INDONESIA: Minister aims to raise LNG export price to China by five times to US$12 per million BTU

(EnergyAsia, September 30 2011, Friday) — The Indonesian government is seeking to raise the liquefied natural gas (LNG) export price from its Tangguh plant in West Papua to China by five times to US$12 per million BTU.Indonesian state agency BPMigas and China National Offshore Oil Corporation had agreed to the original price of US$2.40 in…

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SINGAPORE: Shell shuts down part of 500,000 b/d refinery after fire

(EnergyAsia, September 30 2011, Friday) — Royal Dutch Shell has partially shut down its 500,000 b/d oil refinery in Singapore, including a diesel hydrocracking unit, and evacuated most of its staff as it fought to contain a fire on the Pulau Bukom plant which broke out on Wednesday.No one was seriously hurt and the fire,…

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CONFERENCES: OxfordPrinceton’s oil trading, refining and risk management events

(EnergyAsia, September 30 2011, Friday) — The Oxford Princeton Programme is offering the following workshops in Singapore for the last quarter of this year.

For details, please contact Sean Chiu of The Oxford Princeton Programme at +65-6837 8032 or schiu@oxfordprinceton.com.

Fundamentals of Petroleum Refining – A Non-Technical Introduction (FPR), October 3 to 4.

This two-day workshop is designed to introduce non-technical oil industry members to the fascinating field of petroleum refining.
 
Learn how a refinery works and how refinery operations affect global oil and product prices. New members of the industry will be given a great introduction to the industry. Marketing personnel will grasp the intricacies of how the products they market come to exist.
 
Those from the service side of the industry (brokerage, software, consulting) will get a first-hand view of this the most fundamental aspect of the oil industry.

Principles of International Oil Trading (TR0), November 9 to 12.

This course covers the basic principles of international oil trading and the allied fields of supply, transportation and refining. Through the medium of a case study, delegates will address day-to-day problems and will understand the relevant commercial driving forces in this area.
 
Delegates are introduced to the key elements affecting the international market of oil trading. Crude valuation, ocean tanker transport and freight are explored together with a basic overview of terminals and pipelines.

The structure of a refinery will be explained in the context of the need to produce marketable products. Aspects of product quality will be covered together with the key refining processes needed to achieve them.

International Oil trading – Advanced Techniques and Strategic Price Risk Management (TR2), November 14 to 16.

This course covers the advanced trading techniques applicable to the management of price risk in international oil trading. Through a variety of case studies, delegates will learn the techniques involved in trading and how to address day-to-day problems of managing the price risk associated with the role of producer, refinery or consumer with an integrated trading position.

The course focuses on the key markets, pricing and the mechanisms involved in trading. Aspects of the various exposures encountered in trading are covered.

Advanced trading instruments of swaps, CFDs and options are presented in detail, both from a theoretical and practical point of view, giving the delegates an insight into the application of these instruments in the development and management of a successful trading strategy.

Front to Back Office: Trading Controls and Best Practices (FTBO), November 14.

This fascinating and interactive workshop will give delegates a thorough understanding of best practice controls to be applied in commodity trading activities. Delegates are encouraged to think about the controls processes applied in their own operations, through interactive group case studies, in order to minimize the chances of similar expensive trading mistakes. Recent trading “failures” will be analyzed.

Value-at-Risk: The Basics and Beyond (VAR), November 15.

Value-at-Risk is the new benchmark for measuring and controlling market risk. Premier trading and marketing companies around the world use Value-at-Risk to maximise profit opportunities and minimize costly positioning mistakes. This one day programme teaches the important aspects of this risk management tool.

International Oil Trading – A Practical Approach to the Legal Issues for Successful Management of Claims and Disputes (TRL), November 16 to18.

This course covers areas of dispute that may arise in the performance of international shipping and trading contracts.

Using a mixture of current practice supported by legal interpretation and precedent, delegates will learn to avoid many of the pitfalls that may occur.
 
Real case studies and exercises will provide hands-on experience to enable delegates to draft, interpret and operate oil trading contracts to minimise the risk of dispute. An on-going case study will simulate events taking place in an arbitration.

Advanced Technical Analysis and Technical Trading (ATA), November 18.

This course examines how market participants apply theories of technical analysis to various trading timeframes through the presentation of advanced material and a series of interactive workshops. The timeframes covered include day trading and swing trading through a study of 5, 30, 60-minute and daily charts; also position trading through an examination of daily, weekly and monthly charts.

Oil Trading Orientation (OTO), November 30 to December 2.

This 3-day workshop is ideal for non-traders wishing to know more about the world of oil trading, or for delegates who are at the very beginning of an oil trading career.

Delegates will learn the terminology and key building blocks of knowledge for crude oil and petroleum product trading.

They will also get a flavour of what a trader’s job involves, through competitive team trading simulations focusing on different aspects of trading and risk management.
 
Topics explored include crude oil quality, product refining, blending and specifications, market fundamentals, technical analysis, key trading strategies, pricing mechanisms, derivatives trading, risk management and the mechanics of trading and operations.

INDIA: BG Group secures long-term LNG sales agreement with Gujarat Petroleum Corp

(EnergyAsia, September 30 2011, Friday) — UK’s BG Group said it has secured an agreement to supply India’s Gujarat State Petroleum Corporation (GSPC) up to 2.5 million tonnes of liquefied natural gas (LNG) a year for up to 20 years starting 2014.

BG said it will supply the LNG from its global portfolio once it and GSPC complete negotiations for a fully-termed LNG sales and purchase agreement by early next year.

BG Group chief executive Frank Chapman said:

“This is a landmark agreement for BG Group, establishing long-term LNG sales into one of the world’s largest and fastest growing energy markets. We have been in the Indian gas market for more than 15 years and this agreement brings essential new supplies of natural gas to the country. It adds another important new dimension to the Group’s expanding global LNG business.”

SINGAPORE: Malaysia’s Petronas to acquire 30% stake in GMR’s Jurong Island power plant

(EnergyAsia, September 30 2011, Friday) — India’s GMR said it has agreed to sell a 30% stake in subsidiary GMR Energy Singapore Pte Ltd (GMRE) to Petronas International Corporation Ltd (PICL), a wholly-owned subsidiary of Malaysia’s state energy company Petronas.

GMRE is investing S$1.2 billion to develop an 800 MW combined cycle gas turbine (CCGT) power plant on Jurong Island in Singapore. (US$1=S$1.28). The plant, featuring Siemens’ latest F-class gas turbines, will be designed and constructed by a consortium comprising Germany’s Siemens and South Korea’s Samsung.

Fuelled by re-gassified liquefied natural gas (LNG), the power plant is due to start commercial operations in late 2013. GMR Supply Singapore Pte Ltd, a wholly owned subsidiary of GMRE, holding an electricity retail licence in Singapore, will manage the electricity retail business.

G. M. Rao, GMR’s group chairman, said this deal with Petronas would pave the way for the two companies to jointly undertake “other possible opportunities” in India as well as internationally.

Anuar Ahmad, Petronas’ executive vice president, Gas and Power Business, said:

“This acquisition marks Petronas Group’s maiden foray into the international power market, and is a major step in its effort to extend its existing integrated presence further along the energy value chain.”

Neither companies disclosed the value of the deal.

Bangalore-headquartered GMR is an infrastructure company with interests in airports, energy, highways and urban infrastructure around the world.

Petronas is the second Malaysian company after YTL Group to purchase a stake in a Singapore power company. In 2009, the privately-owned YTL Group paid S$3.8 billion to acquire the 3,100MW PowerSeraya, Singapore’s second largest power company.

Apart from making a secure profitable investment, the Malaysian companies are also looking to obtain power supplies from Singapore which has surplus capacity.

In May this year, PowerSeraya supplied electricity to Malaysia’s largest power group Tenaga for a month, making it the first cross-border sale of power between the two countries.

JAPAN: Fuel storage infrastructure and levels to be upgraded and expanded

(EnergyAsia, September 29 2011, Thursday) — The Japanese government plans to upgrade its fuel stockpiling programme by expanding the storage infrastructure of refined oil products around the country to ensure stable and speedy supplies in the event of natural disasters and emergencies.While details are still being worked out, the government said it hopes to soon…

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CHINA: Signs of a slowing economy as August oil demand touches 10-month low, said Platts

(EnergyAsia, September 29 2011, Thursday) — At 38.02 million metric tons (mt), or 8.98 million b/d, China’s apparent oil demand in August was their lowest in 10 months, said energy media Platts.While this represented a seven percent year-over-year increase, it was the first time in 10 months that apparent oil demand had dipped below nine…

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THAILAND: Cummins Power Generation powers up Laemthong poultry farm

(EnergyAsia, September 29 2011, Thursday) — Nestled in Ayuddhaya-Nakorn Rachasrima in Thailand, Laemthong Farm forms part of the Laemthong Sahakarn Corporation that specialises in agricultural services looking after farms and livestock.

The company owns and operates 20 farms across the country with the help of 3,000 employees, and reliable uninterrupted power supply from Cummins Power Generation.

In looking for a power solutions package, Laemthong Farm specified a number of criteria to support its extensive farm operations including reliability of supply, weather conditions and noise levels.

Cummins was tasked to put their machines to the test at a farm over a four-month period from mid-September to December 2010, in which its diesel generator sets were used to run the motorised ventilation fan systems across various facilities under different weather conditions. The generators were tested to withstand lightning interferences, proving they could maintain peak performance outputs.

Cummins power systems were found to be less noisy than others, thus minimising disturbance to the livestock, in particular, chickens.

Cummins installed and used low kVA sets for power support and backups that were reliable, which met the needs of the farm. However, the farms’ existing Chinese sets could not produce the desired power output to specifications and were far less fuel efficient than the Cummins models.

Cummins was first called upon to provide power to Laemthong Farm in 2006, and again in 2008.

In its latest contract this year, Cummins supplied its 1250 kVA (C1250D5A) models to the farm.

Cummins Power Generation, a subsidiary of NYSE-listed Cummins Inc, is a global leader dedicated to increasing the supply and reliability of electric power around the world. With more than 90 years’ experience, its global distributor network of distributors in over 190 countries delivers innovative power solutions for all commercial, industrial, recreational, emergency and residential requirements.

Its range of products includes alternators, generator-drive engines and pre-integrated power systems, combining generator sets and power control and transfer technologies. Its services range from system design, project management, operations and maintenance contracts to development of turnkey power plants.

SHIPPING: Confidence at all-time low on economic uncertainty, rising fuel costs and fears of supply glut

(EnergyAsia, September 29 2011, Thursday) — The shipping industry’s confidence levels fell to their lowest level for three and a half years in the three months ended August 2011, according to the latest shipping confidence survey by leading accountant and shipping adviser Moore Stephens.

Fears of a supply glut, continuing uncertainty over the global economy and the rising cost of marine fuels were cited as the main reasons for the decline in confidence.

In August 2011, the average confidence level expressed by respondents in the markets in which they operate was 5.3 on a scale of 1 (low) to 10 (high), compared to 5.6 in the previous survey in May 2011.

This is the lowest figure recorded since the survey was launched in May 2008 with a confidence rating of 6.8, which remains the highest rating achieved thus far, said Moore Stephens.

Confidence over the three-month period covered by the latest survey fell most noticeably on the part of owners, down from 5.8 to 5.1, the lowest owner rating recorded during the life of the survey to date.

Confidence levels among charterers were even lower at 5.0, but the fall in comparison with the previous survey (from 5.4) was less than that for owners. The survey found that confidence among managers fell from 5.8 to 5.6, while brokers held on to their already comparatively low rating of 5.1.

Geographically, confidence remained lowest in Europe, falling from 5.5 to 5.0, its lowest level since the survey was launched. Asia, meanwhile, held steady at 5.7, said Moore Stephens.

According to the survey, one respondent said:

“Until recently, things looked quite optimistic, but recent doubts over US loan credibility and EU financial worries have severely dented confidence.”

Another told Moore Stephen that “the most unpredictable period since the beginning of the global financial crisis” and suggested that the market was “back to levels last seen in 2001.”

Few could see a short-term solution to the difficulties.

Overtonnaging or supply glut was a recurrent theme found among those surveyed.

One respondent said: ““Markets are at rock-bottom, and will stay there for some time because of the large number of new vessels due to come into service. Older vessels and speculative investors, as well as low-grade operators, will have to disappear before the situation can start to improve.”

Another noted that “the situation looks pretty grim, given the massive amount of over-ordering.”

Expectations on the part of respondents of making a major investment or significant development over the next 12 months fell, on a scale of 1 to 10, from 5.6 to 5.1 – the lowest level since the same figure was recorded in November 2009.

In August 2010, Moore Stephens found that respondents recorded the highest figure (6.0) in the life of the survey to date. This time, owners recorded the biggest drop in this regard, while managers and charterers were also less confident. Geographically, expectations of making a major investment were down across all the main regions covered by the survey.

Having dropped out of the top three for the first time in the last survey, finance costs returned as one of the top three factors which respondents expected to influence performance most significantly over the coming twelve months. Demand trends and competition, meanwhile, maintained their ever-present record in the top three.

Twenty-two per cent of respondents (down from 23% last time) cited demand trends as the most significant performance-affecting factor, while 17% (19%) identified competition.

Another 16% of respondents, (vs 14%) opted for finance costs. The percentage of respondents overall who identified fuel costs as having a significant effect on performance fell by four percentage points to 12%.

For owners, demand trends continued to be the dominating factor, despite a fall from 28% to 24% in the number of owners who put it in first place overall, ahead of finance costs and tonnage supply.

The top three performance-influencing factors for managers were competition and demand trends – both cited by 17% of respondents in that category and both up by two percentage points on last time – followed by operating costs. For charterers, meanwhile, demand trends and competition made up the top three, ahead of fuel costs.

Geographically, demand trends emerged as the most significant factor for operators in Asia, Europe and North America (19%, 23% and 30%, respectively), with competition and finance costs making up the remainder of the top three.

Fewer respondents expected an increase in finance costs over the coming year – 52% compared to 59% in the previous survey. This was the case across all categories of respondent and in all geographical areas covered by the survey.

Meanwhile, the number of charterers who were anticipating finance costs to fall over the next year was up from 9% to 15%, the highest figure since May 2009.  Geographically, the biggest change was to be found in Asia, where the 50% of respondents anticipating higher finance cost was twelve percentage points down on the 62% recorded in May 2011.

Moore Stephens shipping partner Richard Greiner said:

“The drop in shipping confidence to a record low is a disappointment. But it has been coming. Given what has been happening in the world, and in the industry, confidence remained surprisingly high last year, but it has started to slip in 2011. Indeed, in many ways, it is back to the levels of two years ago.

“We are starting to see now what many had predicted would happen much earlier. Banks are calling in their loans, shipping companies are filing for bankruptcy protection, ships are being arrested and auctioned around the world, and the courts and arbitration tribunals are starting to see an increase in their workloads.

“Financiers wants their money, and are ready to take what they can get now rather than wait in the hope that the markets will recover and enable them to achieve a return on their investment. This results in a situation in which everybody loses something.

“Financiers need to continue to work together with shipping companies and external financial advisers to find a way forward for viable long-term businesses, perhaps exploring the opportunities offered by independent business reviews.

“Meanwhile, costs are going up all the time. Bunker prices are the big worry. The cost of fuel has to be met and passed down the chain, at a time when money is tight for everybody. After a lull, the indications are that operating costs are once again likely to increase. The cost of raw materials also continues to rise.

“At the same time, freight rates are tumbling through the floor, stock markets are falling around the world, the US and European economies continue to stutter unsatisfactorily, political unrest in the Middle East shows no sign of abating, and the general economic gloom deepens.

AUSTRALIA: Chevron approves investment in US$29 billion Wheatstone LNG project

(EnergyAsia, September 29 2011, Thursday) — Chevron Corporation said it has given the approval for its Australian subsidiary to develop the US$29 billion foundation phase of its proposed giant Wheatstone liquefied natural gas (LNG) export complex in Western Australia state.

As the project’s operator, the US major announced its decision after the Australian government granted final approval for the construction of a 25 million tonnes/year LNG project at Ashburton North, located 12 km west of Onslow on the Pilbara Coast.

The foundation phase consists of two LNG processing trains with a combined capacity of 8.9 million tons per year (mt/y), a domestic gas plant and associated offshore infrastructure including the processing platform, subsea equipment, drilling and an export trunkline.

Wheatstone, a joint venture between the Australian subsidiaries of Chevron (73.6%), Apache (13%), Kuwait Foreign Petroleum Exploration Company (KUFPEC 7%) and Shell (6.4%). is expected to begin exporting LNG to Asia in 2016. The complex will be fed with natural gas from the offshore Wheatstone and Iago fields, which are operated by an Australian subsidiary of Chevron in a joint venture with Shell.

Describing it as a “unique hub concept”, Chevron said Wheatstone was developed to provide foundation infrastructure to commercialise its as well as the vast natural gas resources of other companies.

Under the hub concept, Apache and KUFPEC will provide the remaining 20% of the natural gas from their Julimar and Brunello fields. Development of these two fields is not included in the estimated project cost.

Chevron said that about 60% of its equity LNG off-take has been committed under binding long-term agreements, with talks continuing with potential customers to increase that to more than 80% and to acquire equity in the project.

John Watson, Chevron’s chairman and CEO, said:

“The Wheatstone project is a legacy, value-creating investment that will provide Chevron with significant reserves and production growth.

“This project, along with Gorgon LNG, is well-positioned to provide a large, secure energy supply to meet growing demand in the Asia-Pacific region, and to place Chevron as one of the world’s leading LNG suppliers.”

George Kirkland, Chevron vice chairman, said: “Wheatstone will be a strong pillar of the Australian economy for decades. We have achieved this important milestone with the close support and cooperation of the Australian federal, state and local governments along with the local community, our partners and customers.”

SINGAPORE: Rotary Engineering secures S$110 million worth of contracts for 3Q

(EnergyAsia, September 28 2011, Wednesday) — Singapore’s Rotary Engineering said it has secured S$110 million worth of contracts in the third quarter, including one to build a chemical plant on Jurong Island. The project, contracted with CCD (Singapore) Pte Ltd, will form part of Taiwan-based Chang Chun Group’s first-phase S$500 million investment on Jurong Island….

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PHILIPPINES: Seaoil to expand retail network and fuel storage capacity

(EnergyAsia, September 28 2011, Wednesday) — Seaoil Philippines Inc, one of the country’s leading fuel retailers, has announced a three-year programme to expand its retail network and storage capacity at a total cost of three billion peso. (US$1=43 peso). The company president and CEO Glenn Yu said it plans to double its chain of retail…

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MALAYSIA: Esso refinery operations unaffected by fire

(EnergyAsia, September 28 2011, Wednesday) — Esso Malaysia Berhad (EMB), a unit of ExxonMobil, briefly halted operations at its Port Dickson oil refinery last week after a three-hour fire damaged its marine pump area. No one was injured when a naphtha tank ignited, causing an explosion and sending out a large cloud of black smoke…

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INDIA: IOC aims for 125-million-ton refining capacity by 2022

(EnergyAsia, September 28 2011, Wednesday) — Indian Oil Corp (IOC) has set a target to almost double its current 65-million-ton/year refining capacity to 125 million tons by 2022 to meet the country’s rising fuel demand. Together with its 51.89%-held subsidiary, Chennai Petroleum Corp, IOC controls half the country’s 20 refineries….

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INDIA: Oil India may help expand HPCL’s two refineries

(EnergyAsia, September 28 2011, Wednesday) — State upstream company Oil India Limited (OIL) is looking to venture into the downstream sector by helping Hindustan Petroleum (HPCL) expand its two refineries. HPCL owns and operates a 6.5-million-tonne/year refinery in Mumbai and a 7.5-million-tonne/year refinery in Vishakapatnam. Oil India Chairman N. M. Borah said the two companies…

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CHINA: Sinopec Group to start storing crude oil in Shandong terminal

(EnergyAsia, September 27 2011, Tuesday) — China Petrochemical Corp (Sinopec) said it will soon start storing crude oil at a new 1.2-million cubic metre terminal in the eastern province of Shandong. Asia’s largest refiner said an engineering subsidiary has begun trial operations of the facility, two months ahead of its original schedule in November. Together…

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SHIPPING: Wood Mackenzie warns companies against further “speculative orders” of LNG vessels

(EnergyAsia, September 27 2011, Tuesday) — Companies have been warned against making “further speculative orders” in building new liquefied natural gas (LNG) vessels as they could be hit by a declining freight market. In a recent report, ‘Shifting trade moves LNG shipping out of the doldrums’, energy research consultancy Wood Mackenzie said ships ordered in…

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AUSTRALIA: Reserve Bank forecasts LNG exports to increase three fold through 2016

(EnergyAsia, September 27 2011, Tuesday) — The Reserve Bank of Australia has forecast that the country’s liquefied natural gas (LNG) sales could rise by threefold over the next five years, placing it as the world’s second largest supplier after Qatar. With A$120 billion worth of confirmed investments, the central bank said in its report, “The…

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INDIA: IOC looking to raise Koyali refinery capacity by over 30%

(EnergyAsia, September 27 2011, Tuesday) — In response to rising domestic oil demand, state Indian Oil Corp (IOC) is looking to expand the capacity of its Koyali refinery in Gujarat by more than 30% to 18 million tonnes. The company’s board is discussing the idea and could appoint a consultant by December to prepare a…

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AUSTRALIA: Resources and energy export earnings forecast to reach record A$215 billion in FY2011

(EnergyAsia, September 27 2011, Tuesday) — Australia’s resources and energy commodity export earnings are forecast to rise by 21% to reach a record A$215 billion for financial year 2011, according to the Bureau of Resources and Energy Economics (BREE). (US$1=A$0.97).

It issued this bullish forecast in the September edition of its Resources and Energy Quarterly report, citing expectations for continued strong prices and demand for the country’s main export commodities through to June 30 2012.

Quentin Grafton, the bureau’s executive director and chief economist, presented the following export earnings forecasts for the major commodities: iron ore to rise by 26% to A$68 billion, metallurgical coal by 29% to A$37 billion, gold by 47%t to A$19 billion), thermal coal by 29% to A$18 billion, crude oil and condensate by 13% to A$13 billion, and liquefied natural gas by 11% to A$12 billion.

In terms of volume, gold exports are expected to rise 12% to 338 tonnes, metallurgical coal 11% to 156 million tonnes, iron ore 10% to 449 million tonnes, thermal coal 8% to 155 million tonnes, and copper 12% to 950 000 tonnes.

“The increase in export volumes for many minerals and energy commodities reflects increased mine and infrastructure capacity, particularly for iron ore and coal,” said Professor Grafton.

However, prices for most commodities are forecast to ease on weakening economic growth in North America and Europe. Prices for iron ore, metallurgical and thermal coal, aluminum and nickel are forecast to decrease in 2012 compared with 2011.

“While prices for a number of commodities are forecast to ease in 2012, it should be noted that in some cases they are coming off record high levels and still indicate a very positive outlook for the industry,” said Professor Grafton.

CHINA: PetroChina, Zhejiang Haiyue to cooperate on storing oil

(EnergyAsia, September 26 2011, Monday) — Zhejiang Haiyue, a private Chinese oil company, said it has signed an agreement to cooperate with PetroChina’s Zhejiang Sales Company on retailing and storing oil products in Zhejiang province.Haiyuan said it will lease out its five retail fuel stations for a minimum five-year period, with provision for a 20-year…

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ASIA: LNG prices more than doubled to US$16 per mBtu since Japan quake, headed higher

(EnergyAsia, September 26 2011, Monday) — Spot liquefied natural gas (LNG) prices in Asia have more than doubled over the last six months to a three-year high of over US$16 per million Btu since the March 11 earthquake and tsunami in Japan. And they are headed higher as Asia’s major economies of China, Japan, India…

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SINGAPORE: PEC awarded five-year contract by ExxonMobil to provide tank maintenance and repair services

(EnergyAsia, September 26 2011, Monday) — PEC Ltd, a Singapore company which provides engineering, procurement and construction (EPC) and plant maintenance services to the energy and pharmaceutical industries, said it has secured a five-year contract to provide tank maintenance and repair services for ExxonMobil Asia Pacific Pte Ltd.

Starting this month, PEC will maintain the major’s storage tanks and provide repair services for its two refineries and petrochemical complex in Singapore. The company did not disclose the contract’s value.

Robert Dompeling, PEC’s Group CEO, said: “The group is pleased with this win as it comes at a time when the operating environment continues to be challenging. This contract award will not only add to the group’s recurring income stream but also reflects the market’s confidence in PEC as a reliable and trusted engineering solutions provider.”

PEC was named on Forbes Asia’s “Best Under a Billion” List, a well-tracked ranking of Asia Pacific’s best performing companies with annual sales under US$1 billion.

COMPANY: Vopak targets LNG as new growth sector after opening first Dutch terminal

(EnergyAsia, September 26 2011, Monday) — Dutch oil and chemicals logistics giant Royal Vopak is targeting to grow its liquefied natural gas (LNG) portfolio with the opening of its first newly constructed terminal in the Netherlands and the acquisition of an established terminal in Mexico.

At a ceremony last Friday, Queen Beatrix of the Netherlands opened the ‘Gas Access To Europe’ (Gate) terminal on the Maasvlakte in Rotterdam. Jointly conceived and developed by NV Nederlandse Gasunie and Vopak, the terminal will serve as an independent distribution point for companies to import and trade LNG to help meet the rising demand for natural gas in northwestern Europe.

Vopak views the 800-million-euro facility as an important investment that will “increase the security of supplies and enable new players to enter the European gas market.” (US$1=0.74 euro).

Comprising three tanks with a total storage capacity of 540,000 cubic metres, two jetties and an area for the regasification process, Gate is capable of initially handling 12 billion cubic metres (bcm) of LNG a year, sufficient to meet a quarter of annual Dutch gas consumption. Vopak said it is planning to expand the terminal’s annual throughput capacity to 16 billion cbm by adding a fourth tank.

The terminal has already begun receiving shipped cargoes of LNG that are regasified for distribution through the Dutch gas transport network and delivered to consumers in northwestern Europe. Five companies, Denmark’s DONG Energy, Austria’s EconGas, Germany’s E.ON Ruhrgas, Switzerland’s RWE Supply & Trading and the Netherlands’ Eneco, have committed to long-term contracts to use the terminal.

Conceived in 2005, the project dovetails with Dutch and European energy policies, and is built on the pillars of strategic diversification of gas supplies, sustainability, safety and environmental awareness.

At the opening ceremony, Deputy Prime Minister, Minister of Economic Affairs, Agriculture and Innovation, Maxime Verhagen said:

“Gate terminal marks a crucial next step in the development of the Netherlands as the gas hub of Northwest Europe. Over the last decade, gas has changed from a local energy source into a global commodity. More and more countries are linking into a worldwide gas web – a web in which the Netherlands as home to Gate terminal, the Gas Access To Europe, can play a pivotal role.”

In a joint statement, Paul van Gelder, Gasunie chairman and Eelco Hoekstra, Vopak chairman, said:

“LNG can be transported from all over the world, providing additional sources of supply for Northwest Europe. This diversification improves not only the security of supply, but also liquidity in the market, a factor which is becoming increasingly important in the European gas market. This first LNG terminal in the Netherlands was initiated by Gasunie and Vopak because we saw the perfect opportunity to offer new services to our customers.”

Gasunie, a leading gas infrastructure and transport company in Europe, manages and develops the national gas transmission network as well as provides for gas transport and infrastructure services.

Royal Vopak, the world’s largest independent tank storage service provider, operates 82 terminals (including Gate) in 31 countries with a storage capacity of 26.6 million cubic metres. The company is adding 6.7 million cbm of new capacity to expand its total to more than 33 million cbm in 2014.

In June, Vopak announced that it and Spain’s Enagas had agreed to jointly acquire an LNG import and re-gasification terminal in Altamira on the east coast of Mexico. Their 60/40 joint-venture company is concluding project financing and government approvals to complete the acquisition from a consortium comprising Shell, Total and Mitsui.

Established in 2006, the terminal has a throughput capacity of 7.4 billion cubic metres per year to import and re-gasify LNG for the Mexican market.

AUSTRLIA: Canberra approves US$25 billion Chevron’s Wheatstone LNG project

(EnergyAsia, September 26 2011, Monday) — Chevron Corp is one step closer towards launching its US$25-billion Wheatstone project to develop an export-oriented liquefied natural gas (LNG) business out of vast gas reserves off the coast of Western Australia.

Last week, the Australian government’s Federal Environment Minister Tony Burke announced its approval of the proposed complex comprising two LNG trains with a combined 8.9-million-ton/year capacity, and a domestic gas plant for start up in 2016. The approval, which allows the project capacity to increase to 25 million tons a year, clears the path for Chevron and its partners to make a final investment decision by year-end.

The plant is located in Western Australia’s Ashburton North Strategic Industrial Area, about 12 km south of Onslow on the Pilbara coast.

The project’s owners include the Australian subsidiaries of Chevron (operator 73.6%), US-based Apache (13%), Kuwait Foreign Petroleum Exploration Company (7%) and Royal Dutch Shell (6.4%).

Chevron met more than 70 conditions set by the Australian government to limit the project’s impact on the environment in the Pilbara region.

“While I have considered the social and economic implications of this project, my focus has been on protecting environmental matters of national significance through strict conditions to manage any potential environmental impacts,” said Mr Burke.

George Kirkland, Chevron’s vice chairman, said:

“We welcome the Australian federal government’s support for the Wheatstone Project. The federal environmental approval is an important milestone in reaching the final investment decision for the project this year.”

Melody Meyer, president of Chevron Asia Pacific Exploration and Production Company, said:

“Wheatstone and the previously sanctioned Gorgon project position Chevron as a major LNG operator delivering energy, jobs and economic benefits to Australia, as well as helping to meet long-term demand growth for cleaner burning fuel in the Asia-Pacific region.”

Roy Krzywosinski, managing director of Chevron Australia, said:

“Wheatstone is one of Australia’s largest resource projects and is ideally situated to process natural gas produced by Chevron-operated permits, and third parties, from the prolific western Carnarvon basin, one of Australia’s most prospective areas for energy development.”

Apart from Wheatstone, Chevron is also investing US$37 billion to develop the giant Gorgon gas fields, also located off the coast of Western Australia, to produce 15 million tons of LNG a year by 2014.

Earlier, Chevron said the Wheatstone consortium had signed an agreement to deliver up to 700,000 tons of LNG a year to Kyushu Electric for up to 20 years.

Chevron said Kyushu Electric will also acquire 1.83% of its equity share in the Wheatstone field licences and a 1.46% interest in the natural gas processing facilities to be developed onshore near Onslow. Including the equity participation volume, Kyushu Electric will take delivery of 800,000 tons of LNG a year from the project.

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

“We are pleased to build on our relationship with Kyushu Electric as a long term customer of the North West Shelf Venture and, more recently, as a customer of the Chevron-operated Gorgon Project. This sales and purchase agreement is an important milestone as we progress towards a final investment decision in 2011.”

Ms Meyer, president of Chevron Asia Pacific Exploration and Production Company, said:

“We are working with all levels of the Australian government and anticipate timely project approvals, which will enable a final investment decision to be made. Wheatstone will be one of Australia’s largest resource projects and once it is approved will create jobs and substantial economic benefits for the country.”

Chevron also has signed an agreement to supply Korea Gas Corp (Kogas) 1.95 million tons a year. In turn, Kogas has agreed to acquire a 5% interest in the project.