MARKETS: OPEC export revenues to reach US$1.17 trillion in 2012, US$1.13 trillion in 2013, says EIA

(EnergyAsia, April 23 2012, Monday) — Riding on high oil prices, OPEC’s oil export revenues will surge to hit a new record high of US$1.171 trilllion this year before easing off to US$1.133 in 2013, said the US Energy Information Administration.

In its April 2012 Short-Term Energy Outlook (STEO) report, the EIA said the Organisation of the Petroleum Exporting Countries (OPEC) earned US$1.026 trillion in net oil export revenues for a 33% increase from 2010.

Saudi Arabia took in US$312 billion for about 30% of OPEC revenues last year. The UAE was second with US$101 billion followed by Iran (US$95 billion), Nigeria (US$90 billion), Kuwait (US$85 billion), Iraq (US$71 billion), Angola (US$68 billion), Algeria (US$63 billion), Venezuela (US$60 billion), Qatar (US$57 billion), Libya (US$13 billion) and Ecuador (US$10 billion).

On a per-capita basis, OPEC net oil export earnings reached US$2,684 in 2011, said the report.

INDIA: GDF SUEZ appointed as strategic partner to develop floating LNG import terminal

(EnergyAsia, April 23 2012, Monday) — French energy infrastructure company GDF SUEZ said it has been selected by Andhra Pradesh Gas Distribution Corporation (APGDC) as strategic partner to develop a floating liquefied natural gas (FLNG) import terminal project on the east coast of India.

GDF SUEZ said it expects to complete a feasibility study by end-2012, followed by a final investment decision (FID), with commissioning of the 3.5 million tonnes/year terminal expected in early 2014.

The project will provide Andhra Pradesh state with LNG to support its economy which has been growing at an average of 7.4% over last five years.

GDF SUEZ said it will have a 26% stake in the terminal which will be using a floating storage and regasification unit (FSRU).

APGDC is a Joint Venture between GAIL Gas, a fully owned subsidiary of GAIL India Ltd, and the Andhra-Pradesh Gas Infrastructure Corporation (APGIC). GAIL is the largest gas transport and marketing company in India.

Jean-Marie Dauger, GDF SUEZ’s executive vice president in charge of global gas and LNG business, said:

“We are delighted to initiate this new partnership in India. This agreement is recognition of GDF SUEZ expertise in LNG projects development. With a 10% stake in Petronet LNG Limited and a medium term LNG sales agreement signed in 2011, GDF SUEZ confirms that India, and more generally Asia, as a core development region for its LNG business.”

GDF SUEZ venture into India’s natural gas business in 1997 when it acquired a 10% stake in Petronet LNG, the owner of LNG import terminals in Dahej and Kochi (under construction).

Having identified Asia as a core region for its LNG business, GDF SUEZ is developing a two-million-tonnes/year FLNG terminal to tap the Bonaparte field in Australia.

JAPAN: Toyota Tsusho agrees to pay C$602 million for stake in Canadian coalbed methane assets

(EnergyAsia, April 23 2012, Monday) — Japan’s Toyota Tsusho Corp said it is paying Encana C$602 million for a 32.5% royalty interest in natural gas production from the Canadian firms’s coalbed methane (CBM) reserves in Alberta province.  (US$1=C$0.99).

The agreement includes production from a total of about 5,500 existing wells and potential future drilling locations in southern Alberta.
 
The assets include Encana’s CBM assets and shallow gas developments such as coal seams and sands using a combination of existing, new and recompleted wells.

The Japanese trading firm paid C$100 million at the closing of the transaction last week and will invest approximately C$502 million over seven years to acquire a 32.5% royalty interest before deductions in production from approximately 4,000 existing wells and approximately 1,500 potential future drilling locations.

These wells are located in an area covering about 480,000 net acres along the eastern edge of the Horseshoe Canyon fairway – an area that represents about 24%of Encana’s total CBM net acreage.

Encana said the existing wells on these lands are producing a total of about 120 million cubic feet equivalent per day of natural gas. The area contains approximately 480 billion cubic feet equivalent (Bcfe) of proved plus probable reserves and 140 Bcfe of best estimate economic contingent resources as of December 31 2011.

Encana will be operator and has jointly established with Toyota Tsuho a management committee to provide overall supervision and direction of development operations.

Randy Eresman, Encana’s President and CEO, said:

“This investment from a global partner recognises the significant value identified in Encana’s CBM lands which rank among the company’s lowest-cost, lowest-risk assets, and signifies another step as Encana pursues a range of opportunities to manage its portfolio and enhance the long-term value creation of its vast inventory.

“Encana’s CBM resources cover a great expanse that includes approximately 2.1 million net acres in the Horseshoe Canyon fairway. The vast majority of this acreage is fee lands, where Encana holds the mineral rights in perpetuity, and are estimated to contain significant amounts of recoverable natural gas.

“This relationship with Toyota Tsusho, a world-class leader, offers strong synergies that have the potential to foster expanded business opportunities. Further, this agreement serves as a model for other investment opportunities and supplies capital investment to preserve the value and efficient development of Encana’s shallow gas lands in Alberta that have contributed long-life production for more than five decades.”

MONGOLIA: ADB agree to lend US$434 million to support new five-year development plan

(EnergyAsia, April 23 2012, Monday) — The Asian Development Bank (ADB) has agreed to provide the Mongolian government US$434 million of loans and technical assistance as part of a new five-year development assistance strategy to help the country diversify its economic activities and narrow its inequality gap.

ADB said its board of directors has endorsed the Country Partnership Strategy (CPS) that outlines its support for Mongolia’s efforts to address priority infrastructure gaps, regional economic integration, and access to basic urban services, including water supply, education and health.

“As Mongolia approaches the middle-income level, ADB’s support is expected to grow and play an increasingly catalytic role by improving the environment for private sector participation in infrastructure and service delivery, and by addressing policy, regulatory and capacity constraints,” said Robert Wihtol, director-general of ADB’s East Asia Department.

The bank said the new strategy aims to achieve the twin goals of competitive, sustainable and regionally integrated growth, and inclusive social development.

Selective investments are planned in transport, energy and municipal development, with emphasis placed on public-private partnerships and regional cooperation.

ADB said it will also support skills development through higher education reform and vocational training, as well as help sustaining health reforms so that private sector can invest to improve health services.

The Mongolian economy rebounded strongly after being one of the hardest hit by the global economic downturn of 2008 to 2009.

With a growing mining sector, the ADB predicts Mongolia will become one of the fastest growing countries in the region.

But poverty remains a challenge. In 2011, an estimated 39% of the population was living below the poverty line, with nomadic families, households headed by women, and recent urban migrants registering a high poverty incidence.

The bank said inequality is severe between the urban and rural areas, especially in the western part of the country. This is reflected in poor and unequal access to basic social services in underserved suburban and rural areas.

The CPS plans to raise the percentage of college graduates employed in the fields in which they received training to 50% by 2016, up from 40% in 2007. It also plans to achieve universal coverage of health insurance by 2015.

Stating a common complaint among investors, the ADB said Mongolia’s infrastructure is still inadequate to realise the full potential of mining sector development. Despite a strong government commitment to health and education, fundamental skills mismatch and inefficient health services still prevent many Mongolians from participating in the new mining- and services-based economy.

ADB said it has been the government’s single largest source of official development assistance, providing a total of US$839 million in loans for 46 projects between 1991 and 2011. Since 2007, the bank said it provided another US$172 million through 12 Asian Development Fund grant projects.

SINGAPORE: MPA and industry collaborate to develop LNG as bunkering fuel

(EnergyAsia, April 20 2012, Friday) — The Maritime and Port Authority of Singapore (MPA) has established a Joint Industry Project (JIP) to investigate the operational feasibility of developing liquefied natural gas (LNG) into a shipping fuel in Singapore in collaboration with Det Norske Veritas (DNV) Clean Technology Centre and 21 industry partners.

The JIP, co-funded through MPA’s MINT fund, kicked off in January 2012 to provide recommendations to the Singapore government authorities on promoting LNG bunkering, ensuring operational safety, alignment with industry expectations and best practice, and compliance with relevant international rules, regulations and standards.

In fuelling ships, the supplier transfers LNG fuel from trucks, barges or onshore tanks. Switching from conventional marine fuel to LNG fuel provides both environmental and economic benefits to shipowners and the public, said DNV.

The shipping industry is looking for cleaner marine fuel to meet increasingly stringent international environmental regulations, with LNG a likely candidate as it produces less emission when burned compared to marine diesel oil. The shipping industry is subject to progressively more stringent legislations including global cap on fuel sulphur content, emission taxes and controls, and regulations on particulate matters.

According to DNV, LNG-fuelled propulsion has been demonstrated to meet the strictest environmental regulations and to be technically feasible.

As proof, DNV said there are 25 LNG-fuelled ships operating in Norway’s Emission Control Area and bunkering from shore facilities. Shipping firms are increasing their demand for the design and building of LNG-fuelled ships.

But there are barriers facing the adoption of LNG as a shipping fuel, said DNV.

This includes insufficient local LNG supply, inadequate bunkering infrastructure and a lack of regulatory schemes for both shore-based and ship-to ship bunkering. The viability of LNG-fuelled shipping also depends on the simultaneous development of the entire value chain as individual stakeholders face investment and operational risks if others do not join in.

DNV said the LNG bunkering JIP was conceived to address these feasibility issues and to reaffirm Singapore’s commitment towards maritime sustainable growth. As the world’s largest marine fuel bunkering port, it is strategically important to enable Singapore to offer LNG bunkering in the near future.

“With the growing need to reduce the environmental impact of shipping and its related activities, Joint Industry Projects such as these allow us to evaluate the feasibility of alternative marine fuel sources. This is also in line with MPA’s commitment to clean and green shipping in Singapore. The results of this study will provide MPA and the maritime industry with the operational and technical information necessary to implement LNG bunkering in Singapore,” said M. Segar, MPA’s Group Director (Hub Port).

Managed by DNV and co-sponsored by the MPA, the project is supported by 21 industry partners including BG Group, DNV Petroleum Services, Energy Markets Authority, Fearnleys, Gas Supply Pte Ltd, Hong Lam Marine, I.M. Skaugen, IHI Corporation, Innovation Norway, Keppel Offshore & Marine Technology Centre, Land Transport Authority, Maritime and Port Authority, Mitsui & Co Ltd, Norgas (Asia), NYK Line, Rolls Royce Marine, Shell, Singapore LNG Corporation Pte Ltd, SPT Marine Services Ltd and Star Cruises.

Anthony Barker, general manager for BG Singapore Gas Marketing and chairman of the JIP steering committee, said:

“This study provides an opportunity for established and experienced LNG industry players to work with Singapore bunkering stakeholders to ensure best in class safety standards and operating procedures are incorporated from the outset of this exciting development.”

Bjorn Tore Markussen, managing director for DNV Clean Technology Centre, said:

“The JIP is an excellent platform driving a safe and predictable scaling of regional LNG bunkering business solution. It is yet another important step in developing Singapore’s maritime cluster towards a Maritime Knowledge HUB.”

MARKETS: Iran worries keep prices high, despite rising non-OPEC crude supply, says Ernst & Young

(EnergyAsia, April 20 2012, Friday) — World oil prices are being kept high by fears of Middle East supply disruption which are offsetting reports of rising production in the US and other non-OPEC countries, according to consultants Ernst & Young LLP.

As a result, Brent has remained well supported at around US$120 a barrel while US WTI has stayed above US$100.
 
In its latest quarterly update, Ernst & Young LLP said production increases in the US and non-OPEC countries now exceed increases in global oil demand, but the market is deeply concerned about the possibility of further supply interruption from Iran, Syria, Yemen, the Sudans, and the North Sea as well as the continuing low levels of OPEC spare capacity.

Ernst & Young observed that after decades of rising demand and declining supply, the US is consuming less and producing more, lowering its reliance on foreign sources of crude. South America, Russia and Canada have also been raising production.

Marcela Donadio, Americas Oil and Gas Leader, Ernst & Young LLP, said:

“The advent of increased domestic supply is certainly positive for the US economy and energy security. Importing less oil and gas creates a more positive trade balance for the US, and domestic production stimulates job growth, local business revenues and tax receipts, along with other positive economic impacts.”

North America has benefitted from the growth in tight-oil production from the Bakken shale region and increases in natural gas liquids production and Canadian crude supply.

While the US benchmark crude WTI has become disconnected from globally-traded crudes, global crude prices are still high as a result of geopolitical supply uncertainty.

Oil demand in the US and other developed economies in 2012 is expected to continue to decline, but on a global basis will rise by a modest 0.9%, led by the emerging economies.

Ernst & Young noted that US natural gas prices have fallen further as production continues to rise.

Despite shifts away from dry gas production to oil development and to more liquids-rich gas plays, associated gas production continues to be strong. With a very warm winter, surging supplies have kept natural gas storage volumes at “market-crushing” levels.

Power generation is the fuel’s brightest prospect. Even with US electricity demand in decline, natural gas has gained market share in the sector as low gas prices have encouraged fuel-switching. In recent months, natural gas has been increasingly displacing coal for power generation.

The North American shale gas revolution is a cause for concern, said Mr Donadio.

“We’re at a critical point in the shale gas boom where we may start to see some of the small to mid-size players succumb to sustained depressed prices. How much longer can companies continue to produce and sell such a low-priced commodity and keep the lights on?” he asked.

MIDDLE EAST: Oil loses out to plastics and petrochemicals as economic diversification gathers paces

(EnergyAsia, April 20 2012, Friday) — The Middle East is rapidly expanding its petrochemicals and plastics industries to reduce its economic dependence on the production and export of crude oil and natural gas.

In a new report, industry intelligence company GlobalData traced the emergence of the region’s upstream petrochemicals industry over the last decade, which is now the most competitive in the world thanks to its low-cost feedstock advantage.

The report said that the basic petrochemicals capacity in the Middle East grew by a compounded annual average rate of 11.1% to reach 46.61 million tonnes a year between 2000 and 2011.

As a follow through, the region led by Saudi Arabia is building a higher-value plastics sector that will deliver higher profits and create secondary manufacturing industries and services.

In a statement, GlobalData said:

“Middle Eastern countries all derive a significant portion of their gross domestic product (GDP) from petroleum exports, and this high dependency on the oil sector has led to their vulnerability to the frequent fluctuations in crude oil prices.

This exposure to economic instability has driven many countries to attempt to diversify their sources of income by establishing petrochemical industries.

“The region’s basic petrochemical industry was boosted at the start of the decade when producers began receiving ethane feedstock at subsidized prices, which led to lower production costs, making the Middle East the hub of the global basic petrochemical industry.

“Continuous government support has seen foreign investments welcomed and higher efficiency achieved through the integration of petrochemical operations with refinery operations previously under government control.”

GlobalData said the region’s strong basic petrochemical industry will serve as a feedstock provider for the downstream industry.

The focus on the downstream petrochemical industry will also help the Middle East to offset the competition it faces from China in the basic petrochemical market, which is currently suffering from over-capacity.

“The Middle Eastern plastics processing industry will be a big winner from its drive to diversify its economy. While the region has a thriving plastic resin production market, its plastic processing industry is very small and scattered.

“To encourage domestic processing, many countries in the region plan to start cluster programs, which will allow plastics processors to establish a unit in a polymer park.

“The processing units will benefit from the integrated supply chain and tax benefits by the government, while the polymer parks will cater to the domestic plastics conversion industry to increase plastics output. Two polymer parks have already been established: the Abu Dhabi Polymer Park situated in the UAE and the Rabigh Conversion Industrial Park situated in Saudi Arabia.”

The report discusses the reasons for the region’s increased petrochemical and plastic exports to Asian countries, focusing on the trade in the major products like polyethylene, polypropylene, polyethylene terephthalate (PET) resins, polystyrene and polyvinyl chloride (PVC). The study also provides details on the capacity growth for the basic petrochemicals (ethylene, propylene, butadiene, benzene, toluene, xylenes and methanol) and major plastics in the Middle East.

QATAR: Qatargas loads 1,000th LNG cargo for export from Berth 4’s base

(EnergyAsia, April 20 2012, Friday) — Qatargas said it achieved a milestone last month when it loaded its 1,000th liquefied natural gas (LNG) cargo for export from a loading base built less than three years ago.

Bound for Elba Island in Georgia state in the US, the cargo was loaded from the Common Lean LNG storage and loading base at Berth 4 onto the Q-Flex LNG vessel, Al Khattiya, said a company statement.

The Common Lean LNG base was built to store LNG produced from the company’s six mega trains at Trains 4, 5, 6 and 7 and RasGas’s Trains 6 and 7, and to load Q-Flex and Q-Max ships in addition to conventional ships from Berths 4, 5 and 6. The base is also used to serve Qatargas ships at Berth 3 for customers in Asia, Europe and the Americas.

Khalid Bin Khalifa Al-Thani, Qatargas CEO said:

“This is indeed a remarkable milestone, not only for Qatargas, but also for Qatar’s LNG industry. This achievement further demonstrates the efficient and stable operations of our facilities and enhances our reputation as a reliable supplier of LNG worldwide. What makes this achievement even more significant is that it has been achieved without any Lost Time Incidents (LTI).”

The Common Lean LNG Storage and Loading Asset base was built less than three years after the first loading from the facility.

The Qatargas Q-Flex vessel, Al Hamla, was the first ship to load lean LNG from the base at Berth 4 on March 15 2009.

In October 2009, the Qatargas Q-Flex vessel, Al Kharaitiyat, became the first ship to load lean LNG from Berth 5 while the first ship to load lean LNG from Berth 6 was the RasGas Q-Flex vessel, Al Sahla, in February 2011.

The Common Lean storage and Loading base includes eight LNG tanks, each with a storage capacity of 140,000 cubic metres, four loading berths, and equipment to recover boil-off gas (BOG) from the tanks.

Established in 1984, Qatargas is the largest LNG producing company in the world today, with an annual production capacity of 42 million tonnes.

INDONESIA: Security remains tight around Jakarta’s Plumpang fuel storage terminal

(EnergyAsia, April 20 2012, Friday) — One of Indonesia’s largest fuel storage terminals remains under heavy police protection weeks after protestors threatened to torch it in protest against the government’s attempt to raise fuel prices. The Plumpang depot in North Jakarta, which had prevously been set on fire, was not harmed this time as police…

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MALAYSIA: VTTI’s ATB terminal in Johor state received first oil cargo

(EnergyAsia, April 19 2012, Thursday) — VTTI said the ATB oil terminal in Pelepas Port in Malaysia’s southern Johor state has received its first oil cargo, marking the facility’s start as an oil storage and logistics hub serving the region.
 
VTTI, an equal joint venture between Swiss trader Vitol and Malaysian energy shipping firm MISC Bhd, said the 10,000-dwt MT Kition “safely and successfully discharged” the cargo at ATB’s VLCC berth on April 10.

Offering storage and logistics services to compete against Singapore, the terminal’s first phase development consists of 41 tanks with a total capacity to store 841,000 cubic meters of fuel oil, gasoline and middle distillates. Construction started in September 2009.

The project’s first phase, which began construction in September 2009, is designed to handle 20 million metric tons of oil products a year, accommodating five tankers round the clock.

VTTI said it has already fully leased out the phase I capacity, and has begun planning the second phase with the long-term goal of building 1.6 million cubic metres. The new capacity is targeted to be ready for lease to third parties by the third quarter of 2013.

VTTI said it has made “significant” investment in land improvements and infrastructures to ensure that work on the second phase can begin “in the soonest possible time.”
 
“The ATB terminal will set a new benchmark in the independent terminalling industry. Designed to comply with the highest industry and safety standards, whilst meeting the demanding storage requirements of oil traders, the terminal offers one of the highest levels of flexibility, product security, and load rates available in the commercial storage industry. The jetty carries four 30-inch fuel oil pipelines and an additional six pipelines for clean products,” the company said.

SOUTH KOREA: KOGAS, DNV to jointly undertake LNG research and development

(EnergyAsia, April 19 2012, Thursday) — Norway’s DNV and state-owned Korea Gas Corporation (KOGAS) have signed a memorandum of understanding (MOU) to jointly undertake research and development in the liquefied natural gas (LNG) sector.

The companies will jointly organise conferences and cooperate on R&D projects focusing on the entire LNG value chain from gas reservoir exploration, natural gas production, liquefaction, transportation, storage, regasification and supply.

“Based on our expertise in the LNG industry, we anticipate helping KOGAS to acquire innovative technology and strengthen its position in the global market,” said Jon Rysst, DNV’s regional manager for South Korea and Japan.

As the country’s sole LNG provider, KOGAS is expanding its investment in foreign resource projects and acquiring non-conventional resources such as shale gas. It is also focusing on the mid-downstream LNG business to generate better returns.

 

AZERBAIJAN: BP heralds US$25 billion “next stage” of Shah Deniz project development

(EnergyAsia, April 19 2012, Thursday) — The consortium developing Azerbaijan’s Shah Deniz gas reserves has reached an important milestone with its decision to start work on the front-end engineering and design (FEED) of the project’s estimated US$25 billion stage 2 development, operator BP has announced.

The UK major, which owns a 25.5% stake in the consortium, revealed this following Tuesday’s meeting in Baku between its group chief executive Bob Dudley and Azerbaijan’s President Ilham Aliyev.

The Shah Deniz Stage 2 project aims to produce 16 billion cubic metres of gas per year from the Caspian Sea mostly for exports to markets in Turkey and Europe that form the ‘Southern Gas Corridor’ from end-2017.

BP said with the FEED decision, the consortium will refine engineering studies, drill more wells, complete commercial agreements and start key construction contracts.

The consortium’s other shareholders include Norway’s Statoil (25.5%), Azerbaijan’s SOCAR (10%), France’s Total SA (10%), LukAgip, a joint venture company of Italy’s Eni and Russia’s LUKoil (10%), Iran’s NIOC (10%), and Turkey’s TPAO (9%).

Perhaps, most importantly, the Shah Deniz consortium will finalise its selection of export routes across Turkey and into Europe. Countries and companies competing to dominate the natural gas markets and supplies in the region covering Central Asia to Western Europe have been vying to build separate pipeline networks.

Azerbaijan’s support for the BP-led consortium’s proposal is crucial as the country holds one of the world’s largest untapped natural gas fields with the Shah Deniz reserves alone estimated at more than 30 trillion cubic feet.

Rashid Javanshir, BP’s President of the Azerbaijan, Georgia and Turkey Region, said:

“We are pleased to announce this major step forward. Over the past two years we have made substantial progress on all the individual components of this mega-project. Engineering studies, commercial agreements and the support of the state of Azerbaijan and other governments give the Shah Deniz consortium the confidence to embark upon this FEED phase.

“With over 30 trillion cubic feet of gas resources, Shah Deniz is truly a giant field. With more than 26 wells, two new platforms, a terminal expansion and up to 4000km of new pipelines to Europe, this chain of major projects represents one of the largest oil and gas developments in the world.”

Shah Deniz Stage 2 is expected to add a further 16 billion cubic metres per year (bcma) of gas production to the approximately 9 bcma from Shah Deniz Stage 1.

As part of Stage 2 development, located some 70 km offshore in the Caspian Sea, the consortium is expected to install two new bridge-linked production platforms, drill 26 subsea wells with two semi-submersible rigs, build 500 km of subsea pipelines at up to 550m of water depth, undertake a 16 bcma upgrade of the South Caucasus Pipeline (SCP), and expand the Sangachal terminal. It will build additional pipeline capacity to transport Shah Deniz gas through Turkey and Europe.

Last October, the consortium signed gas sales and transit agreements with BOTAS, the Turkish pipeline company, and the Turkish government, within a wider agreement between the governments of Azerbaijan and Turkey.

Since then, agreements have been signed to allow the Trans Anatolia Pipeline developers to start engineering studies for potential gas transportation across Turkey. Three options are being considered to carry gas into Europe: the Trans Adriatic Pipeline (TAP) with a route to Italy, Nabucco West taking gas from Turkish-European border through Eastern Europe to the West and the South East Europe Pipeline (SEEP) taking gas through Hungary, Bulgaria and Romania. The Shah Deniz consortium will make a final route selection in 2013.

JAPAN: Chubu Electric signs 20-year agreement to import LNG from Chevron’s Wheatstone project

(EnergyAsia, April 19 2012, Thursday) — US major Chevron Corp said a consortium led by its Australian subsidiaries has secured an agreement for the annual supply of one million tons of liquefied natural gas (LNG) to Japan’s Chubu Electric Power Company Incorporated for up to 20 years.

The Chevron-operated consortium will supply the LNG from its onshore Wheatstone gas project in Western Australia under several non-binding heads of agreement (HOA). Wheatstone’s founding partners include the Australian subsidiaries of Chevron (72.14%), Apache (13%), Kuwait Foreign Petroleum Exploration Company (KUFPEC 7%), Shell (6.4%) and Kyushu Electric (1.46%).

Due to start up in 2016, the US$29 billion Wheatstone project is set to become one of Australia’s largest resource projects. Located at Ashburton North, 12 km west of Onslow in Western Australia, the foundation phase of the project will consist of two LNG gas trains with a combined capacity of 8.9 million tons/year and a domestic gas plant.

With the Chubu deal, Roy Krzywosinski, Chevron Australia’s managing director, said that more than 70% of its equity LNG from Wheatstone has now been committed through long-term off-take agreements with customers in Asia.

“Our Wheatstone and Gorgon projects are strategically positioned to commercialise our significant natural gas position in Australia through satisfying Asia’s rapidly growing demand for reliable, cleaner-burning and safe energy,“ he said.

Joe Geagea, President of Chevron Gas and Midstream, described Chubu as a long term customer of the company’s Australian natural gas production.

Chevron is also leading a consortium involving ExxonMobil and Royal Dutch Shell to develop the A$43 billion Gorgon LNG project in Western Australia state.

 

UAE: Masdar Institute and First Solar in joint workshop on R&D in solar PV technology

(EnergyAsia, April 18 2012, Wednesday) — Masdar Institute of Science and Technology, an Abu Dhabi-based graduate-level university focused on advanced energy and sustainable technologies, and First Solar Inc, a producer of photovoltaic (PV) solar modules and solar systems, recently conducted a workshop to highlight the role of research and development (R & D) in the fast evolving solar power industry.

The workshop, “Solar PV: Striving for Grid Parity – the Importance of R&D,” was led by James Brown, First Solar’s President for Global Business Development.

The session, ‘PV technology, system optimisation and the role of R&D’, was conducted by David Eaglesham, First Solar’s chief technology officer, while the last session, ‘Innovation in EPC and O&M’, was led by Matthew Merfert, the company’s EPC Director.

Steve Griffiths, executive director of Initiatives at Masdar Institute, gave the welcome address that was followed by a talk on ‘Emirates Solar Industry Association (ESIA) Introduction: Solar potential in the Middle East’ by Sami Khoreibi, CEO of Enviromena Power Systems, a leading developer of solar projects in the Middle East and North Africa region.

More than 20 industry professionals, as well as faculty, researchers and students from Masdar Institute attended the workshop.

First Solar supplied its thin film solar modules for the Masdar City PV plant that was designed and constructed by Abu Dhabi-based Enviromena. First Solar will be working with Masdar Institute to research the economic potential of solar PV in the UAE.

Mr Brown said the solar industry has witnessed tremendous growth globally in the past few years at the same time that the cost of solar PV has fallen dramatically. First Solar has chosen to focus on utility-scale PV generation in order to translate low PV costs, economies of scale and engineering know-how into the lowest electricity cost in order to make the largest global impact. 

The company expects to produce approximately 2GW in 2012 and is targeting reductions in its module manufacturing cost per Watt from US$0.74 in Q3 2011 to less than US$0.60 by 2015. First Solar has two priorities: continuing its investments in R&D, and bringing its utility-scale solar power plants to ‘sustainable markets,’ regions experiencing high energy growth with high, although not readily apparent, energy costs.’

RUSSIA: Rosneft and ExxonMobil sign agreements to implement E&P programmes in Russia, US and Canada

(EnergyAsia, April 18 2012, Wednesday)— Russia’s Rosneft and US major ExxonMobil have signed agreements to implement joint efforts to explore and develop oil and gas in both their countries as well as Canada.

Signed in the presence of Russian Prime Minister Vladimir Putin and Deputy Prime Minister Igor Sechin, the agreements form joint ventures to manage an exploration programme in the Kara Sea and Black Sea. They also set the terms for US$3.2 billion worth of investments to be made by the partners in Russian offshore projects.

Signed by Rosneft President Eduard Khudainatov, ExxonMobil Corp chairman and CEO Rex W. Tillerson, ExxonMobil Exploration Company President Stephen M. Greenlee, and, ExxonMobil Development Company President Neil W. Duffin, the agreements implement a long-term strategic cooperation agreement concluded last August that calls for the companies to share technology and expertise.

Neftegaz Holding America Limited, an independent indirect subsidiary of Rosneft registered in Delaware, concluded separate agreements to acquire a 30% equity in ExxonMobil’s share in the La Escalera Ranch project in the Delaware Basin in West Texas in the US.

Neftegaz Holding America Limited will also be given the right to acquire a 30% interest in 20 blocks held by ExxonMobil in the US Gulf of Mexico, one of the most oil and gas rich basins in the world. The ExxonMobil blocks are located in prospective areas of the Western part of the Gulf.

In addition, RN Cardium Oil Inc., an independent Rosneft subsidiary, acquired 30% of ExxonMobil’s stake in the Harmattan acreage in the Cardium formation of the Western Canada Basin in Canada’s Alberta province.

The Cardium formation is an active unconventional oil play in which ExxonMobil has a significant acreage position. The execution of that project may become a source for the development of technologies for unconventional reservoirs in Russia.

As part of implementation of the Strategic Cooperation Agreement, exploration activity began in the Tuapse licence block in the Black Sea in Russia in September 2011. The seismic programme is 70% complete. Interpretation of data collected will be carried out following programme completion scheduled for the second quarter of 2012. Drilling of the first exploration well is planned for 2014-2015.

In the Kara Sea, plans are under way to undertake seismic and environmental programmes of East Prinovozemelsky blocks later this year in anticipation of a potential exploration well in 2014.

Mr Khudainatov said: “Today Rosneft and ExxonMobil enter offshore projects of unprecedented scale in the Russian Arctic and Black Sea regions, which are home to the world’s largest hydrocarbon resources base. In so doing we lay the foundation for long-term growth of the Russian oil and gas industry.

“I am certain that 15 years of Rosneft and ExxonMobil partnership, as well as the use of the latest environmentally safe technologies and unique experience will allow Rosneft to become one of the global leaders in the oil and gas industry.”

Mr Tillerson said: “These agreements are important milestones in this strategic relationship. Our focus now will move to technical planning and execution of safe and environmentally responsible exploration activities with the goal of developing significant new energy supplies to meet growing global demand.”

In a joint statement, the two CEO said said they were encouraged to proceed with these projects by the Russian government’s efforts to reform taxation of the high-potential oil industry sectors and improve investment conditions for foreign and Russian oil companies.

Rosneft and ExxonMobil have also signed an agreement to jointly develop tight oil production technologies in Western Siberia. This will enable the companies to later discuss undertaking joint projects to explore and develop prospective areas with unconventional oil potential in Russia.

A programme of technical and management staff exchanges has been agreed to by the companies and their affiliates including positions in geology, geoscience, field development, well drilling, finance, logistics, safety, health and the environment. The knowledge and experience exchange will not only strengthen relationships between the two companies and their affiliates but also provide career development opportunities.

The Arctic Research and Design Center for Offshore Developments will provide a full range of research and design services to support the development of offshore fields. The main roles of the center include supporting all stages of oil and gas field development on the Arctic shelf and helping ensure projects are environmentally safe, including through the provision of technical support in environmental monitoring.

The centre will also support offshore safety. A special Offshore Accident and Emergency Warning and Prevention Service will be created to help prevent and respond immediately to any emergencies or accidents.

MONGOLIA: Government suspended exploration and mining licences for SouthGobi’s coal mine

(EnergyAsia, April 18 2012, Wednesday) — Canada’s SouthGobi Resources Ltd said the Mongolian government has suspended exploration and mining licenses for its Ovoot Tolgoi coal mine which is being targeted for a stake buyout by Chinese state aluminum firm Chalco.SouthGobi said the Mineral Resources Authority of Mongolia (MRAM) held a press conference in the capital…

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INDIA: IndianOil Corp processed record 55.6 million tonnes in FY2011

(EnergyAsia, April 18 2012, Wednesday) — State-owned Indian Oil Corp said its refineries processed a record volume of 55.6 million tonnes (MT) of crude oil for the last financial year ending March 31 2012. It achieved its previous best of 53 million tonnes the previous year. It is India’s largest refiner with a nameplate capacity…

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CHINA: Sinopec aims to expand Hainan oil refinery

(EnergyAsia, April 18 2012, Wednesday) — China Petroleum & Chemical Corp (Sinopec) is planning to expand its existing 160,000 b/d oil refinery and petrochemical complex on Hainan Island.Together with the Hainan provincial government, the company is hoping to obtain Beijing’s approval this year for the proposed 39-billion-yuan investment to add 100,000 b/d of refining capacity…

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AUSTRALIA: Origin Energy to invest A$100m to develop cleaner electricity for Sydney city

(EnergyAsia, April 17 2012, Tuesday) — Australia’s Origin Energy Limited said it has agreed to develop low-carbon, cost efficient trigeneration precincts to supply cleaner energy to central Sydney, the country’s largest city.

Origin said its wholly owned subsidiary, Cogent Energy, will invest A$100 million over a 10-year period to build trigeneration precincts in four zones across central Sydney. (US$1=A$0.96).

Trigeneration involves using natural gas-powered engines to generate on-site electricity. It is a highly efficient process, as the waste heat from the engine is captured and re-used to provide heating, or for conversion to chilled water for cooling through an absorption chiller. Using gas as the fuel source offers the potential for a significant reduction in carbon emissions.

Jim Galvin, Origin’s general manager for retail markets, said:

“Origin is committed to meeting customers’ energy needs today, and investing in the energy solutions for tomorrow. This means finding and developing new energy solutions which can provide Australians with a cleaner, reliable and affordable supply of energy.

“Working in partnership with large organisations like the City of Sydney, Origin is actively installing smarter technology including trigeneration systems, which use energy more efficiently, reduce carbon emissions and also deliver economic benefits to customers.

“As a leader in the installation of trigeneration in Australia, Origin is already demonstrating these savings with customers. In 2011, Origin worked with Investa Property Group to develop Australia’s first open commercial trigeneration precinct in Sydney. Origin is also building a groundbreaking trigeneration precinct in Melbourne.”

Trigeneration is a compelling, alternative energy solution that helps lower carbon emissions and network demand, while increasing energy efficiency and power security and reducing costs for large energy users, for example commercial buildings.

Trigeneration solutions offers owners of commercial buildings the opportunity to attain high standards of energy efficiency. Commercial buildings account for approximately 10% of Australia’s greenhouse gas emissions, according to Climateworks’ Low Carbon Growth Plan for Australia. The success of this initiative and the proliferation of similar initiatives in Australia’s central business districts could help drive material reductions in greenhouse gas emissions.

Precincts and customers for the first stage of the trigeneration project are currently being negotiated, including the city’s own sites. It is expected that the plants will be constructed from 2013, as customers are identified and secured. Origin will be responsible for the ongoing operation and maintenance of the plants.

CHINA: SABIC invests US$100 million to spearhead research and development

(EnergyAsia, April 17 2012, Tuesday) — Saudi Basic Industries Corporation (SABIC) has announced that it will be investing US$100 million to develop new technology centre in Kangqiao, east of Shanghai, China.

When completed in 2013, the 60,000 sq m facility will house some 200 commercial and corporate function staff as well as a team of more than 200 scientists and engineers who will research and develop advanced engineering plastics materials for use in the  automotive, electronics, IT, alternative energy, building, construction and infrastructure industries

At the project’s recent groundbreaking ceremony, the Saudi chemicals giant also announced that the centre will include the ‘China Automotive Innovation Hub’ to develop next generation materials solutions.

 

MALAYSIA: Petronas says refinery-petrochemical project in Johor state progressing according to schedule

(EnergyAsia, April 17 2012, Tuesday) — Malaysian state energy firm Petronas said it is making progress in developing an integrated oil refinery-petrochemical project in Pengerang town in the southern Malaysian state of Johor.

The proposed RM60-billion Refinery and Petrochemical Integrated Development (RAPID) complex will include a 300,000 b/d refinery to supply feedstock to an adjoining petrochemical complex as well as produce EU-grade gasoline and diesel when it starts up in late 2016.

Announced by Prime Minister Mohd Najib Tun Abdul Razak last May 13, the project has achieved several important milestones in the past few months.

Petronas said it completed a detailed feasibility study last October, and has begun a front-end engineering design (FEED) study while finalising the selection of potential partners and licensors for the various facilities within the project.

The site topographical survey and soil investigation work have been completed, while the Environmental Impact Assessment Study (EIA) is currently being performed.

Recently, Petronas signed a heads of agreement with Germany’s BASF to jointly own, develop, construct and operate production facilities for specialty chemicals and plants for precursor materials within the RAPID complex. These world-scale facilities will be undertaken on a 40:60 basis.

Progress is also made in the various other technical and commercial aspects of the proposed project for Petronas to reach its final investment decision (FID) in the middle of 2013. Except for pre-FID works, no other contract has been tendered out or awarded.

Petronas said it will begin pre-qualification exercise for various tender packages for the project in stages, the earliest of which is expected to be held in the third quarter of this year.

The company is also working on recruiting qualified and trained personnel to work at the complex’s various plants and facilities.

Petronas said RAPID’s implementation could turn southern Johor into a new refining and petrochemical centre in Malaysia, complementing the existing complexes in the country’s eastern corridors.

It will also create multiple economic spin-offs and a new generation of oil and petrochemical professionals that will drive the development of this sector further, in line with the government’s vision to turn Malaysia into a leading petroleum industry hub in the region.

MARKETS: Increased competition and bright outlook for gas trade in Southeast Asia, says IGU

(EnergyAsia, April 17 2012, Tuesday) — Southeast Asia will be an attractive area for gas activity amid growing demand for energy in the region, according to the International Gas Union (IGU).

Globalenergy demand is expected to increase in tandem with growing population, economic expansion, individual’s prosperity and urbanisation. It is projected that the world will consume 35% to 40% more energy by 2030 than in 2005. Two-thirds of this future energy demand will come from emerging markets like China and India.

While the Asia Pacific region is the world’s second largest LNG exporter, it is also a fast-growing consumer with an annual average growth rate of 13.4% between 2000 and 2011.

China and India collectively accounted for about 25% of the region’s aggregate gas demand since 2008. The region’s smaller countries such as Pakistan, Bangladesh, Thailand, Vietnam, Singapore, Indonesia and Malaysia are also raising their gas demand.

“Active regasification projects in Southeast Asia are expected to set the stage for future economic developments in the region by averting gas shortages and enhancing long-term supply security,” said Abdul Rahim Hashim, President of the International Gas Union (IGU).

He said Southeast Asia will build up a total of 37 million tonnes/year of regasification capacity between 2011 and 2017: Thailand (2011), Malaysia (2012), Singapore (2013), Indonesia (2014), and Vietnam (2017).

Tight market ahead

China and India have considerably increased their LNG imports in recent years and together accounted for 15.2% of the total LNG imports in Asia in 2010. India and China are  the biggest LNG buyers from Qatar and Australia.

The Fukushima nuclear disaster of March 2011 contributed to a substantial spike in oil, gas and coal demand across the Asia-Pacific region, and intensify competition for LNG supplies in the future.

IGU predicts that Southeast Asia’s leading economies, Indonesia, Thailand, Singapore, Malaysia and Vietnam will face tough competition for suppliers from Asia’s traditional LNG buyers, Japan, South Korea, Taiwan, China and India.

“Energy security has always and will remain as a strategic issue, against the backdrop of declining production and depleting reserves,” Dr Rahim said.

“It is imperative for ASEAN member countries to accelerate and embrace full gas market liberalisation. While subsidised gas prices continue to distort the market, and “artificially” boost higher demand, this is not sustainable in the long-term.”

As a result, Dr Rahim said Southeast Asian economies will have to pay more  for their gas supplies.

While, oil has taken centre stage for much of the 20th century, natural gas is starting to gain prominence in recent years.

Geopolitics and natural gas will be a one of the four daily themes in the upcoming 25th World Gas Conference will examine the interplay between economic and political factors in the development of natural gas resources.

Due to the global nature of the gas industry and of concerns for energy security, the IGU established a special task force to conduct in-depth research on the subject over the past three years.

The 25th World Gas Conference (WGC2012) will be held in Kuala Lumpur on June 4-8, 2012.

SOUTH KOREA: KOMIPO signs long-term agreement to puchase LNG from Vitol

(EnergyAsia, April 17 2012, Tuesday) — Swiss energy trader Vitol SA said it has signed a long-term agreement to supply Korea Midland Power (KOMIPO), a South Korean power company 400,000 tons of liquefied natural gas (LNG) a year for 10 years starting 2015.

The contracted volume is equal to about 17% of KOMIPO’s annual consumption volume based on 2011 figures.

Worth about US$3.4 billion on current prices, the contract for the direct import of LNG from an overseas supplier is the first of its kind signed by a Korean power company. Until now, Korea Gas Corporation has been the sole supplier of LNG for domestic public power companies.

COMPANY: Vitol takes 9.1% stake in Canada-listed African coal miner CIC Energy

(EnergyAsia, April 16 2012, Monday) — Swiss trading giant Vitol Group said its subsidiary, Vitol Energy (Bermuda) Ltd, has bought a 9.1% stake in Canada’s CIC Energy Corp, which owns and operates a coal mine in Botswana, for C$10 million. (US$1=C$0.99).Vitol said it bought a total of 5,263,158 CIC Energy common shares through a private…

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INDIA: BPCL to raise Kochi refinery’s capacity to 310,000 b/d by 2015

(EnergyAsia, April 16 2012, Monday) — India’s Bharat Petroleum Corp Ltd (BPCL) said it will be investing 142.25 billion rupees to expand as well as upgrade its 190,000 b/d Kochi oil refinery in the southwestern part of the country. (US$1=51 rupees).On completion by December 2015, the plant will have the capacity to refine 310,000 b/d…

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