinopec, Asia's biggest refiner, said business began to recover in March from losses in the first two months of the year, boding well for the second quarter. First-quarter earnings were down 86 per cent as poor economic conditions hit prices.

Chinese crude imports hit a seven-month high in March at 5.37 million tonnes, or 1.29 million barrels per day (bpd), customs data showed.

Johnson said he expected incremental Chinese demand this year of four to six per cent, outstripping the IEA's forecast of for a little over two per cent of growth to 4.99 million bpd from 4.88 million last year.

China should at least make up for the 100,000 bpd decline in Japanese consumption to 5.33 million being projected by the IEA.

Japan's Ministry of Economy, Trade and Industry reported a 2.9 per cent contraction in domestic oil demand in the fiscal year 2001/2002, compounded by the economic downturn and a mild winter, which dampened consumption of kerosene for heating.

Japanese refiners have slashed crude runs - in some cases by up to 15 per cent - and say they expect to maintain low rates of just below 85 per cent for the time being.

A rosier economic picture boosted oil demand in South Korea in March, which saw a near three per cent rise versus a year ago and up about 11 per cent against February, largely fuelled by the transport sector, according to official figures last week.

The South Korean central bank recently lifted its 2002 gross domestic product forecast to 5.7 per cent from 3.9 per cent and the Energy Ministry forecast in January oil products demand would rise two per cent to 759 million barrels this year.

South Korea is Asia's third demand centre after Japan and China and an upturn could mean better growth than the 10,000 bpd being forecast by the IEA this year to 2.14 million.

India, Asia's fourth largest consumer importing two-thirds of crude needs of about 2.3 million barrels per day, saw demand contract for the second straight year in fiscal 2001-2002 as diesel sales fell on weak agriculture and industrial sectors.

Official figures put Indian oil products demand down one per cent at 88.9 million tonnes in the 12 months to March 31, although refinery utilisation rose to average 2.14 million bpd versus 2.06 million bpd a year ago as exports rose.

Jakarta ups fuel prices to fulfil reform pledge Posted Sunday, May 5, 2002 - 4:55 by petromin

Indonesians will now pay more for fuel, after the government hiked pump prices by an average of 15 per cent from 3 May to show foreign lenders its commitment to painful reform measures.
The premium petrol costs 1,750 rupiah (19 US cents) per litre, up from 1,600 rupiah last month. Diesel rose from 1,250 rupiah to 1,400 rupiah. Other petrol varieties, mainly for luxury cars, now cost as much as 2,400 rupiah. It has kept the price of kerosene unchanged.
'This move is a crucial part of our economic reforms,' said Mr Mahendra Siregar, a top adviser to Coordinating Economics Minister Dorodjatun Kuntjoro-Jakti.
'We need to reduce price-intervention policies, including subsidies.
'Allowing prices to reflect international standards also helps prevent distortions to, and helps to liberalize, our domestic markets.'
International lenders, including the International Monetary Fund, applauded Jakarta's move to stick to its reform pledge and set higher fuel prices.
Mr David Nellor, the IMF's representative in Jakarta, said:
'The adoption of the pricing mechanism in January, and its implementation in subsequent months, is an important element of moving prices towards international levels.
'This enables the government to meet spending priorities that are more consistent with the country's developmental needs.'
Analysts said that allowing pump prices for several petrol varieties to reach all-time highs could trigger short-term jumps in the costs of transportation, food and other commodities or services.
Higher fuel prices reduce the pressure on Indonesia's state budget and allow Jakarta to start spending on education and poverty-alleviation initiatives.
The government wants to eliminate costly fuel subsidies by 2004.
It has budgeted around 30 trillion rupiah this year for fuel subsidies, much lower than the 54 trillion rupiah made available last year.
Indonesian fuel prices now fluctuate on a monthly basis, following market prices set in Singapore.

Opec secretary-general steps down Posted Tuesday, April 23, 2002 - 12:50 by petromin
ARACAS: Ali Rodriguez has quit his job as secretary-general of the Opec and will become the president of Venezuela's State-owned oil monopoly Petroleos de Venezuela.

Rodriguez, a former Venezuelan oil minister who became Opec secretary-general in 2001, was under heavy pressure from President Hugo Chavez to head the oil company.

It wasn't immediately known who would replace Rodriguez at Opec. The government spokeswoman, speaking on condition of anonymity late Friday, said a new board of directors was being appointed at Petroleos de Venezuela but said she couldn't provide the names.

Venezuela is the fourth-largest oil exporter in the world and a leading member of Opec. Petroleos de Venezuela was at the centre of a dispute that sparked last week's failed coup against Chavez.

Rodriguez has shared Chavez's interest in trying to keep oil prices high by sharply limiting crude production by the group's 11 member countries.

Chavez tried to assert control over PDVSA by appointing supporters to key positions in the company in February. Many managers perceived the moves as political interference.

The dispute boiled over this month when dissident executives and oil workers began a work slowdown that almost choked production and exports.

Venezuela's largest business and labour groups called a general strike to support them, and a storm of opposition swept Chavez from office April 12. The coup collapsed, and Chavez was back in office by Sunday.

India scraps oil industry price controls Posted Wednesday, April 17, 2002 - 11:28 by petromin
India on Monday abolished state price controls in its oil and refinery industry, clearing the way for greater competition for almost all petroleum products.

From April 1 state subsidies were scrapped for all products, apart from kerosene and cooking gas, which are used in the home. Subsidies for these politically sensitive items would continue for three to five years before being phased out, said Mr Ram Naik, petroleum minister.

Oil companies will be free to set their own prices at the pump. But the petroleum ministry said it would try to cushion the impact for at least three months to prevent consumers being hit by big price fluctuations.

Mr Naik said he did not expect a sharp rise in domestic prices as a result of the move.

The liberalization of the market is expected to clear the way for new entrants to the retail petrol station sector. Oil giants can set up a retail petrol chain provided they invest Rs20bn ($410m, E470m, £288m) over a decade.

The subsidy regime, known as the "administered price mechanism", was introduced 30 years ago. Under it, kerosene, diesel and liquefied petroleum gas were heavily subsidized by charging above-market rates for high-end products such as petrol and aviation fuel.
In recent years, however, the high-value products have failed to finance the subsidized sector, leaving the price control system in deficit and draining government coffers.

India imports over two-thirds of its oil, and recent rises in international prices have made the subsidy regime untenable when the government is seeking to rein in its fiscal deficit.


Malaysia: Titan Petrochemicals to produce cutting edge resins Posted Wednesday, April 17, 2002 - 11:26 by petromin
TITAN Petrochemicals & Polymers Bhd, a leading petrochemicals and polymer producer in Malaysia, is to produce cutting edge Metallocene Polyethylene (mPE) resins, managing director James Y Chao said.
Titan will be the first company to produce mPE in South East Asia and will work towards filling demand currently satisfied by imports from Japan and the US, he said in a statement. The metallocene-based polyethylene is expected to be available by September this year.

Titan group yesterday signed a metallocene catalyst supply agreement with Univation Technologies LLC of Delaware, US, which will enable Titan to produce metallocene polyethylene resins.

The new metallocene catalysts, first introduced in 1991, are rapidly emerging as a primary driving force for a change in the polyolefins business.

Metallocene catalysts permit the production of polyolefins with a controllable molecular weight distribution, which is tailored to achieve a specific structure and set of properties. Metallocene PE is known for its enhanced performance and exceptional toughness.

Chao said Titan had already established a strong platform to supply a comprehensive range of polyolefins products.

Metallocene polyethylene will enhance Titan's ability to meet both the domestic market's needs and the international market it serves, thus resulting in further import substitution and greater foreign exchange earnings, he said.

Univation's vice president Dr Randall Wu said the agreement signed with Titan validated the wide acceptance of Univation's metallocene technology.

Univation is a joint venture between ExxonMobil Chemical Co and The Dow Chemical Co.

The Titan group, Malaysia's first integrated petrochemicals and polymer producer based in Johor, is a joint venture between the Chao Group International of US and Permodalan Nasional Bhd.
The Chao group is a privately held conglomerate, producer and marketer of petrochemicals and plastics.

The group is Johor's biggest investor, with total investments of about RM6bil.

Reliance Petroleum to ink three marketing deals soon Posted Wednesday, April 10, 2002 - 2:43 by petromin
Reliance Petroleum will ink new marketing deals with three oil companies including IndianOil this week for sale of petroleum products from its 27 million tonne per year Jamnagar refinery in Gujarat.

"They are arriving at a conclusion. Hopefully it will be completed before March 31," Petroleum Minister Ram Naik told a news conference called to announce the modalities of dismantling of the administered pricing mechanism (APM).

To ensure that there is no disruption in reaching products throughout the country, public sector oil companies, private companies and JV refiners have finalized product supply/exchange arrangements, he said.

"The companies on their own are working out hospitality, supply and product swap arrangements. A marketing arrangement would be in place before the sector is deregulated from April 1 and we would ensure that customers get uninterrupted supplies," he said.

Naik expressed confidence that with these arrangements, a smooth transition from the administered pricing to the free market regime would be achieved.

Under the new marketing deal being formalized, IOC would sell about seven million tonnes of RPL's Jamnagar refinery product while another six million tonnes would be marketed by BPCL and HPCL on 'best-endeavour' basis, sources said.

Asked about the offtake of products of the joint venture Mangalore Refineries, Naik said, "MRPL products would be considered products produced by sister concern of HPCL and marketed accordingly."

India: Nocil Thane plant to resume production Posted Tuesday, March 12, 2002 - 1:04 by petromin
AFTER a three-month shutdown, National Organic Chemicals Industries (Nocil) has decided to resume production at its Thane plant.
"The plant will resume operations in a day or two. But it may take a week or so to get back to normal production,'' a senior company official said.
The petrochemical plant of Nocil, shut down in November for annual maintenance, could not resume production, as its raw material supplier stopped delivery of naphtha due to non-payment of arrears.
According to sources, Nocil owed large sum as dues to Bharat Petroleum Corporation on account of purchase of naphtha, the key raw material for its plant. However, the public sector refinery has agreed to supply the material on cash payment.
A BPCL official confirmed that it had agreed to supply naphtha to the company on cash payment basis. "We have started supply to Nocil two days ago,'' the official said.
The plan to revive and modernize the Mafatlal-controlled petrochemical company suffered a setback with the Shell Group backing out of an MoU on equity investment in Nocil last year. The company's effort to find a new partner has yet to materialize.
A senior company official, however, said negotiations with a new party were still in progress.
At one stage, Nocil tried to get BPCL and IOC to pick up a part of the Mafatlal stake in the company, but both had turned down the proposal.
The low price of naphtha may help the company to pull on for the time being.
But without the proposed modernization, it would be difficult for the company to survive in the long run, said a petrochemical analyst.

PNG: Oil Search bid to oust Santos at AGL for gas Posted Thursday, March 7, 2002 - 12:37 by petromin
Oil Search and other partners in the Papua New Guinea export gas project are in the final stages of negotiating with The Australian Gas Light Co (AGL) for long-term contracts to replace the gas supply contract AGL has with Santos.
If the talks are finalized successfully, AGL will agree to take base load gas from Papua New Guinea for sale in NSW.
Oil Search managing director Mr Peter Botten said his group was in "advanced negotiations which are expected to deliver in the short term".
AGL officers would not comment when asked about the status of negotiations, which have been under way for some time. The sale into NSW related to the unwinding of contractual commitments in 2005 and 2006, Mr Botten said, and would probably keep gas prices at near present levels.
AGL's long-term gas contracts with Santos begin expiring from 2005-06.
Backers of the PNG gas project - Mobil Exxon, Oil Search and also Santos - are competing with Timor Sea groups to supply gas into southeastern Australia.
Both PNG and Timor Sea project supporters hope to take advantage of both the end of long-term contracts between Santos and AGL, along with an anticipated decline in output from Santos's Cooper Basin gas fields in central Australia to gain a position in the local gas market.

Philippines Shell sets P0.25-P0.30 oil price hike Posted Thursday, March 7, 2002 - 12:33 by petromin
PILIPINAS Shell Petroleum Corp. is likely to raise its petroleum prices by P0.25 to P0.30 per litre in middle of this month due to the hike in world crude prices.
“If the trend (of rising crude prices) continues, we are seriously considering adjusting our prices. We want to do it on a small and frequent basis,” Shell Spokesperson Roberto Kanapi said.
Kanapi said Pilipinas Shell, the second largest oil refiner in the country, would continue to monitor and evaluate prices this week and issue a decision as soon as possible. He said the average crude oil prices for the month of February stood at $19.02 per barrel, as against $18.48 in January.
“If this average was kept at that level, we would not have to change our prices. But so far, prices have gone up to $20.76 per barrel. We think the prices have gone up substantially that we already have to adjust our prices,” he said.
Kanapi said they would still have to determine if the prices would continue to rise in the next few months.
The hike in oil prices was projected after the Organization of Petroleum Exporting Countries (OPEC) decided to cut back on its production early this year.

All Arun gas fields in full operation Posted Thursday, March 7, 2002 - 12:28 by petromin
All of the Arun gas fields in the troubled province of Aceh operated by American oil and gas firm ExxonMobil Oil Indonesia Inc. have resumed full operation following the reopening of the Pase field on Monday evening.
"The last field, Pase, resumed operation on the evening of 4 March 2002 with gas production at 25 MMcfd. The gas production was expected to increase to 50 MMcfd the following day, according to a company source.
At present, ExxonMobil was producing a total 1.506 Bcfd of gas from Arun and other fields. Prior to the Arun closure in March last year, ExxonMobil produced 1.6 Bcfd of gas and 30,000 barrels of condensate per day.
ExxonMobil shut down its Arun gas fields in mid-March last year on security fears arising from the enduring armed conflict between local rebels and the government's police and military. The company reopened several of Arun's gas fields in mid-July, and gas production from the fields has since increased continuously.
The resumption of Arun operations has enabled the nearby liquefied natural gas (LNG) producer PT Arun NGL Co. to recommence LNG production last August and resume exports to South Korea and Japan.
ExxonMobil supplies about 90 percent of its gas production to the Arun LNG plant and the remaining 10 percent to fertilizer plants, PT Pupuk Iskandar Muda and PT ASEAN Aceh Fertilizer (AAF), as well as to a pulp facility, PT Kertas Kraft Aceh.

LETH entered the Asian marketplace Posted Tuesday, February 26, 2002 - 6:41 by petromin
Life Energy & Technology Holdings Inc. (LETH), headquartered in Utica NY and the Eastern Hope Company based in Bangkok Thailand, have entered into a contract via California based PCG Electric to sell two Biosphere Process(TM)1(1) Systems for deployment in Thailand.

Mr Sawasdi Horrungruang, the president and chief executive officer of the Eastern Hope Company, a leading Thai Industrialist, expects these to be the first of many Biosphere Process(TM) Systems to be deployed in South East Asia.

LETH plans to manufacture the Biosphere Process(TM) Systems in facilities located in Central NY.

The two Biosphere Process(TM) System's have been sold on a sales and service contract for an initial purchase price of US$ 6,000,000 per machine with subsequent annual service and support payments of US$ 500,000 per machine, per year, for twenty five (25) years. The total value of the contract is US$ 37,000,000, payable to Life Energy & Technology Holdings Inc. The Biosphere Process(TM) System's have an operating lifespan of 25 years.

The Biosphere Process(TM) System, developed by LETH is an independent multi-fuel micro-power electrical generating system that LETH sells and leases to government entities and corporate clients throughout the world.

The Biosphere Process(TM) System is a mobile, modular, micro-power plant that consumes and recycles 100% of waste materials including municipal solid waste (MSW), agricultural wastes, forestry wastes, industrial wastes, medical wastes, animal wastes, and traditional fossil fuels (coal, oil, gas, peat) and oil industry wastes such as ‘wet gas’. The Biosphere Process produces clean, green, renewable electricity and at the same time significantly reduces harmful green house gas emissions.

Contracts for construction of pipeline and compressor station Posted Monday, February 25, 2002 - 5:01 by petromin
Guardian Pipeline has signed a contract with H.C. Price Co. for construction of Guardian's 142- mile pipeline. H.C. Price, of Dallas, was selected in a competitive bid process and will construct the pipeline in one ‘spread’, in which work will be done by a single construction crew over the entire length of the project.

Guardian Pipeline also announced it has signed a contract with Murphy Bros., Inc., of Moline, Illinois, for construction of Guardian's 22,225-horsepower compressor station, to be built near Joliet, Illinois. Murphy Bros. was also selected in a competitive bid process. The compressor station will consist of five engine-compressor units, which combined will be capable of delivering up to 750 million cubic feet of natural gas per day to Guardian Pipeline's customers.

“Guardian Pipeline is continuing to make steady progress. Both H.C. Price and Murphy Bros. have broad experience in successfully building pipelines and compressor stations throughout the United States in accordance with environmental requirements, on schedule and within budget. This signing of the project's main construction contractors keeps Guardian on track to meet its scheduled in-service date this November,” said George Hass,
Guardian project manager.

Hass added that construction of Guardian will provide an estimated 700 temporary construction job while the project is being built in Illinois and Wisconsin, and an estimated seven-to-ten permanent operating jobs.

Land acquisition work in support of Guardian Pipeline is continuing in both Wisconsin and Illinois. Construction is expected to begin on the compressor station in March 2002 and on the pipeline June 1, 2002, with completion and operation of the pipeline expected by November 2002.

The Guardian Pipeline will transport natural gas from interconnections with Alliance, Northern Border, Midwestern Gas Transmission, and Natural Gas Pipeline of America at the Chicago hub near Joliet, Illinois, to northern Illinois and southern Wisconsin markets. The project will consist of 22,225 horsepower of compression and approximately 142 miles of 36-inch pipe extending from Joliet to the Ixonia, Wisconsin area. The Public Service Commission of Wisconsin has approved a lateral pipeline connecting Guardian with the Wisconsin Gas system.

Currently Guardian Pipeline has firm precedent agreements with Wisconsin Gas and others to transport 662 million cubic feet of gas per day (88% of design capacity) when the pipeline goes into service in November.

Guardian Pipeline is a partnership of three Midwestern energy companies: CMS Energy, based in Dearborn, Mich.; WICOR, a subsidiary of Wisconsin Energy, headquartered in Milwaukee, Wis.; and Viking Gas Transmission, a wholly owned subsidiary of Xcel Energy Inc., and located in St. Paul, Minn.

Howe-Baker International acquired TPA, Inc Posted Monday, February 25, 2002 - 4:58 by petromin
Howe-Baker International, L.L.C., a subsidiary of Chicago Bridge & Iron Company N.V. has acquired the assets of TPA, Inc. of Richardson, Texas.

The acquired business, which will now operate as TPA Howe-Baker Ltd, is a full-service EPC company specialising in sulphur removal and recovery technologies for the refining, gas processing and chemical manufacturing industries. Terms of the acquisition were not disclosed.

TPA Howe-Baker's capabilities include analysis and consultation, environmental program management, process design licensing, detailed engineering, procurement, fabrication, construction services and training. Its technical expertise includes amine treating, sour water stripping, sulphur recovery (air and oxygen enhanced), ResulfTM tail gas treatment, and liquid sulphur degassing. More than 1,000 hydrocarbon-processing facilities located throughout the world use sulphur-processing technologies designed by TPA Howe-Baker.

The acquisition combines TPA's process know-how and design capabilities with Howe-Baker's skills and experience in engineering, project management, plant modularization, fabrication and construction.

"This acquisition significantly enhances Howe-Baker's ability to offer refiners the most cost-effective process units for sulphur removal and recovery, and is consistent with our stated strategy of expanding our services and products by leveraging our technical knowledge and project execution capability," stated Howe-Baker International president and CEO James McAdory.

David King, vice president of sales for Howe-Baker International, added, "TPA Howe-Baker’s sulphur recovery process provides a key step required for production of low sulphur transportation fuels needed to meet future environmental standards."

Howe-Baker International, L.L.C. is a global technology company specialising in the engineering and construction of hydrocarbon processing plants for customers in the refining, petrochemical and natural gas industries.

CB&I is a global specialty engineering and construction company offering a complete package of design, engineering, fabrication, construction and maintenance services.

BHP Billiton to invest in Gulf of Mexico transportation system Posted Monday, February 25, 2002 - 4:57 by petromin
BHP Billiton has announced that it would take equity ownership in two limited liability companies that will transport hydrocarbons from the Group's recently sanctioned Mad Dog oil and gas development and its Atlantis discovery, both in the ultra-deepwater Gulf of Mexico.

The pipelines are part of a new system being built in the southern Green Canyon area that will also transport hydrocarbons from the BP-operated Holstein development, and potentially other fields in the area.

BHP Billiton will acquire a 25% interest in the new Caesar oil pipeline (28-inch diameter) and a 22% interest in the Cleopatra gas pipeline (20-inch diameter). Capital costs for the development are expected to be about US$ 100 million (BHP Billiton share).

The Caesar pipeline will have a design capacity of at least 450,000 barrels of oil per day (bopd), and Cleopatra will have a capacity of 500 million standard cubic feet of gas per day (mmscfd).

The pipelines will be about 120 miles long, including laterals, and are the first of their size to be laid in water depths greater than 5,000 feet in the Gulf of Mexico. Both will be installed on a parallel timeframe with the Mad Dog and Holstein field developments and commissioning is expected in 2004.

President and CEO BHP Billiton Petroleum Philip Aiken said, "This investment provides BHP Billiton with equity participation in a strategically and commercially important infrastructure project that will serve the southern Green Canyon area where significant discoveries have been made by BHP Billiton, BP, Shell and Unocal, as well as other third parties."

The equity ownership enables BHP Billiton to secure transportation arrangements for Mad Dog, Atlantis and future proximal discoveries. In addition, the arrangements provide BHP Billiton with the opportunity to capture additional value from the transportation of third-party volumes resulting from industry exploration and development activity in the area.

As part of the agreement BHP Billiton will utilise the infrastructure to transport its 23.9% equity share of the hydrocarbons from the Mad Dog development (gross reserves 200-450 million barrels of oil equivalent, mmboe) and its 44% equity share of the hydrocarbons from the Atlantis discovery (gross reserves 400-800 mmboe), which is scheduled for approval later this year.

These quantities, together with the BP operated Holstein field, constitute the underpinning volumes for the development.

The system will link to Ship Shoal Block 332, which connects to the existing Manta Ray gas gathering system and the Cameron Highway oil pipeline system — a new offshore pipeline recently announced by El Paso Energy Partners. From there, oil and gas will be transported to markets in Texas and Louisiana.

The participants in the Caesar and Cleopatra pipeline system are BHP Billiton, BP (operator), Shell, Equilon Pipeline Company, and Unocal. BP will be the construction manager and operator of these systems through its wholly owned subsidiary Mardi Gras Transportation System, Inc.





Honeywell to provide control system for Beijing Gas Group Posted Thursday, February 21, 2002 - 5:25 by petromin
Honeywell Industry Solutions has received a $ 5.5 million order from Beijing Gas Group for a control system for a gas distribution network being built to serve metropolitan Beijing, China, the nation's capital.

The pipeline project is intended to make gas available to replace unwashed coal currently used as fuel by both commercial and residential users, with the objective of substantially reducing air pollution over the next several years. Beijing Gas Group serves an area with a population of more than 10 million people.

Honeywell will supply PlantScape® SCADA, its supervisory control and data acquisition solution that incorporates leading-edge, open-system technologies. PlantScape SCADA will give Beijing Gas Group the ability to integrate and unify the diverse subsystems and components (both hardware and software) intended to be part of the installation. The order also includes engineering and project services, training, maintenance and integration of third-party specialty applications and equipment.

The Beijing project is the first in an anticipated series of similar projects to reduce air pollution in many of China's larger cities.

Terry Sutter, president of Honeywell Industry Solutions, said, “We are delighted to be able to participate with Honeywell technology and expertise in this important effort designed to help clean the environment for the Beijing people and its visitors. We are hopeful we will be able to extend this activity to China's other major cities as well.”

Funding assistance will be provided by the Asian Development Bank.

Industry Solutions, a global business in the Honeywell Automation and Control Solutions group (ACS), provides automation and business solutions that help customers achieve improved productivity, compliance, safety, and decision-making.

Honeywell is a US$ 24 billion diversified technology and manufacturing leader, serving customers worldwide with aerospace products and services; control technologies for buildings, homes and industry; automotive products; specialty chemicals; fibers; plastics; and electronic and advanced materials.

BV development underpins cutting edge LNG vessel Posted Thursday, February 21, 2002 - 5:23 by petromin
Bureau Veritas has welcomed the order for an innovative 74,000 cu m LNG carrier placed with Chantiers de l'Atlantique by Gaz de France last week. The order includes an option for a second vessel. BV helped develop the concepts for the vessels, and developed unique new rules to allow the yard and owners to break new technological frontiers.

“BV has consistently been the world leader in LNG carriage, since development of membrane LNG carriers was first begun. Now we will class these new vessels, which is a quantum leap forward in cost-effective LNG transportation. The innovative features in these ships will set the benchmark for the rest of the world to live up to,” said Bruno Dabouis, commercial manager of BV's marine division.

The ships have two key innovations. The traditional steam turbine plant will be replaced by a low-pressure dual fuel diesel electric system, and the cargo gas will be carried in the new GTT CS1 membrane system.

BV developed the safety concept of the low-pressure dual fuel diesel/gas engine, and has issued new rules for such engines. These are unique, and set new standards for this type of machinery plant.

BV's consultancy division, Tecnitas, worked with GTT on the complex calculations and modelling needed to develop the cost-effective CS1 containment system. CS1 was granted BV concept approval earlier this month.

The dual fuel diesel electric propulsion system offers several advantages. As a more compact installation, it allows the shipyard to maximise cargo space in the hull. It will reduce gas consumption compared to the conventional turbine installations. Operators will have more flexibility with respect to crewing, as engineers familiar with turbine installations are now in short supply. Maintenance is simplified as generator sets can be taken of line and maintained on passage. Machinery redundancy is enhanced, cutting the risk of a power failure.

The CS1 containment system combines the best features of the proven Mark III and NO96 membrane systems. It offers increased strength, faster fabrication, and a cost reduction of 15% compared to existing systems. Partial loading conditions are also possible, improving operational flexibility.

Bureau Veritas is one of the leading international service providers, dedicated to the prevention of risk and the promotion of quality across a wide range of economic activities: Marine, Aeronautics, Industry, Building Inspection, International Trade, Consumer Products and Certification.

Acquisition of Texaco downstream completed Posted Wednesday, February 20, 2002 - 5:15 by petromin
Shell Oil Company (Shell) and Saudi Refining, Inc. (SRI) have completed the acquisition of Texaco Inc.'s interests in Equilon Enterprises LLC (Equilon) and Motiva Enterprises LLC (Motiva). As a result of the transactions, initially announced October 9, 2001, Shell and SRI now each own a 50% interest in Motiva, and Shell now owns a 100% interest in Equilon.

Shell Oil Company, including its consolidated companies and its share in equity companies, is one of America's leading oil and natural gas producers, natural gas marketers, gasoline marketers and petrochemical manufacturers.

Shell Oil is one of the leading oil and gas producers in the deepwater Gulf of Mexico and is a recognised pioneer in oil and gas exploration and production technology. Shell Oil Company is an affiliate of the Royal Dutch/Shell Group of Companies.

Saudi Refining, Inc. (SRI) is a subsidiary of Aramco Services Company, headquartered in Houston, Texas. In addition to managing its joint venture investments, SRI supplies approximately 550,000 barrels of crude a day to Motiva, which has a refining capacity of approximately 800,000 barrels per day.

New plant to be built at Down Under Posted Wednesday, February 20, 2002 - 5:13 by petromin
Singapore Power is building a new power generation plant worth between $ 40 million and $ 150 million near Melbourne in Australia’s Victoria state.

The eventual capacity of the plant would range from 90 megawatts (MW) to 270 MW, said Singapore Power International (SPI) managing director Chris Brown. However, the final capacity to be built has yet to be decided, he said. SPI is Singapore Power’s overseas arm.

The Melbourne based The Age Daily has recently reported that Australia’s Environmental Protection Authority (EPA) has given SPI the green light to build the first stage of its power generation plant. It said approval was given for four separate gas-turbine configurations and a decision about which configuration to use will be made this year.

Confirming SPI’s plans, Mr Brown said the EPA approval was just the ‘first step’ in setting up the plant. Looking ahead, SPI will still need to conduct market analysis, arrange the financing as well as sign gas contracts related to the plant.

Mr Brown emphasised that the building of the plant, which is relatively small to other facilities which SPI has purchased recently, was aimed at ensuring Singapore Power ‘squeezed’ the most out of its assets in Victoria. “It’s really the process of monetising our assets in Australia,” he added.

Currently, SPI owns a transmission facility on a 2.5 ha tract of land in Victoria. The new plant will be built next to it. It also owns a 16,000km-long power transmission grid.

On another front, Mr Brown said SPI was looking out for other opportunities in Australia but keep mum when pressed further.

“It’s no secret that we like the wired business,” he said, referring to the power transmission business. “As wired business comes up in Australia we will look at them … but again with all these businesses you got to get the right price.”

If the new plant managed to bring on-line a maximum capacity of 400MW, Victoria, could with the addition of capacity from other providers see power supply boosted by more than 3,000 MW.

-The Straits Time-


MLNG Tiga to supply LNG to three Japanese companies Posted Wednesday, February 20, 2002 - 5:12 by petromin
Malaysia LNG Tiga Sdn Bhd, a subsidiary of PETRONAS, has signed a sale and purchase agreement (SPA) with a consortium comprising Tokyo Gas Co Ltd, Toho Gas Co Ltd and Osaka Gas Co Lid to supply up to 1.6 million tonnes a year of liquefied natural gas (LNG) to the consortium for 20 years beginning from 2004.

At current prices, the contract is valued at about US$ 6 billion.

The LNG will be supplied to the consortium from MLNG Tiga's plant - which is Malaysia's third LNG production facility at the Bintulu LNG Complex, Sarawak, by tankers owned by Malaysia International Shipping Corporation Bhd (MISC), a subsidiary of Petronas. The LNG will be transported from Malaysia's loading terminal at Bintulu to receiving terminals in Tokyo, Nagoya and Osaka in Japan.

MLNG Tiga is a joint venture between Petronas (60%), the Sarawak State Government (10%), Shell Gas BV (15%), Nippon Oil LNG (Netherlands) BV (10%) and Diamond Gas Netherlands BV (5%). The MLNG Tiga plant will comprise two liquefaction trains with an annual production capacity of 3.4 million tonnes each and is scheduled to begin commercial operations in early 2003,

Once operational, the MLNG Tiga plant will make the Bintulu LNG Complex, which already houses plants owned and operated by Malaysia LNG Sdn Bhd and Malaysia LNG Dua Sdn Bhd, the world’s largest LNG production facility in a single location with a combined capacity of about 23 million tonnes per annum.

The SPA concluded sealed the Confirmation of Intent MLNG Tiga signed in May 2000 with the three-company consortium. Apart from the consortium, MLNG Tiga in April last year signed the SPA to supply up to 900,000 tonnes of LNG per year to Tohoku Electric Co Inc. MLNG Tiga is now finalising the terms of SPAs with other confirmed buyers.

At the SPA signing ceremony held in Kuala Lumpur, MLNG Tiga was represented by its chairman Tan Sri Dato' Mohd Hassan Marican, who is also president and chief executive officer of Petronas. The consortium was represented by Mr Hideharu Uehara, president of Tokyo Gas; Mr Toshitaka Hayakawa, president of Toho Gas; and Mr Akio Nomura, president of Osaka Gas.


Launch of pioneering sulphur-free fuels Posted Tuesday, February 19, 2002 - 4:49 by petromin
Edinburgh is the first city in the world to offer both Sulphur Free Unleaded and Sulphur Free Diesel, following another industry-leading cleaner fuels launch by BP.

Sulphur Free Unleaded and Sulphur Free Diesel will be available at 18 BP service stations in the Edinburgh area from 18 February 2002. BP's service stations in Scotland will be the first in its worldwide network to sell both fuels.

The latest in a long line of innovative and pioneering fuel developments by BP (1), the new fuels are the cleanest petrol and diesel fuels available in the UK, containing virtually no sulphur. Sulphur Free Petrol and Sulphur Free Diesel are allowed to have a maximum sulphur content of 10 parts per million. This amount is so small that it is barely detectable with the most sophisticated laboratory test methods, which is why it is commonly referred to throughout the fuel and motor manufacturing industries as 'sulphur free' or 'zero sulphur'.

These new environmentally-friendly fuels are produced at BP's Grangemouth refinery in east Scotland. Grangemouth is able to manufacture Sulphur Free fuels for the Edinburgh market as it is the only UK refinery with world-class hydrocracking technology.

The fuels will be the cleanest available anywhere in the UK, and are six years ahead of EU legislative requirements (2). Immediate environmental benefits include the reduction of particulate emissions that are a cause in the development of 'acid rain', and a reduction in sulphur dioxide emissions that create air pollution and contribute to respiratory problems.

There are significant benefits to the motorist too. Sulphur Free Unleaded and Sulphur Free Diesel improve catalyst efficiency and are treated with advanced additive technologies to optimise performance and fuel economy. Despite higher refinery costs, the new Sulphur Free fuels will be sold at the same price as BP's current Ultra Low Sulphur fuels, Cleaner Unleaded and Cleaner Diesel.

In addition to the roll out of the fuels to its service stations in Edinburgh, BP has agreed to supply Sulphur Free Diesel to First in Edinburgh for use in its 260-strong city bus fleet. The deal will include five First refuelling sites in Edinburgh and the Lothians, and involve 400,000 journeys every week, covering routes spanning the whole Lothian region, from as far afield as Glasgow in the west and Dunbar in the east.

Graham Sims, head of BP Retail in the UK, said, "BP is committed to developing fuels that maximise performance but minimise exhaust emissions. We are working in all aspects of our industry towards lowering emissions for the future (3), and believe that people share our commitment to a cleaner environment through choosing cleaner fuels. Edinburgh is just the first step.

"The fuels are produced at our Grangemouth refinery and build on the experience of previous launches of Ultra Low Sulphur Unleaded and Ultra Low Sulphur Diesel. While these new Sulphur Free fuels increase complexity in terms of logistics and refining, they reinforce Grangemouth's position at the forefront of clean fuels manufacture."

Deputy Minister for Enterprise, Transport and Lifelong Learning, Lewis Macdonald, said, "I am delighted that BP have launched this new, more environmentally friendly fuel and that they have chosen the Edinburgh area in which to do so. The Scottish Executive is committed to improving the environment in which we live and work and this initiative by BP is an excellent example to all industries."

Gordon Dewar, First Director, Scotland (East), said, "First is delighted to be working with BP in Edinburgh and the Lothians to bring their new sulphur free diesel to the UK bus industry. First has consistently led the industry in the development of environmental initiatives and I am pleased to be working in partnership with BP in taking this latest step forward in Edinburgh."



Oil products pipeline ‘Perm-Andreyevka’ launched Posted Monday, February 18, 2002 - 4:56 by petromin
The new pilot project of oil products pipeline (OPP) ‘Perm-Andreyevka’ was launched recently in Perm. The pipeline connected Perm refinery OOO ‘LUKOIL-Permnefteorgsintez’ and the AK ‘Transnefteproduct’ pipeline system.

The length of a first non-government owned oil products pipeline connected to the central state pipeline system is 335.3km, its volume capacity is 2.4 mln tons of oil products per year. The cost of the pilot project is more than 3 billion rubles (US$ 97.2 mln), its payback period is 7 years.

The new complex includes major pump station ‘Perm’, linear part, underwater passages, oil products registration units, and motor vehicles filling units. The emergency-repair posts to monitor and localise oil product leaks, are also installed along the pipeline. The pipeline is equipped with remote control units supplied by Honeywell (Germany).

The remote control units allow to set up the connection with a central dispatching unit of a major pump station at any spot of the OPP within the area of 500-600 metres; the transform signals to open and close valves and establish control over the security posts. Pipeline monitoring and service is to be carried out by helicopters and employees monitoring the status of the system. All of the above ensures highest levels of environmental safety.

The newly launched OPP ‘Perm-Andreyevka’ will provide OOO ‘LUKOIL-Permnefteorgsintez’ with a transportation facility to supply its products directly to southern parts of Perm region, Udmurtia, Bashkiria, surrounding regions and further on to the west - to export markets. It will also add new employment opportunities for the countryside residents. The new OPP will significantly improve the environment situation in the regions surrounding the oil refinery - the product feed will be carried out in a ‘closed’ method, which fully excludes the possibility of harmful vapours and leaks. LUKOIL will also be able to keep its products prices at a reasonable level due to the decrease in transportation costs.

The launch of the OPP will result in savings on railroad tariffs which could amount to 60 mln (US$ 1.9 mln) p.a. and 44 thousand tank trucks per year will not be used by the company.

"The launch of a new oil products pipeline is a next step in a Company's marketing network development aimed to supply quality products to the Russian consumers," noted LUKOIL's President Vagit Alekperov.



PEL acquired Posted Monday, February 18, 2002 - 4:55 by petromin
KBC Advanced Technologies plc has announced the acquisition of Petroleum Economics Ltd (PEL), based in London, England. The combination of PEL and KBC offers an additional dimension in consulting services for the hydrocarbon processing and energy industries.

This addition to KBC’s refining and petrochemical technology consultancy provides a broadened overview of the key economic, market, and commercial factors driving oil pricing, production, transport, supply, refining, marketing, and industry strategy. PEL carries out a wide range of regional studies concentrating on the future outlook for the industry, including forecasts of prices and supply demand balances. Additionally, client specific studies allow clients to obtain an independent perspective on future economic opportunities. Their client base includes OPEC and other State-owned energy companies, oil & gas operators, trading companies and financial institutions.

“We are excited to add PEL’s commercial capabilities to KBC’s broad range of consulting and service offerings. The synergistic combination of KBC’s technical consulting services with PEL’s recognised commercial and trading knowledge will allow our hydrocarbon processing industry and energy clients to obtain a unique perspective to optimising current assets, as well as a truly independent view on future investment options,” commented Don Romano, KBC’s chief executive officer.

Steve Terry, managing director of PEL, added, “Organisations working in the energy business face a complex and constantly shifting pattern of market forces. PEL and KBC can provide both a thorough appreciation of the principles governing the working of the world energy market and a detailed understanding of the oil, coal, gas, chemical and power generation sectors within it. We are very pleased that we have been able to conclude this agreement, and are confident that our client base will see the benefits of this acquisition.”

PEL was founded in 1955 and ever since then its aim has been to provide its clients with objective and unprejudiced analysis of developments in the international oil and energy industries. PEL specialises in oil and natural gas markets and covers all the main phases of these industries, exploration, production, transportation, refining and marketing.

KBC Advanced Technologies an independent process engineering consultancy, improving operational efficiency and profitability in the Hydrocarbon Processing Industry.




Dow extended standardisation of AspenTech engineering and manufacturing solutions Posted Monday, February 18, 2002 - 4:54 by petromin
Aspen Technology, Inc. and The Dow Chemical Company have announced a major agreement to significantly expand the use of AspenTech's software solutions in Dow's global manufacturing operations.

Under the multi-million dollar agreement, Dow will standardise on key elements of AspenTech's integrated engineering and manufacturing technologies, supporting the company's ambitious goals for increased productivity and delivering a dramatic improvement in manufacturing performance throughout hundreds of Dow's worldwide facilities.

The new agreement enables Dow to extend its use of process engineering and design tools from the Aspen Engineering Suite(TM), and to standardise on key components of AspenTech's integrated Plantelligence(TM) solution for production optimisation. Dow will use AspenTech's integrated solutions for production management and scheduling, process information management, and advanced control and optimisation. Using these technologies, Dow will be able to generate higher yields, improve product quality and reduce energy costs.

Said Maggi Walker, director of Dow, Process Automation, "Standardising on AspenTech's solutions in these areas represents a significant step in our manufacturing strategy and will strengthen Dow's competitive position in the marketplace.

"These tools and applications will provide us with a powerful technology platform to drive performance improvements across our manufacturing network, and we believe these applications will be a key enabler in helping Dow to achieve its business objectives."

Dow will use the Plantelligence applications within its Manufacturing
Execution Systems (MES) initiative to link plants with the company's SAP Enterprise Resource Planning (ERP) system, allowing critical real-time information to be shared along the value chain for automated, faster and more profitable decision-making.

The decision to extend the standardisation of AspenTech's applications
builds on extensive experience and utilisation of the solutions within Dow's manufacturing operations. AspenTech's technologies have been widely used in the modelling and design or re-design of plants; in advanced control and optimisation - such as the agreement announced in 2001 for Dow's global ethylene plants; and in the process information management systems currently being implemented across Dow's manufacturing network.

"This major agreement with Dow demonstrates how our solutions help companies transform the way they manage their manufacturing operations, by providing them with a comprehensive set of optimisation and decision-making tools. The agreement builds on the 20-year relationship between our two companies, and demonstrates AspenTech's strong commitment to the long-term relationship," said Larry Evans, chairman and CEO of AspenTech.

Dow is one of the leading science and technology companies that provides innovative chemical, plastic and agricultural products and services to many essential consumer markets.

Aspen Technology, Inc. is one of the leading suppliers of integrated software and solutions to the process industries.

Aspen Technology and Accenture strengthened alliance Posted Monday, February 18, 2002 - 4:52 by petromin
Aspen Technology, Inc. and Accenture have announced an expansion of their strategic alliance, under which they will develop and implement new manufacturing and supply chain solutions to improve the performance of chemical and petroleum manufacturers.

The expanded alliance, which builds on the marketing agreement that the two companies announced in July 2001, is designed to help chemical companies and petroleum refiners significantly increase operational efficiencies and reduce costs by transforming their manufacturing and supply chain operations and leveraging their existing investments in enterprise resource planning (ERP) systems.

As part of the agreement, Accenture and AspenTech will work together to enhance AspenTech's solutions for the chemical and petroleum industries. In return for its software development resources and use of its intellectual property, Accenture will receive shares of AspenTech common stock.

The expanded relationship establishes AspenTech as a key strategic technology supplier for manufacturing and supply chain in Accenture's chemical and downstream petroleum business, and Accenture will become a strategic supplier for AspenTech to the petroleum and chemical industries.

Said Mary Tolan, managing partner of Accenture's Resources global market unit, "We believe that manufacturing and supply chain execution systems will become a major source of productivity and cash flow improvement for our clients.

"With innovative solutions and an unmatched delivery capability, Accenture and AspenTech are perfectly positioned to help our chemical and petroleum clients transform the effectiveness of their manufacturing networks."

"The expansion of our alliance with Accenture is testament to the opportunity that exists for new manufacturing and supply chain solutions. We believe that our joint offering will become the de facto standard for chemical and petroleum companies wishing to drive profitability and maintain a competitive advantage in the marketplace," said Larry Evans, chairman and CEO of AspenTech.

The new alliance will further leverage the leadership position of both partners. AspenTech and Accenture each have a long tradition of serving a majority of the world's top chemical and petroleum-refining companies.

Accenture is one of the world's leading management and technology services organisations.

Aspen Technology, Inc. is one of the leading suppliers of integrated software and solutions to the process industries.

Keppel Offshore & Marine Posted Friday, February 15, 2002 - 5:37 by petromin
The newly integrated Keppel Offshore & Marine will be headed by Mr Choo Chiau Beng, executive director of Keppel Corp and chairman of Singapore Petroleum Co and Singapore Refining Co. He will lead the new company as chairman and chief executive.

According to an in-house publication, the integration of Keppel FELS and Keppel Hitachi Zosen would be completed next month, and unlocking maximum value from the merger was the top priority. The new company aimed to be a global leader in design and engineering solutions, shipyard services and products to the offshore and marine industries, it said.

The new management structure, according to Keppel Corp, was expected to be in place by end-April, and the organisation by end-June. As part of the integration, a committee led by Mr Choo will look at various ways of unlocking value from the merger of the two companies, said Keppel.

The Keppel group has been reorganising its business to focus on its core competencies, including rationalising the operations of its two shipyards subsidiaries.


New four-component seismic acquisition contracts awarded Posted Friday, February 15, 2002 - 5:37 by petromin
Petroleum Geo-Services ASA has announced that its Seafloor Seismic division has secured new four-component (4C) seismic acquisition contracts valued at $ 33 million in offshore Nigeria, Norway's North Sea sector and the West of Shetlands area in the North Atlantic. These contracts also include the provision of seismic data processing services by PGS' Data Processing division.

All of these surveys will be acquired using PGS' FOURcE(SM) Seafloor Seismic Acquisition System. The FOURcE system is a proprietary multi-component acquisition system comprised of components that are proven effective in water depths down to 2000+ metres. In addition to handling the challenges of seafloor seismic recording in deepwater, the FOURcE system is also highly effective in shallow water areas where towed streamer surveys are uneconomic or geophysically inappropriate.

In Nigeria, PGS has been selected by ChevronTexaco to acquire and process a 3D 4C survey and additional 2D 4C data. This project marks the first purpose-designed application of 4C technology in West Africa.

A full North West Europe season of 4C acquisition follows the Nigeria survey. PGS will acquire 3D 4C data over the Statfjord and Statfjord East fields in Norway's North Sea sector for Statoil. Multi-component seafloor technology using a high-density survey design is being applied to these producing fields to better characterise the reservoirs, with emphasis on enhanced fault definition.

PGS will also acquire and process a large 3D 4C survey in the West of Shetlands area for BP. This survey will image the Clair field located off of the United Kingdom Continental Shelf (UKCS). The use of seafloor technology, which allows for optimal attenuation of multiple energy caused by the hard water bottom in the area, will enhance imaging of major faults and the reflectors adjacent to these faults.

“These 4C projects indicate the growing acceptance of multi-component technology in the industry. It is worth noting that the technology is being used on both undeveloped and producing fields to solve geophysical problems that do not lend themselves to conventional towed streamer acquisition methods,” said Tim Rigsby, president of PGS' Seafloor Seismic division.

“The efficiency and 4C capability afforded by our proprietary FOURcE system, coupled with our experience in performing complex surveys around platforms, pipelines and other subsea production installations played a major role in PGS being selected to perform these surveys over competition that was firmly established in the region,” he added.

Meanwhile, Diz Mackewn, president of PGS Geophysical, said, “PGS is a leader in the multi-component segment of the seismic market. Projects like these strengthen our view that there is a bright future for this technology and reinforce our ongoing efforts to make 4C acquisition more efficient and affordable.”

Petroleum Geo-Services is a technologically focused oilfield service company principally involved in two businesses: Geophysical Operations and Production Operations. PGS acquires, processes and markets 3D, time-lapse and multi-component seismic data.

Largest land contract for Snøhvit Posted Friday, February 15, 2002 - 5:36 by petromin
Operator Statoil has signed a letter of intent with NCC Norge for blasting and levelling of the industrial site for the Snøhvit project at Melkøya off Hammerfest in Finnmark county.

A letter of intent has also been signed with the Veidekke and Selmer Skanska companies to construct a road and a 2.3km subsea tunnel from Hammerfest to Melkøya. The contracts have a combined value of around NOK 700 million.

"This is one of the largest construction contracts on land in Scandinavia," reported Morten Vinje, area manager in the Snøhvit organisation.

Most of the investments are related to the blasting and levelling of the industrial site. The work includes the construction of cooling water tunnels, a dock for the process plant and a quay.

Mr Vinje added that the contracts are being awarded with the proviso that the Storting (parliament) approves the Snøhvit development, which will probably take place in March. He said that the purpose of awarding the contracts so early is to give the contractors time to plan the work and establish subcontractors.

Plans call for the work to begin immediately following the Storting's ruling.

The levelling of the site is estimated to take one year. It will then be ready for the installation of process facilities and the four storage tanks – two for liquefied natural gas (LNG), one for liquefied petroleum gases (LPG) and one for condensate.

The LNG plant at Melkøya is planned to come on stream at the end of 2005.

Deals with Agip and Fortum Posted Friday, February 15, 2002 - 5:35 by petromin
Italy's Agip is to buy 7.9% of the Mikkel development in the Norwegian Sea from Statoil, and has secured an option in the same deal to acquire 7.9% of the nearby Tyrihans discovery.

Statoil, which operates both fields, has also concluded agreements with Agip and Fortum of Finland on the loan and sale of gas.

Mikkel is due to begin producing gas and condensate in the autumn of 2003, with this output being piped to Statoil's Åsgard B platform for processing.

"This sale marks an important step in aligning ownership interests in the Halten Bank area," said Henrik Carlsen, executive vice president for Exploration & Production Norway. He added that this realignment would ensure good commercial development and operation.

At the same time, Statoil, Agip and Fortum have settled an arbitration dispute relating to investment at the Kårstø treatment complex north of Stavanger for handling gas from Åsgard.

Foster Wheeler won three biomass-based power plants in Germany Posted Friday, February 15, 2002 - 5:34 by petromin

Foster Wheeler Ltd's Finnish-based subsidiary, Foster Wheeler Energia Oy, has been awarded three power plant projects in Germany in the wake of the country's modified bioenergy legislation, introduced in May 2001.

The value of the projects is approximately $ 70 million and each will use Foster Wheeler's advanced circulating fluidised-bed (CFB) boiler technology applied to biomass-based power generation.

A 20 MWe turnkey biomass-fired power plant has been awarded by German-based MVV Energie AG. The plant will be located at Konigs Wusterhausen, near Berlin, and is scheduled for completion in mid-2003.

Foster Wheeler was also awarded a contract by Prokon Nord Energiesysteme GmbH for a 63 MWt CFB unit at Papenburg. The plant, which is scheduled for completion in fall 2003, will primarily supply industrial customers and will also generate 20 MWe of electricity.

In addition, Foster Wheeler was selected by Heizkraftwerk Kehl GmbH, majority owned by a subsidiary of Germany's second-largest utility, RWE, to supply a turnkey 44 MWt CFB boiler plant. This unit, scheduled for completion in early 2003, will be part of a plant supplying electricity to the national grid and process steam to the Kohler paper mill in Kehl.

Elias Gedeon, Foster Wheeler's vice president of global power sales, said, "These projects reflect our technological leadership in winning all recent projects involving CFB-based biomass-fired power plants in Germany, among global competition. They represent strong references for extending the use of Foster Wheeler's technology for ‘green energy’ projects in the European and global marketplace."

Foster Wheeler Ltd is a global company offering, through its subsidiaries, a broad range of design, engineering, construction, manufacturing, project development and management, research, plant operation and environmental services.


Merger of Aker Maritime and Kværner approved Posted Friday, February 15, 2002 - 5:33 by petromin
The Norwegian Competition Authority has cleared the merger of Aker Maritime and Kværner's oil and gas activities.

The authority has approved the merger without reservations, on the basis that the merged company will not have the opportunity of exercising market power through deliveries of newbuildings and maintenance services to oil companies operating on the Norwegian continental shelf.

The Competition Authority concludes that following the merger there will still be sufficient competition from foreign players, and the oil companies, which are active in Norway have significant purchasing power. Except for clearance in the US, which in this case is expected to pose no problems, this is the final approval required from the authorities.

The implementation of the rescue plan between Aker Maritime and Kværner was made conditional on all necessary permissions from the authorities being obtained. The European Commission cleared Aker Maritime's acquisition of control over Kværner's shipyard operations on 23 January last and permission in accordance with Norwegian acquisition law was given on 4 February. Clearance from the US authorities is expected in 10 days. All necessary approvals will then have been obtained and the conditions for implementing the merger fulfilled.

A number of internal working groups made up of personnel from the two companies are now working to ensure that all the practical arrangements for accomplishing the merger are settled as soon as possible. Everything is now in place for the merger to go through by the beginning of March.



CML for ROC Oil completed Posted Friday, February 15, 2002 - 5:32 by petromin
Reeves Oilfield Services (Reeves) has successfully completed its second open hole logging operation on the Saltfleetby gas field, UK using its wireless open hole Compact Memory Logging (CML) system.

Saltfleetby is operated by Australian independent ROC Oil. Located in Lincolnshire, eastern England, it is by far the UK's largest onshore gas field, with initial in-place reserves of 119 bcf, and with production exceeding that of many North Sea fields.

CML was deployed successfully in the horizontal Saltfleetby-5 well in September 2001 following earlier CML operations in Roc's Keddington 2z well - the first use of CML at a UK land location. This was followed in December 2001 by another successful horizontal operation in Saltfleetby-6y. A quad-combo measurement string (density - neutron porosity, gamma ray, array induction and sonic velocity) was conveyed without a wireline on drill pipe in CML Memory Pipe Conveyed Logging mode (Memory PCL).

Memory PCL does not use the wireline wet-connect system needed in conventional wireline PCL, so logging tools are run in the well more quickly. In Saltfleetby-6y, for example, the time between rig-up and rig-down was less than 18 hours, compared with an estimated 28 hours for a wireline PCL operation. Safety is also improved because drilling mud can be circulated during the operation to control the well.

Saltfleetby-6y was completed in January, confirming gas reserves in the previously untested southern area of the field. The well also intersected a gas-water contact, confirming it to be 19 metres deeper than had previously been assumed for reserves calculations. Information gathered in Saltfleetby-6y has contributed to increased estimates of likely recoverable reserves from the field - up by 13.4 bcf, which is more than the 2001 production of 12.1 bcf. The well was successfully put on production on 20th January 2002.

John Boyes, director of Corporate Development at Reeves, said, "We are delighted at the success of this project, which demonstrates the efficiency and effectiveness of CML. Reeves is fully committed to delivering value to our clients through innovative technologies while maintaining the highest standards of quality and safety in data capture and service delivery."

Reeves developed Compact tools to improve operational efficiency and well access across a broad range of well types. They have been used in over 7,000 logging operations in North America, Australia and Europe since 1998, over 100 of which have been with the recently introduced CML system.

Founded in 1970, Reeves Oilfield Services Ltd is one of the leading international oilfield service providers of well logging products and services to the global energy and mineral resources industries.



Framework agreement signed Posted Friday, February 15, 2002 - 5:32 by petromin
Halliburton International Inc. and Sibneft, have signed an agreement that will give Halliburton the ability to deploy all of its product service lines to the Russian oil and gas market.

Sibneft intends to use Halliburton's new technologies to improve well construction and production processes and overall project management. Halliburton, currently providing its Sperry-Sun and Baroid product service line applications to Pride Furasol/Sibneft for extended horizontal reach wells, will expand its offering to other product service lines as required.

An engineering team comprised of Sibneft and Halliburton specialists will evaluate projects and implement the optimum application of technologies for those projects. An immediate deployment of Coil Tubing and Nitrogen Services will be initiated and these services will be provided throughout the Noyabrskneftegas operational area.

"The current and future services provided under this framework agreement and a close relationship with Sibneft will give Halliburton a broader geographic presence and increased market share in Russia. It will also allow Halliburton to introduce and implement technologies