SINGAPORE: Goldman Sachs, Harren & Partner to invest US$500 million in OIG

(EnergyAsia, April 29 2011, Friday) — The Harren & Partner Group and Goldman Sachs Capital Partners said they have agreed to invest a total of US$500 million in Singapore-based OIG Offshore Installation Group to help finance the company’s strategic growth and acquisition of additional vessels.

OIG Offshore Installation Group is an offshore engineering contract procurement installation (EPCI) provider of global subsea installation and logistics services.

Goldman Sachs Capital Partners (GSCP), which operate the funds for Goldman Sachs’ direct private equity investments, will be OIG’s majority shareholder upon expected closing of the transaction in early May.

With the investment injection, OIG will own two modern, high specification giant class offshore installation vessels and build a third vessel due for delivery in 2012. OIG will also acquire Global Mooring Services AS (GMS) to strengthen its position in the offshore installation and mooring space.

Jarle Andersen, GMS’s founder and main shareholder, will be a significant shareholder in OIG and will join the company as chief operating officer. OIG has secured a strategic partnership with Kongsberg Oil & Gas Technologies (KOGT), providing access to certain technologies and KOGT’s leading engineering capabilities.

Geir Aune, OIG’s chairman said: “OIG is an excellent combination of quality offshore services and engineering capabilities, an experienced maritime partner and a new vessel design. The efficiency resulting from the game changing vessel design will allow us to reduce the installation time and thereby add significant value to customers. I see strong growth opportunity from developing OIG into a leading offshore installation & construction group, benefitting from Harren & Partner’s maritime expertise, GMS’ proven track record and GSCP’s financial commitment.”

Captain Heiko Felderhoff, CEO of OIG, said: “In both H&P and GSCP we have found partners whose understanding of this industry, the markets we compete in and what it takes to be successful is a great fit for our business and its strategy. With their support, we plan to grow the company based on an expansion of our fleet and developing new and innovative technical solutions. One example is deepwater flexible pipe laying, where we have developed a new efficiency enhancing system together with KOGT, our strategic partner.”

Captain Peter Harren, founder and managing director of H&P Shipping, said: “Being a founding partner of OIG, we are excited about the opportunities ahead for OIG. With an experienced management team and new and specifically developed assets, we are well positioned to capitalise on the growth opportunities ahead and to provide customers with high quality services. We are convinced that our track record as a successful maritime group with significant experience within the oil and gas industry will benefit OIG.”

Till Hufnagel, GSCP managing director, said: “We believe that OIG is very well positioned to become a leading player in the growing offshore installation and construction space. GSCP is committed to support OIG’s ambitious growth strategy together with our partner Harren & Partner.”

GSCP said its latest VI fund was raised in 2007 and is the sixth global private equity fund of Goldman Sachs with a total value of US$20.3 billion. GSCP has extensive experience investing in the energy sector.

Its portfolio of energy investments include oil field companies such as Expro, Ensco, Sub Sea International, Seacor Smit and Prysmian; exploration and production companies like Bill Barrett Corporation and Cobalt Energy; energy transportation and storage services provider Kinder Morgan, oil refiner Coffeyville Resources, independent power producer Orion Power Holdings, diversified utilities provider TXU and renewable energy firm Horizon Wind Energy.

MARKETS: OPEC basket price up for the 7th month, further upside likely

(EnergyAsia, April 29 2011, Friday) — OPEC said its reference basket price rose sharply to US$120 a barrel in late April, its highest level since 2008, capping a run of seven consecutive months of price increase. The reference price averaged nearly US$110 in March, and just over US$100 in February, showing the strength of the…

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RUSSIA: Transneft threatens to sue while China downplays dispute over oil deal

(EnergyAsia, April 29 2011, Friday) — China and Russia appear to be taking different approaches to settle a dispute over a 20-year oil supply deal hailed as one of their most important bilateral achievements when it was signed in 2009.While Russia’s state-owned oil and gas firm Rosneft and oil pipeline operator Transneft have gone public…

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ASIA: Thermal coal contract prices hit new record high

(EnergyAsia, April 29 2011, Friday) — The contract price of thermal coal has risen to an all-time high, supported by rising demand from China and India, and Japan’s renewed interest.With nuclear power programmes facing cutbacks around the world following the crisis at Japan’s Fukushima reactors, countries will increase their demand for the three main traditional…

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INDIA: ABB awarded US$18 million contract to upgrade power plant automation

(EnergyAsia, April 28 2011, Thursday) — ABB, the Switzerland-based power and automation technology group, said it has won an order worth US$18 million to upgrade and modernise control systems a 1,260 megawatt (MW) thermal power plant in the western Indian state of Gujarat.

The contract was awarded by Gujarat State Electricity Company Limited (GSECL) for work at its plant in Wanakbori to be completed by 2013.

ABB said it will install its proven SymphonyTM distributed control system (DCS) and supply the complete control and instrumentation package for the 6×210 MW plant. The solution will include diagnostics and optimization packages, turbine controls, steam generator control, station controls and instrumentation, a steam and water analysis system (SWAS), flue gas analyzers, control valves, actuators and positioners.

CHINA: Rolls-Royce secures US$65 million contract to supply and install gas compression equipment

(EnergyAsia, April 28 2011, Thursday) — Rolls-Royce, the UK-based global power systems company, said it recently secured a contract to supply gas compression equipment to PetroChina, the country’s largest oil and gas producer, for its West-East gas pipeline project.

Rolls Royce said it will supply and install its RB211 gas turbine compressor packages at the West-East pipeline, and associated feed and branch lines before year-end. The order includes six RB211 gas turbine compressor packages to be installed at the WEPP Line 2 rated as one of China’s most important and expensive energy project.

The gas turbine units will be installed at two new compressor stations along the 2,400-km Eastern section of the line. They will join six RB211 units currently being installed along the 2,450 km Western section and 19 RB211 compressor sets already in service on WEPP Line 1.

The 8,859-km WEPP Line 2 consists of one 4,859-km trunk line, and eight sub-lines. It will transport 30 billion cubic meters of natural gas every year from reserves in Central Asia, across 15 provinces to major regions such as Zhejiang, Shanghai, Guangdong and Hong Kong. The equipment is scheduled for delivery by the fourth quarter of 2011.

This country-wide distribution network will help boost China’s clean energy consumption to offset an expected 11 million tonnes of coal usage every year, thereby reducing harmful greenhouse gas emissions.

Tony Ruegger, Rolls-Royce’s executive vice-president for oil and gas, said: “Once again, PetroChina has put their trust in Rolls-Royce technology for this vital gas pipeline.

“The nineteen RB211 packages currently operating in China have been in service for nearly half-a-million hours, with the longest running engine achieving over 34,000 hours. Using Rolls-Royce aero engine technology, these gas turbine packages continue to provide very high levels of performance and reliability.”

AUSTRALIA: Sinopec to pay US$1.5 billion for 15% in Australia Pacific LNG

(EnergyAsia, April 28 2011, Thursday) — Australia Pacific LNG Pty Ltd has agreed to supply China Petroleum & Chemical Corporation (Sinopec) 4.3 million tonnes of liquefied natural gas (LNG) per year for 20 years from its coal seam gas (or coalbed methane) resources and proposed LNG facility on Curtis Island in Gladstone in Queensland state. ($1 =A$0.94).

Sinopec will also pay US$1.5 billion for a 15% stake in Australia Pacific LNG which is developing the A$35 billion coal-seam-gas to LNG project. Australia’s Origin Energy and ConocoPhillips of the US, the current equal joint owners, will reduce their individual stakes in the company to 42.5% after the Sinopec buy-in.

The Australia Pacific LNG project consists of the development of its gas fields in the Surat and Bowen basins in south western and central Queensland state, the construction of a pipeline linking the gas fields to an LNG facility in Gladstone, and the development of an LNG facility on Curtis Island to export cargoes to Asia.

MARKETS: IMF expects global economic recovery to continue

(EnergyAsia, April 28 2011, Thursday) — High inflation and soaring oil prices in emerging economies create new challenges but the global economic recovery should continue, according to the latest assessment by the International Monetary Fund (IMF). In its recently released World Economic Outlook report, the IMF has maintained its global economic growth forecasts at 4.4%…

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CHINA: Sinopec to continue holding down oil product exports

(EnergyAsia, April 28 2011, Thursday) — China Petrochemical Corp (Sinopec), Asia’s leading oil refiner, said it will stop oil-product exports indefinitely in the face of a worsening domestic supply squeeze and rising fuel prices that has triggered a major truckers’ strike in Shanghai. “We have suspended exports to regions other than Hong Kong and Macau,”…

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ABU DHABI: IPIC to invest in US$3billion refiner in Fujairah

(EnergyAsia, April 28 2011, Thursday) — Abu Dhabi’s state-owned International Petroleum Investment Company (IPIC) said it will proceed with plans to invest US$3 billion in a 200,000 b/d oil refinery in Fujairah. Expected to start up in 2016, the refinery will be linked by pipeline to a new deepwater terminal in Fujairah designed to handle…

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AUSTRALIA: BP investing A$20 million to expand Largs North fuel terminal in Adelaide

(EnergyAsia, April 27 2011, Wednesday) — BP said it is investing A$20 million to expand its Largs North fuel terminal in Adelaide to enhance supply security in South Australia state. (US$1=A$0.93).The new tanks will increase the terminal’s diesel storage capacity from 75 million to 105 million litres when operational in late 2012.The UK major said…

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AUSTRALIA: Shell to develop diesel import and storage facility at Newcastle Harbour

(EnergyAsia, April 27 2011, Wednesday) — Shell Australia said it recently signed a memorandum of understanding with Marstel Holdings for the development of a greenfield diesel import facility at Newcastle Harbour by 2012.The new terminal will enable Shell to continue to grow its business in the Hunter Valley and through New South Wales state up…

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MARKETS: OPEC oil export revenues to hit record $1 trillion this year, says IEA

(EnergyAsia, April 27 2011, Wednesday) — The International Energy Agency (IEA) expects the Organization of Petroleum Exporting Countries to earn a record US$1 trillion in export revenues this year if crude prices stay above US$100 a barrel.Both US WTI and North Sea Brent have climbed above the US$100 mark since late January, with Brent holding…

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JAPAN: Association chief says refining throughput back at pre-quake level

(EnergyAsia, April 27 2011, Wednesday) — Japan’s oil refiners have raised their throughput to the four-million-b/d level they were operating at before the March 11 earthquake and tsunami disaster took down refineries in eastern and northeastern Japan, said the Petroleum Association of Japan chief.They have restarted some of the plants in the affected areas while…

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MARKETS: US EIA expects oil supplies to remain tight over next two years

(EnergyAsia, April27 2011, Wednesday) — The world oil market will remain tight over the next two years with demand seen rising by 1.5 million b/d in 2011 and 1.6 million b/d 2012, said the US Energy Information Administration (EIA). As a result, the world will have to drawdown inventories and rely on “significant increases” in the…

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CHINA: March oil demand “stays” robust at 9.2 million b/d, says Platts

(EnergyAsia, April 27 2011, Wednesday) — China’s oil appetite remained strong, rising 10.5% year-on-year to 38.96 million metric tons (mt), or 9.2 million b/d, in March said McGraw-Hill’s energy media specialist Platts.
While March demand eased from February’s peak of 9.58 million b/d, Platts said this is still fairly robust, as the world’s second largest oil consumer’s oil demand has stayed above 9 million b/d for five consecutive months.

With apparent oil demand at 9.19 million b/d in January and 9.58 million b/d in February, China’s Q1 oil demand averaged 9.32 million b/d. It appears that surging international crude prices have failed thus far to make a dent in the nation’s consumption, said Platts.

“Oil demand in the first quarter was buoyed by diesel consumption due to rising industrial production and increased agricultural demand with the onset of the spring planting season,” said Calvin Lee, Platts senior writer for China.

According to data released last week by the country’s top economic planning agency, the National Development and Reform Commission (NDRC),

China’s apparent demand for petroleum products reached a new monthly high of 21.73 million mt during March.

This is up 11.7% from the same period a year ago and some 13.9% more than February. The NDRC did not provide the figure for the previous record high.

For the first quarter, Chinese consumption of oil products reached 58.39 million mt, 10.2% higher compared with the same period last year. Gasoline demand rose 5.6% year over year and diesel demand grew 10.6%, according to the NDRC report.

In March, China’s refiners processed a combined 37.66 million mt of crude oil, or an average of 8.9 million b/d, 9% more than the crude throughput in March 2010, figures released earlier by the National Bureau of Statistics showed.

Mr Lee said: “Sources tell Platts that Chinese state oil majors have had to increase production of petroleum products in recent weeks, probably by directive of the central government, to fill a big gap in supply resulting from drastic cutbacks by private refiners in East China, where operations have been cut to as low as 30% of capacity due to dismal margins.”

At the same time, petroleum imports continued to expand in March as Chinese oil companies purchased more cargoes from the international markets to maintain ample supply of fuels to local industries.

Last month, the volume of oil product imports jumped 20.5% year over year to 3.88 million mt, the highest since December’s 3.96 million mt. Exports fell 2.3% to 2.58 million mt.

Net product imports, at 1.3 million mt for March, were up 124% from a year ago, but down 9.7% from February when net imports were 1.44 million mt.

March product exports were 2.58 million mt, the highest in eight months, as Chinese state companies sought to increase exports to make up for the loss in domestic refining margins.

Platts, a division of The McGraw-Hill Companies, is a leading global provider of energy, petrochemicals and metals information.

SINGAPORE: Government support, regulations needed for rapid shift to LNG as bunker fuel

(EnergyAsia, April 26 2011, Tuesday) — Regulations and widespread government support would be needed for the shipping industry in Southeast Asia to rapidly adopt liquefied natural gas (LNG) as a bunker fuel, said industry experts.They made this point in response to a collective effort by several companies led by Norway’s DNV and the Singapore government…

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PHILIPPINES: Government begins building strategic oil reserves

(EnergyAsia, April 26 2011, Tuesday) — After years of debate and planning, the Philippine government has begun building a strategic oil reserve to provide for emergency fuel in the event of supply disruptions. In in a speech marking the 35th anniversary of the Philippine National Oil Co.-Exploration Corp. (PNOC-EC) last week, President Benigno Aquino III said…

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MARKETS: OPEC’s March crude production down, further decline seen in April

(EnergyAsia, April 26 2011, Tuesday) — Crude oil production by the Organization of Petroleum Exporting Countries declined by around 2% on-month to 29.17 million b/d in March, said energy media group Platts. There are signs that the cartel’s output could continue declining in April, with Iran seen cutting production. Saudi Arabia, the holder of the world’s biggest…

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MARKETS: Oil prices well supported in absence of Libya

(EnergyAsia, April 26 2011, Tuesday) — The absence of Libya’s 1.6 million b/d of oil production is lending strong support to the global markets and keeping prices well above US$100 a barrel, said BP Plc group chief economist Christof Ruhl. Countries wracked by political instability and conflict often take years to return to normalcy, and in…

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MARKETS: Oil may hit US$160 a barrel this year, says BoA, as forecasts now call for US$100 average

(EnergyAsia, April 26 2011, Tuesday) — Brent crude oil is expected to trade at a record average US$100 a barrel this year on robust economic growth in emerging markets, the declining value of the US dollar and the loss of Libya’s oil, said various analysts. Bank of America Merrill Lynch is the most bullish, giving a…

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CHINA: CNOOC plans gas pipeline to support LNG terminals

(EnergyAsia, April 26 2011, Tuesday) — State-owned oil and gas firm CNOOC plans to build a large natural gas pipeline along the southern coast of China to support the operations of existing and new liquefied natural gas (LNG) terminals.The proposed pipeline will connect the country’s existing LNG receiving terminals in Guangdong and Fujian, as well…

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INDIA: Malaysia’s Petronas to sell out stake in Cairn for US$2.1 billion

(EnergyAsia, April 25 2011, Monday) — Malaysia’s state-owned oil and gas firm Petronas said it has agreed to sell off its 14.94% stake in Cairn India Limited to India’s Vedanta Group for about US$2.1 billion.

Sesa Goa, a Vedanta subsidiary, is offering to buy Cairn India shares from minority shareholders for 335 rupees per share. The offer closes on April 30. (US$1=44 rupees).

The Malaysian firm’s overseas arm, Petronas International Corp, holds about 283.4 million shares or about 15% in Cairn India, which it accumulated from 2006 to 2009.

“The transaction brings to a close a successful association as a shareholder with Cairn India since 2006,” Petronas said in a statement.

Edinburgh-based explorer Cairn Energy owns a 62.37 stake in Cairn India.

Last August, Vedanta had offered to buy up to 60% of Cairn India which could cost as much as US$9.6 billion.

JAPAN: Nuclear disaster set to exceed Chernobyl’s impact

(EnergyAsia, April 25 2011, Monday) — Japan’s nuclear crisis is set to exceed Chernobyl’s impact on the nation’s economy and the environment, making it the worst on record. A month after the Fukushima Dai-Chi nuclear plant was damaged in the March 11 earthquake and tsunami, Japanese regulators officially, and reluctantly, raised the scale of the…

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IRAN: Tankers could be holding as much as 38 million barrels of crude oil

(EnergyAsia, April 25 2011, Monday) — Unable to move most of its crude in the face of a tightened Western-led trade sanction, Iran may be storing up to 38 million barrels of crude oil at sea, according to US-listed tanker firm Overseas Shipholding.The company said Iran may be storing the oil in 19 Very Large…

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