US: Refinery throughput at highest level since 2007, underpinning crude oil demand

(EnergyAsia, July 19 2013, Friday) — US refineries drew heavily on crude inventories and increased imports to process 16.1 million b/d for the week ending July 5, the highest for any week since 2007, said the Energy Information Administration (EIA). This level represented a 2.1-million b/d increase from the first week of March, the low…

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AUSTRALIA: India’s gas utility wants to renegotiate price for 2009 Gorgon LNG supply deal

(EnergyAsia, July 19 2013, Friday) — Emboldened by potential supply deals with US shale gas producers, India wants to renegotiate the estimated US$14.50 per million BTU price that it had agreed to pay Australia for liquefied natural gas (LNG) imports from the Gorgon project. In August 2009, Petronet LNG Ltd, a joint venture between the…

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MARKETS: IEA sees global oil demand at record 92 million b/d in 2014, 90.8 million b/d in 2013

(EnergyAsia, July 18 2013, Thursday) — The International Energy Agency (IEA) has raised its forecasts for global oil consumption to reach new all-time highs over the next two years. Powered by China, India and other large emerging economies, global oil demand will rise to 90.8 million b/d this year and to 92 million b/d in…

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AUSTRALIA: As costs soar and labour challenges persist, LNG investors turn to the US, Canada

(EnergyAsia, July 18 2013, Thursday) — Stung by high business costs, a scarce and inflexible labour market and tough regulations, liquefied natural gas (LNG) investors are increasingly turning away from Australia and looking to tap emerging opportunities in North America. Three of Australia’s biggest fans, Chevron, Exxon and Royal Dutch Shell, have decided to slowdown…

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OMAN: Economy to continue growing by 5% to 5.1%, predicts IMF

(EnergyAsia, July 18 2013, Thursday) — Steady as she goes, Oman’s hydrocarbon-powered economy will grow by 5.1% this year after expanding 5% last year and 4.5% in 2011, said the International Monetary Fund (IMF). Oil and gas exports will bring in record high revenues of US$36.4 billion this year, just slightly higher than 2012’s level…

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NIGERIA: Snubbed by the US, welcomed in China

(EnergyAsia, July 17 2013, Wednesday) — Barely two weeks after US President Barack Obama skipped Nigeria on his three-day trip to Africa, President Goodluck Jonathan flew to a high-profile welcome in Beijing and left with as much US$3 billion worth of deals including a US$1.1 billion low-interest loan to pay for infrastructure projects. The contrast…

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SAUDI ARABIA: Japan expected to extend Aramco’s crude oil storage deal beyond 2013

(EnergyAsia, July 17 2013, Wednesday) — Japan is expected to extend a three-year deal for the free storage of Saudi crude oil on Okinawa Island when it expires at the end of 2013. In December 2010, state Japan Oil, Gas and Metals National Corp (JOGMEC) signed an agreement with Saudi Aramco to store up to…

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VIETNAM: Businesses warn against worsening electricity supply disruptions

(EnergyAsia, July 17 2013, Wednesday) — Local and foreign businesses warn that they may have to cut back on operations and reduce long-term expansion plans in Vietnam in response to the country’s worsening electricity supply disruptions, particularly in the southern provinces where most of its trading and manufacturing activities are conducted. At the recent 2013…

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INDIA: Natural gas price could double to US$8 per million BTU, but still well below spot market

(EnergyAsia, July 16 2013, Tuesday) — After years of debate over the need to reduce energy subsidies, the Indian government said it has agreed to raise the domestic price of natural gas to as high as US$8 per million BTU from next April 1, compared with US$4.2 today. The new price still represents a huge…

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INDIA: Officials say Iraq offers oilfields while Iran is ready to accept rupee payment

(EnergyAsia, July 16 2013, Tuesday) — Indian officials said Iraq and Iran have made unprecedented offers to expand oil and trade ties with their country. Worried about potential competition from surging shale oil output in the US and slowing global demand, the two Middle Eastern oil producers are racing to lock up sales to Asian…

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ASIA: InterOil, Schneider Electric and Societe Generale announce new appointments

(EnergyAsia, July 16 2013, Tuesday) — InterOil, Schneider Electric and Societe Generale, three companies with substantial exposure to the energy business in Asia, have announced senior executive appointments. InterOil Corporation, which is developing an integrated oil and gas business in Papua New Guinea, said it has appointed Michael Hession as CEO effective July 11, 2013….

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SINGAPORE: KrisEnergy aims to raise S$270.8 million from listing to develop upstream assets

(EnergyAsia, July 15 2013, Monday) — The team that launched Singapore’s most successful oil company in 2005 is back again to try raise S$270.8 million through a public listing. (US$1=S$1.28). KrisEnergy Ltd will offer nearly 152 million shares at S$1.10 each, with 132.1 million shares marked for institutional and other sophisticated investors, and the remaining…

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CHINA: Climate agreement with the US to limit emissions from coal-fired plants, vehicles and buildings

(EnergyAsia, July 15 2013, Monday) — The world’s two largest polluting nations have agreed to a non-binding five-point plan to reduce greenhouse emissions from coal-fired power plants, manufacturing facilities, heavy-duty vehicles and buildings. The US and China signed the agreement in Washington DC last week that includes exchanging climate data and cooperating on developing smart…

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SAUDI ARABIA: Economic growth to slow to 4% this year on lower oil production and price, says IMF

(EnergyAsia, July 15 2013, Monday) — Saudi Arabia’s economy will grow by 4% in 2013, down from last year’s 5.1%, on account of reduced oil production and a weaker oil price, said the International Monetary Fund (IMF). “Private sector growth is expected to be strong, but oil production is likely to be below 2012 levels…

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SINGAPORE: Sinopec says company’s first lubricants plant outside China is key to global expansion

(EnergyAsia, July 12 2013, Friday) — Two years after it began construction, Sinopec, China’s largest integrated energy and chemical group, has started up a large lubricants plant in Singapore, the first outside its home base, as it prepares for global expansion.

Located on a 242,811-sq m site in Tuas on the southwestern tip of the island, the plant has an initial annual capacity to produce 80,000 tonnes of lubricants and 20,000 tonnes of grease. The facility will also operate as Sinopec’s regional services and logistics hub to better serve the needs of its customers in Southeast Asia, Australia and New Zealand as well as spearhead the company’s expansion into the global lubricants market.

The plant was opened on July 11 Thursday by Pei Wenjun, general manager for Sinopec Lubricant (Singapore) Pte Ltd, at a ceremony attended by customers, employees and officials representing the Singapore government and the Chinese embassy in Singapore.

According to Mr Pei, the new plant will use one of the world’s leading lubricant production equipment and processing technology, 90% of which are proprietary to Sinopec.

The plant forms part of Sinopec’s growth strategy as it develops inhouse capabilities to make low-carbon high-value products for the world markets. The strategy calls for the company to focus on first developing markets in the Asia Pacific region, to be followed by building a chain of lubricant plants around the world and establishing a strong international sales network.

“The Sinopec Lubricant brand has become the face that most people in the energy market would associate companies under the Sinopec group with. So we are using this brand to spearhead the establishment of the Sinopec name internationally,” said Mr Pei.

“The completion of the Singapore plant will further increase our visibility and influence around the world, besides helping to greatly enhance the international competitiveness of other Chinese lubricant brands in general.”

As an example, it cites the rapid growth of subsidiary brand Sinopec Great Wall Lubricant in over 50 countries through the efforts of representative offices in the Middle East, Latin America, Australia, Africa and Southeast Asia.

General Manager Song Yun Chang said:

“As China’s leading lubricant brand, Sinopec Great Wall Lubricant has set its sights beyond China. The completion and operation of the Singapore facility will allow Sinopec to build its international experience and credibility.

“To meet the increasing global demand for Chinese lubricant products, Sinopec will look towards investing and building more factories, undertake mergers and acquisitions and sub-contracting to establish its supply chain and service network.

“Our ultimate goal is for Sinopec is to establish an integrated business model for investment, production sales and management of our lubricant business, while striving to establish ourselves in the global lubricant sector.”

In welcoming the plant’s start-up, Yeoh Keat Chuan, managing director of the Singapore Economic Development Board, said it will add to the strength of the energy and chemicals sector, which accounted for 34% of the country’s manufacturing output of more than S$100 billion in 2012.

“Lubricants companies are leveraging Singapore as a base to tap on growth opportunities in Asia. The Asia-Pacific region is the largest and fastest growing lubricants market, accounting for almost 42% of the global lubricants market in 2012. This region is expected to register the highest growth worldwide, to reach 17 million tons of lubricants consumed by 2017,” he said.

“The lubricants industry also strengthens integration across the refining and marketing value chain. We have a strong lubricants ecosystem in Singapore, with top lubricants additives companies such as Chevron Oronite and Afton, and lubricants blending players such as Shell and Total being based here to serve the growing demand for lubricants in the Asia Pacific.

“Lubricants blenders in Singapore have the option of purchasing base oils, a key component of finished lubricants, from the local refineries and lubricant additives from Singapore-based manufacturers.”

Png Cheong Boon, CEO of JTC Corp, Singapore’s main industrial land developer and landlord, said the Sinopec plant is contributing to the start-up of a new cluster of energy and chemicals manufacturing plants in the Tuas South region to complement the existing well-developed hub on Jurong Island.

“JTC worked closely with Sinopec and other companies to plan and develop critical shared infrastructure, such as common jetty and pipeline corridor. These common infrastructure help companies to reduce their capital investments and operating expenses, and enable Singapore to optimise its limited waterfront land,” he said.

Sinopec produces a wide range of lubricants including internal combustion engine oil, gear oil, hydraulic oil, grease, turbine oil, electrical insulating oil and compressor oil for use in most industries including power generation, automobile, machinery, metal works, mining, construction, shipping and oil and gas.

CHINA: US-listed coalbed methane developer Far East Energy welcomes gas pricing reform

 

(EnergyAsia, July 12 2013, Friday) — China’s recently announced reform of its natural gas pricing system has won the approval of at least one US company, the Houston, Texas-based Far East Energy Corporation which is exploring and developing coalbed methane (CBM) resources in Shanxi province.
The National Development and Reform Commission (NDRC), China’s top policy-making body, has announced that from July 10, 2013, city-gate gas prices will increase by an average of 15% across the country. These price increases will be borne by industrial and other consumers to the benefit of upstream producers such as Far East Energy.

Importantly, the NDRC is introducing a two-tier pricing structure that will base new incremental gas supply on the new pricing formula that has already been tested in provinces such as Guangdong, said Far East Energy, which has a production-sharing contract in the Shouyang block.

The company said that domestic gas prices have risen to US$14 per million standard cubic feet (scf) in provinces where the formula, linked to the more freely-traded liquefied petroleum gas (LPG) and fuel oil markets, is applied.

Praising this as a “long-awaited” reform, CEO Mike McElwrath said:

“Far East Energy is currently receiving $6.50 per million scf for gas sales from our Shouyang block for the first 10.6 million scf produced, inclusive of subsidies. We expect volumes going forward to be sold at increasingly higher prices as the new pricing formula takes effect.”

While these reforms apply to city gate pricing, the company said its analysis show that the 15% increase equates to a near 25% increase in well-head prices, giving “a clear incentive” for increased exploration and production of China’s domestic gas resources while making it less attractive for the more expensive options of importing liquefied natural gas (LNG) or piping gas into the country.
“The changes to China’s gas price policy underline the determination by the country’s leadership that gas play a major role in the country’s energy mix moving forward,” McElwrath said.

“Higher gas prices are needed to stimulate more domestic production and compensate for high LNG import prices and the move to link gas prices to oil based fuels recognises that gas is a clean alternative to LPG and fuel oil.”

As a result of the reform, Far East Energy, which has offices in Beijing and Taiyuan cities, said it expects CBM prices to rise above current levels as they are not regulated and are derived from independent negotiation between producers and buyers.

SAUDI ARABIA: Non-oil sector to fuel GDP’s projected 4.2% growth in 2013

(EnergyAsia, July 12 2013, Friday) — For the first time in memory, growth for Saudi Arabia’s oil-dependent economy will be driven entirely by infrastructure building, construction, tourism, telecommunications, banking and services. The oil sector, which provides around 90% of government revenue, will be the drag in 2013 as it is expected to shrink by 1.5%…

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MONGOLIA: Australia’s Aspire Mining secures non-binding purchase agreements for Ovoot coking coal project

(EnergyAsia, July 11 2013, Thursday) — Australia-listed Aspire Mining said it has signed non-binding memoranda of understanding (MOUs) with four Chinese mills and coking coal buyers that it says will support plans to develop and commercialise a major coal project in northern Mongolia. The Chinese companies could purchase an annual total of up to 5.6…

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SINGAPORE: Global Pacific’s 19th Asia Oil Week to focus on new E&P opportunities in Asia

(EnergyAsia, July 11 2013, Thursday) — Global Pacific & Partners will unveil new exploration, production and development business opportunities in the Asia Pacific region at its upcoming 19th Asia Oil Week event in Singapore on October 3-4. The landmark event for Asia’s upstream oil and gas industry brings together keynote speakers from all over the…

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INDONESIA: Coal production expected to fall, miss 2013 production target

(EnergyAsia, July 11 2013, Thursday) — Indonesia could miss its coal production target of 400 million tonnes this year amid mine cutbacks and continuing weak external demand, particularly in China and India. Larger miners have reduced operations while smaller ones have shut down with no signs that the main buyers of Indonesia coal will resume…

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SINGAPORE: Could Pavilion Gas be next to buy into Canada’s gas boom through Petronas?

(EnergyAsia, July 10 2013, Wednesday) — Could Singapore’s newly established Pavilion Gas be next to buy into Canada’s natural gas boom through an equity stake in Petronas’s Pacific NorthWest LNG?

The subsidiary of Singapore sovereign wealth fund Temasek Holdings was established in May with an initial capital of S$1.25 million to focus on buying, marketing and selling natural gas. (US$1=S$1.28).

Temasek has named senior managing director Seah Moon Ming as CEO of the new company as well as Pavilion Energy, which looks after non-gas energy businesses.

Since taking over Calgary-based Progress Energy last December, Malaysian state energy firm Petronas has shown some neat moves in advancing the development of its proposed US$16 billion liquefied natural gas (LNG) project. In the seven months since Ottawa approved the US$5.9 billion takeover of Progress, Petronas has formed Pacific NorthWest LNG for the purpose of developing natural gas reserves in BC, tying up supply deals, building an export terminal and securing long-term purchase agreements with customers in Asia.

PacificNorthWest has raced ahead of its various rivals who have tabled at least 10 proposals to develop export-oriented LNG projects from locations near or at Kitimat and Prince Rupert. It has sold a 10% equity stake to Japan’s Japex, which has also committed to buying up a certain volume from the proposed 12-million-tonne/year terminal.

This is a proven strategy for companies building large capital-intensive projects as they greatly reduce risks by bringing in equity partners who will double up as customers, ensuring that they don’t have to fight the competition for future sales. The “we’re all in this together” strategy has been tested and proved in developing the LNG industry in Australia and the Middle East.

Petronas is continuing talks to recruit others into the project, with Reuters reporting that it is hoping to close a deal with state-owned Indian Oil Corp.

Pavilion Gas and SembCorp, both subsidiaries of Temasek, could fit the bill too, given that Singapore has just started up its new import terminal and needs to build up a supply chain and gas reserves abroad. Pavilion Gas has made clear that LNG will be a major part of its focus while SembCorp owns and operates power plants in Singapore and elsewhere.

Also, Hassan Marican, the former CEO of Petronas, is chairman of S$1-billion sister company Pavilion Energy and sits on the boards of SembCorp and Singapore Power.

For the financial year ending March 31 2013, Temasek said it made net investments of S$4 billion in the energy and resources sector. The company raised its stake in Spain’s Repsol to 6.3% as well as bought into Kunlun Energy, the listed natural gas subsidiary of state-owned PetroChina and US-based LNG terminal operator Cheniere Energy.

 

AUSTRALIA: Cokal to raise A$9.6 million in share sale to Singapore’s Blumont Group

(EnergyAsia, July 10 2013, Wednesday) — Australian metallurgical coal miner Cokal Limited said it will raise A$9,609,125.44 from selling shares to Singapore investment company Blumont Group over the next four months. (US$1=A$1.07).

The Australia-listed miner said it will sell a total of 60,057,034 fully paid ordinary shares at A$0.16 each in five tranches between July and November. The money will help pay for a feasibility study to develop the Bumi Barito Mineral (BBM) project in Indonesia’s Central Kalimantan that could begin producing coal from next year.

Cokal owns a 60% stake in the project which it believes holds at least 77 million tonnes of coal reserves. Indonesian companies own the remaining 40%.

Cokal’s executive chairman Peter Lynch said:

“The placement to Blumont will provide sufficient funds to complete the drilling programme and the definitive feasibility study for BBM project.”

Singapore-listed Blumont, which has a market capitalisation of S$2 billion, owns an 11.48% its stake in another Australia-listed miner, Celsius Coal.

 

IRAN: Hard fight to keep customers as US insists oil markets remain well supplied

(EnergyAsia, July 10 2013, Wednesday) — Iran faces an uphill battle to keep its oil customers as the US and its allies insist the markets are well supplied while further tightening trade and financial sanctions against the Islamic regime for pursuing its nuclear energy programme. In an interview with Reuters last month, US Energy Secretary…

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IRAN: Bilateral trade with India seen rising despite Western sanctions

(EnergyAsia, July 9 2013, Tuesday) — Both facing serious domestic economic challenges, Iran and India expect their bilateral trade to continue growing despite the weight of trade and financial sanctions imposed by the West on Tehran and its trading partners. Iran is holding onto its main oil customers in Asia, while India, faced with its…

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AUSTRALIA: Coal industry to contribute A$43 billion to domestic economy and employ 180,000 people this year

(EnergyAsia, July 9 2013, Tuesday) — The coal industry will contribute about A$43 billion to the Australian economy this year and provide 180,000 direct and indirect jobs, said the Australian Coal Association (ACA). (US$1=A$1.07).

The association recently revealed these and other figures contained in a special study that it had commissioned to counter a growing national campaign by green groups to shut down the industry.

The study, “The Australian Coal Industry-adding value to the Australian Economy”, was written by Professor Sinclair Davidson and senior lecturer Ashton De Silva of the School of Economics, Finance and Marketing at RMIT University.

The study’s main findings include:

– The ‘coal economy’ made up 3.1% of gross value added (worth around $43 billion) in 2011-12 rising by 18.25% since 2006-07. This is a supply side measure.

– The broader ‘coal economy’, including both supply-side and demand-side considerations, made up 4.2% of gross value added (worth almost A$60 billion) in 2011-12.

– For every job created in coal mining, 3.7 jobs are created nationally in the Australian economy, making up a direct and indirect workforce of more than 180,000 people in 2011-12.

– For every million dollars of output in coal mining, the coal economy would see 3.2 jobs being created as a result of the extraction of coal and investment in new and improved capacity.

– The coal extraction industry made up 1.8% of gross value added in 2011-12 up from 1.5% in 2006-2007.

In a joint statement, the authors said:

“Over the past 30 years, coal has been one of Australia’s major export industries. In fact, for most of that period it was the major export industry. Coal represents the main export earner for both Queensland and New South Wales states.

“The modern Australian economy is highly dependent on access to reliable and relatively cheap electricity-coal mining in particular, and the coal economy in general, underpins our prosperity.”

It follows a key Reserve Bank of Australia working paper, published in February 2013, which found that the wider resource economy accounted for 18% of gross value added in 2011-2012.

ACA CEO, Nikki Williams said the report shows the extent to which the coal industry is embedded in the Australian economy.

“It is a reality that coal for power generation and steel manufacture has built our modern Australia and is now helping other countries to improve the quality of life of their people by reducing energy poverty,” she said.

“This indisputable fact is not widely understood. The long-term outlook for coal remains strong. We need to ensure that our sector remains internationally competitive to ensure that Australia benefits from the sustainable development of its coal resources.”