SAUDI ARABIA: Foster Wheeler-SOFCON consortium awarded contract to work on Riyadh Refinery clean fuels project

(EnergyAsia, July 29 2011, Friday) — Foster Wheeler SOFCON, an unincorporated consortium between a subsidiary of Foster Wheeler’s Engineering and Construction Group and A. Al-Saihati, A. Fattani & O. Al-Othman Consulting Engineering Co., (SOFCON), has been awarded a contract by Saudi Aramco to provide front-end engineering design (FEED) and management services for the Clean Transportation…

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SINGAPORE: China Aviation Oil signs agreement with China Development Bank for access to US$3 billion

(EnergyAsia, July 29 2011, Friday) — China Aviation Oil Singapore Corporation Ltd (CAO), Asia’s largest jet fuel trader, said it has signed a non-binding strategic cooperation agreement with China Development Bank Corporation (CDB), giving it access to up to US$3 billion to finance its expansion including asset acquisitions and oil trading activities. With the July…

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JAPAN: Chevron to supply LNG from Australia’s Wheatstone project to TEPCO

(EneryAsia, July 29 2011, Friday) — A consortium led by US major Chevron Corporation have secured agreements to supply liquefied natural gas (LNG) from its Wheatstone natural gas project in Australia to Japan’s Tokyo Electric Power Company (TEPCO).

Chevron said that its Australian subsidiaries, together with US-based Apache Energy and Kuwait’s Kufpec will deliver up to 3.1 million tons a year (mt/y) of LNG to TEPCO for
a period of up to 20 years.

The Japanese utility, which has lost the use of its giant Fukushima 1 nuclear power complex in north-eastern Japan following the March 11 earthquake, is also in discussions with Chevron to purchase an equity share in the titles covering the

Wheatstone fields and a percentage of Chevron’s share of the Wheatstone downstream processing facilities.

John Gass, president for Chevron Gas and Midstream, said:

“TEPCO is one of the world’s leading LNG customers. Its support for Chevron’s Wheatstone Project reinforces the strength of the relationship between the two companies that has been built up over many years.”

Roy Krzywosinski, managing director of Chevron Australia, said the Wheatstone project had completed the front-end engineering and design phase and Chevron remains on track to make a final investment decision later in the year.

He said: “The TEPCO agreements and other LNG agreements we are finalising give Wheatstone great momentum. The Ashburton North site earmarked for the LNG processing plant is ideally located to unlock the significant gas resources in the western Carnarvon basin.”

The Chevron-operated project will become one of Australia’s largest resource projects. Located at Ashburton North, 12 km west of Onslow in Western Australia state, the foundation phase of the project will consist of two liquefied natural gas trains with a combined capacity of 8.9 mt/y and a domestic gas plant.

SINGAPORE: “Energy Map of Singapore/Johor 2011” and “Energy Industry in Singapore 2011 with directory”

(EnergyAsia, July 29 2011, Friday) —  The 2011 edition of this map, measuring 120 cm by 90 cm, shows the latest oil, gas, petrochemical, chemical and power and marine installations and plants in Singapore and Johor.

First produced in 1999, this unique map contains latest statistical information including oil and power consumption, refining capacities, power generation capacity and storage facilities.

It also shows Singapore’s facilities for the booming marine and offshore sector which supports global upstream and deepwater oil gas exploration and production activities.

There are data on the volume and value of Singapore’s trade in crude and oil products including LPG, naphtha, gasoline, jet kerosene, diesel, fuel oil and lubricants for 2008, 2009 and 2010.
Report on “Energy Industry in Singapore”

Complementing this map is the 2011 edition of the Energy Industry in Singapore report, last updated in 2008.

The report provides an overview and description of Singapore’s energy industry, covering the oil refining, trading, petrochemical, power and offshore and marine sectors .

An overview of Jurong Island and how their activities contribute to Singapore’s downstream oil, petrochemicals and chemicals production.

Three giant oil refineries provide feedstock to more than 30 large downstream manufacturing plants on the island. These petrochemical products are then broken down and converted to materials and plastics for the production of a wide range of household and commercial products.

It also contains a directory of personnel involved in the country’s oil, gas, coal, power, petrochemical and marine industries. It also has a list of oil, gas, marine, offshore, power, petrochemical, chemical, logistics, support and engineering companies and their contact details. Please contact for your copy.

SINGAPORE: New operations centre to improve maritime safety and security, by SURESH NAIR

(EnergyAsia, July 29 2011, Friday) — Singapore, the world’s busiest port by vessel arrival tonnage, has launched a new operations centre to further raise the bar on navigational safety and security to support the region’s maritime trade.

The official opening this week of the new Port Operations Control Centre (POCC) in Changi on the western end of the island will enable Singapore to handle the significant growth in maritime traffic along the Straits of Malacca, which carries about a third of the world’s traded goods.

The government has invested a total of S$25.4 million in the POCC-Changi centre and in upgrading the existing POCC-Vista centre to ensure that its infrastructure continue to provide safe and efficient operation for users of Singapore’s port, said Minister for Transport and Second Minister for Foreign Affairs, Lui Tuck Yew. (US$1=S$1.2).

The POCC is at the core of Singapore’s latest navigational safety measures as its state-of-the-art Vessel Traffic Information Service (VTIS) technology is set to play a crucial role in protecting the local and regional maritime environment.

Vessel traffic management operators responsible for ensuring traffic safety through Singapore’s port waters will be able to operate more effectively as they now have access to a system that integrates information flow from separate sources, including a closed-circuit television system (CCTV). The new system can track up to 10,000 vessels at one time, twice the capacity of the existing VTIS, and boasts enhanced vessel monitoring functions.

Sharper eyes on ship traffic are crucial because Singapore has about 1,000 vessels docked at its terminals at any one time, with a ship leaving or arriving every three or four minutes. The new VTIS system, designed by Norwegian developers, Kornsberg, can also detect smaller vessels such as leisure craft.

Three years in the making, the new POCC-Changi is Singapore’s third POCC and will eventually replace the existing unit at Tanjong Pagar Complex.

The new VTIS is also able to pull together information from various sources including radars, automatic identification system (AIS), harbour craft transponders, CCTVs and ship databases to present a comprehensive sea situation picture to the Maritime and Port Authority of Singapore’s (MPA) Vessel Traffic Management (VTM) operators on high-resolution displays.

Enhanced monitoring functions also assist the VTM operators in detecting potential collisions and grounding situations, so as to facilitate timely warnings to ships.

Stressing the importance of the POCC-Changi system to regional seafaring security, Mr Lui said:

“Singapore sits strategically on the crossroads of trade between Asia and Europe. We have the world’s busiest port by vessel arrival tonnage with more than 127,000 vessels totaling 1.92 billion gross tons calling at our port last year.”

The Straits of Malacca, which covers the deep-sea borders of Malaysia, Indonesia and Singapore, is the world’s second busiest shipping channel after the English Channel, and the second most popular oil tanker route after the Straits of Hormuz in the Middle East. Over 30% of the world’s oil delivered by sea passes through the Straits of Malacca en route to East Asia.

CHINA: CNPC starts up refinery in Chad

(EnergyAsia, July 28 2011, Thursday) — China National Petroleum Corp (CNPC), the country’s leading oil producer, has started up a joint-venture refinery with the Chadian government just outside the Central African country’s capital city of N’djamena. The one-million-tonne-a-year plant was officially opened last month at a ceremony attended by Chad’s President Idriss Deby and Prime…

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CHINA: Oil refining capacity could rise by a third by 2016, IEA says

(EnergyAsia, July 28 2011, Thursday) — China, the world’s second-largest oil user, could expand its refining capacity by a third to 13.3 million b/d between now and 2016, said the International Energy Agency (IEA). China National Petroleum Corp (CNPC) and China Petroleum & Chemical Corporation (Sinopec), the country’s two biggest oil and gas producers, own…

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TAJIKISTAN: First oil refinery due to start up in late 2012

(EnergyAsia, July 28 2011, Thursday) — Energy-poor Tajikistan has started building its first oil refinery to meet its rising domestic fuel demands and reduce its energy dependency on Russia. Tajik President Emomali Rahmon attended the groundbreaking ceremony for the privately-owned 100,000-ton/year plant in the western part of the country. Rustam Dustov, a local businessman who…

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MARKETS: OPEC’s net export revenues to exceed US$1 trillion in 2011, says US EIA

(EnergyAsia, July 28 2011, Thursday) — The 12-member Organisation of the Petroleum Exporting Countries (OPEC) could see their net oil export revenues surge by 35% to a new high of US$1,028 billion in 2011, and by a further 7.8% to US$1,108 billion in 2012, said the US Energy Information Administration (EIA).

In its July 2011 Short-Term Energy Outlook (STEO) report, the EIA said the cartel, which comprises Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the UAE and Venezuela, will breach the trillion-dollar export level for the first time with prices holding at around US$110 a barrel.

Last year, OPEC made US$778 billion, enabling its members to achieve a per-capita net oil export earnings of US$2,074. Saudi Arabia had the largest earnings of US$225 billion, representing 29% of total OPEC revenues.

With oil markets expected to tighten through 2012 on account of rising world oil demand and slowing supply growth from non-OPEC producers, the EIA has projected US refiners to pay an average US$102 for a barrel of crude in 2011 and US$108 per barrel in 2012.

The agency expects total world oil consumption to grow by 1.4 million b/d to 88.1 million b/d in 2011 and by 1.6 million b/d to 89.7 million b/d in 2012. It said the world will rely on both a drawdown of inventories and production increases in both non-OPEC and OPEC countries to meet the increased demand.

Non-OPEC countries are expected to increase production by an average of 600,000 b/d annually in 2011 and 2012 while OPEC is seen boosting production of crude and non-crude liquids by 300,000 and 900,000 b/d in 2011 and 2012, respectively.

The EIA said the outlook on oil prices remains uncertain on account of risk of further supply disruptions in producing regions like Sudan, doubts over the willingness and ability of key OPEC-member countries to increase and sustain production, the outlook on the world economy, and fiscal issues facing governments of many important countries around the world.

INDONESIA: IMF predicts 6.5% economic growth and higher inflation on reduced energy subsidies

(EnergyAsia, July 28 2011, Thursday) — Indonesia’s economy will continue to experience strong growth the next two years but will face rising inflationary pressures caused partly by the removal of energy subsidies, said the International Monetary Fund (IMF).

The fund gave its finding in a report submitted by its Asia Pacific division chief, Thomas Rumbaugh, who led a team to Jakarta from July 7 to 21 and met with government officials to obtain an update on the state of Indonesia’s economy as well as discuss the impact of global developments. A more detailed report will be presented to the IMF’s Executive Board in September.

In a statement, the IMF said:

“Indonesia is experiencing strong economic growth, supported by solid export income and investment. Recent falls in food prices and the postponement of a planned reduction in fuel subsidies have reduced immediate inflationary pressures. Sales and production indicators remain solid, while measures of business and consumer confidence continue to improve.

“Global market sentiment is likely to remain volatile in the period ahead. Despite this, world output growth is expected to be maintained, supported by the better performance of emerging market economies like Indonesia. In particular, the growth of Asian economies remains robust. As a result, many central banks in the region are signalling that further rate hikes may be necessary.

“A key risk to the near-term outlook would be a sharp increase in global risk aversion arising from the Euro Area. However, given strong fundamentals and relatively low dependence on external demand, the downside risks for Indonesia appear to be limited.

“Indonesian GDP growth is projected to remain robust at around 6.5% in 2011-12. Increases in both foreign and domestic investment are supporting growth, while accelerating credit growth and expected reductions in energy subsidies should push core inflation modestly higher this year and into 2012.

“Although the external current account is projected to move into deficit next year, the overall balance of payments will remain in surplus as capital inflows—which are shifting more toward foreign direct investment—continue.

“There are no signs of any misalignment in the exchange rate, and export growth is strong (including in manufacturing). In this context, continued flexibility of the exchange rate will help buffer volatile inflows.

“The government intends to increase the pace and quality of economic growth in the medium-term through a sustained increase in infrastructure investment and improvements to the business climate. Implementation of financial sector reforms and improvements to the supervisory framework would enhance financial system stability, promote capital market development, and widen the domestic investor base.

“Strengthening investor confidence will be an important factor in propelling the markets forward.

“The 2011 budget is consistent with the government’s firm commitment to fiscal sustainability and strong public finances.

However, increasing fuel subsidies are distorting the structure of the budget. Therefore, fiscal policy needs to be re-oriented away from subsidies and towards infrastructure and social spending. Continued efforts are also needed to raise the tax revenue ratio from its current low level to provide greater fiscal space through broadening tax bases and increasing tax compliance.

“Bank Indonesia (BI) has used a range of instruments to contain price pressures, including increasing its policy rate in February and raising reserve requirements. Planned reductions in energy subsidies, when they occur, will feed into core inflation, and BI will need to act decisively to contain inflationary expectations and limit the pass through of fuel prices to generalised inflation. Indonesian banks continue to be profitable and well capitalized.

“The strong GDP growth outlook suggests vulnerabilities remain low. To strengthen the framework for financial stability, the adoption of the Financial System Safety Net (FSSN) law remains a top priority.

“A lack of infrastructure remains one of the biggest constraints to boosting Indonesia’s growth potential. Significant improvements to the regulatory framework are needed to support infrastructure spending and public-private projects. Social safety nets should be increased and better targeted towards vulnerable groups, while increased and more effective education and health spending will be needed to promote improvements in human capital and generate more equitable growth.”

CHINA: Sinopec, Italy’s Eni agree to jointly develop shale gas projects

(EnergyAsia, July 27 2011, Wednesday) — Italian oil major ENI and China Petroleum & Chemical Corp (Sinopec), Asia’s largest oil refiner, have signed a memorandum of understanding (MOU) to cooperate on projects in Africa and to jointly develop shale gas assets.The agreement expands ENI’s growing interest to develop its China ties. In January, Italy’s largest…

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IRAQ: Oil ministry and Karbala Corp to build 200,000 b/d refinery

(EnergyAsia, July 27 2011, Wednesday) — Iraq’s oil ministry and the Karbala Corporation Refinery (KRC) have signed an agreement to jointly invest in a 200,000 b/d refinery in the country’s central Karbala region.Operator KRC has awarded the main EPC contract for the long-delayed project to Italian engineering firm Saipem.The ministry said the US$6.5 billion refinery,…

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MALAYSIA: KNM, Zecon sign EPC agreements for refinery-petrochemical complex in Johor

(EnergyAsia, July 27 2011, Wednesday) — Malaysian engineering companies KNM Group Bhd and Zecon Bhd sai they have signed agreements with Gulf Asian Petroleum Sdn Bhd (GAP) to develop its proposed refinery, petrochemical and oil storage projects at Teluk Ramunia in Malaysia’s Johor state.KNM said the heads of agreements involved engineering procurement and construction (EPC)…

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MALAYSIA: Petronas to import LNG from Qatar from 2013

(EnergyAsa, July 27 2011, Wednesday) — Malaysia will import liquefied natural gas (LNG) from Qatar starting 2013 under a long-term contract signed between state oil and gas company Petronas and Qatargas.Wholly-owned subsidiary Petronas LNG Ltd, formerly known as ASEAN LNG Trading Company, signed an agreement with Qatargas in Doha City in Qatar last week for…

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SAUDI ARABIA: Aramco, Dow Chemical to jointly invest in US$20 billion chemicals complex in Jubail

(EnergyAsia, July 27 2011, Wednesday) — Saudi Aramco and The Dow Chemical Company said they have agreed to form an equal joint venture to build and operate a US$20-billion fully integrated chemicals complex in Jubail Industrial City in Saudi Arabia by 2016.
The companies said their boards authorised the formation of the new joint venture, Sadara Chemical Company, following the positive results of an extensive project feasibility study and front-end engineering and design effort which began in 2007.

Comprising 26 manufacturing units, the complex will be one of the world’s largest integrated chemical facilities, and the largest ever built in one single phase. The complex will produce a wide range of performance products including polyurethanes (isocyanates, polyether polyols), propylene oxide, propylene glycol, elastomers, linear low density polyethylene, low density polyethylene, glycol ethers and amines.

Using Saudi Aramco’s project management and execution expertise, and many of Dow’s industry-leading technology, it will produce over three million metric tons of high value-added chemical products and performance plastics a year to help meet the world’s growing demand for energy, transportation, infrastructure and consumer products.

Construction will begin immediately and the first production units will come on line in the second half of 2015, with all units expected to be up and running in 2016.

Sadara is expected to deliver annual revenues of approximately $10 billion within a few years of operation and generate thousands of direct and indirect employment opportunities through the complex and related investments in downstream value parks.

Sadara will become an equal joint venture between Saudi Aramco and Dow after an initial public offering. In addition to their equity, the partners expect the export credit agencies and financial institutions will provide project financing to Sadara.

Sadara will be responsible for product marketing within a local zone of eight countries while Dow will market and sell on behalf of Sadara to countries outside of the Middle East.

Jubail Industrial City, in Saudi Arabia’s Eastern Province, is located approximately 100 kilometers northwest of Dammam.

Khalid Al-Falih, president and CEO of Saudi Aramco, said:

“This project represents a key milestone in Saudi Aramco’s ambitious downstream growth strategy. We are pleased to have Dow as our partner, as they bring a fantastic record of success in the chemicals business and a top tier brand to the project. Dow also brings a superior mix of downstream product technologies, and world-class operational and marketing capabilities to the Sadara joint venture.

“These will complement the strengths of Saudi Aramco as the world’s largest integrated and most reliable supplier of energy and petroleum-based derivative products.

“Many of Sadara’s products will be produced for the very first time in Saudi Arabia. This enterprise will play a key role in the Kingdom’s industrial and economic diversification while contributing to the creation of thousands of high quality jobs. It will enable significant development in the country’s conversion industry, thereby supporting Saudi Arabia’s ambition to be a magnet for downstream manufacturing investments that add significant value to the Kingdom’s hydrocarbon resources.”

Andrew N. Liveris, Dow’s chairman and CEO, said:

“This premier partnership is the right economic ownership model with the right partner. It is designed to capture growth in the rapidly growing sectors of energy, transportation and infrastructure, and consumer products by creating a manufacturing hub that will provide a differentiated product slate and an advantaged cost position.

“We are bringing the best of Dow’s technology-differentiated and globally leading products to Sadara. Customers in emerging geographies such as China, the Middle East, Eastern Europe and Africa will benefit from a strong supplier with feedstock integration, in-market commercial and supply capabilities, advanced technologies and resources to grow with their demand. Taken together, Sadara will deliver significant new equity earnings to Dow.”

COMPANY: CB&I to build storage tank project in Saudi Arabia, LNG tanks in unnamed Asian country

(EnergyAsia, July 26 2011, Tuesday) — US engineering and construction firm CB&I said it has been awarded two contracts, worth more than US$560 million, to build storage tanks in Saudi Arabia and an unnamed Asian country.In Saudi Arabia, it will build a storage tank project, valued at more than US$60 million, for the Ma’aden Bauxite…

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INDONESIA: President wants LNG import business opened to private firms

(EnergyAsia, July 26 2011, Tuesday) — The Indonesian government is planning to open up the business of importing liquefied natural gas (LNG) to the private sector as it struggles to meet the country’s fast-growing energy demand, said Industry Minister M.S. Hidayat.His ministry has found that domestic production will meet only half the country’s industrial demand…

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SINGAPORE: Sim Siang Choon renamed Loyz Energy to focus on oil and gas exploration and production

(EnergyAsia, July 26 2011, Tuesday) — Singapore-based bathroom products supplier Sim Siang Choon Limited (SSC) said shareholders have approved two resolutions for the company to shift its focus to exploring and producing energy, and to rename it Loyz Energy Limited. At an extraordinary general meeting last week, SSC shareholders approved the two resolutions for company to…

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AUSTRALIA: Santos to strengthen position in natural gas sector with acquisition of Eastern Star Gas

(EnergyAsia, July 26 2011, Tuesday) — Australian upstream company is strengthening its position as a natural gas player with its proposed share-swap acquisition of Eastern Star Gas Limited (ESG) which owns extensive coal seam gas reserves near Gunnedah in north-western New South Wales state. The deal, worth A$924 million, calls for ESG’s owners to swap…

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SINGAPORE: Gazprom unit’s fourth LNG supply contract into India is with Indian Oil Corp

(EnergyAsia, July 26 2011, Tuesday) — Gazprom Marketing and Trading Singapore Pte Limited said it has signed a Memorandum of Understanding with Indian Oil Corporation Limited (IOCL) to supply up to 2.5 million tonnes per year of liquefied natural gas (LNG) for up to 25 years.
This is Gazprom Singapore’s fourth LNG supply contract into India following on the Russian firm’s previous deliveries to India since 2007.

Last month, Gazprom Singapore announced that it had secured similar long-term deals to supply LNG to three Indian state-owned companies, GAIL India Limited, Gujarat State Petroleum Company (GSPC) and Petronet LNG Limited.
Gazprom Singapore said it sees India as one of its key markets for LNG supplies, along with Japan and other North Asian countries, as it continues to strengthen its presence and operations in the Asia-Pacific region.

Gazprom will source its supplies from its production in Sakhalin, other parts of Russia as well as international portfolio.

Nigel Kuzemko, Gazprom Singapore’s Global Director of LNG Development, said:

“We are delighted to have entered into this agreement with IOCL as it provides an excellent base to further develop Gazprom Singapore’s relationship with a premier Indian company.  We recognise IOCL as major player in global energy markets with a strong presence in refineries, pipelines and marketing in India.”

Gazprom Singapore trades, markets and supplies LNG, manages shipping and originates carbon reduction projects in the Asia Pacific markets.

SINGAPORE: Rotary Engineering to build fuel storage tanks for Alstom Power on Jurong Island

(EnergyAsia, July 26 2011, Tuesday) — Rotary Engineering Limited said it has secured 13 different contracts with a total value of S$40 million in recent months, including a project to build two fuel oil tanks and a water tank for Alstom Power Singapore Pte Ltd. (US$1=S$1.2).
Located at the Tuas Power Station at 60 Tuas South Avenue 9, Singapore 637607, the three tanks will have a combined capacity to hold 4,000 cubic metres of liquids.

Rotary said it has started work on the engineering design and expects to complete the project by July 2012.

Rotary will also be building temporary facilities and undertaking ground preparation and civil works for CCD (Singapore) Pte Ltd in relation to Taiwan-based Chang Chun Group’s initial S$500 million investment in a petrochemical plant on Jurong Island.

Rotary has also secured include a contract to provide mechanical works for an oil major, as well as maintenance work for Germany’s speciality chemical manufacturer Evonik Rohmax Asia-Pacific Pte Ltd and US-based energy conglomerate Invista (Singapore) Pte Ltd.

Rotary is a leading provider of engineering, procurement, construction and maintenance services serving the oil, gas and petrochemical industries.

JAPAN: Refiners expect oil demand by power companies to triple from FY2010 to FY2012

(EnergyAsia, July 25 2011, Monday) — Power companies will consume about 40 billion litres or 250 million barrels of oil in FY2012, up from about 13.5 billion litres or 85 million barrels in the last financial year of 2010 ending March 31 2011, said the President of the Petroleum Association of Japan (PAJ). At a…

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PHILIPPINES: Government begins stockpiling diesel

(EnergyAsia, July 25 2011, Monday) — The Philippines government has begun stockpiling diesel fuel, starting with a purchase of about 50 million litres over the last two months. Philippine National Oil Company – Exploration Corporation (PNOC-EC) has allocated around 2.4 billion peso to acquire its first 50 million litres of diesel stockpile. (US$1=42 peso). In…

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UPSTREAM: OPEC recognises Venezuela’s claim of 296.5 billion barrels of oil reserves, topped Saudi

(EnergyAsia, July 25 2011, Monday)— With more than 296.5 billion barrels of crude oil in the ground, Venezuela displaced Saudi Arabia as the holder of the world’s proven reserves last year, said the Organisation of Petroleum Exporting Countries (OPEC). In its annual statistical bulletin, the cartel recognised Venezuela’s claim to have boosted its reserves by…

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CHINA: China Natural Gas completed trial operation of Jingbian LNG plant

(EnergyAsia, July 25 2011, Monday) — China Natural Gas Inc (CNGI), a provider of compressed natural gas for vehicular fuel and pipeline natural gas for industrial, commercial and residential use in Xi’an city, said it has started operation at its liquefied natural gas (LNG) plant in Jingbian county in Shaanxi province.

Qin’an Ji, CNGI’s chairman and CEO, said the plant started up last week after a successful trial and development work over 46 months.

The company transports and sells natural gas to vehicular fueling terminals, as well as commercial, industrial and residential customers through its distribution networks in Shaanxi and Henan provinces. It owns approximately 120 km of high-pressure pipelines and operates 26 CNG fueling stations in Shaanxi and 12 CNG fueling stations in Henan.