INDONESIA: Herbert Smith advised Banpu on US$400m sale of stake in coal mining unit

  (EnergyAsia, October 1 2010, Friday) — Law firm Herbert Smith LLP said it and Indonesia’s Hiswara Bunjamin & Tandjung (HBT) jointly advised Thailand’s largest coal miner, Banpu, on the recent sale of its 8.7% stake in its listed Indonesian subsidiary, PT Indo Tambangraya Megah Tbk (ITMG), for US$400 million.  (US$1=8,970 rupiah). The transaction is…

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INDIA: US-based Hydrovolts receives order and investment to deploy hydropower solution

  (EnergyAsia, October 1 2010, Friday) — Hydrovolts Inc, a Seattle, US-based hydropower company, said it has received a US$250,000 investment to develop a 25kW hydrokinetic canal turbine for US-based civil engineering firm DLZ Corp for hydropower projects in India. According to Hydrovolts, DLZ Corp has obtained permits and a power purchase agreement to develop…

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MARKETS: Smart grid pilots require regulatory change, consumer focus, says Accenture and WEF report

  (EnergyAsia, October 1 2010, Friday) — For smart grid investments to pay off, policy makers must introduce regulatory incentives and utilities must improve their engagement with consumers, according to a joint report by Accenture and the World Economic Forum. The report, “What makes a successful smart grid pilot?” assesses some of the world’s 90…

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MARKETS: OPEC maintains world oil demand to grow by 1.2% to 85.5 mb/d in 2010, 86.5 mb/d in 2011

  (EnergyAsia, October 1 2010, Friday) — OPEC is maintaining its forecast for world oil demand to grow by around 1.05 million b/d or more than 1.2% to 85.5 million b/d in 2010, and by around the same rate next year. The Organisation of Petroleum Exporting Countries said that stimulus packages in key consuming countries…

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INDONESIA: Lack of coal supplies may threaten Sasol’s proposed investment

  (EnergyAsia, October 1 2010, Friday) — Without guarantee of coal supplies, South Africa’s Sasol Corp may be forced to cancel plans to invest in a US$10 billion coal liquefaction plant in Indonesia. Indonesian state coal miner PT Tambang Batubara Bukit Asam, a prospective partner for the project, said the government has yet to respond…

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JAPAN: Trading house Itochu to expand coal exports

  (EnergyAsia, October 1 2010, Friday) — Buoyed by rising demand from China and India, Japanese trading house Itochu Corp expects exports to account for half its coal sales in the next five years. Exports now account for only 10% of the company’s total sales. Itochu said it expects annual shipments to hit 22-24 million…

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CHINA: Yitai Coal, Mongolia Mining aim to raise billions of dollars from share listings in Hong Kong

  (EnergyAsia, October 1 2010, Friday) — Two coal mining firms are planning to launch initial public offerings of their shares in Hong Kong in the coming months. Between them, Inner Mongolia Yitai Coal Co and Mongolian Mining Corp are aiming to raise as much as US$2.7 billion to fund their expansion to help meet…

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ASIA: Singapore to lose competitive edge in manufacturing, says study

  (EnergyAsia, October 1 2010, Friday) — Asia’s power houses China and India, along with South Korea, are expected to continue dominating the global manufacturing sector in the coming years, while Singapore and developed nations may lose their competitive edge, according to a joint research report by Deloitte and the US Council on Competitiveness. Japan, …

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RUSSIA: China hosted President Medvedev to celebrate start-up of first cross border oil pipeline

(EnergyAsia, September 30 2010, Thursday) — China and Russia raised their ties to a new level this week with the completion of their first cross-border pipeline delivering crude oil from the world’s largest oil producer to the world’s largest energy user. They have also begun work on building a US$5 billion oil refinery in the…

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AUSTRALIA: China approves firm’s A$30 million investment in coal project with MetroCoal

(EnergyAsia, September 30 2010, Thursday) — The Chinese government has approved China Coal Import & Export Company (CCIEC)’s application to transfer A$30 million to its Australian subsidiary for the establishment of a joint venture with Australia’s MetroCoal to develop the Columboola coal reserves in Queensland’s Surat Basin. (US$1=A$1.05). Australia-based MetroCoal Limited made the announcement on…

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MARKETS: IEA maintains forecast for world oil demand to rise 1.5% to 87.9 million b/d next year

(EnergyAsia, September 30 2010, Thursday) — Sticking with its forecast from last month, the International Energy Agency (IEA) expects global oil demand to grow by 1.5% to 87.9 million b/d in 2011. The agency also kept unchanged its forecast for world oil demand to grow by 2.2% to reach 86.6 million b/d in 2010. While…

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MALAYSIA: Fluor awarded Shell’s refinery upgrade project

(EnergyAsia, September 30 2010, Thursday) — US engineering giant Fluor Corporation said it has been awarded a contract by Shell Refining Company to build a 6,000 tonnes-per-day diesel processing unit at its refinery in Port Dickson in Malaysia. Fluor said it will perform engineering, procurement and construction management (EPCM) services as a follow-on scope of…

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SINGAPORE: Brightoil signs up three-year oil storage lease

(EnergyAsia, September 30 2010, Thursday) — Hong Kong-listed Brightoil Petroleum said a wholly-owned subsidiary has signed a three-year lease to store oil products at a storage terminal in Singapore. The marine bunker supply and oil trading firm said that it plans to continue expanding its business in China and globally, and will likely expand its…

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PHILIPPINES: Cheap imported fuel may force one refinery to close

(EnergyAsia, September 30 2010, Thursday) — Under pressure from cheaper imported fuel, the Philippines may be forced to shut down the operation of one of its only two oil refineries. At a recent Congressional hearing, Energy Secretary Rene Almendras said that China’s moves to boost its refining capacity may make it more viable for the…

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MALAYSIA: Oil and gas sector to play major role in 2011-2015 national economic plan

(EnergyAsia, September 30 2010, Thursday) — The oil and gas sector has been given a key role in driving Malaysia’s economic growth under its new five-year plan to 2015. The Malaysian government is targeting the economy to switch to using imported liquefied natural gas (LNG) in place of oil by 2012, thus reducing its substantial…

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CHINA: August oil demand up 7.6% from year ago at 8.4 million b/d, says Platts

(EnergyAsia, September 30 2010, Thursday) — China consumed an estimated 35.54 million metric tons (mt) of oil in August, 7.6% higher than the corresponding month of last year, but still down from June’s all-time peak, according to a just-released Platts analysis of official Chinese data. The August apparent oil demand equates to an average 8.4…

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ASIA: Singapore aims for role as comprehensive regional LNG hub, says energy official

(EnergyAsia, September 30 2010, Thursday) — The following is an edited version of the speech delivered by Lawrence Wong, chief executive of Singapore’s Energy Market Authority (EMA), at the World LNG Series (Asia-Pacific Summit) in Singapore on September 21.

As countries worldwide strive to decarbonise their energy mix, natural gas will be an important part of the solution.

Compared to renewable energy sources like solar or biofuels, natural gas has higher power density, meaning that it generates a lot more power for a small amount of land, and relatively low cost. Compared to other hydrocarbons like oil and coal, natural gas produces lower carbon emissions and therefore results in very low air pollution.

Natural gas is now considered by many people to be the fuel of the future. Seven of the eight Exxon-Mobil projects last year were for natural gas developments. Shell has said that half of its output will come from gas by 2012. The opening of vast unconventional gas reserves in the US has also sparked renewed interest.

Because gas resources are largely found in places far away from the key consumption centres, LNG is critical to the take-up of gas. LNG is already the fastest growing segment of the world’s hydrocarbon industry and (will become) an increasingly important part of the world’s energy mix.

A big part of the growth is coming from the Asia-Pacific region. The key producers are here: Qatar, and Australia, with major projects being developed in Queensland and the North-Western territories. And so are the major consumers like Japan and South Korea, as well as rapidly growing markets in China and India, especially with their switch from coal and oil-fired plants to cleaner gas turbines.

Singapore’s energy needs are small but gas plays a major role in the powering of our economy. About a decade ago, 70% of our electricity was generated by fuel oil using oil-fired steam plants. After we de-regulated the electricity market in 2001, the power companies in Singapore competed aggressively for more efficient ways of power generation.

When the first piped natural gas contract was signed with Indonesia in 2003, it sparked a dash for gas amongst the companies. All our power generators switched to gas-fired plants, stranding their steam plants as this brought about a dramatic change in our fuel mix.

Today, 80% of our electricity is generated by gas, and it has contributed to a relatively low emissions profile from our power generation sector. With LNG, we will have even more gas generation capacity coming on-line. All five of our power companies have announced plans for new plants. A new company, Island Power, has announced that it will be investing in Singapore and entering the power market.

Altogether, based on the announced plans of these companies, we expect around 3,000 MW in gas generation capacity over the next 3 – 5 years. I’m sure they will phase in their investments in line with demand. Some of this gas capacity will displace existing steam sets, so they will not increase our overall capacity, but will replace existing plants with more efficient plants. Some of these will be new additions to our overall generation capacity, so we do expect a healthy pipeline of gas generation capacity going forward, which will help to meet growing demand for electricity in Singapore. Our fuel mix will therefore continue to be dominated by gas, but it will be gas from diverse sources, piped gas, as well as LNG, providing us with clean, resilient, and sustainable supply of power for years to come.

We are also positioning ourselves to take advantage of the global trends in the gas market, and create value across the entire chain of LNG activities. One area is in LNG trading. Singapore is already one of the world’s leading commodity trading hubs. We have no oil here, but we are Asia’s top oil trading centre and the world’s largest oil trading market after London and New York. We want to extend this competitive advantage to LNG trading.

We have seen greater opportunities for LNG trading. LNG spot trades or short-term LNG contracts was insignificant 10 years ago. Today, it accounts for about 20% of total LNG trade. LNG long-term contracts have become more flexible, for example in their destination clauses. With more trading activity, there will be a need for a transparent price discovery mechanism. Singapore can provide an attractive platform for all this to happen. We already have companies like ConocoPhillips and Gazprom setting up their LNG trading offices and trading in Singapore. We hope to attract even more companies to develop, grow their LNG trading business from Singapore, and to enable new platforms for price discovery.

Another area is in LNG ship repairs and refurbishment. Singapore has excellent shipyard facilities. We have one of the most technically competent and efficient repair yards in the world for refitting of LNG carriers. Two of our local companies, Keppel and SembCorp, are world leaders for LNG repairs and refurbishments, and together command a significant share of the global LNG ship repair market.

Sembawang Shipyard is the world’s leading LNG repair yard. They have a total of 75 ships repaired in the last four years, and have clinched several long-term contracts with major LNG vessel owners and operators like Shell, BP, BG and China LNG Shipping recently. Sembawang is also embarking on life extension programmes for the older fleet of LNG carriers.

Keppel has also carved a successful niche in the LNG business. They successfully delivered the first-ever conversion of an LNG carrier into an LNG Floating Storage and Regasification Unit (FSRU) in 2007. This year alone, Keppel has undertaken 8 LNG carrier refits and 1 FSRU conversion for companies like Shell, Golar, Tokyo LNG and Qatar Gas.

We need to talk about the LNG terminal which we are building (and which) will enhance the value proposition that Singapore can offer in the LNG business. The terminal will offer vessel cool-down services so that vessels completing their maintenance in the shipyards, can be gassed up, brought down to operating temperature before arriving at their loading ports. The LNG terminal will offer storage and re-loading services – which will enhance our environment for trading activities, by allowing companies to store and subsequently re-export their LNG cargoes.

We have made good progress with the LNG terminal. EMA has set up a subsidiary company, Singapore LNG Corporation (SLNG), to own and operate the terminal, and the project is proceeding on schedule. SLNG has completed piling for the first tank and they have already started piling for the second tank. The pipeline operator, SP PowerGas, is staying on top of the procurement and construction process for the connecting pipelines from the terminal to the gas network. Overall, we are on track for commissioning of the terminal in 2013.

The LNG terminal in Singapore will be located on a 40-hectare site in Jurong Island. It will have two 180,000 m3 tanks providing 3.5 million tonnes per year of initial capacity in the first phase, but there will be provisions for further expansion. What we are building with these two tanks in the initial phase of the terminal construction will be sufficient for Singapore’s gas needs in te short-to-medium term, but as the LNG market is evolving rapidly, we also have to plan for the future. And so SLNG is now developing a long-term Master Development Plan for the LNG Terminal. The intention of this plan is to give SLNG flexibility to configure and develop the terminal for expansion to meet future needs.

The site can accommodate up to five more storage tanks with the appropriate regasification facilities. This means that the terminal itself can potentially handle around nine or more million t/ya of LNG throughput for domestic consumption alone.

The terminal can also provide a range of different services, e.g., storage and sale of industrial gases like LPG, cold ‘energy’ integration and cooling services, LNG trucking or the use of LNG as bunkering fuel for ships in the future.

All these are possibilities that we have mapped out and provided for in the master plan. It is not going to be possible to do all of these things at the same time. It is also too early to say which particular activity or services we will be focussing on. A lot will depend on how the LNG market evolves, and how the industry demand shapes up. We are planning for these possibilities now, so that as the market changes, we will be well positioned to take advantage of the opportunities.

All of us in Singapore are excited about the future of the LNG industry. We are putting in place key components for a vibrant LNG eco-system in Singapore, whether through trading, ship repairs, refurbishment or the terminal itself. We will develop Singapore as an LNG hub, and a catalyst for LNG trading in the region.

SINGAPORE: DBS calls oil storage builder PEC an “undervalued cash cow”

(EnergyAsia, September 29 2010, Wednesday) — DBS Vickers has maintained its ‘buy’ rating on the stock of Singapore-listed engineering and oil storage builder PEC Ltd, with a price target of S$1.31 a share for a 31% gain. (US$1=S$1.32). DBS Vickers reiterated its stance in light of what it calls PEC Ltd’s strong cash position and…

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CHINA: Russia to supply the bulk of crude oil to Tianjin refinery

(EnergyAsia, September 29 2010, Wednesday) — China National Petroleum Corp (CNPC) and Russia’s Rosneft have agreed that their new 51/49 joint venture refinery in the northern Chinese city of Tianjin will process mostly Russian crude oil. Under the agreement, Russia will supply 70% of the refinery’s feedstock while the remainder will be sourced from suppliers…

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INDONESIA: Singapore’s Marco Polo Marine secured US$15.5 million coal shipment contract

(EnergyAsia, September 29 2010, Wednesday) — Marco Polo Marine Ltd, a Singapore-based integrated marine logistics group, said its wholly-owned subsidiary, MP Shipping Co Pte Ltd (MPS), has secured a two-year coal shipment contract worth US$15.5 million. (US$ 1= S$1.33). The group said the contract with an unidentified Indonesian coal miner will begin this month with…

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INDIA: IOC to expand refining capacity to more than 80 million tons by 2012

(EnergyAsia, September 29 2010, Wednesday) — Indian Oil Corp (IOC), the country’s largest refiner, is expanding its refining capacity by upgrading its Haldia and Panipat plants. Upon completion, IOC will have a total refining capacity of 64.7 million tons by the end of this year, up from 60.2 million tons now. That will rise to…

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CHINA: Longwei Petroleum reports 119% rise in FY2009 profit to US$31.3 million

(EnergyAsia, September 29 2010, Wednesday) — China-based oil and gas storage and distributing company Longwei Petroleum Investment Holding Limited said its gross profits for the fiscal year ended June 30 rose by 119% from US$31.3 million to US$68.5 million. Its total revenues jumped 72% to US$339.4 million over the same period. Longwei Petroleum president and…

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CHINA: Pipeline to start delivering gas from Kazakhstan later this year

(EnergyAsia, September 29 2010, Wednesday) — Kazakhstan expects to soon start up the first of a five-phase 10,000-km long pipeline to deliver more than 15 billion cubic meters of natural gas from Central Asia to China. Connecting Turkmenistan, Uzbekistan and Kazakhstan, the pipeline will spur the development of economies in Central Asia, the Caspian Sea…

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AUSTRALIA: Record LNG production in 2009-10 due to growing world demand, says consultant

(EnergyAsia, September 29 2010, Wednesday) — Rising global demand boosted Australia’s liquefied natural gas (LNG) production to levels in the last financial year to June 2010, said Australian energy economics group EnergyQuest. In a new report, the company said Australian LNG production grew by 7.5% from 17.4 million tonnes per year (mt/y) in FY2008 to…

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KAZAKHSTAN: Engineering management firm Mott MacDonald holds one-day oil and gas seminar

(EnergyAsia, September 29 2010, Wednesday) — Mott MacDonald, a UK-based global management, engineering and development consultancy, hosted a one-day seminar at the Grand Park Esil Hotel in Astana, Kazakhstan on September 21.

More than 40 representatives from oil and gas, government and investment organisations attended the seminar, which helped raised Mott MacDonald’s profile in the infrastructure, oil and gas sectors in Kazakhstan. The event featured presentations from both industry specialists, and the country’s political figures.

Azfar Shaukat, Mott MacDonald’s head of oil and gas advisory services, delivered the closing speech.

The oil and gas industry is an important sector in Kazakhstan, the largest economy in central Asia. With more than 200 oil and gas fields, Kazakhstan is expected to supply over five percent of the oil demand of Central and Eastern European by 2012.

Mott MacDonald is active in the Commonwealth of Independent States (CIS), with offices in Almaty, Moscow and Kiev, and has been aiding development in Kazakhstan since 1995.

The company has played a key role in providing technical assistance on the giant Kashagan oilfield development, and a landmark scheme that aims to prevent the devastation of the lower Syr Darya valley from seasonal floods.