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      <>><<____________Volume 105:08-April 25--2005________________><<><><>><
           >><<<<_____Editor: Charlie Bartholomew, kryopak@qwest.net_____<>><<
                 >><<>>This issue distributes to 70 subscribers in 24 countries>><
April 25--2005
Angola ChevronTexaco partners $5bn LNG plant
Angola ChevronTexaco & Total LNG project
Bolivia Congress to Review 76 E&P Contracts
Bolivia Congress approves new oil law
Bolivia proposes gas supply to Chile
Bolivia hopes sea access by offering gas to Chile
China coastal cities report better economic performance
CNOOC Fujian LNG Project Breaks Ground
S.China Sea New oil-gas field discovered in west
Qaidam Basin Qinghai builds large-scale oil and gas field
Gazprom Petro-Canada LNG venture study
ChevronTexaco-Unocal merger is all about Azerbaijan
April 25--2005
Baja Coast Floating LNG Terminal OK'd
India, Qatar Partnership Investments, LNG Supplies
Kazakhstan-China oil pipelineChina starts work
LNG Consumer Benefits Gas Markets Imports Rise
Guangxi Halong Bay Vietnam New bus service links
Pakistan studies options to acquire LNG
Philippines promote compressed natural gas
Sempra, Gazprom sign LNG agreement
Snohvit Main Pipeline Work Begins
Thailand PTT leads efforts to replace diesel with gas
Turkey Offshore Drilling Program On Track
Westport MOU Beijing Tianhai Ind Ltd. Gas Tanks

Westport MOU with Beijing Tianhai Industry Co. Ltd. Gas Tanks
April 14, 2005 VANCOUVER, British Columbia BUSINESS WIRE

Westport Innovations of Vancouver (TSX:WPT) today announced it has signed a Memorandum of Understanding with Beijing Tianhai Industry Co. Ltd. (BTIC) of the People's Republic of China, to work together to explore business opportunities to develop and market natural gas tanks for the transportation market.

BTIC is a Sino-Korean cooperative company that has expertise in the design and manufacture of gas cylinders serving a wide range of applications, including automotive and industrial.
BTIC manufactured more than one million cylinders in their Beijing and Tianjin facilities in 2004.
"Westport is pleased to be working with BTIC, an industry leader in natural gas storage, to advance the use of natural gas in transportation in China.

Customers are asking for an integrated solution, including reliable on-board fuel storage. By working with companies like BTIC, we are making strong strides in developing this complete vehicle solution," said Dr. Mike Gallagher, President of Westport Innovations Inc.
"China is experiencing a growing demand to use natural gas in transportation applications to address environmental and energy security challenges," said Mr. Wang Pingsheng, President of BTIC. "We are looking forward to working with Westport, an industry leader, to help provide complete solutions to customers looking to make the transition from oil to natural gas."

Westport Innovations Inc. is the leading developer of technologies that allow vehicles to operate on clean-burning fuels such as natural gas, hydrogen, and hydrogen-enriched natural gas (HCNG).
Westport has technology development alliances in place with Ford, MAN, BMW and Isuzu, and an ownership interest in Clean Energy, the largest provider of vehicular natural gas in North America.
Cummins Westport Inc., our joint venture with Cummins Inc., manufactures and sells the world's widest range of low-emissions alternative fuel engines for commercial transportation applications such as trucks and buses.
Guangxi Halong Bay Vietnam New bus service links
Vietnam will open new land transport services to connect World heritage site Halong Bay with locations in China’s Guangxi province by the end of this month, announced a transportation official Monday.

There will be two separate new services, one connecting Nanning and the other connecting Beihai - both in China’s southern Guangxi province - to Halong Bay in Vietnam’s northern Quang Ninh province, said the provincial transportation chief Nguyen Minh Bach.

There has been an existing bus service since July 2000 connecting Guangxi to the province, but it stops short of the renowned Halong Bay, Vietnam’s main tourist attraction.

The existing service proves inefficient, as most passengers want a direct connection to Halong Bay, said Mr. Bach.Traveling time for the new services is estimated from 4 to 6 hours.

(Reported by Nguyen Truong – Translated by Ha Nguyen)
Qinghai Qaidam Basin builds large-scale oil and gas field
Source: SinoCast 08-04-05

Within the following five years, the annual oil and gas production of Qinghai Province will break through 10 mm tons. Qaidam Basin in Qinghai, is abundant with high-quality oil and gas resources, the main exploration and development field for Qinghai oilfield, and has huge exploration potential with prospering outlook.

In recent years, Qinghai oilfield has made greet progress in this basin. Until late 2004, 25 fields have been found with the storage volume of over 400 mm tons, and the annual production has topped more than 4 mm tons.

According to the plan, Qingdao aims to achieve its development target for annual production volume of 10 mm tons. In order to realize this target, Qinghai will devote to three aspects, oil exploration, steady production, and comprehensive utilization, which will help Qinghai do contributions to China's energy construction.
ChevronTexaco-Unocal merger is all about Azerbaijan
by Christopher Helman 04-04-05 Source: Forbes

For years, oil analysts have kicked ChevronTexaco and its peers like ExxonMobil and Shell for their inability to grow output while maintaining high levels of return on capital. There's plenty of oil and gas out there, it's just getting harder to get to. With its $ 16.4 bn purchase of Unocal, ChevronTexaco is finally able to deflate those concerns, at least for the time being -- Unocal's key assets in the Middle East and Asia have the potential for explosive growth by the end of the decade.

For all the talk of synergies in fast-growing Asia, the plum morsel that ChevronTexaco will get from this Unocal deal is in Azerbaijan.
The small country, north of Iran on the Caspian Sea, is home to the Azerbaijan International Oil Consortium. Ten oil companies -- led by BP with a 34 % stake and Unocal with 10.3 % -- are jointly developing major fields there. Early production is 150,000 bpd, with output slated to soar to 1.1 mm bpd by 2009. The consortium will move much of that oil through the nearly complete BTC pipeline from Baku, Azerbaijan to Ceyhan, Turkey. Unocal owns nearly 9 % of that $ 2.9 bn project.

ChevronTexaco is buying Unocal at a prime time, considering that the riskiest stage of development in Azerbaijan -- exploration -- is over. In recent years, Unocal's average return on capital employed has been higher than ChevronTexaco's, 9.4 % vs. 8.7 %. But as Unocal's Azerbaijan investments come on line and generate profit, those returns will be even juicier, upgrading ChevronTexaco's overall earnings quality. The second most interesting assets appear to be in Thailand, where the combined Unocal and ChevronTexaco operations will make it that nation's premier energy company. Unocal produces some 20,000 bpd of oil and 1 bn cfpd of natural gas and supplies the gas to generate 75 % of the nation's power demand.

ChevronTexaco pumps 24,000 bpd and 100 mm cf of gas and owns Ma Tap Phut, one of Southeast Asia's most efficient refineries. Seeking to grow its energy base, Thailand has recently ordered the steel to build a third major gas pipeline, which in time would trigger development of 2 tcf of undeveloped Unocal reserves. Solidifying dominance of the Thai energy industry will likely lead ChevronTexaco to its next acquisition. Duane Grubert, analyst at Fulcrum Global Partners, notes that Pogo Producing, a 43 % stakeholder on a ChevronTexaco gas project in Thailand, has indicated its willingness to sell. Grubert thinks ChevronTexaco could get Pogo's Thai assets for $ 500 mm, and recommends Pogo stock.

Other major asset matches exist in Indonesia, as well as the Gulf of Mexico, where both ChevronTexaco and Unocal have been exploring deepwater prospects to total depths of 35,000 feet. By consolidating GOM operations, ChevronTexaco will be able to reduce operating costs while leveraging Unocal's proprietary geologic data. Most of the rest of Unocal's North American assets will likely be part of the $ 2 bn in asset sales planned by ChevronTexaco CEO David O'Reilly.

The biggest piece on the block is Unocal's wholly owned subsidiary Pure Resources, which develops oil and gas in southwest US basins like the San Juan and Permian. Last year ChevronTexaco sold $ 1 bn of its own mature US fields, reasoning that it could get better returns investing capital in Asia and the Middle East than stateside. Likely bidders for Pure, as well as Unocal's small Alaskan operations would be independents like Forest Oil, Devon Energy and XTO Energy.
Turkey Offshore Drilling Program On Track
Toreador Resources Corporation 4/15/2005 URL:

Toreador is on track to begin its offshore drilling program in the shallow waters of the western Black Sea in late April with the spudding of the Akkaya-1 delineation well, which is on trend with and located about seven miles east of the Ayazli-1 discovery well. The Ayazli-1 well found natural gas in the South Akcakoca sub-basin in 2004.

Initial development plans for the South Akcakoca sub-basin include the drilling of three consecutive delineation wells. If successful, the wells will be completed and suspended as future producers. Toreador will have the option to drill up to five additional wells using the same rig that drilled the first three wells. Phased development of the South Akcakoca sub-basin is planned with production beginning in the second half of 2006.

Toreador is operator and holds a 36.75% working interest in this acreage.

In the onshore Sinop area northeast of Ankara, Toreador plans to re-enter the Boyabat-2 well in late April. Initial construction work has begun at the re-entry site, with the rig due on location shortly. The company estimates the re-entry could identify 60-80 billion cubic feet of potential field natural-gas reserves. If the re-entry is successful, Toreador expects to offset the re-entry with a development well during the second half of 2005.

Toreador operates and holds a 100% working interest in six Sinop permits.

Toreador continues its horizontal drilling campaign in the Charmottes Field where it expects to fully exploit additional oil reserves. The Charmottes-110 horizontal development well is drilling ahead in the target Dogger formation. Toreador anticipates completing the well by late April, after which the company will test the Charmottes-108 and -110 wells. Toreador previously shut in the Charmottes-108 until the Charmottes-110 is completed. The Charmottes-108 well was drilled earlier this year and encountered oil shows over 1,122 feet. If the Charmottes-108 and -110 are successful, the company could drill another 2-4 horizontal wells in the field in late 2005 and in 2006.

In addition, Toreador expects to drill at least one additional well in 2005 to further develop reserves in the Charmottes Field's Triassic-age Donnemarie formation, which produces at a depth of about 8,600 feet. Two of the company's wells in this formation together have produced about 500,000 barrels of oil. Recent remapping of the deeper Triassic formation has shown that the structure's areal extent may be larger than originally believed.

Toreador is operator and owns a 100% working interest in the Charmottes Field.

Toreador has re-entered two of six wells on its 1,325-acre Fauresti Block. Upon initial re-entry, the second well flowed at a rate as high as 2.6 million cubic feet of gas per day during two testing periods. Toreador currently is conducting re-entry operations, after which the company will log and test the well. If successful, this well could be placed on production during the second half of 2005.

The first well re-entry has been logged and suspended pending further testing. The company anticipates re-entering four additional wells and drilling up to two new development wells on the block this year. The Fauresti Field license produced approximately 15.5 million barrels of oil equivalent before the government oil company suspended operations in 1999.

Toreador also plans to re-enter a well on the Viperesti Block and will continue to gather geological and geophysical information, as well as reprocess seismic data, on both the Viperesti and Moinesti blocks.

Toreador is operator of and has a 100% working interest in these Romanian concessions.

United States
Toreador holds a 17% nonoperated working interest in the Cowherd-1 well in Marion County, Texas. The well has reached total depth, and testing of the Travis Peak formation, the primary objective, is under way.
S.China Sea New oil-gas field discovered in west
By People's Daily Online March 29 2005

China National Offshore Oil Corporation (CNOOC) announced on Monday that CNOOC Limited - a subsidiary of CNOOC - had discovered a new oil-gas field in west South China Sea through independent prospecting. It could produce crude oil of nearly 1,900 barrels and natural gas of bout 15,000 cubic meters per day.

The discovery was made in the Weixinan depression in west South China Sea, which is about 35 kilometers southwest of the Weizhou Island. The drilling well extends to a depth of 3,476 meters 34 meters under the water. During two drill-pipe tests the well ran through 11.11mm oil nozzles. It can produce crude oil of nearly 1,900 barrels and natural gas of bout 15,000 cubic meters per day.
Gazprom Petro-Canada LNG venture study
Source: Dow Jones 31-03-05

Petro-Canada expects to conclude within the next two months a study on the feasibility of a partnership with Gazprom to bring LNG from Russia to North America, Petro- Canada President and CEO Ron Brenneman said. "We're making very good progress in our discussion," said Brenneman, during a presentation to investors. "We would wrap up this phase here in the next couple of months." The next step would involve "some substantial commitment in engineering," Brenneman said.

Petro-Canada and Gazprom signed a memorandum of understanding in October, 2004, to study the feasibility of a joint venture to liquefy natural gas near St Petersburg and regasify it in Quebec, where it would supply the Canadian and US markets. In the future, the joint venture could rely on gas extracted from Gazprom's planned offshore developments in the Barents Sea, Brenneman said. "There's a geographical advantage in accessing the market through Canada and not through the Gulf Coast," said Brenneman.

The executive expressed confidence in dealing with Russia's state oil monopoly, which he described as "used to dealing in external markets and in a free-enterprise system." "What they lack is entry points in North America," said Brenneman.

Thailand PTT leads efforts to replace diesel with gas
Source: Bangkok Post 05-04-05

PTT has co-operated with a number of transport and automotive companies in two pilot projects aimed at modifying the diesel engines of heavy vehicles to use natural gas and replacing the diesel engines altogether. The first project aims to modify buses and trucks to use natural gas for vehicles (NGV).
Eight major transportation service providers will have 10 of their buses and trailers modified and fitted with the necessary equipment.

The 8 transportation companies are Cherdchai Industry, SK Tour and Service, Lat Krabang, Thai Trailer Transport, TP Transport Partnership, MML Transport, United Motor Sales, and Wangkarnkij.
Three joint ventures will provide the installation and modification services. They are Omnitek Engineering from the United States, Advanced Fuel Technology and Green Gas Technologies from Australia.
The three groups will bear the costs of the modification and those of the equipment and engineering service. PTT will provide 100 NGV cylinders and financial support for the testing of the vehicles.

The second project aims to replace diesel engines in trucks with NGV engines.
KNR Group, a major transportation service provider, will buy a new NGV engine from Samsung Group for use in one of its trailers. After a three-month run, the trailer will be tested and evaluated in terms of efficiencies and economy. If the engine replacement proves successful, the company will have the engines of another 20 of its trailers and up to 40 in the future changed to NGV. PTT also plans to transform its service station at Kamphaeng Phet into an NGV station to supply the fuel to KNR's trailers.

Energy Minister Viset Choopiban, who presided over the contract signing ceremony, said the pilot projects, if successful, would pave the way for wider uses of NGV in the transportation sector, which consumed the most diesel. In addition, by replacing diesel with NGV in transportation activities, the energy cost for operators could be substantially cut since the price of NGV was half that of diesel and 40 % of premium petrol. PTT president Prasert Bunsumpun said if the pilot projects were successful, about 500 trucks and buses were expected to be modified this year. This translated into savings of 20 mm litres per year.

Presently, Thailand has 4,750 NGV vehicles and 29 NGV service stations, all of which are owned by PTT.
PTT plans to increase the number to 60 stations by the end of next year and 120 stations in 2008. In another development, PTT will raise petrol prices by 40 satang a litre today in line with the prices in international markets. Premium petrol will now cost 22.49 baht a litre, regular petrol 21.69 baht and gasohol 95 20.99 baht.
Philippines to promote compressed natural gas transport system
Source: AsiaPulse 05-04-05

To mitigate the adverse effects of the continuously increasing oil prices, the Philippine government will push the operationalisation of its compressed natural gas (CNG)-fuelled public transport system project this year. Department of Energy (DoE) Secretary Raphael Lotilla said they will inaugurate in June the CNG mother gas stations and field out initial buses to serve the South Super Highway route. The twin moves, Lotilla said, will also initiate the accelerated deployment of CNG fuel tanks and the use of compressed natural gas in vehicles.

Lotilla expressed optimism that by December this year, the full deployment of the initial 200 CNG-fuelled buses will be completed. "Then, we will be able to negotiate with the Natural Gas Consortium (of China) for 2,000 additional buses to be deployed over a years time," he added.

When President Gloria Macapagal-Arroyo visited Beijing in September last year, she witnessed the signing of a memorandum of agreement between the DoE and the Natural Gas Consortium for the acquisition of an initial batch of CNG-fuelled Chinese-made buses. The agreement also provided for the consortium to invest in the setting up of CNG gas stations in the country and provide the needed CNG tanks to be fitted to vehicles. The energy chief said the government is likewise trying its best to address through various means the concerns about the immediate impact of the rising oil prices.

Lotilla said oil companies have committed to continue and even expanded the number of gas stations offering diesel for public transport at P 1 per litre discount, from 247 to 377 nationwide. To ensure that there will be no "price gouging," the government, he added, will continue to monitor the oil price increases. Lotilla also appealed anew to oil firms not to suddenly jack up their prices and adopt instead a graduated price hike schedule to mitigate the impact on consumers.

Aside from the four-day workweek scheme, he has also appealed to all concerned to reduce the use of elevators, which he suggested "should stop only on every other floor instead of every floor," to help save energy. In the case of power, Lotilla said the government has now significantly reduced the country’s dependence on oil by tapping indigenous energy sources like coal and natural gas.
Pakistan studies options to acquire LNG
Source: Iran Daily 04-04-05

Pakistani Prime Minister Shaukat Aziz has said that his country was studying four options to acquire natural gas and would make a final decision on the basis of economic feasibility and national interests. He said this while receiving a presentation by the Ministry of Petroleum and Natural Resources on Pakistan's energy requirements and its options to meet them.

Aziz said Pakistan was examining the options to acquire LNG from Qatar and from Iran or Turkmenistan. Aziz's latest observations are significant in the light of the opposition voiced by the United States to both India and Pakistan to the proposed Iran-Pakistan-India gas pipeline. During her visit to India and Pakistan in the third week of March, US Secretary of State Condoleezza Rice said she had conveyed the Washington's opposition to the Iran gas pipeline project and offered to pool technologies and thinking to see “if we can find ways that are environmentally sound and that can meet the burgeoning demands for energy”. Pakistanhas so far not responded to the US concerns.

During his visit to Teheran in March, Aziz said he had invited Iranian oil minister to Islamabad for discussions on the gas pipeline. He had also said Pakistan would invite the Indian Petroleum Minister Mani Shankar Aiyar for a possible trilateral meeting among Iran, Pakistan and India. India has said if it agrees to be part of the project, it will prefer separate agreements with Iran and Pakistan. No dates have been announced by Pakistan on the visit of the Iranian minister.
LNG Benefits Consumers, NatGas Markets, as Imports Rise
U.S. Department of Energy 4/15/2005 URL:

U.S. imports of liquefied natural gas (LNG) jumped by 29 percent last year and added three percent to the Nation's supply of a critical energy. Natural gas consumers benefited as this additional supply helped to keep prices stable for home heating and other uses, according to the Department of Energy's Office of Fossil Energy.

As shown in Fossil Energy's recently released Natural Gas Imports and Exports Fourth Quarter Report 2004, the increase to 652 billion cubic feet (Bcf), from 507 Bcf in the previous year, caps a rise of 300 percent in LNG imports since 1999. LNG imports are projected to account for 20 percent of supply by 2020. Seventy percent of U.S. LNG imports currently come from Trinidad and Tobago.

In 2002, LNG imports to the United States totaled 229 Bcf, or six percent of imported gas. In 2003, imports totaled 506 Bcf, or 13 percent of all imported gas – more than doubling 2002's total. Data for 2004 shows that LNG accounted for 15 percent of total imports – nearly a tripling in volume in just two years. The LNG numbers will increase yet again in 2005, and in the years beyond.

Natural gas serves most of the Nation's households and many industries in which it is not easily replaced. Both have been hard-hit by higher prices since 2000. Natural gas is used in about 6 of every 10 U.S. households – around 63 million – mostly for heat. It is an indispensable feedstock for fertilizer and chemical manufacturers. And, it has been a growing source of fuel for electric-power generation. Using LNG imports to expand supply can moderate price and deliver relief to both household and industrial users.

EIA's Annual Energy Outlook 2005 foresees that the Nation will need much more LNG over the next 20 years. This year's projections say it should account for almost 10 percent of supply by 2010, which means imports of 2.5 trillion cubic feet, and more than 20 percent of supply by 2025, imports of 6.4 trillion cubic feet. The imports will be necessary to satisfy increases in demand that cannot be accommodated by domestic or other North American production of gas. The import estimates are up strongly from those of the Annual Energy Outlook 2004.

High-volume production and global trade in LNG constitute an emerging energy resource for the United States and the world in a time of rising demand. Present use is limited by a lack of liquefaction capacity among producing nations and a lack of import terminals among consuming nations. Large expansions are underway in all areas. At least 40 proposed terminals have been announced for the United States in recent years, but not all will be built. A lesser number have actually applied for the necessary state and federal permits.
India, Qatar Partnership Investments, LNG Supplies
AFX News Limited 4/15/2005 URL:

India and Qatar said they are planning to forge a strategic partnership to boost two-way investments and the supply of natural gas from the Gulf emirate. Sheikh Hamad bin Khalifa al-Thani, the emir of Qatar, today wrapped up three days of talks with Indian leaders including Prime Minister Manmohan Singh which both sides described as "comprehensive and fruitful."

Qatar's Deputy Prime Minister Hamad bin Jassem al-Thani said Doha will next month send a high-powered delegation for further talks with energy-hungry India.
"Although there is a decision on a strategic partnership we are studying it now to see what kind of partnership we can have, because we just don't want to promise something," he told a news conference.

Qatar, which boasts the world's third-largest gas reserves, agreed in 1999 to deliver 7.5 mln tons of liquefied natural gas (LNG) to India annually for 25 years. The first shipments arrived at the start of 2004 in northwestern Gujarat state, which is to take 5 mln tons. LNG receiving capacity at Gujarat's Dahej terminal is being doubled to 10 mln tons.

Talks are under way between Qatar's state-run Rasgas and Petronet for a second phase covering 2.5 mln tons a year to the southern state of Kerala.

Petronet's chief executive Suresh Mathur said last month the company planned to offer a 10 pct stake to Rasgas in a proposed gas storage terminal in Kerala's Cochin city. State-owned Indian oil companies own half of Petronet with private-sector firms holding the rest.
"We have a commitment of 7.5 mln tons of gas (to India) which is huge, but still if there is room to increase production then we will give priority to India," Qatar's deputy premier said.

Indian Petroleum Minister Mani Shankar Iyer underlined that the emir backs a closer partnership in the energy sector.

India wants natural gas to meet 20 pct of its energy needs by 2025, up from about 8 pct today.

Qatar plans to boost LNG production to 60 mln tons in 2010 from 18 mln tons in 2004.

The deputy premier also said a deal for Doha to sell India 12 of its used French-built Mirage 2000 jets had been finalized, but disclosed no details. India's air force flies the Dassault Aviation fighters and signed a deal in Sept 2000 to buy 10 new planes to replace aircraft lost out of a 1985 order of 49 Mirages. India has announced plans to buy 126 jet fighters to bolster its fleet by five squadrons in the next 15 years. It is considering a number of potential suppliers, including Russia's MiG-29K, Dassault's Mirage-2005/5, the Grippen from Saab, a British-Swedish consortium, and Lockheed Martin's F-16 and F-18.

India and Qatar have also signed a bilateral air services pact to improve connectivity.
Kazakhstan-China oil pipelineChina starts work
Source: People's Daily Online 25-03-05

Construction began on the 240 km Chinese section of the Kazakhstan-China oil pipeline in Jinghe county in the Xinjiang Uygur Autonomous Region, according to sources with China National Petroleum Corp. (CNPC), China's biggest oil producer. The Xinjiang section will form part of a 3,000 km pipeline from the oil-rich Caspian shelf to China, which will carry oil across eastern Kazakhstan into China's Xinjiang autonomous region, where it will be refined or sent directly to China's booming east. The pipeline, which will cost $ 3 bn, began construction last year. It will link Atasu in Kazakhstan to Dushanzi and is China's first major land oil import route.

A CNPC staff member said the cross-border oil pipeline, with 2,800 km in Kazakhstan and 240 km in China, is expected to be completed on December 16, 2005. It will be able to carry 20 mm tpy of oil. Oil analysts say the pipeline will benefit both countries. China can get stable and secure crude oil supply, while Kazakhstan will have a reliableoil market.

Construction on the Kazakhstan section of the oil pipeline began in September and will be completed in 2005. Kazakhstan is the world's third largest oil producer. The country plans to raise its annual crude production to 100 mm tons by 2010. Three Chinese factories are principally responsible for supplying the pipe. China-made pipes have been shipped to Kazakhstan since last winter. China's imports of Kazakh oil now travel hundreds of kilometres by rail to Xinjiang.
CNOOC's Fujian LNG Project Breaks Ground
Xinhua Economic News 4/15/2005

CNOOC announced that its liquefied natural gas (LNG) stations and pipeline project in Putian city, eastern Fujian Province broke ground on April 15. "It signifies the start-up of the LNG project in Fujian Province," said Wu Zhenfang, vice president of CNOOC.
As the first part of the LNG project, the stations and pipeline construction were invested in and performed by the Zhonghai Natural Gas Company Ltd. of Fujian, a company jointly invested in by the CNOOC and the Fujian Investment and Development Corporation.

Covering an area of 37 hectares, the LNG receiving stations will be built in the Xiuyu Port of Putian city.
The first phase of the station and pipeline construction project, with an investment of 5.5 billion yuan (664 million US dollars), plans to have an annual LNG output of 2.6 million tons.

The pipeline laid in the first phase is 360 kilometers long, including a 315-km long trunk line and three laterals of 54 kms long. Starting from Xiuyu Port, the trunk line will go through five cities of the Fujian Province including Fuzhou, Putian, Quanzhou, Xiamen and Zhangzhou.

As a significant energy project of China's foreign cooperation, the LNG project will get natural gas pumped from the Tangguh natural gas field in Indonesia. It is also the second LNG project of CNOOC after its project in South China's Guangdong Province.

The LNG project is made up of 10 sub projects including the construction of the station and pipelines, transportation, three gas power stations in Putian, Jinjiang and Xiamen cities, and five urban gas use projects in Fuzhou, Putian, Quanzhou, Zhangzhou and Xiamen.

The construction of the project will be performed in two phases.
The first phase project is designed to have an annual LNG yield capacity of 2.6 million tons. With an investment of 24 billion yuan ( 2.9 billion US dollars), the first phase will be completed and put into operation at the end of 2007.

According to the plan, when the second-phase project is finished, the LNG project will have an annual yield capacity of five million LNG.

The use of LNG, a clean, efficient energy will relieve the pressure of the soaring demand for electricity in Fujian and improve the province's energy structure. It will also boost the growth of the LNG industry in China, a country featured in recent years by hiking energy consumption, said Wu.
China coastal cities report better economic performance
People's Daily Online  April 19, 2005

According to information from the State Statistics Bureau, China's first-batch 15 costal open cities realized last year a total regional output value of 2,924.4 billion yuan, more than 21.4 percent of the national GDP 1,3651.5 billion yuan, while the population of these cities only accounted for 7.4 percent of the national total.

The 15 cities formed four ranks in terms of economic aggregate. "Super giant" Shanghai took the lead with a regional output value exceeding 700 billion yuan; it was closely followed by Guangzhou with over 400 billion yuan; the third rank included Tianjin, Qingdao, Ningbo, Dalian, Yantai, Fuzhou, Wenzhou, Nantong, with a figure between 300 and 100 billion yuan; the last rank consisted Zhanjiang, Qihuangdao, Lianyungang and BEIHAI with an output value below 70 billion yuan.

Statistics showed that the average economic growth of the 15 cities was 15 percent, higher than the national average of 9.5 percent, remaining an important driving force of the national economy as a whole.

Per capita GDP in these cities were nearly three times national level. Their per-capita regional output value, after exceeding 3,000 US dollars in 2003, went beyond 30,000 RMB yuan last year to reach 30,729 yuan (calculated on the number of permanent residents), up 4,626 yuan over the previous year. Among them, the figure for Guangzhou and Shanghai were above 6,000 US dollars, and that for Weihai, Ningbo and Dalian were over 4,000 US dollars, and Tianjin, Qingdao, Fuzhou, Yantai over 3,000 US dollars.
Bolivia hopes sea access by offering gas to Chile
Source: MercoPress 25-03-05

President Carlos Mesa said Bolivia is prepared to sell natural gas to Chile as long as its neighbour agrees to give this landlocked nation access to the Pacific Ocean, a Bolivian goal ever since it lost its coastline to Chile in a 19th century war. Mesa said Bolivia may use its mammoth natural gas reserves to become "the energy axis of South America" -- and is willing to share its wealth with Chile if the two can agree on a "solution to our maritime problem." "There will be no real regional integration unless Chile agrees to work with Bolivia to solve the matter of or maritime demand," Mesa said in a speech during a ceremony marking the "Day of Sea," a local celebration.

Bolivia lost its coastline in a 1879-83 war with Chile, and has since kept an international campaign to press for its demand to recover access to the Pacific Ocean -- possibly by getting control of a strip of Chilean territory that runs to the coast. Chile refuses to cede control of any part of its land, saying a 1904 bilateral treaty solved all territorial matters with Bolivia. The two countries do not have diplomatic relations due to the dispute. Mesa noted that Bolivia’s natural reserves, estimated at 1.5 tcm, are the largest non-oil related in South America.

Chile has experienced energy shortages the last couple of years as a result of steep cuts in the sales by Argentina. It currently does not import any natural gas from Bolivia. Mesa repeated his appeal to the Chilean government to re-start discussions over a possible outlet to the sea. Sporadic bilateral negotiations through the decades have failed. "We are prepared to make that discussion in the most reasonable terms," Mesa said. Both the export of natural gas and demand for sea access have become sensitive issues in Bolivia.

In October 2003, protesters took to the streets to demonstrate against a government plan to export gas through a Chilean port because they understood that Chile would profit from the venture. The violent demonstrations took the lives of 56 people and forced the resignation of President Gonzalo Sanchez de Lozada. The opposition to use a Chilean port forced Mesa to sign an agreement to use a port in Peru instead, although all technical studies indicated it would be much more expensive.
Bolivia proposes gas supply to Chile
in exchange for sea access Source: Xinhua 23-03-05

Bolivian President Carlos Mesa said that his country is willing to sell natural gas to Chile if Chile agrees to provide the land-locked country an access to the Pacific Ocean. At a ceremony marking the "Day of Sea," Mesa said it is necessary to restart negotiations with Chile on the sea access issue. Bolivia may share its natural gas reserves with Chile if the two countries can agree on a "solution to our maritime problem," said Mesa.

Bolivia's natural gas reserves are estimated at 1.5 tcm, the largest in South America. Bolivia lost its coastline after being defeated by Chile in the 1879-1883 war. The country is trying to restore the Atacama corridor, a key access to the Pacific Ocean. Chile, however, refuses to cede control of the strip, saying a 1904 bilateral treaty settled all territorial matters with Bolivia. Decades-long negotiations on the issue have failed.

Bolivia and Chile downgraded diplomatic relations in 1978 over the border issue. The two countries maintain commercial relations and have consulates in each other's capital.
Bolivia’s Congress approves new oil law
Source: Dow Jones 16-03-05

Upset that Bolivia's Congress approved a controversial new hydrocarbons proposal that would dramatically raise taxes on oil companies, President Carlos Mesa formally announced his decision to call for early elections in August. Mesa, who signalled his intention as members of Bolivia's lower house moved toward passing the bill, said his opponents are seeking the " collective suicide of the country" as the legislation would prompt foreign oil companies to pursue legal redress.
Jose Galindo, Mesa's chief of staff, has since submitted legislation to advance elections by two years from August, 2007, when the president should complete his term. The early elections would be general, meaning lawmakers would also have their seats on the ballot.

Bolivia has been besieged recently by protests from some indigenous and labour groups, which are blockading roads, threatening urban centres with shortages and costing the economy, South America's poorest, millions of dollars.
Earlier, Mesa said Bolivia was becoming ungovernable and offered lawmakers his resignation. But they rejected it. Mesa blamed Evo Morales, an indigenous leader who represents coca growers in Congress as head of the Movement Toward Socialism party, of instigating the protests. Morales has demanded that royalties on petroleum production be raised to 50 % from 18 % before the road blocks are lifted. The 50 % royalty must be still be ratified by the Senate, where there is a consensus to give it a stamp of approval.

Mesa's proposal would have raised the tax that oil companies pay on income, not the royalty on production, which is applied at the well-head. Energy Minister Guillermo Torres called the new royalty "a disaster," saying the associated tax regime will be too onerous and predicting that it will spur lawsuits against the government for breach of contract. In any event, analysts and lawmakers, including Morales, said Mesa's proposal for early elections is unconstitutional. Legally, he can only resign, they say.

Meanwhile, another coca leader, Julio Salazar, said from El Chapare that the blockade of the highway connecting the east and the west of the country -- on which some 1,500 vehicles are stranded -- has begun to be lifted with the passage of the law. Morales said he also favoured suspending the protests and re-opening the country's highways. Analysts point out that although Mesa has high approval ratings, he has no political party to push his agenda in Congress.
Angola ChevronTexaco & Total LNG project
Source: This Day 21-03-05

US oil major, ChevronTexaco has announced that it was collaborating with three other multinational oil companies to execute a LNG project (LNG) in Angola. The co-venturers, namely Total, BP and ExxonMobil along with Angola state oil firm, Sonangol, signed agreements to establish the principles for gas supply, corporate structure, and legal and regulatory framework for the LNG Project. The agreements, which support the commencement of Front-End Engineering and Design studies, were reached thanks to the strong collaboration between the Government of Angola and the Project co-venturers.

Angola's Minister of Petroleum, Desiderio Costa, said, "This is a significant step forward on a project of national importance. We strongly believe that the Angola LNG Project will serve as a catalyst for Angola's reconstruction and growth by facilitating increased production of the nation's abundant oil and gas resources and by supplying natural gas for local industrial development.” “By providing a viable alternative to the flaring of associated gas, Angola is also demonstrating environmental leadership in the way in which it is developing its energy resources."

Manuel Vicente, President of the Administration Council of Sonangol, speaking as Concessionaire for hydrocarbon licenses in Angola, noted his expectations of the impact Angola LNG will have on petroleum activities in the country, saying "the LNG Project is critical to Angola's objectives of expanding the petroleum sector.” “This development will unlock further exploration and production potential in the country, will improve Angola's earnings, and will develop and demonstrate Angola's attractiveness to foreign investors interested in gas industry-related opportunities here."

On behalf of the Project co-venturers, Jim Blackwell, Managing Director of ChevronTexaco's Southern Africa Business Unit, based in Luanda, said, "We believe the establishment of the gas supply agreements and a mutually beneficial corporate structure are significant milestones, which demonstrate our continued commitment to this Project and to Angola. A reduction in gas flaring will be good news for the environment but, in addition to its environmental benefits, the Angola LNG Project will also unlock the commercial and strategic value of Angola's vast natural gas resources for the benefit of the country, its people, and the Project co-venturers.” "The Project will offer additional benefit to Angola through direct investment and opportunities for Angolan manpower, suppliers of materials and equipment, and contractors to contribute to the Project," added Blackwell.

"We sincerely appreciate the support of the Ministry of Petroleum and the Government of Angola -- in particular, for their work to foster a growth oriented framework. We now look forward to their continued cooperation in quickly implementing these measures in order to maintain our Project schedule and to allow the Project to capture available market opportunities to support this magnitude of investment." Planned as an integrated gas utilization project encompassing offshore and onshore operations to commercialise gas resources and reduce gas flaring from blocks located offshore of Angola, the Angola LNG Project is set to be a joint development between the state oil company of Angola -- Sonangol (22.8 %) -- and affiliates of ChevronTexaco (36.4 %), BP (13.6 %), ExxonMobil (13.6 %), and Total (13.6 %). ChevronTexaco and Sonangol are co-Project leaders.
Angola, ChevronTexaco partners $5bn LNG plant
Source: Dow Jones 10-03-05

Oil major ChevronTexaco, Angola and their partners have agreed on the key aspects of a $ 5 bn LNG plant to be operated in the country, a spokesman for Chevron said. He said the two project leaders, Chevron's local unit and Angolan state oil company Sonangol, have reached deals with their partners in the project on issues such as gas supply principles, corporate structure and legal and regulatory framework.

The other participants are ExxonMobil of the US, Total of France and BP of the UK. The announcement for the 5 mm-ton plant comes a few days after Angola's government gave official approval for the project. "The agreements give the green light for the engineering design to start", said the spokesman. "But the final investment plans won't be decided before early 2006", he added.
Snohvit Main Pipeline Work Begins
Statoil 4/20/2005 URL:

Work is underway on laying the main pipeline to carry the wellstream from the Snøhvit field in the Barents Sea to the Hammerfest LNG plant on the island of Melkøya in northern Norway. On April 18th, the Solitaire laybarge started laying the 143-kilometer pipeline from the western side of Melkøya. The vessel will continue towards the Snøhvit field at a rate of three to six kilometers per day.
"Laying the main pipeline means that an important piece of the big Snøhvit jigsaw is falling into place," says Olav Hagland, manager for pipelaying in the Snøhvit project. "There are many factors that play a part in contributing to the success of an operation like this, and the fact that we are operating so far north poses extra logistical challenges."

On board the Solitaire, 12.2-meter-long sections of pipe are welded together in a continuous process. The sections are fed out through an opening in the stern of the laybarge, ensuring that the main pipeline is curved correctly during the laying. The Solitaire is supplied with new pipe by three pipe transport boats which are sailing in shuttle service between the laybarge and the pipe storage area at Polarbase outside Hammerfest for as long as the laying continues.

The 28-inch diameter line pipe is made of steel with an outer coating of reinforced concrete. Each pipe section weighs between eight and 10 tons, with a total of 11,000 sections making up the main line.
Laying the main pipeline is expected to be completed at the end of May.
Bolivian Congress to Review 76 E&P Contracts
( 4/21/2005 URL:

Bolivia's government has submitted to congress 76 exploration and production contracts signed with oil companies since 1997 to be either ratified or rejected, government news agency ABI reported. Presidential minister José Galindo said that none of the contracts have been signed by the government and are therefore subject to congressional approval.

The contracts will be reviewed under the terms of the new hydrocarbons bill, which is currently before the senate after being approved by the lower house last month.
The senate's economic development commission will submit by Thursday its report on the new hydrocarbons bill, ABI said in a separate statement.
The commission has ratified the lower house's decision to charge an 18% royalty and an additional 32% tax on hydrocarbons production, the statement said.

Bolivia's constitutional court ruled on April 7 that congress must approve all oil production contracts signed in the country even though contracts have been signed in the past few years without congress' approval. "We will comply with what the constitution says and the rulings of the constitutional court. There is no reason for this government to hide any of these documents," newspaper El Nuevo Día quoted Galindo as saying.

As a result existing oil contracts in Bolivia are in "limbo," local press reported. "We don't know the status of the oil sector contracts, they could be seen as being in limbo or not in limbo, it's worrying," El Nuevo Día quoted the US ambassador to Bolivia David Greenlee as saying.

The opposition MAS socialist party has asked the attorney general's office to investigate the legal responsibilities of former Presidents Gonzalo Sánchez de Lozada and Jorge Quiroga as well as current President Carlos Mesa for allowing contracts to be signed without congressional approval.
Floating LNG Terminal OK'd Off Baja Coast
Apr. 22 2005 by  Diane Lindquist The San Diego Union-Tribune 4/23/2005

Mexico's environmental agency has approved another liquefied natural gas receiving terminal for Baja California.
The $55 million floating project would be built about five miles off the coast of Rosarito Beach by Moss Maritime, a global leader in LNG tanker construction, and Mexican partner Terminales y Almacenes Maritimos de Mexico (TAMMSA).

Several other federal and local permits are needed before construction can begin for the terminal, which would start operating in 2008, said Lucy Ocaña, the project's public relations director.
They include the approval of Mexico's federal energy commission and the transportation and communication secretariat. In addition, Rosarito Beach would have to grant a land-use permit for a small, on-shore control station.

The environmental permit, which addresses the impact on the natural habitat and is one of the key permits required, was granted in record time. The partnership applied for the permit to the Secretaria del Medio Ambiente y Recursos Naturales (Semarnat) in February.
"This concept has less impact on the environment compared to shore-based and gravity-based platforms," Ocaña said.

The process took more time for Sempra Energy, which plans an $800 million onshore terminal north of Ensenada, and ChevronTexaco, which envisions a $650 million platform that would be secured to the ocean bed near the Coronado Islands.

Both of those ventures have gained the necessary approvals to start construction, but Sempra's LNG terminal is being challenged in Mexican courts and is under investigation by Baja California's legislature.

"Fifty-five million is peanuts," said George Baker, a Houston-based Mexican energy consultant.

By converting an LNG tanker into a floating storage and regasification unit known in the energy industry as an FSRU -- the developers can significantly slash the cost of a project, Ocaña said. Because the terminal will float, she said, it will have less impact on the marine, land and air conditions where the FSRU will operate.

The project's storage capacity is expected to be 4.4 million cubic feet, she said, while the regasification facility would process additional amounts of the fuel.

"We would process for other companies," she said. "We only would offer the service."

Energy industry analysts note that companies using Moss' FSRU would be able to buy LNG on spot markets, which are likely to offer a considerable cost savings compared with long-term supply agreements reached by ChevronTexaco, Sempra and Shell, which plans to process liquefied natural gas at the Sempra terminal.

Companies using the Moss-TAMMSA facility also would have the option of selling the natural gas on either side of the U.S.-Mexico border. The ship would be connected to the Baja California natural gas pipeline system through a sub-sea pipeline.

Terminales y Almacenes Maritimos de Mexico is owned by Compania Energeticade Mexico S.A. de C.V., or CEMSA, and Moss Maritime of Norway. Moss is wholly owned by Saipem/ENI, a major gas and oil pipeline construction contractor and drilling company. ENI is Italy's national oil and gas company.

A similar Moss-designed FSRU is being installed in Livorno, Italy.
Sempra, Gazprom sign LNG agreement
by Stephanie I. Cohen 4/25/2005 WASHINGTON MarketWatch

Sempra Energy announced Monday it may receive some help from Russian energy giant Gazprom moving liquefied natural gas into North America.
Top executives from subsidiary Sempra Global and Gazprom signed a non-binding memorandum of understanding to discuss ways to steer Gazprom supplies to three Sempra liquid natural gas receiving terminals by 2010. "We are pleased to sign this agreement to help facilitate the movement of Russia's plentiful natural gas into the North American marketplace, where it is needed," said Donald Felsinger, chief operating officer of Sempra Energy.

Sempra LNG, a subsidiary of San Diego-based Sempra (SRE), is developing three LNG terminals to receive supplies -- one in Baja California, Mexico, and two others near Lake Charles, La., and Port Arthur, Texas. The terminals, which are currently under development and slated to be operational between 2008 and 2009, will be able to import between 4 and 5.5 billion cubic feet of supplies a day.

In 2004, five companies imported 244 cargos of liquefied natural gas into the U.S., including BG Group (BRG), BP Energy(BP), Distrigas, Royal Dutch/Shell Group (RD) and Statoil (STO), according to the Energy Department.

Sempra anticipates Gazprom shipments from the Shtokman gas field in the Barents Sea could begin to reach its terminals between 2010 and 2011, according to a statement from the companies.
"Sempra Global is well-positioned as a gas trading and transportation company in the United States and, because they do not intend to enter the production business outside the United States, they make an ideal partner for us," said Alexey Miller, chairman of Gazprom, the largest natural gas producer in the world.