SINGAPORE: Puma Energy to acquire Chevron Kuo Pte Ltd, owner of bitumen business in Vietnam

(EnergyAsia, July 23 2012, Monday) — Puma Energy, a Switzerland-based midstream and downstream oil company, has begun its expansion into Asia with the purchase of Chevron Kuo Pte Ltd, a Singapore entity which owns 70% of Chevron Bitumen Vietnam Limited (CBVL).

With a 35-member staff, CBVL imports, stores and distributes bitumen or asphalt for road building and infrastructure developments in Vietnam. The company owns and operates a terminal in Hai Phong port with wharf facilities and a 5,000-metric ton state-of-the-art bitumen storage terminal that supports its bitumen distribution business in the main urban centres of Hanoi and Ho Chi Minh City.
Following rapid growth across Africa and the Americas, Puma Energy said the acquisition marks Vietnam as the 32nd country that it is operating in. The company plans to beef up CBVL with the aim of growing its sale volumes through better regional logistics.

Pierre Eladari, Puma Energy’s CEO, described the acquisition as “the next step in our planned expansion in Asia as we become a global marketer of bitumen. Today, we operate over 100,000 tonnes of bitumen storage capacity, with plans to expand the footprint to over 200,000 tonnes within five years.”

Apart from operating a chain of bitumen terminals in Spain, Angola and Central America, Puma Energy owns and manages refineries, and a network of over 1,000 service stations around the world.

RENEWABLES: Applied Material’s international solar energy survey reveals consumer optimism and misperceptions

(EnergyAsia, July 23 2012, Monday) — Consumers in four major markets are optimistic about the future of solar power, but are not fully informed about the current cost and adoption rates of solar technology, according to the latest annual survey by Applied Materials Inc, a market leader in solar photovoltaic (PV) manufacturing equipment.

In its fourth annual survey expanded to cover consumers in China, India, Japan and the US, the Santa Barbara, California company found that the industry expects the cost of solar panels to drop below US$1 per watt, enabling grid parity, or solar energy power that is cost-competitive with traditional electricity prices, to be achieved by the end of the year. Last year, most had expected this to be achieved by 2020.

“Solar panels now cost less than US$1 per watt, which means more than 100 countries have achieved grid parity,” said Charlie Gay, president of Applied Materials’ Solar division.

“We have witnessed an explosion in global solar PV installations in the past year due to the dramatic and accelerated rate of cost reductions in the supply chain. This has resulted in significant decreases in end-market costs, and a continued focus on technology innovation will further drive down the total cost of solar electric power plants.”

The survey found that 55% of respondents recognise this shift and believe solar energy is less expensive than traditional energy sources such as coal.

About 68% of respondents in India believe solar power was less expensive while only 49% of Japanese thought so. Of the 35% of all respondents who believe solar power to be more expensive, 39% believe it will become equal to or less expensive than traditional power by the end of the decade.

The survey also found that nearly half of respondents believe that solar market growth will create jobs, and that Chinese and Indians support more aggressive solar energy adoption than current national goals.

About 46% of respondents believe the growth of the solar market would create jobs. The US is most optimistic with nearly six in 10 consumers (58%) expressing this view. China and India are nearly equal in second place in their estimation of job growth, at 49% and 48% respectively.

Consumers in Japan are the most cautious, with four in 10 believing that it will have no impact on the job market.

About a quarter of all surveyed think that it will reduce the number of jobs.

“More than 50% of the jobs in the global solar power industry are found after the solar panel leaves the factory such as construction teams, installers, sales people, designers, engineers, electricians, etc,” said Cathy Boone, senior director for Energy Policy and Market Development at Applied Materials.

“Any country, city or community has the potential to directly benefit from the growth in the solar power industry with on-the-ground jobs if they are willing to make a commitment to replacing fossil fuels with solar.”

Ketchum Global Research & Analytics and Ipsos conducted the Applied Materials Summer Solstice survey online between May 25 and June 7 2012.

Applied Materials did not state the number of people covered by the survey.

INDIA: Engineering companies award contracts for refining and petrochemical project expansions

(EnergyAsia, July 23 2012, Monday) — Two Indian companies, Reliance Industries Ltd (RIL) and Bharat Petroleum Corp Ltd (BPCL), recently awarded contracts to expand and upgrade their downstream oil and petrochemical plants.

In separate statements, French engineering giant Technip and US-based CB&I said they have secured contracts with privately-owned RIL to help build and integrate a giant petrochemical pl!nt with its oil refinery at Jamnagar city in Gujarat state, while Engineers India Ltd said it has been selected to expand BPCL’s refinery in Kochi.

While not disclosing the project’s value, Technip has claimed to have landed the contract for one of the world’s largest ethylene crackers.

The Paris-based company will provide a licence as well as supply basic engineering package, and engineering and procurement services for the refinery off-gas cracker (ROGC) plant. This contract is part of the expansion project being executed at RIL

INDIA: Consulting group calls on government to reduce economy’s high dependence on coal

(EnergyAsia, July 23 2012, Monday) — To enhance India’s energy security, the government must act now to increase the nation’s nuclear and renewable energy use while reducing the high dependence of the power industry on coal, said London, England-based consulting group GlobalData.

In a new report on India’s coal industry, GlobalData said the sector has been weakened by the dominance of state Coal India Limited (CIL) that, in turn, has hurt the economy. Coal is the fuel for more than 70% of India’s electricity output.

The report described as “desperate” the government’s attempts to order CIL, the country’s largest coal miner and supplier, to boost production and sign supply agreements with power utilities without paying attention to market conditions.

GlobalData said the government’s intervention for CIL to supply at least 80% of the coal needed by power companies will “not be enough to ease looming coal shortages” facing the country.

CIL has been told it will have to pay its utility customers a penalty equivalent to 0.01% of any supply shortfall.

GlobalData said this will not be sufficient to “motivate” CIL as the penalty will only apply three years after the contracts are signed, and will therefore have no impact on the country’s short-term supply situation.

The report also noted India’s vulnerability in depending on Indonesia for half its coal imports. India faces the dual threats of higher prices and reduced supplies from Indonesia in light of Jakarta’s attempts to raise prices and tighten controls over foreign ownership of its coal mines. Indian power generating companies which recently acquired stakes in Indonesian mines want New Delhi to intervene on their behalf.

Another source of concern is Australia, which accounts for 5% of India’s coal imports. Canberra recently issued a draft mining law to impose tax on coal and iron ore projects from next year, said GlobalData.

In addition to seeking New Delhi’s intervention, India’s Association of Power Producers (APP), a group of 13 private companies, wants the Power Ministry to set up a committee to find “appropriate solutions” to deal with the rising cost of imported coal.

GlobalData wants the government to focus on developing nuclear and renewable energy sources as a long-term solution.

In its paper on the country’s 12th Five Year Plan from 2012 to 2017, the state Planning Commission discussed the possibility of expanding the role of alternative energy sources to limit the country’s carbon footprint, achieve energy security, and diversify its energy mix.

India is actively seeking to develop nuclear power, which is attractive in environmentally conscious countries desiring energy security where demand for energy is growing at a fast pace.

According to GlobalData, India has 20 operating commercial reactors and is building another five that will boost the nation’s total nuclear capacity to 19,350 MW by 2020.

GlobalData predicts that over the next two decades, India’s nuclear energy sector and related trade will be worth about US$100 billion, in the process, helping the country achieve energy security while boosting the economy and meet its environmental goals of producing and consuming clean energy.

SINGAPORE: Panasonic established first energy solutions development centre in the Asia Pacific region

(EnergyAsia, July 20 2012, Friday) — Panasonic Asia Pacific, a unit of the Japanese electronic firm, has established its first Energy Solutions Development Center in the Asia Pacific region in Singapore.

At the recent World Cities Summit in Singapore, Panasonic said it will be investing S$10.2 million in the centre over the next two years to develop energy solutions which the company hopes to commercialise for the regional and global markets.

The centre will initially be supported by 22 R&D engineers, including experienced energy solutions experts from Japan.

The Panasonic Energy Solutions Development Center Singapore (PESDCSG), a division of Panasonic Asia Pacific, will focus on proposing, designing and integrating energy systems; developing an intellectual property strategy to facilitate commercialisation; and providing technical support on test-bed projects in collaboration with partners.

Over the next two years, the centre will support the total energy solutions project for a residential building at Punggol Eco Town in eastern Singapore. Started last August, Panasonic is collaborating with several government agencies including the Housing & Development Board (HDB), Energy Market Authority (EMA) and the Singapore Economic Development Board (EDB).

Having installed rooftop solar panels, Panasonic is carrying out laboratory tests of the panels and lithium-ion battery systems at Nanyang Technological University.

Once the system is installed in the HDB block, it will power the water pumps, lifts and lightings to achieve zero emission for the common area.

Panasonic said its home energy management system and air-conditioners with demand response functions, which will be linked to EMA’s smart meters installed under the pilot Intelligent Energy System (IES) project, will be installed in 10 selected households by the end of the year.

If the results prove positive, Panasonic and its partnering local authorities will explore wider implementation in Singapore.

Yorihisa Shiokawa, managing director for Panasonic Asia Pacific, said:

“The Center is an important strategic move for Panasonic in line with our new business focus of becoming a more solutions and systems business-oriented company with a wider global business outlook focusing on green innovation. Having an energy solutions development center in Singapore will enable us to develop smart and sustainable solutions for a wider market beyond Japan.”

Julian Ho, assistant managing director at the Singapore Economic Development Board (EDB), said:

“We are glad that Panasonic has chosen Singapore to be a key innovation hub and reference site for their new energy solutions business. This project is well aligned with Singapore’s intent to be a “living laboratory”, where companies can co-create, demonstrate and commercialise innovative system solutions in our real-life urbanised environment, in partnership with our government agencies.”

Johnny Wong, Group Director at the HDB Building Research Institute, said:

“As a developing town, Punggol Eco Town serves as a “living laboratory” that presents numerous opportunities for HDB to collaborate and carry out test-bedding of emerging green urban solutions with industry partners. We are glad to have Panasonic onboard to augment HDB’s efforts in driving sustainable development in Punggol, and creating a green living environment for our residents.”

Yasuyuki Shintani, general manager for the Energy Solutions Development Center, said:

“Singapore is a high density tropical urban city, with conditions similar to other regional cities. This environment with Singapore’s excellent infrastructure makes Singapore an ideal “living lab” to test-bed our energy solutions.

We look forward to partner local public agencies and universities to research, develop and test-bed new energy solutions to realise a more energy efficient future.

MIDDLE EAST: GE to boost Iraqi power output, marked first anniversary of Saudi energy manufacturing technology centre

(EnergyAsia, July 20 2012, Friday) — US conglomerate GE said it is working to boost electricity output in Iraq’s Kurdistan region as well as localise operations at its one-year-old energy manufacturing technology centre in Saudi Arabia.

The NYSE-listed company said it has secured a contract from independent power producer Mass Global Investment Company to provide and install steam turbine technology to increase the efficiency and the output of the Erbil Power Plant in Iraq’s Kurdistan region. In operation since late 2008, the Erbil plant plays a vital role in meeting the growing power needs of the oil-rich region.

GE said it will supply two steam turbines that will be used to convert the Erbil plant from simple to combined-cycle operation, boosting plant output by 500 megawatts, enough additional electricity to serve 100,000 households.

When completed in the second half of 2014, the combined-cycle plant will increase thermal efficiency to more than 48%, making Erbil among the most efficient power plants in Iraq. The GE C-7 steam turbines will join eight GE Frame 9E gas turbines already operating at the site.

ENKA Construction & Industry Co (ENKA), the Turkish engineering, procurement and construction company, has been selected to build the new combined-cycle power plant. 

MassGlobal chairman Ahmad Ismail said:

“Converting our Erbil facility to combined-cycle service supports the Kurdistan Regional Government’s policy to increase the thermal efficiency of its power generation facilities. This new agreement builds on our growing relationship with GE, a global technology leader, whose proven and reliable advanced energy technology has been employed in our gas power facilities since 2006.”
Joseph Anis, GE Energy’s president and CEO for the Middle East, said the latest agreement “builds on our growing relationship with Mass Global, supporting its efforts to enable a reliable and efficient supply of electricity needed to fuel the growth and development of the Kurdistan region. This agreement also reflects GE’s ongoing commitment to support Iraq in boosting its power generation and infrastructure growth.”
In Saudi Arabia, GE recently celebrated the first anniversary of its one-billion-riyal Energy Manufacturing Technology Center in the city of Dammam by achieving a series of firsts in technology, customer services and the development of local talent. (US$1=3.75 riyal).

GE said the center achieved key milestones in the delivery of service technology to Saudi and global customers, enabling enhanced operational efficiencies along the entire energy value chain, while continuing to drive the development of local human resources.

In its first year, the center serviced 450 gas turbines that power the kingdom, with GE today supporting the generation of half of its electricity through over 500 turbines installed at various sites.

GE said the center also extended service to more than 50 key customers in Saudi Arabia and across the Middle East, Africa and Europe, underling its competencies to help local and global customers achieve operational efficiencies with advanced and localised technology and services.

The center is employing about 400 technologists and training another 100 under the Saudi GE Joint Technical Program (JTP). Participants are being trained in key areas of maintenance and repair of gas turbines, electrical motors and generators that are critical to the efficient generation of electricity in the kingdom. More than 60% of the center’s employees are Saudi nationals.

A joint venture with Ali A. Tamimi Co, the center includes a plant to manufacture high technology equipment for the power, water and oil and gas industries; a service and repair centre for advanced turbine equipment; and a training facility that offers the latest technology and managerial courses for college students, field engineers and other power industry professionals throughout the region.

Recently, GE signed another strategic partnership agreement with TVTC to annually train 150 Saudi technical graduates in the center.

“These achievements are in line with the kingdom’s Vision 2020 goals of promoting localisation and empowering national talent towards a knowledge-based economy,” the company said.

Joseph Anis, President and CEO for GE Energy in the Middle East said:

“Through the center, GE is proud to be serving the technology and service needs of its long-term customers including Saudi Electricity Company, Saudi Aramco, Marafiq and SABIC.  We are also proud of the center’s focus on technical talent development to support the kingdom’s growing energy infrastructure and further establish the kingdom as a technology hub for the global energy industry.”


CHINA: Five-year shale gas development plan is “overly optimistic”, declares GlobalData

(EnergyAsia, July 20 2012, Friday) — Citing the country’s geological complexities, UK-based consulting group GlobalData has declared China’s plans to develop and produce shale gas as being “overly optimistic”.

In a new report, GlobalData said the industry will be challenged by the difficult geology of China’s shale gas formation, water shortages, insufficient pipeline infrastructure, state control over natural gas prices, and environmental issues despite the government’s extensive plans to support and encourage the sector’s development.

According to a March 1 report by the Ministry of Land and Resources, China has 134.4 trillion cubic metres (tcm) of onshore shale gas reserves and 25.1 tcm of exploitable shale gas reserves.

In its five-year shale gas development plan to 2015, released on March 16, 2012, the government has set a target for the industry to produce 6.5 billion cubic meters (bcm) of shale gas a year and an increase in China’s shale gas reserves. It also sets targets for an increase in local shale expertise and the development of technologies, as well as the development of a regulatory framework.

The government has promised to support the research and development (R&D) of shale gas technology, accelerate the process permitting investors to develop the country’s shale gas reserves, and implement a contract management system to control and monitor industry activities.

China will also consider introducing subsidies for shale gas projects as well as assist companies with obtaining a waiver or reduction of their license fees, priority for land use permits, and exemption of custom duties for the import of equipment and technologies unavailable in the country.

Essentially, the government aims to provide a supportive environment for huge shale gas development.

The construction of pipelines will be encouraged at shale gas reserves that are sited near existing gas pipeline networks, while the construction of small-scale liquefied natural gas (LNG) and compressed natural gas (CNG) facilities will be encouraged at shale gas reserves that are located far away from existing pipelines.

GlobalData cautioned that the development of the domestic pipeline network will take time and money, and therefore is expected to slow the pace of shale gas development.

“China aims to achieve a commercial level of shale gas production which has so far only been achieved in North America. However, Chinese shale gas companies cannot use the high performing drilling technologies used to extract shale gas in the US, as further research is needed to adapt US drilling methods to China’s very different geology,” said GlobalData.

Shale gas development also requires Chinese authorities to address the environmental issues associated with this industry. Water shortages are a major issue in China while hydraulic fracturing technology requires vast quantities of water, and has been reported tokcontaminate waterways with corrosive and toxic pollutant hydrogen sulphide, which Chinese shale gas contains in abundance.

Sophisticated drilling and gas purifying technologies, and strict emission standards would be needed to save China from the corrosion of drilling equipment and air pollution.

Lastly, while the government said it wants to encourage international co-operation and investment, it retains control over natural gas prices by keeping them artificially low.

Investors will have little incentive to develop the country’s shale reserves given the huge capital requirement and high risk.

CHINA: Gas imports and domestic production will rise to meet ballooning demand, predicts GlobalData

(EnergyAsia, July 20 2012, Friday) — With its natural gas consumption set to almost treble over the next eight years, China will boost imports as well as domestic production, predicts UK-based consulting firm GlobalData.

According to its latest research, China’s natural gas consumption surged from 24.5 billion cubic metres (bcm) in 2000 to 131.7 bcm last year. This trend will continue, pushing Chinese gas consumption to 375 bcm by 2020 as its government is determined to sharply boost the share of natural gas in the national energy mix.

China has substantial natural gas reserves of its own, but demand has already outstripped production, making imports essential, said GlobalData.

Last year, China consumed 131.7 bcm of natural gas, but it only produced 100.9 bcm, and the disparity will widen.

The country’s leading energy companies including China Petrochemical Corporation and its subsidiary China Petroleum & Chemical Corporation (Sinopec), CNPC and its subsidiary PetroChina Company Limited, and China National Offshore Oil Corporation (CNOOC) are actively involved in acquiring overseas oil and gas assets to expand their natural gas reserves.

China will also step up its import of liquefied natural gas (LNG) as part of its long-term energy strategy.

In 1998, the government approved the country’s first LNG import terminal in Guangdong province to meet energy demand in the country’s booming south-eastern coastal region.

By the end of last year, it had established five LNG terminals with a total regasification capacity of one trillion cubic feet (tcf). This is expected to rise to 2.8 tcf by the end of 2016 for an annual average growth rate (AAGR) of 19.7% as a result of the completion of another 11 terminals.

In March this year, the government announced a new energy plan to produce 6.5 bcm of natural gas from shale reserves by 2015.

Last December, the government set a goal for the industry to produce 30 bcm of coalbed methane (CBM) by 2015, with 16 bcm from ground-based projects and the remaining 14 bcm from coal mine projects.


CHINA: Wood Mackenzie says shale gas will not fully meet demand, imports needed through 2030

(EnergyAsia, July 19 2012, Thursday) — Gas processed from coal and imports from other countries will help China meet its rising energy demand through 2030 as its domestic shale production will not be sufficient, said Wood Mackenzie analyst Gavin Thompson. Speaking at last month’s World Gas Conference (WGC) in Malaysia, he predicted that China’s natural…

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INDIA: Slowing economy faces risks from inflation, volatile oil prices, global economic crisis

(EnergyAsia, July 19 2012, Thursday) — Apart from growing at a projected slower rate of 7% this and next year, the Indian economy will face rising risks from its slow reform efforts, high oil prices, volatile inflation and the global economic crisis, said the business community and the International Monetary Fund (IMF).In a recent report…

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KAZAKHSTAN: Chinese state bank to lend US$1.13 billion for Atyrau refinery upgrade

(EnergyAsia, July 19 2012, Thursday) — China’s Export-Import Bank has agreed to lend US$1.13 billion of the US$1.68 billion needed by Kazakhstan for the upgrade of its largest and oldest oil refinery in Atyrau province.With the 13.5-year loan, state oil and gas firm KazMunaiGas will add an 48,000 b/d unit to enable the 100,000 b/d…

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RUSSIA: GE, Rosneft sign MOU to jointly develop upstream opportunities

(EnergyAsia, July 19 2012, Thursday) — US conglomerate GE said it and Russia’s oil and gas giant Rosneft have signed a memorandum of understanding (MOU) that lays the foundation for the two companies to jointly evaluate and develop oil and gas exploration and production opportunities in the Russian Federation.

Signed by John Krenicki, GE vice chairman and president and CEO of GE Energy, and Igor Sechin, president of Rosneft, the agreement will focus on leveraging GE Oil & Gas technologies to help Rosneft improve efficiency and yields in its oil and gas exploration and recovery operations, and jointly developing, manufacturing and selling equipment for use in Russia’s oil and gas industry.

The two companies will form a joint working group to identify opportunities for providing equipment for Arctic offshore field development, gas monetisation technologies and enhanced oil recovery and difficult reserve development.

Mr Krenicki said: “The MOU underscores GE’s interest in discussing, jointly with the Russian government and Russian oil and gas companies, the technology needs of the Russian oil and gas industry today and in the future, identifying key areas of cooperation to create value for the Russian Federation and GE.

“GE Oil & Gas has developed a comprehensive portfolio that we believe can meet the challenges of the unique Russian oil and gas environment.”

With a history of partnering with major oil and gas companies to provide package solutions, GE Oil & Gas has developed technology for increasing gas monetisation and recovery efficiency as well as developing fields in the most extreme conditions.

GE Oil & Gas, headquartered in Florence, Italy, employs 33,000 people and has operations in 130 countries worldwide, generating more than US$14 billion of annual revenue. GE sells advanced technology equipment and services for all segments of the offshore and onshore oil and gas industry, from subsea, drilling and production, LNG, pipelines and storage to industrial power generation, refining and petrochemicals.

MARKETS: Wood Mackenzie analyst Leitch on the short-term outlook for refining margins in Asia

(EnergyAsia, July 18 2012, Wednesday) — The following is an edited transcript of an updated podcast by Jonathan Leitch, Downstream Senior Analyst at consultant Wood Mackenzie.

In the update below, Mr Leitch examines what is driving refining margins in the short-to-medium term, with margins recovering in June after declining in May. WoodMackenzie provides monthly product supply demand balances for the main product markets and monthly crude and product prices for the world’s main refining centres.

In June 2012, Brent crude prices fell by $15 a barrel, contributing to very strong refinery margins in Europe and the US as product prices tend to lag movements in crude prices.

But despite the large fall in crude prices, our benchmark margins for refining Dubai in Singapore fell in June. This was partly due to a narrower Brent-Dubai differential which indicates that Asian refiners were paying more for their crude relative to European refiners.

The Atlantic Basin gasoline market was very strong due low stocks in the US and low crude runs in Europe. However, the gasoline market in Singapore was not as strong and gasoline prices in Singapore moved to a wide discount to prices in Europe and the US. Crack spreads for naphtha also fell sharply in Singapore.

Middle distillate cracks were slightly weaker but fuel oil cracks narrowed were at very strong levels.

Our assessment is that crude runs in Asia increased in June as refinery maintenance decreased seasonally, helping to boost the supply of products. But, there was little opportunity to export products to Europe on account of its weak demand caused by the state of its economy.

Our calculated margins for light sweet Tapis crude in Singapore increased in June due to its narrower price premiums over Brent. Light sweet crude supply is increasing and there was an overhang of uncommitted West African crude cargoes which weighed on light sweet crude premiums. Hydroskimming margins were supported by strong fuel oil.

We expect weaker Tapis margins in July and August as its premium increases from the clearing of the overhang of cargoes in West Africa. Brent crude is expected to be supported by lower North Sea production due to maintenance and strikes.

Dubai margins are expected to be little changed in July, remaining relatively weak as crude runs increase further. Dubai margins are forecast to be at or below the seasonal average for the remainder of 2012 due to a combination of high runs, weak demand globally and narrower discounts for Dubai versus Brent.

We forecast crack spreads for gasoline to remain relatively weak due to the restart of refineries in Vietnam and Indonesia. However, some support will come from the partial shutdown of Shell’s Singapore refinery and the shutdown of Thailand’s Bangchak refinery.

We forecast rising exports from Asia to balance stocks. However, they will face competition from high crude runs in the US and higher runs in Europe.

Naphtha crack spreads will be supported by increased petrochemical production as steam crackers return from maintenance and new capacity comes on stream.

We forecast that middle distillate crack spreads will weaken in July due to rising production in Asia and weak demand in Europe. However, the Middle East will provide some support as a result of extra demand for air-conditioning and during Ramadan.

Fuel oil crack spreads are forecast to remain strong in July helped by strong demand from utilities. Lower prices are stimulating bunker demand to provide price support. This will be somewhat offset by high fuel oil stockpiles in Singapore and Rotterdam. Imports from North West Europe are likely to increase in August to weaken fuel oil cracks.

INDONESIA: Economy to grow by 6.1% this year despite deteriorating external economic conditions, says IMF

(EnergyAsia, July 18 2012, Wednesday) — Indonesia’s economy will again perform well this year, growing by 6.1% to follow on last year’s 6.5% expansion, said the International Monetary Fund (IMF).

An IMF study team which visited the country from June 25 to July 6 said Indonesia would have to watch out for knock-on effects from the “renewed weakness” in the global economic environment.

It noted that Indonesia’s external current account has turned from a surplus to a small deficit recently as exports fell by more than imports, reflecting a combination of the deteriorating external environment and continued strong domestic demand.

Easy domestic monetary conditions, combined with the weaker current account, are contributing to pressure on the local currency during bouts of global risk aversion, said a statement issued by Milan Zavadjil, the IMF’s senior resident representative.

However, the IMF team said Indonesia has sufficient foreign reserves, while the central bank’s policy mix of letting the exchange rate adjust and increased supply of foreign exchange is softening the impact.

Led by its Asia Pacific division chief, Sanjaya Panth, the IMF met with the government leaders and Bank Indonesia to discuss global and local economic developments as well as public and private representatives.

Of last year’s economic performance, the IMF said the 6.5% rate of growth was the highest in over a decade.

“Inflation is currently within the central bank’s target range, credit growth is robust, and measures of business and consumer confidence remain strong,” the agency said.

“Growth is expected to continue to ease modestly in the near term. The current account should end the year with a deficit of about 1% of GDP, which is fully consistent with Indonesia moving towards its medium-term equilibrium as suggested by fundamentals.

“A somewhat widened budget deficit is appropriately helping offset the impact on growth of slowing external demand. On this basis, GDP growth is projected at 6.1% in 2012 but should pick up again subsequently.

“Annual inflation bottomed out at 3.6% in January but has since edged up to 4.5% and is expected to reach 5 percent by year-end, still within the authorities’ target range.

“The external environment continues to pose risks to this outlook. Risks include an intensification of the Euro area problems, as well as a sharper-than-expected slowdown in China.

“Exchange rate flexibility, combined with interventions to smooth temporary sharp mismatches in supply and demand of foreign exchange, is key to helping buffer the economy from shocks.”

MARKETS: Weighed down by Iran, OPEC’s June crude oil output slipped to 31.72 million b/d, says Platts

(EnergyAsia, July 18 2012, Wednesday) — Despite Saudi Arabia raising its production, the Organisation of the Petroleum Exporting Countries’ (OPEC) crude output dipped by 30,000 b/d to 31.72 million b/d in June from 31.75 million b/d in May, said energy media Platts. The decline in Iranian production, as a result of tightening economic sanctions imposed…

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AUSTRALIA: Total raised stake in Ichthys LNG project to 30%, APIA calls on young professionals to consider long-term stay in NT

australia total raised stake in ichthys lng project to 30 apia calls on young professionals to consider long-term stay in nt

(EnergyAsia, July 18 2012, Wednesday) — French oil and gas major Total said it has boosted its 24% stake in the Ichthys liquefied natural gas (LNG) project in Australia’s Northern Territory to 30% after acquiring shares from operator and majority Japanese partner INPEX.

Total said the acquisition does not affect the project’s offtake agreements as customers have already committed to its entire annual 8.4 million tons of LNG production for 15 years.

Total itself has committed to an annual purchase of 900,000 tons of the output through its gas trading subsidiary.

The transaction remains subject to approval by the Australian authorities.

Yves-Louis Darricarrère, President of Total Exploration & Production, said:

“We are delighted to have increased our stake which demonstrates our confidence in this world class Ichthys LNG project. This further enhances our presence in Australia and our position as supplier in the Asian LNG market, the fastest growing market offering high value prices linked to oil. This move also consolidates Total’s strategy as a leading LNG player.”

Ichthys became the world’s largest LNG project in January 2012 when Total and INPEX announced they had approved the US$34 billion final investment decision.

The partners will develop approximately three billion barrels oil equivalent of hydrocarbon reserves including around 500 million barrels of condensate. Construction started on May 18 with production expected to begin by end-2016.

The project consists of the development of the Ichthys gas and condensate field in 260 metres of water depth off the coast of North West Australia and the construction of an 889-km gas transmission pipeline and an onshore 8.4-million tons/year LNG plant near Darwin city in the Northern Territory.

With Darwin in the midst of a long-term economic boom, the Australian Pipeline Industry Association has called on young professionals to consider committing their long-term careers to energy industry in the state of Northern Territory.

The state is fast emerging as a regional energy hub linking Asia with the huge resources available in northern Australia.

At an industry dinner in Darwin last week, APIA chief executive, Cheryl Cartwright, said:

“We now have a new and expanding LNG production centre across the harbour, there are emerging offshore oil and gas projects in our northern waters which will require Darwin as their base, and we have Central Australia attracting new exploration and development impetus in oil, gas, pipeline and other energy infrastructure proposals.

“Darwin offers tremendous opportunities for young people in the energy industries, particularly the gas industry, and APIA provides access to information about those opportunities through its Young Peoples Forum.

“Energy is increasingly at the centre of major political, resources, investment and infrastructure decisions in the Territory and that will create tremendous opportunities for our young professionals.

“They will help to shape milestone decisions covering not just energy project initiatives but key issues such as environmental protection and sustainable social engagement, as well as the strength, calibre and intent of business partnerships with our energy neighbours to the near north.”

ASIA: Coal’s growth checked by resource nationalism, environmental opposition, weak demand, rising cost

(EnergyAsia, July 17 2012, Tuesday) — Resource nationalism, environmental opposition, slowing demand and rising cost may have effectively put an end to the current cycle of coal’s runaway growth in Asia.Faced with the same challenges of slowing external demand and rising cost, the region’s three major coal producing countries, Australia, Indonesia and Mongolia, are also…

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AUSTRALIA: AWE Energy slams partner Origin over BassGas project cost over-run

(EnergyAsia, July 17 2012, Tuesday) — Relations between the two Australian partners developing natural gas reserves in the Bass Strait have soured after the latest cost blow-out means the project could exceed the original A$360 million budget by over 60%. (US$1=A$0.98).

AWE Energy, with a 46.25% stake, has slammed operator and 42.5% owner Origin Energy in the increasingly troubled BassGas joint venture for the project’s second A$100 million cost blowout in three months. Japanese trading house Toyota Tsusho owns the remaining 11.25%.

The joint venture is enhancing the Yolla gas field, off Victoria state with the aim of boosting its production to supply the increasingly tight southeastern Australian market.

The Australian partners reported that Origin has had to revise its development plan after failing to install a compression module as planned. As part of the upgrade, Yolla was to have been converted to a manned platform equipped with an export compression and condensate pumping modules.

Blaming stormy weather conditions in the Bass Strait for holding up the upgrading work, Origin’s upstream CEO Paul Zealand said Yolla will return to its “usual free flow production mode.”

AWE Energy estimates that the change in project plan will raise the project budget by between A$90 and A$120 million, lifting the total budget to A$550 to A$580 million.

In criticising Origin Energy’s “extremely disappointing” performance, AWE’s managing director, Bruce Clement, said:

“The additional capital costs and project delays reported by the operator are extremely disappointing and AWE is looking at opportunities for reducing the impact of these cost overruns.

“In light of the history of the project and this schedule delay and budget increase, AWE continues to be very disappointed with the project delivery performance by the operator.

“However, despite these issues, which have impacted AWE in the short term, we remain confident in the future value and potential of the asset.

“With additional potential oil reserves in the Upper EVCM and strengthening East Coast gas markets, we are confident that BassGas will deliver significant long term value to AWE shareholders.”

Disputing AWE’s estimate, Origin said the project cost would rise by A$30 million to A$490 million.

SAUDI ARABIA: Bahri to acquire Aramco’s Vela to form national oil shipping firm

(EnergyAsia, July 17 2012, Tuesday) — Saudi Arabia’s state oil giant Aramco said it is merging its Vela International Marine subsidiary with another Saudi firm Bahri to create a large and more diversified national shipping company, and one of the world’s largest oil carriers.

Under a non-binding memorandum of understanding, Bahri, or National Shipping Company of Saudi Arabia, will pay Vela 4.875 billion riyal comprising 3.123 billion in cash and the rest in stocks to merge their fleets and operations. (US$1=3.75 riyal).

The expanded Bahri will own 77 vessels including 32 Very Large Crude Carriers (VLCCs), 20 chemical tankers, five product tankers, four roll-on roll-offs (ROROs) vessels and another 16 vessels under-construction.

Aramco said Bahri would become the world’s fourth-largest VLCC owner, enhancing Saudi Arabia’s ability to meet the maritime transport needs of its expanding downstream businesses while continuing to reliably and efficiently serve existing customers.

When the merger is completed sometime next year, Bahri would be the exclusive provider of VLCC crude oil shipping services to Saudi Aramco under a long-term agreement and would take responsibility for maintaining reliable crude transportation at all times. The two companies will explore ways to expand their cooperation in the maritime sector.

Bahri has appointed JP Morgan Capital while Saudi Aramco has appointed HSBC Saudi Arabia as their respective financial advisors for the transaction.

Bahri chairman Abdullah Al-Rubaian and Saudi Aramco senior vice president Khalid G. Al-Buainain, who also serves as chairman of Vela, signed the agreement in Dhahran last month.

“By creating a new global leader in shipping, Saudi Aramco hopes to build a strong company that can leverage its capabilities in the shipping sector and would meet its growing business portfolio. This company in turn will serve as a national champion that will promote the development of a thriving national maritime industry that creates jobs and other long-term opportunities for the kingdom,” said Saudi Aramco President and CEO Khalid Al-Falih.

“This is a transformational step for Bahri to strengthen its strategic partnership with Saudi Aramco and offers expanded future growth opportunities to create long-term value for our shareholders,” said Bahri chairman Abdullah Al-Rubaian.

VIETNAM: GE Technology to help double capacity of national transmission line

(EnergyAsia, July 17 2012, Tuesday) — US conglomerate GE said it has secured a US$16.5 million contract to supply equipment to the Power Transmission Company No. 4 (PTC4), a subsidiary of Vietnam’s National Power Transmission Corporation (NPT), to double the country’s power capacity.

GE said it will supply six series capacitor banks and provide on-site supervision for installation testing and commissioning as part of the upgrade of the 500-kV Pleiku–Phu Lam transmission line to increase power capacity from 1,000 amps to 2,000 amps by late 2013.

In strengthening Vietnam’s national backbone transmission system, GE said the project will utilise its latest fuseless technology to double the capacity of the existing transmission line and installed infrastructure.

For the first time, GE will partner with a local corporation, 3C Company, to provide local content for the project, which will receive financing from the US Export-Import Bank.

Shipping and installation of the capacitors at the three locations will begin in the second quarter of 2013, with commercial operation set to begin in the third quarter of the year.

Dang Phan Tuong, chairman of NPT’s board, said:

“The 500-kV Pleiku-Phu Lam transmission line, which is 500 km in length, is the backbone of Vietnam’s North-to-South power transmission. Increasing the capacity of the line to transmit power across the country more efficiently will enable EVN to mobilise generation sources to more effectively meet power demand, which varies from region to region.

“When it comes into operation in 2013, the project is expected to supply approximately 800 megawatts to the Southern area.”

GE Energy Asia Pacific President Kenji Uenishi said: “We are delighted with this opportunity to assist Vietnam meet its power needs. A healthy power infrastructure is vital to supporting economic growth. GE’s advanced equipment, services and partnership with local corporations will enable Vietnam to manage power needs more efficiently in line with efforts to enhance current infrastructure.”

US Secretary of State Hillary Rodham Clinton witnessed the signing of the contract in Hanoi last week.

GE signed a memorandum of understanding in March 2011 with NPT for both companies to work together in an effort to increase Vietnam’s power transmission efficiency and expertise, while reducing the risk of power shortages.

INDONESIA: Confusion reigns over plans to restrict coal exports as miners fear more policy uncertainties

(EnergyAsia, July 16 2012, Monday) — Indonesia has written a Balinese ‘wayang kulit’ plot for its coal industry, leaving both investors and domestic consumers confused and deeply anxious over future policies governing export plans and supply availability.After months of well-founded rumours that the government was planning to impose a punitive tax on coal exports, Energy…

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SINGAPORE: ExxonMobil-chartered tanker makes first commercial bunker delivery using mass flow metering system

(EnergyAsia, July 16 2012, Monday) — A tanker, owned by Hong Lam Marine Pte Ltd and chartered by an ExxonMobil subsidiary, has become the first in Singapore to use an officially-approved mass flow metering system for bunker fuel transfers.

The custody transfer between the bunker tanker MT Emissary and Kota Layang on July 11 took place slightly over a month after the system had been approved by the Maritime and Port Authority of Singapore (MPA) on June 1. The Kota Layang is operated by one of Asia’s largest ship-owners, Pacific International Lines (PIL).

According to the MPA, ExxonMobil Marine Fuels (EMMF) has been actively involved in a working group comprising industry stakeholders, led by MPA and SPRING Singapore, to develop and validate the use of a reliable and accurate system for mass flow meters in bunkering operations in Singapore.

Prior to the custody transfer, the mass flow meter was verified and sealed by the Weights and Measures Office (WMO) under SPRING Singapore.

Working in collaboration with industry and technical experts, EMMF, Hong Lam Marine Pte Ltd, MPA and SPRING Singapore developed the mass flow metering system and procedures for bunker deliveries by MT Emissary. Several trials were successfully carried out on the tanker to validate the performance and ensure the integrity of the system before it was approved by the MPA.

Parry Oei, MPA’s Director for Port Services, said:

“The transfer of bunkers using the mass flow metering system as another official custody measurement of bunker quantity is a significant milestone for the bunkering industry in Singapore. As the world’s largest bunkering port, Singapore sees more than 40 million tonnes in bunker sales each year.

“It is important for us to leverage on technology to enhance the efficiency and transparency of the bunker delivery process. We have set aside S$1 million from the Maritime Innovation and Technology Fund to support further research, development and test-bedding of mass flow meters for bunkering applications.” (US$1=S$1.25).

Seah Khen Hee, the key convenor of the working group, said: “The activities of the group, together with MPA, SPRING and in partnership with ExxonMobil, support the validation and endorsement of a mass metering option for the bunker industry in Singapore with tangible benefits for both deliverer and customer in the form of a secure and accurate system, enhanced transparency, improved efficiency and cost effectiveness.”

EMMF’s Asia Pacific general manager, Damon Davis, said: “We are proud to be the first supplier in Singapore to launch a mass flow metering system that has been approved by MPA for the commercial transfer of bunker fuel.

“Technology, coupled with expertise and knowledge of the bunkering process, has allowed us to elevate measurement integrity to a new level. ExxonMobil is constantly evolving to better serve our customers and we believe that the mass flow metering solution will further increase the efficiency and transparency of the bunkering process.”

EMMF, a global business in the ExxonMobil Fuels, Lubricants & Specialties Marketing Company, is a leading supplier of marine fuels to a range of passenger and cargo vessels including container, dry bulk, cruise ships, ferries, tugboats, tankers and fishing vessels.

The MPA was established in February 1996 to develop Singapore as a premier global hub port and international maritime centre, and to advance and safeguard the nation’s strategic maritime interests.

SPRING Singapore is an agency under the Ministry of Trade and Industry responsible for helping Singapore enterprises grow and building trust in Singapore products and services.


SINGAPORE: Strategic Petroleum claims launch of world’s first commercially viable multi-feed gasifying system

(EnergyAsia, July 16 2012, Monday) — Singapore-based Strategic Petroleum has launched what it claims to be the world’s first commercially viable system that simultaneously converts different types of waste-material feedstock into clean energy and water.

Using a proprietary molten metal gasification process, the company said its STX MultiFEEDTM system turns low-rank coal, biomass, landfill waste, shale oil, wood chips and rubber tires into synthesis gas (syngas) that can be used to generate electricity or converted into synthetic diesel.

Strategic Petroleum said the system is capable of treating and converting hazardous waste by-products such as biomedical waste, toxic materials and even radioactive waste into safe and stable granulated slag. Slag is a glass-like substance, another by-product of the process.

Feedstock material is fed into a furnace heated by a molten iron core, with temperatures within the furnace reaching 1,500 Celcius. At 800C, the resulting syngas, comprising carbon monoxide, carbon dioxide and hydrogen, is siphoned off for downstream application as it is a flammable, recyclable and an environmentally friendly source of energy.

According to Strategic Petroleum, an independent third party study commissioned in 2012 using industry recognised ANSYS systems engineering simulation has validated STX MultiFEEDTM with a machine safety factor between 5 to 7.5.

This exceeds the known industry benchmarks of 3 to 4, making STX MultiFEEDTM suitable for deployment in the major markets of the US and European Union.

The system has been designed to be highly portable and scalable to meet different client needs.

STX MultiFEEDTM is built into the standard 40-ft shipping containers, allowing it to be loaded and unloaded, stacked and transported efficiently to wherever it is needed.

The containers are mounted one on top of another and multiple containers can be fitted to handle larger waste loads if required, making it easy to construct the system.

Facilities in remote and hard-to-reach locations including offshore oil rigs, tanker ships, marine-based facilities can benefit from the system.

STX MultiFEEDTM is protected via a series of patents globally for its proprietary gasification processes, plant components and manufacturing methods.

Strategic Petroleum’s managing director, H.K. Gueh, said:

“STX MultiFEEDTM is uniquely positioned for the global power, water and materials processing markets. Our STX MultiFEEDTM system is a flexible plant that can be configured to generate energy, water or treat hazardous materials in a cost effective manner.

“We pride ourselves on the ability to subject every part of our technology to independent validation, to deliver the benefits of STX MultiFEEDTM worldwide, even our financial payback models are independently validated.”

Ivan Tan, the company’s Head of Business Development, said:

“To the best of our knowledge, there is currently no known system that we have heard of that is able to process different types of waste materials simultaneously and convert them into syngas on a commercially viable scale. No matter what the melting points and different physical states of the feedstock, our STX MultiFEEDTM system is able to efficiently produce the syngas.”

Strategic Petroleum said China’s First Qilin has commissioned to build a 50-metric ton per day STX MultiFEEDTM plant, the lowest feasible capacity capable of producing one megawatt of power a day using very low calorific high moisture feed.

Strategic Petroleum said it is in talks with several interested parties to construct its STX MultiFEEDTM system.


CHINA: Hyundai-Wison consortium awarded US$2.99 billion contract to expand and upgrade Venezuelan refinery

(EnergyAsia, July 16 2012, Monday) — Venezuela’s state oil and gas company PDVSA has awarded a US$2.993 billion contract to a Sino-South Korean consortium to expand and upgrade the existing 210,000 b/d refinery in Puerto la Cruz, located about 250 km east of Caracas city.

Wison Engineering Ltd, China’s largest private chemical engineering, procurement and construction (EPC) service provider, said it will receive a 31% share of the contract worth US$927.8 million with the rest going to Hyundai Engineering & Construction Co Ltd and Hyundai Engineering Co Ltd.
In expanding the refinery’s capacity to 280,000 b/d, Wison said the consortium will undertake EPC work on the environmental and auxiliary units, and revamp its atmospheric distillation units to enable it to process heavy crude oil from the Orinoco Basin. The project is expected to be completed within 42 months.

Dong Hua, a Wison Engineering vice president, said:

“Venezuela has become one of the key important markets for Wison Engineering as the company focuses on its international business development. We are very proud to be recognised by PDVSA for our project management capabilities that we have accumulated over the years. We are very happy to partner with Hyundai at the time we are developing the global market.”
As part of its international expansion plan, Wison Engineering, a unit of thekWison Group, said it has been conducting feasibility studies to attract potential clients in Southeast Asia and the Middle East since 2008.

Through recently established sales offices in Saudi Arabia, Singapore and Indonesia, the company is in the process of securing new projects, including two with Saudi Arabia’s state-owned SABIC.

CHINA: Shenhua Energy to invest 4.57 billion yuan in Guangdong coal storage and shipping hub

(EnergyAsia, July 13 2012, Friday) — China Shenhua Energy Co said it plans to invest 4.57 billion yuan in building a coal storage and shipping hub in Zhuhai city in the country’s southern province of Guangdong.The Hong Kong-listed company said it received approval from China’s main planning agency, the National Development and Reform Commission, to…

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