(EnergyAsia, March 23 2012, Friday) — Canadian oilsands producer Cenovus Energy Inc has exported its first crude oil cargo to China that it hopes could lead to a long-term supply deal.The Calgary, Alberta-based company declined to reveal the identity of the Chinese buyer which took the 250,000-barrel cargo of heavy crude last month as a…
(EnergyAsia, March 23 2012, Friday) — China’s latest plan to reform energy use and resource pricing will benefit the state companies that own and operate the nation’s electricity grid, nuclear power plants and retail oil markets, but not the thermal power industry, said US ratings agency Fitch.In his report to the National People’s Congress (NPC)…
(EnergyAsia, March 23 2012, Friday) — China failed to meet its targets to reduce energy consumption and carbon emissions last year, putting the government under pressure to accelerate its energy conservation and environmental plans as part of an ambitious economic restructuring programme in coming years.According to Zhang Ping, Minister of the National Development and Reform…
(EnergyAsia, March 23 2012, Friday) — Three of China’s main state oil companies each plan to build new storage terminals to serve major markets in the northern and southern parts of the country.China Petrochemical Corp (Sinopec Group) and China National Petroleum Corp (CNPC) said they will each build a 300,000-ton terminal in Tianjin city port…
(EnergyAsia, March 23 2012, Friday) — The Shaw Group Inc, a US-based global provider of engineering, construction, technology, fabrication, remediation and support services, said it has been awarded contracts to provide a process design package and technology licence for the addition of a 30,000 b/d deep catalytic cracking (DCC) unit for IRPC’s oil refinery in Thailand.
The upgrade project to the 215,000 b/d refinery in Rayong will maximise the production of polymer-grade propylene and recovery of polymer-grade ethylene to be used as feedstock for petrochemical derivative units at the same site.
Shaw said it also will function as the superlicensor for four additional supporting technologies provided by Axens. As superlicensor, Shaw has single point responsibility for execution and performance guarantees for these technologies.
James Glass, president of Shaw’s Energy & Chemicals Group, said:
“This solution will enable IRPC to move to the next level of heavy oil cracking and propylene production.
“As superlicensor, Shaw will optimise the integration of these technologies and maximise the production of propylene and other products for our client. This solution will enable IRPC to move to the next level of heavy oil cracking and propylene production.”
Shaw is the exclusive licensed provider of DCC technology outside of China, and together with the technology’s developer, Sinopec Research Institute of Petroleum Processing in China, has licensed a total of 16 DCC units.
The first DCC complex designed and engineered by Shaw was successfully commissioned in 1997 at this same site in Thailand, for Thai Petrochemical Industries, the previous name of IRPC.
Shaw said it has also provided its technology for the world’s largest DCC unit (producing in excess of 900,000 tons per year of propylene) for a grassroots high olefins fluid catalytic cracking project in the Middle East.
(EnergyAsia, March 22 2012, Thursday) — Exploration and production spending is expected to rise in Asia in 2012, creating an environment ripe for oil and gas professionals to switch jobs, even though employers are frequently offering incentives to keep them in their current position, said Rigzone, a leading online resource for oil and gas information, data and talent recruitment.
More than one-third (34%) of Asia-based oil and gas professionals noted their company had offered them positive incentives in the last six months to stay in their current position, according to a global survey by Rigzone.
Tops on the list of inducements for Asia-based oil and gas professionals: larger salaries, followed by challenging assignments, promotion, working in a new location and retention bonuses.
These incentives, more often than not, were put on the table after the employee was offered a competing position, said Rigzone.
Its survey found that 59% of respondents were offered incentives as part of a counteroffer, exceeding the rate in other regions including the Middle East (58%), South America or Africa (54%).
However, Rigzone found that just 24% of US-based oil and gas professionals had to utilise a new job offer as a bargaining chip.
“This give and take atmosphere creates a vibrant recruiting environment; however, the level of counteroffers in Asia is quite high. Companies need to be more proactive in retaining energy talent, before they have another opportunity and risk losing a valuable employee,” said John Benson, managing director (energy) of Dice Holdings Inc.
Asia-based energy professionals are optimistic that it would be easy to find a new position in their area of specialty, with 44% confident of their prospects.
However, more than one-third (35%) of respondents felt obtaining a new position would be hard, while another 21% were unsure.
Petroleum engineers in the region were most assured in the ease of finding a new position, followed by drilling and production professionals.
More than three-quarters (76%) of Asia-based oil and gas professionals have been contacted by recruiters dangling new career opportunities in the last six months. Design and construction engineers are most frequently contacted, followed by maritime and drilling professionals.
As a result, energy professionals in the region capitalised on the offers and left for greener pastures.
Thirty-eight percent of respondents noted that voluntary departures in their department are higher than last year, while 41% have noticed no change. This compares to just 7% who have seen a decline in colleagues quitting their positions from a year ago.
Rigzone conducted its email survey from January 2 to January 9 2012, receiving responses from more than 27,800 employed professionals, with 6,245 identified as working or residing in the Asia. About 48% of the respondents were in Southern Asia, 36% were in Central Asia and 16% in the Far East.
Duplicate responses from a single IP address were removed. Margin of error is +/- one percent, said Rigzone.
(EnergyAsia, March 22 2012, Thursday) — The International Monetary Fund (IMF) chief said Brent crude oil could surge 20% to 30% from its current level of US$125 a barrel if oil flows from Iran were disrupted in the event of conflict with the West.
Following her visit to China and India earlier this week, Christine Lagarde told reporters that the world economy would suffer “serious consequences” if there was a major and sudden cut-off of oil exports from Iran.
Ms Lagarde met with the top leaders of the two Asian giants when she attended the China Development Forum in Beijing on March 18 and participated in the IMF-sponsored conference, “China and India: Sustaining High Quality Growth”, in New Delhi on March 19 and 20.
In India, the IMF managing director met with Prime Minister Manmohan Singh, Finance Minister Pranab Mukherjee, Minister of Commerce and Industry Anand Sharma, Deputy Planning Commission Chairman Montek Singh Ahluwalia, Unique Identification Authority Chairman Nandan Nilekani, and other senior officials.
Ms Lagarde reported: “We exchanged views on a range of issues, particularly the unsettled global outlook, which has added to India’s domestic policy challenges. Our discussions focused on how to build investment in India and facilitate growth.
“The IMF supports the steps that the authorities have announced in the 2012/13 Budget to continue on the fiscal consolidation path and to increase allocations for capital and social spending, which will support stronger and more inclusive growth. Commitments to continue with tax reforms and streamline spending over the medium term are also welcome.
“As the government has indicated, India intends to build the momentum for reform. Indeed, we welcome the substantial decline in poverty in recent years, which demonstrates the benefits of policies also focused on more inclusive growth.
Apart from the oil threat, the IMF mentioned that Asia has to guard against fallout from the economic crisis in Europe.
Chinese Premier Wen Jiabao has reduced his country’s economic growth target for 2012 to 7.5% compared with more than 8% in recent years and made boosting consumer demand the year’s main priority, while India reported that its economy grew 6.1% in the final quarter of 2011, its slowest pace in two years.
The IMF noted that while China has followed a more traditional manufacturing- and export-led growth strategy, India’s growth has been driven by the services sector and reliance to a large extent on domestic demand.
“In emerging economies, the priority is to ensure a soft landing as domestic growth slows amid a deteriorating external environment and volatile capital flows,” according to the IMF’s economic surveillance note.
“There is scope to increase expenditure including, in some cases, social spending in economies where inflation pressure is expected to ease, fiscal positions are sound, and external surpluses are large (e.g., China). In those economies with relatively high inflation and public debt, policy space is more limited, warranting a more cautious stance toward policy easing (e.g., India).”
(EnergyAsia, March 22 2012, Friday) — Dubai Electricity and Water Authority (DEWA) said it is continuing its efforts to raise and upgrade the emirate’s power capacity and infrastructure to keep pace with the growth of demand.
The agency upgraded its 132kV power transmission grid by opening a 120-million-dirham 132/11kV main substation with a 150 MVA (megavolt per ampere) capacity at the Factories Area in Industrial Area 4 last month. It also invested 130 million dirham to lay the 132kV ground cables. (US$1=3.7 dirham).
“These efforts aim to consolidate Dubai’s leading position in the region and enhance its role as a global hub for economy and finance. Also, DEWA seeks to enhance the efficiency of power transmission grids and strengthen its infrastructure; so that all vital projects can make use of these various services,” said Saeed Mohammed Al Tayer, DEWA’s managing director and CEO.
The ground cables have been extended by 14km to connect the 400/132kV main transformation substation to enhance efficiency and reliability, and ensure uninterrupted supply to all customers at all times.
He said: “These substations adopt cutting-edge digital technologies for substations, to improve their efficiency and reliability and serve Dubai’s ambitious urban and economic plans. There are also another 30 132kV substations under construction.”
(EnergyAsia, March 22 2012, Thursday) — China National Petroleum Corporation (CNPC) and Shell China Exploration and Production Company Limited, a subsidiary of the European major, said they have signed what could be the country’s first shale gas production sharing contract (PSC).
Still to be approved by the Chinese government, the contract is for the exploration, development and production of shale gas in the 3,500-km Fushun-Yongchuan block in China’s Sichuan Basin.
Zhao Zhengzhang, a PetroChina Company Limited vice president, and Lim Haw-Kuang, executive chairman of Shell Companies in China, signed the contract at a ceremony in Beijing this week witnessed by CNPC chairman Jiang Jiemin and Royal Dutch Shell CEO Peter Voser.
Shell said it will apply its advanced technology, operational expertise and global experience in the project to jointly develop the shale gas resources with CNPC.
Mr Voser said: “We are delighted about this new milestone in our strategic cooperation with CNPC. China has huge shale gas potential and we are committed to making a contribution in bringing that potential into reality.”
China is partnering Shell as it lacks the technology and technical expertise to tap its shale reserves, estimated at more than 25.08 trillion cubic metres or 886 trillion cubic feet to meet the country’s fast-growing energy demand.
The government has set a target to triple the use of natural gas by 2020 to meet 10% of the country’s energy demand, and to produce 6.5 billion cubic metres of shale gas a year by 2015 rising to 80 billion by 2020.
(EnergyAsia, March 22 2012, Wednesday) — As a strategy to stay ahead of their East Asian rivals, India’s oil refiners are aggressively expanding plant capacity and upgrading capabilities while boosting product exports to offset losses from their domestic downstream operations.Led by IndianOil Corp, BPCL, HPCL and Essar Oil, Indian refiners expect to increase their annual…
(EnergyAsia, March 21 2012, Wednesday) — Vietnam has substantial biomass resources, which are mainly used by households and small businesses.Finland’s VTT Technical Research Centre is hoping to leverage the country’s solid biomass fuel resources on an industrial scale through an energy and environment partnership programme operated by the Finnish Ministry for Foreign Affairs. In partnership…
(EnergyAsia, March 21 2012, Wednesday) — As part of its great economic rebalancing act, China appears to be reducing its US dollar holdings, de-emphasising exports and increasing oil imports that contributed to a larger-than-expected trade deficit of US$31.49 billion for February, its biggest monthly on record.Even taking into account reduced activity during the Lunar New…
(EnergyAsia, March 21 2012, Wednesday) — India’s privately owned Essar Oil Ltd said its Vadinar refinery in Gujarat state produce can now produce Euro V-grade gasoil with the start-up of a new diesel hydrotreater unit.The Essar Group company said it would complete the first phase expansion of the refinery with the commissioning of the hydrotreater…
(EnergyAsia, March 21 2012, Wednesday) — France’s Total and two subsidiaries of Kuwait Petroleum Corp said they have signed a Memorandum of Understanding (MOU) to develop an integrated oil refining-petrochemicals complex in Zhanjiang, China’s southern-most major city in Guangdong province with Chinese major Sinopec.
Through its subsidiaries, Kuwait Petroleum International (KPI) and Petrochemicals Industries Company (PIC), KPC will supply crude feedstock and participate in developing a 300,000 b/d full-conversion refinery integrated with petrochemicals and marketing.
KPI handles international refining and marketing while PIC oversees KPC’s petrochemicals activities.
KPI, PIC and Total have agreed to form a consortium, which will potentially hold interests in two joint-ventures together with Sinopec. The MOU sets forth the agreement among KPI, PIC and Total regarding the development of the project.
Farouk Al Zanki, KPC’s CEO, said:
“Total, with its long experience in the downstream business in China coupled with know how in Refining and Petrochemicals operations, will add value to the China project. Moreover Total and KPC’s strategic objectives in Guangdong are highly aligned.”
Christophe de Margerie, Total chairman and CEO, said:
“Total is pleased to have been selected by Kuwait Petroleum Corporation as its preferred partner to participate in the project of a top-performing refining and petrochemicals platform with Sinopec in China. This agreement will be the keystone of a long-term relationship with KPC.
(EnergyAsia, March 21 2012, Wednesday) — The following is an edited version of an article by Arabinda Acharya and Wang Zhihao of the S. Rajaratnam School of International Studies (RSIS).
At the National Peoples’ Congress early this month, the Chinese government announced an 11% increase in spending on domestic security. At US$ 111 billion, this is higher than China’s defence budget, making it one of the few in the world to spend more on internal security than on defence. The increase comes amidst continuing tensions in Tibet and in the wake of an armed attack in Xinjiang on February 28 2012.
However, it is unrealistic to expect that a stronger security apparatus could, on its own, stem the bouts of violence in the region while underlying issues remain unaddressed.
In Kashgar in February 2012, a group of Uighur armed with knives ran headlong into a crowd and killed 13 people, characterises the type of violence that has haunted Xinjiang in recent years – sporadic, but intense. However, with the Chinese media blackout, and Uighur activist organisations strongly contesting all official accounts of events, the question of what underlying problems these attacks reflect is open to speculation.
Beijing’s approach to Xinjiang has always been cited as a major source of discontent leading to several of the violent attacks in the past. Chinese policies have been seen to be assimilative at any cost, marginalising the Uighur vis-à-vis the Han Chinese and threatening the survivability of the entire community. This has been exacerbated by the government’s overreaction and lack of restraint in dealing with protests and uprisings by the Uighur.
However, it would be unfair to castigate all of Beijing’s policies as leading to cultural, ethnic or religious persecution.
The main issue is not with policies per se, but lack of overall transparency, the official rhetoric concerning the grievances that underlie the protests and an overwhelmingly violent response to them by the state.
The priority that the Chinese government places on economic development and the tools that it employs to ensure national stability are seen to be trampling the identity – cultural, religious and ethnic – of Uighur as a minority community. This has been aggravated by Beijing lumping extremist ideology together with particular religious practices, cracking down on both at the same time. Attempts to voice discontent are construed as anti-state actions, and the ensuing military action is often highly disproportionate.
What is the truth?
The Xinjiang situation is characterised by a lack of certainty over events on the ground.
Accounts come mainly from two sources: state-sponsored media and overseas Uighur activists who claim to have sources within the region. Due to China’s ban on the presence of outside media in the region, reporting by these two entities however cannot be independently verified, making it difficult to determine where facts end and embellishment begins.
State media attributes the incidents to rioters or terrorists belonging to the East Turkestan Islamic Movement (ETIM) also going by the name Turkistan Islamic Party (TIP). Beijing also accuses overseas Uighur organisations especially the World Uighur Congress for inciting unrests in Xinjiang. Uighur activist groups however, claim that the protests are acts of the local Uighur lashing out at Beijing’s systematic oppression.
These incidents are being exploited to garner international support for resisting what is being termed as “state oppression” in Xinjiang. But without all the facts, it has become difficult to distinguish protests against specific grievances by local Uighur from organised acts of terrorism.
The fact that China faces a domestic terrorist threat with international linkages cannot be disputed. But Beijing’s attempts to project it as a credible national security threat, thereby justifying hard counter-measures, lacks legitimacy due to a transparency deficit and conflation of the issues at the local level. This stems from Beijing’s propensity to label any or all challenges to its authority anywhere in the country as the outcome of “three evils” – splitism, separatism and terrorism.
While real, the terrorist threat to China is of limited consequence.
The ETIM exists and operates mostly mainly in Pakistan, has limited resources and personnel and scant support in Xinjiang, and cannot be a credible threat to China on its own.
While the Islamic Movement of Uzbekistan and even Al Qaeda support the ETIM, they have priorities and problems of their own. There is no indication that any of the overseas Uighur organisations is inclined or capable to carry out terrorist attacks in China.
This makes a strong case for Beijing to be able to distinguish between protests against specific grievances which can be easily resolved and acts of terrorism, especially those with external connections.
Events between 2009 (the syringe attacks and riots) and February 2012 reflect anguish and discontent at a local scale which could have been dealt with and resolved in a more calibrated manner.
The Xinjiang issue could be changing from a separatist struggle to one which is seeking an equitable stake in development and economic prosperity, and perhaps to preserve native identities. Beijing’s propensity to see the discontent as a separatist issue can lead the Uighur to perceive government response as demonic and extreme.
Fortunately for China, the situation in Xinjiang is not and does not portend to be a problem of massive proportions.
However the best way for the government to establish enduring peace is to understand and empathise with Uighur identity and associated concerns.
National or social stability is mostly cultivated, rather than enforced. Beijing would do well to temper its actions with appropriate sensitivity to overall issues involved rather than attempt to crush all dissent with mere force.
* Arabinda Acharya is a research fellow and Wang Zhihao is a research analyst at the S. Rajaratnam School of International Studies (RSIS). Arabinda is a co-author of Ethnic Identity and Nationalist Conflict in China (Palgrave Macmillan, 2010).
(EnergyAsia, March 20 2012, Tuesday) — Rotating Offshore Solutions (ROS) has become the second company to invest in Singapore’s new Offshore Marine Centre (OMC) owned and managed by state industrial landlord JTC Corp.
ROS, an engineering, procurement, construction and commissioning services (EPCC) for the oil and gas industry, said its S$25 million facility ona two-hectare site at Tuas South Avenue 8 will include a four-storey office-cum-warehouse building with waterfront access. (US$1=S$1.25). The 27,000-sq ft facility will be used for developing engineering solutions for the offshore oil and gas sector and for “incubating” oil and gas entrepreneurs.
The site will include a fabrication area comprising three sheltered yards and an open yard to facilitate the installation of semi-automated fabrication equipment.
ROS will be designing, engineering and fabricating entire topside packages for floating production storage and offloading (FPSO) platforms that comprise at least 20 different modules used in processing oil and gas from offshore wells.
Victor Lim, ROS group CEO, said:
“In order to pursue new growth opportunities, we had to look for a waterfront yard that can enable a quick start-up with low upfront capital commitment. The OMC came as a natural choice for us as there is a common waterfront and berthing services facility, which makes the OMC an efficient plug-and-play infrastructure that allows our operations to start with minimal delay.
This is very helpful to SMEs like us, and we are glad that JTC has new projects like the OMC that takes care of the needs of SMEs.”
Manohar Khiatani, JTC’s CEO, said:
“We are delighted to have ROS, a homegrown SME, at the OMC. We developed the OMC to optimise the use of our limited waterfront land and enhance the competitiveness of the industry. Besides the quick start up, companies can enjoy reduced capital costs and lower operating costs because of the shared facilities at the OMC.
“The OMC development is testimony of JTC’s commitment to support the growth of key industry sectors by providing future-ready industrial infrastructure solutions.”
The 13-hectare OMC site was designed and developed by JTC to overcome Singapore’s scarce waterfront resources and to tap into new growth opportunities in the offshore and marine industry. The development is equipped with multi-user facilities including a common waterfront and berthing services facility for marine & offshore companies.
(EnergyAsia, March 20 2012, Tuesday) — As it struggles to replace depleting mature oil fields at a time of surging global energy demand, the upstream oil and gas sector will face a critical loss of more than 22,000 senior key technical professionals through retirement by 2015.
According to oilfield services company Schlumberger, the industry will suffer a net loss of more than 5,500 experienced petrotechnical professionals (PTPs) in the same timeframe as it steps up the recruitment of new graduates who will not be able to fill the experience gap.
As a result, Schlumberger Business Consulting (SBC), the company’s management consultancy arm, found that most upstream companies are failing to meet project deadlines.
The situation could worsen as the industry is going through a ‘big crew change’ in which the generations of geoscientists and petroleum engineers, or PTPs, hired before the sweeping recruitment cuts of the mid-1980s are now approaching retirement.
Oil and gas companies will identify with this warning of the growing supply squeeze on trained professionals contained in the eighth edition of SBC’s 2011 Oil & Gas Human Resources (HR) Benchmark Survey.
The latest report highlights the pressing issues facing the oil and gas industry as it faces competition for human resources resulting from changes in demographics, the increasing technical complexity of resource exploitation, and the challenges of developing pools of talent with the required experience and competencies.
SBC said that upstream companies, regardless of size, should consider human resources policy and competency management as key to their growth and survival.
High-growth companies have more technical resources proportionately and more pragmatic HR policies than low growth companies. This year’s survey attracted a record number of respondents with 37 participating upstream companies accounting for approximately 37% of global oil and gas production.
The report observed that the global surge in interest and activity in unconventional oil and gas resources and the growth of deepwater exploration and development have raised the complexity of technical challenges, both in geosciences and in petroleum engineering, and have increased the difficulty of hydrocarbon exploitation.
The growing pressures on the technical workforce threaten the timely completion of projects.
Of the respondents in the 2011 survey, up to 70% of national oil companies (NOCs), 60% of major international oil companies (IOCs), and 45% of independent companies acknowledged project delays due to staffing difficulties.
Participating companies reported mid-career recruitment targets significantly higher in 2011 than in 2010 with an increase of more than 60% by the majors, which are being severely hit by the retirement of senior PTPs.
The imbalance in supply and demand of experienced PTPs has resulted in an increase in attrition rates. Attrition in the geosciences now varies from 4% to 5% on average versus 2.6% to 4% in 2010. For petroleum engineers, turnover ranges from 4.5% to 7% in 2011 versus 3.5% to 6% a year earlier.
Oil-rich developing countries have become increasingly ambitious in their targets for national recruitment by local subsidiaries of foreign operating companies. This trend towards nationalisation of talent within the E&P industry is a major challenge in many countries where there is often a lack of experienced local staff, especially in emerging oil and gas producing nations.
Today, it is not unusual for regulatory bodies to set recruitment targets for nationals at 80% to 90% of middle management positions.
Although NOCs, IOCs and independent operators are slowly building national workforces, the acceleration of requirements by governments and state agencies is stretching companies’ capabilities.
Competency development programs require time for education, but there is also a need for a shift in culture and people management. Even though many companies are international in terms of operations personnel, the top executives of major IOCs remain almost exclusively from the home country.
Human resources as main driver of production growth
The SBC report said human resource polices have a measurable impact on production growth.
First, high-growth companies tend to have a higher ratio of PTPs per unit of operated production, known as PTP Intensity, than lower-growth companies. PTP Intensity is a concept developed by SBC showing the correlation between number of technical people in the company (PTP intensity) and organic growth of operated production.
Second, in terms of management, high-growth companies show more diversity and flexibility in developing their talent pool.
The 2011 HR Benchmark survey found that high-growth companies, whose portfolios often contain unconventional or deepwater assets, employ more technical people than their lower-growth peers. The lower-growth companies with complex portfolios and fewer PTPs may only demonstrate production growth of 0.5% to 2% per annum. Complex hydrocarbon exploitation coupled with a high number of PTPs show a statistical correlation to higher growth.
This year’s survey found that high-growth companies tend to foster diversity in the workforce, implement innovative competency development programmes, and demonstrate flexibility in career management.
High-growth companies have more women in their technical talent pool. In the geosciences, 27% of PTPs were female in the high-growth survey participants versus 18% in lower-growth companies. Among petroleum engineers, the female ratio was 19% for high-growth companies versus 11% for lower growth.
The same segmentation applies for HR policies. For example, high-growth companies tend to have a faster recruitment process; they frequently employ retired staff on a consultancy basis to serve as mentors, coaches or experts; they typically have fewer barriers to promotion; and training is more often on the job than in classrooms.
For all companies, whatever size or growth rate, the development of key capabilities remains the biggest hurdle in talent management. The concept of ‘time to autonomy,’ developed by SBC in 2006, has become a key indicator that companies seek to reduce.
Faced with the prospect of steadily rising demand for oil and gas in the next two decades, and increasing technical challenges to meet that demand, the most successful E&P companies should consider HR as the main driver for long-term production growth, both in terms of PTP Intensity and talent management practices.
(EnergyAsia, March 20 2012, Tuesday) — Malaysian state energy company Petronas said it has awarded the contract for the Front End Engineering Design (FEED) for a 3.6 million tons/year liquefied natural gas (LNG) project to JGC Corporation and to a Chiyoda Corporation-Saipem SpA partnership.
Petronas, which is building train 9 at its LNG complex in Bintulu in Sarawak state, said the two contractors will compete for the project’s FEED and in the Engineering, Procurement and Construction (EPC) price proposal.
Upon completion of the FEED project in December 2012, Petronas will announce the winner for the project’s engineering, procurement, construction and commissioning (EPCC) contract.
When completed by end-2015, train 9 will boost the Bintulu complex’s capacity to 27.6 million t/y and will be supplied by up to 850 million standard cubic feet per day (mmscfd) of gas supply from various fields located off the coast of Sarawak.
Using the same liquefaction process technology as the other eight trains, the new unit will include gas receiving facilities, acid gas removal unit, dehydration and mercury removal unit, fractionation and liquefaction unit, LNG rundown unit and all the associated utilities and facilities.
A new company, Petronas LNG 9 Sdn Bhd, was incorporated on January 13 2012 to manage the project.
(EnergyAsia, March 20 2012, Tuesday) — Japan’s leading upstream company, INPEX Corp, said its subsidiary, INPEX Oil & Gas Australia Proprietary Limited, has agreed to acquire a 17.5% interest in the Prelude floating liquefied natural gas (FLNG) project from Shell Development (Australia) Proprietary Limited (SDA), a subsidiary of Royal Dutch Shell plc.
Neither company disclosed financial terms of the transaction for the project which must be approved by the Australian government.
The FLNG terminal, located in WA-44-L, 475km north-northeast of Broome city off the coast of Western Australia, will develop the Prelude and Concerto gas fields for the annual production of at least 3.6 million tonnes of LNG and 400,000 tonnes of liquefied petroleum gas (LPG) along with 36,000 b/d of condensate at peak. Shell decided last May to invest in Prelude, likely making it the world’s first FLNG project when it starts up around 2017.
INPEX said it is also working with Shell to develop an FLNG project in Indonesia’s Abadi field. Elsewhere, INPEX is operating the Ichthys LNG project in Darwin in northern Australia, a Canadian shale gas project, and three projects in Indonesia, namely Mahakam, Bayu-Undan (JPDA) and Tangguh LNG.
Directed by the Japanese government to meet the country’s energy demand, INPEX is actively involved in 71 oil and gas projects in 26 countries, producing more than 400,000 barrels of oil equivalent per day.
(EnergyAsia, March 19 2012, Monday) — India’s largest gas importer, Petronet LNG Limited, said it has begun work on expanding the capacity of its 10-million-tonne/year Dahej terminal in Gujarat state to handle more liquefied natural gas (LNG) cargoes to meet the country’s rising energy consumption.After pushing Dahej to its operational limits to import 11 million…
(EnergyAsia, March 19 2012, Monday) — India’s state planners expect the country’s annual oil refining capacity to grow by 15% year-on-year to 214 million tonnes (4.31 million b/d) for the current year ending March 31.According to their ‘Economic Survey 2011-12’ report submitted to Parliament last week, India’s 21 refineries are expected to produce 206.15 million…
(EnergyAsia, March 19 2012, Monday) — US major Chevron said it has approved a multi-million-dollar expansion of its Oronite lubricant additives plant on Singapore’s Jurong Island by 2014, more than double the plant’s original capacity when it started up in 1999.
The additives are used to improve the performance of lubricants used in engines, hydraulic systems and drivelines. Oronite said finished lubricants containing its additives can be found in a variety of applications such as passenger cars, heavy-duty trucks, marine vessels, locomotives, tractors, construction equipment and natural gas engines.
Chevron Oronite’s president, Ron Kiskis, said the expansion will help the company “stay at the forefront” to meet the Asia Pacific’s continued demand increase in additives demand for years to come.
In a previous announcement, the company explained that its plan to expand the Singapore plant would grow manufacturing, blending and shipping capacity, as well as improve overall infrastructure.
Morgan Clark, Oronite’s vice president, manufacturing and supply, said:
“When this expansion is complete, we will have more than doubled the size of our Jurong Island facility since it was commissioned in 1999.
This is important because it will position us well for the additional growth in the Asia-Pacific region as well as provide the additional capacity and flexibility that will help strengthen our global supply chain to even more reliably serve our customers’ needs.”
Linked to feedstock and utilities infrastructure on a 20-hectare site on Jurong Island, the Oronite plant is operated with an advanced distributed control system and supported by a laboratory that is fully equipped to monitor the quality of raw materials and finished products.
It is served by its own private jetty to accommodate vessels of up to 40,000 dead-weight tonnage.
Oronite also serves customers in the Asia-Pacific region through a joint venture manufacturing plant in Chennai, India as well as a large blending and shipping plant in Omaezaki, Japan. The company maintains sales offices in Singapore, Beijing, Tokyo, Seoul and Mumbai.
(EnergyAsia, March 19 2012, Monday) — The Shaw Group Inc, a US engineering company, said it has been awarded a contract to provide the technology licence and process design package for the revamp of a residue fluid catalytic cracking (RFCC) unit for the Star Petroleum Refining Company in Thailand.
Shaw Group will incorporate the latest reactor system technology into the design of the 40,800 b/d plant in Map Ta Phut.
The company said it jointly developed the proprietary RFCCU technology through an alliance with Axens and Total in the early 1990s. To date, Shaw and Axens have licensed 51 grassroots units and performed more than 200 revamp projects.
The undisclosed value of the contract was included in Shaw’s Energy & Chemicals segment’s backlog of unfilled orders in the first quarter of fiscal year 2012.
James Glass, president of Shaw’s Energy & Chemicals Group, said:
“Shaw was the original licensor of this RFCC unit, which first started-up in 1996. We are now upgrading the unit to incorporate the latest technology features and improve performance and profitability.”
The Shaw Group Inc is a leading global provider of engineering, construction, technology, fabrication, remediation and support services for clients in the energy, chemicals, environmental, infrastructure and emergency response industries.
(EnergyAsia, March 19 2012, Monday) — Malaysia’s state energy company Petronas and German chemicals giant BASF said they will jointly invest a total of RM4 billion to develop an integrated oil refinery-petrochemical complex in the southern Malaysian state of Johor, and expand their existing venture in nearby Pahang state. (US$1=RM3.05).
The two projects are targeted for completion between 2015 and 2018, said Petronas, which will be represented by subsidiary Petronas Chemicals Group Berhad.
The partners will form a new entity, with BASF holding a majority 60% stake, to jointly own, develop, construct and operate new plants to produce isononanol, highly reactive polyisobutylene, non-ionic surfactants, methanesulphonic acid and precursor materials to form part of Petronas’s proposed Refinery & Petrochemical Integrated Development (RAPID) complex in Pengerang in Johor.
The head of agreement for the project was signed early this month by Martin Brudermueller, BASF’s vice chairman, and Wan Zulkiflee Wan Ariffin, Petronas’s executive vice president (downstream).
The partners also announced that they are “making progress” with a feasibility study to expand the operation of their existing BASF Petronas Chemicals Sdn Bhd plant in Pahang’s Kuantan city.
They are planning to expand their C3 value chain by adding a superabsorbent polymers plant and expanding the existing glacial acrylic acid unit. BASF holds a majority 60% stake in the company which was set up in 1997.
Dr Brudermüller, who is responsible for BASF’s Asia Pacific operations, said:
“With our new development in Pengerang and the expansion of the Verbund site in Kuantan, we will be able to improve supply our customers in Asia Pacific with specialty chemicals that help meet the needs of a rapidly growing population, especially in the ASEAN market.”
Mr Wan Zulkiflee said: “The development of a new specialty chemical products portfolio is an important component of PETRONAS’ plan to facilitate the sustainable development of our downstream petrochemical business. This complements our integrated plan to become a key player in the region as well as to spur domestic investment in the oil, gas and petrochemical industries.”
Non-ionic surfactants are used in almost all cleaning applications, particularly in environmentally friendly laundry detergents as well as in technical processes, including as ingredients for auxiliaries in the textile and leather industry.
Methanesulphonic acid is utilised in many different applications wherever a strong, readily biodegradable and low-corrosive acid is needed, such as for use in detergents, electroplating, and chemical synthesis.
Isononanol is a feedstock for the production of plasticisers, which is used in a variety of industries including construction and automotive.
Superabsorbent polymers are the key ingredients in disposable diapers and adult hygiene products. Aroma chemicals are used mainly in the flavours and fragrance industry.
(EnergyAsia, March 16 2012, Friday) — OPEC expects Japan’s oil demand to grow by about 2% this year, making it one of the fastest in recent memory as the country looks to fossil fuels after shutting down most of their nuclear power plants.
The Organization of Petroleum Exporting Countries (OPEC) said Japan’s oil consumption edged up 0.6% last year to around 4.5 million b/d as fossil fuels demand began to take off after the earthquake-tsunami tragedy of March 11 2011.
According to OPEC, Japan’s economy will rise by about 1.8% this year after contracting 0.7% in 2011, down sharply from a growth of 4.4% in 2010.
The impact has been so dramatic that the initial comparison to the 1995 Kobe earthquake – when the economy recovered swiftly – has turned out to be overly optimistic. The deceleration in the global economy in 2011 was an additional factor delaying the recovery in Japan.
So far this year, there have been some signs of an economic improvement, helping to limit the decline in Japanese exports while domestic demand also has begun to improve.
In addition, last year’s broad stimulus efforts worth 16.1 trillion yen or some US$200 billion undertaken by the Japanese government have boosted the reconstruction of the devastated Fukushima areas and the ailing economy in general. Last November, the government approved another stimulus package worth 12 trillion yen (US$150 billion) that will help the economic recovery this year.
OPEC said the disaster has changed Japan’s economy and energy profile over the medium term. Under public pressure, the government has indefinitely shut down 52 out of a total of 54 of the country’s nuclear reactors. Only 4.6% of Japan’s total installed nuclear capacity is currently operational, and these could be shut by the summer.
Given the capability of dual fuel power plants, the country has switched to other forms of fuel – LNG, fuel oil, and crude oil for direct burning – in order to generate electricity. Given the tight supply of low sulphur crude oil for most of last year, the dominant alternative fuel has been LNG with import volumes jumping by about 25%.
Fuel switching has resulted in positive growth in the country’s oil consumption, in contrast to the negative trend seen over the past few years, when Japan total oil consumption lost nearly 900,000 b/d between 2005 and 2010.
The disaster has also damaged some refineries and caused throughputs to fall below 66% in the second half of 2011. However, most of the refineries have been back on line since July, except for Cosmo-Chiba’s 220,000 b/d plant, and JX-Sendai’s 145,000 b/d unit.
Japan has compensated for this loss by boosting throughput at other refineries. However, as economic activities have been severely affected, the demand for certain fuels has been low for most of last year. As a result, overall refinery utilisation has not been dramatically increased, even in the northern part of the country, where demand for kerosene during the heating season has been met with higher imports in the fourth quarter.
Refinery utilisation currently stands at around 80%, the same level as in the period before the disaster, said OPEC.
Last year, Japan experienced a negative trade balance for the first time in 32 years, which OPEC attributed to three factors: the decline in manufacturing exports due to the disaster; the strengthening of the yen to multi-year highs against the US dollar and euro; and higher bills for energy imports due to the disruption in nuclear power generation.