|
Cummins Westport
Order for 260 Natural Gas Engines
Dec. 22, 2008 VANCOUVER, BRITISH COLUMBIA
Cummins Westport Inc. (CWI) (TSX: WPT)(NASDAQ: WPRT), a leading
provider of high-performance, alternative fuel engines for the global
market, announced today that North American Bus Industries, Inc. (NABI)
has ordered 260 compressed natural gas (CNG) CWI ISL G engines for
CompoBus buses.
"Production is underway to fill this significant order from NABI," said
Guan Saw, CWI's President. "The ISL G, our flagship engine, continues
to gain market share in the North American transit fleet. The ISL G
offers operators the benefits of meeting EPA 2010 emissions standards
today, with the robust performance and reliability they require."
The NABI CompoBus is a 45-foot vehicle made from a lightweight
composite material that weighs roughly the same as the company's
traditional 40-foot bus, enabling it to provide a lower operating cost
per passenger mile as compared to buses with traditional steel
structures.
About the Cummins Westport ISL G
The ISL G surpasses EPA 2007 phase-in levels and meets 2010 emission
standards of 0.2 g/bhp-hr (grams per brake horsepower hour) NOx
(nitrogen oxide) and 0.01 g/bhp-hr PM (particulate matter). Based on
the Cummins ISL, the ISL G leverages Cummins' proven cooled Exhaust Gas
Recirculation (EGR) with stoichiometric combustion allowing for the use
of a three way catalyst, which is maintenance free and is in common use
in passenger cars. In addition to delivering ultra-low emissions, the
ISL G, with ratings from 250 to 320 horsepower, delivers increased
thermal efficiency and over 30% higher low-speed torque compared with
today's CWI "Plus" engines. More information about the ISL G can be
found at: www.cumminswestport.com/products/islg.php.
|
Williams Completes 1st Phase Pennsylvania New Jersey pipeline
Williams 12/22/2008
Williams has placed the first phase of its Sentinel expansion project
on its Transco natural gas pipeline system into service, increasing
firm transportation capacity into the northeastern U.S. by 40,000
dekatherms per day.
The Sentinel expansion project is being constructed in two phases.
Phase 2 of the expansion will provide an additional 102,000 dekatherms
per day and is expected to be placed into service by November 2009. The
entire Sentinel expansion project is designed to increase Transco's
firm transportation capacity by 142,000 dekatherms per day.
"This is a major milestone and we sincerely appreciate our customers'
commitment to this project," said Phil Wright, president of Williams'
natural gas pipeline business. "We look forward to placing the
remaining portion of this much needed project into service and working
with our customers to provide reliable natural gas service for the
northeastern United States for years to come."
Phase 1 construction has included the addition of approximately four
miles of 42-inch pipe in Northampton and Monroe counties, Pa., in
addition to compressor station upgrades at Transco Station 195 in
Delta, Pa. Phase 2 will include the addition or replacement of 14 miles
of pipeline at various locations in Pennsylvania and New Jersey.
|
Northeast US Millennium pipeline First Delivery 182-Mi.
Millennium Pipeline 12/22/2008
Millennium Pipeline Company, L.L.C. announced that its recently
constructed 182-mile natural gas pipeline was placed into complete
service today and deliveries of natural gas supplies to its anchor
shippers have commenced.
"This is an historic day for New York State and the Northeast," said
Millennium President Dick Leehr. "Many years of hard work and planning,
permitting and eventual construction have finally come to fruition,
enabling Millennium to deliver much-needed natural gas supplies as we
enter the peak of the 2008-09 winter heating season. But the real
winners are the energy users of today and tomorrow, who now have a
reliable new natural gas pipeline system that will meet their growing
need for clean-burning natural gas for years to come."
"It is gratifying to see that a major collaborative effort involving
skilled union workers from local communities and around the country,
government officials at all levels, customers, partners, contractors,
vendors and many other organizations came together to achieve this
common important goal of meeting the region's growing energy needs,"
Leehr added.
Millennium Pipeline began construction activities in 2007; however, the
majority of the 30-inch-diameter mainline pipeline installation work
across New York's Southern Tier and lower Hudson Valley was completed
this year. Some land restoration and environmental monitoring work will
extend into 2009 and beyond. More than 2,000 workers -- many hired from
local communities -- were involved in construction of the pipeline.
More than 90 percent of the Millennium pipeline was installed within or
adjacent to existing pipeline rights-of-way. Millennium is the
centerpiece of a $1 billion investment in new energy infrastructure
that includes new facilities by Empire Pipeline, Algonquin Gas
Transmission and the Iroquois Gas Transmission systems.
Millennium Pipeline is anchored by its customers National Grid,
Consolidated Edison of New York, Central Hudson Gas and Electric
Corporation and Columbia Gas Transmission Corporation. Millennium will
serve markets along its route in the Southern Tier and lower Hudson
Valley as well as providing essential service to the New York City
markets through its pipeline interconnections. Millennium's design will
allow it to transport up to 525,400 dekatherms per day, based on market
needs. Millennium is jointly owned by affiliates of NiSource Inc.,
National Grid and DTE Energy.
|
Nymex
Crude Breaks $34/Bbl, Demand Concerns Hold
by Sherry Su FWN Financial News 12/19/2008
Nymex crude futures hit a four-and-a-half year low Friday, as a gloomy
global demand outlook continued to outweigh the impact from output cuts
by oil producing countries. However, the steep decline was
restricted to the January Nymex contract, in trading that was seen to
be associated with the contract's expiry later Friday.
Other crude contracts edged higher, but failed to make significant
gains as activity continued to wind down ahead of the Christmas holiday
season. "It looks to me that January is detached from the rest of the
complex," said Jim Rintoul, analyst at London-based trade advisory
TheOilTrader.com, and he suggested that the contract's impending expiry
blunted the significance of the sharp move.
At 1336 GMT, front-month January light, sweet, crude contract on the
New York Mercantile Exchange was trading $1.53 lower at $34.69 a
barrel, after dropping as low as $33.44 a barrel. The February contract
was up 4 cents at $41.71 a barrel.
The front-month February Brent contract on London's ICE futures
exchange was up 71 cents at $44.07 a barrel.
The ICE's gasoil contract for January delivery was down $2.75 at
$452.50 a metric ton, while Nymex gasoline for January delivery was up
212 points at 98.41 cents a gallon.
Speaking in London Friday, the Organization of Petroleum Exporting
Countries' President Chakib Khelil said the group will continue cutting
output until the price of crude stabilizes. The group announced
Wednesday it will cut production by 2.2 million barrels a day effective
Jan. 1, as it attempts to put a floor under sliding oil prices. Initial
market response to Wednesday's move, however, has been for prices to
extend their decline.
Saudi Oil Minister Ali Naimi said: "today's price levels are wreaking
havoc on the industry and are threatening current and planned
investments." Those words, however, were likely to fall on deaf
ears again, as traders and analysts fret about deteriorating global
demand.
"We suspect that at least in the very short-term, some of the
uncertainty could lift when the Detroit situation gets clarified," said
Edward Meir at MF Global, referring to a potential government bailout
for U.S. automakers.
However, the lack of a concrete plan, and the wait for a fresh U.S.
administration to take power threatened to stymie any optimism over a
quick fix. "In such a lame-duck environment, commodity markets cannot
be blamed for discounting the worst possible scenario i.e., a
recession-induced demand implosion aggravated by the credit crisis, all
festering within a political vacuum," he said.
Chart watchers meanwhile suggested that Nymex crude futures could now
be targeting the heart of their 1999-2004 range near $25.00 a barrel,
technical analysts at Barclays Capital said. "In the absence of a
recovery above $43.50 (a barrel), the risk is for weakness to extend to
this zone near $25.00 (a barrel), though such a move would likely be
the final stages of the decline from the July peak," they said.
|
The
shock of lower oil prices
World Oil DECEMBER 2008 23 by Dr. Anas Alhajji (NGP Energy Capital
Management)
If the recent declining trend in oil prices continues, the
oil-producing countries in the Middle East are heading toward a crisis
similar to those of the mid-1980s and late 1990s. Government officials
thought that their accumulated foreign currency reserves would shield
them during periods of low prices. They are shocked by the sudden,
steep and painful decline in oil prices. They did not expect a
financial crisis that would force them to bail out their own banks and
provide billions of dollars in aid to local businesses and populations.
The oil and gas business in the region has started to contract. Already
Saudi Aramco is rethinking several long-planned upstream projects,
including multibillion-dollar developments at Manifa, Karan and Shaybah
Fields, according to Khalid Buraik, the company’s executive director of
affairs. And on Nov. 6, Saudi Aramco and ConocoPhillips announced they
would halt bidding for construction of the planned 400,000-bpd export
refinery at Yanbu, Saudi Arabia, citing the contracting market. Fears
that planned projects in the region will be mothballed are becoming
more reasonable by the hour.
At the time of this writing, oil prices were about $65/bbl. This price
is confusing. We have a major worldwide financial crisis and a crisis
in the real economy. Even so, oil prices remain in the range that was
prevalent when the US was growing at 3—4% per year, China at 11% per
year, and India at 7% pet year. If prices are too high, then they must
decline in the following weeks to levels that will be remembered for
years to come. If not, then the $60 range is likely to be the new floor.
The dependence of many countries in the Middle East, especially in the
Gulf region, on oil revenues has not changed substantially in the last
two decades. While key economic indicators in some countries suggest
otherwise, most of the new industrial sector consists of petrochemicals
and energy-intensive industries. The growth in other sectors depends
heavily on government spending, which is fueled by oil revenues.
Therefore, a large decrease in oil prices necessarily has a profound
impact on these countries.
The experience of collapsing oil prices in the mid-1980s and late 1990s
allows us to draw several conclusions about the probable impact of low
oil prices on the oil-producing countries in the Middle East:
Decline in oil revenues
The decline in oil revenues will set a new record. If oil prices
continue to drop, the coming period will be mote like the mid-1980s
than the late 1990s. Like that of the mid-’80s, the current decline
came after a long period of price increases. Prices were relatively low
in the late 1990s before they declined further in 1998 and early 1999.
Gulf countries do have a cushion of foreign reserves, which did not
exist in 1998. However, given population growth and increasing
budgetary demands, Middle Eastern countries will sell more oil for
lower real revenues compared with either the mid-’80s or the late ‘90s.
More oil for less money!
Budget deficits
Despite conservative estimates of oil prices in government budgets, a
continued decline in oil prices will result in budget deficits in all
the Middle East’s oil-producing countries. Some market analysts believe
that these countries will defend the oil prices found in their budgets
by cutting production. Theory, statistical analysis and history
indicate otherwise.
In theory, countries that relate oil prices to their budgets are price
takers. Therefore, they cannot be price makers by cutting production to
raise prices. Some of these countries will continue to produce to
maintain the flow of oil revenues at any price. They will use their
foreign reserves or borrow money to finance their budget deficits.
Saudi Arabia, for example, registered an unprecedented budget deficit
of $16.7 billion in 1986 and $14 billion in 1987. In 1998, the Saudi
budget deficit reached 510.7 billion. Kuwait’s budget deficit was 54.53
billion in 1987 and $5.73 billion in 1998. Iran registered budget
deficits of $17.7 billion, 59.8 billion and $6 billion in 1986, 1987
and 1998, respectively.
Budget cuts and canceled development
Lower revenues translate into canceled, curtailed or postponed
contracts. In 1987, Saudi Arabia had to cut defense and security
expenditures by 5.9%. Saudi Arabia’s 1999 budget slashed spending by
15.8%, the largest budget cut ever. Education and health services both
suffered 6% cuts. In the late 1990s, Iran closed several embassies,
citing budget cuts. During the same periods, Abu Dhabi cut back its
building contracts by 35%.
Lower or negative economic growth
Economic growth in Middle East oil-producing countries correlates
highly with oil prices. High economic growth accompanies higher oil
prices in the same manner that low economic growth is associated with
low oil prices. For example, Saudi real economic growth averaged 7.4%
between 1974 and 1981. It declined to less than 1% between 1984 and
1989. It turned negative in 1999, but higher oil prices in recent years
raised growth rates to more than 5%. Kuwait experienced 7.3% real
growth between 1974 and 1979. Growth declined to 5% between 1984 and
1989, despite revenues from its foreign investments. Kuwait suffered
from a recession in 1999. The average growth between 2002 and 2007
exceeded 10%. The same applies to Iran, the UAE, Bahrain, Qatar and
Oman.
In a low-price environment, there is no incentive to spend money on new
oil and gas projects and oilfield maintenance, even if that money
exists. The result is declining production capacity and poorly
maintained facilities. Consequently, the world will soon experience
another cycle of bust and boom in the oil business.
Dr. Anas Alhajji joined NGP Energy Capital Management, one of the
leading energy private equity firms in the industry, in 2008 as Chief
Economist. In this newly created role, Dr. Alhajji leads the firm’s
macro-analysis of the oil, natural gas and related markets and the
overall economic environment. Before joining NGP, he served as a
Professor of Economics at the University of Oklahoma (1995—1997), the
Colorado School of Mines (1996—2001) and, most recently, Ohio Northern
University (2001—2008), where he held the George Willard Patton Chair
of Business and Economics.
World Oil DECEMBER 2008 23
|
Oil at $60-$70 Better
for All Says Eni's CEO
AFX News Limited 12/19/2008
An oil price of around $60-$70 is best for both producers and consumers
in the long term, Eni Chief Executive Paolo Scaroni told reporters on
Friday. Low oil prices were immediately attractive to consumers
but lead to under-investment and supply shortages further down the
line, he said. "In the short term consumers love the idea,"
Scaroni said. "I've made a caclculation that at this level of price
every American household has 6000 more dollars in their pocket to spend
on other things -- so big money. "With the price extremely low
today it will mean very high prices three to five years from now," he
added. "It's in no one's interest to see prices in 2014 of something
like $300." "There is a position that will be good for the consumer
today and good for the consumer tomorrow and this will be more in the
region of $60-$70," Scaroni said.
He said he thought oil prices were likely to rebound if OPEC producers'
output cuts were carried out effectively.
"People tend to forget that only 9 years ago oil prices were below $10
-- so $30 is not high, but not dramatically low either," Scaroni said.
Eni was not considering halting any of its own big projects due to the
dropping oil price or the global financial problems, Scaroni said. "We
do not see a major decision to be taken in this area right now."
Nor was Eni particularly exposed to the pressure on refining profits
from falling demand, he said.
"Refining margins are probably going to go down simply because
consumption overall for petroleum is not moving up," Scaroni said. "For
us refining is a very small business...so we aren't particularly
worried."
He was asked if he saw negative oil demand growth next year: "It is
possible, this year demand growth will be negative, 2009 its early days
but certainly for the first part of the year there will be negative
growth.
Scaroni was attending a conference of oil producers and consumers,
including oil ministers from OPEC members and top industry executives,
hosted by British Prime Minister Gordon Brown.
"Its very difficult for the world to live with such volatility of oil
prices," Scaroni said. "On this everyone is agreed and that is the
reason everyone is here, but to move from this state on to practical
action is a different story...it's not easy."
|
Australia Chevron Picks Site for Proposed LNG Project
Xinhua Financial News 12/19/2008
Chevron Corp has chosen a production site in Australia for its proposed
Wheatstone liquefied natural gas project, the company said on
Friday. After narrowing its search to three locations, the oil
and gas major said it preferred to build the project, potentially one
of the largest of its kind in Australia, at Ashburton North. The
site is 12 kilometers (7 miles) west of the town of Onslow and about
200 kilometers south of the offshore Wheatstone natural gas field.
Chevron Australia Chief Executive Roy Krzywosinski said in a statement
that front-end engineering and design work would be carried out in 2009
while the company sought government approval to operate a 25 million
tonnes per year LNG and domestic gas plant complex.
The initial development consists of two LNG processing facilities with
a nominal capacity of 5 million tonnes per year each. A separate, but
co-located domestic gas plant designed to initially process up to 250
million standard cubic feet per day is included as part of the
development plan.
A Chevron spokeswoman said no Wheatstone gas had been contracted for
sale while a final investment decision would be made following the
completion of the design study.
Approvals from the Western Australian state government were needed for
the project to proceed, the spokeswoman said.
Output from the project, announced in March as a 5-
million-tonnes-per-year facility, has been since revised following
discovery of more gas at its Iago gas field adjacent to the Wheatstone
gas field.
If expanded to 25 million tonnes, the Wheatstone plant would be larger
than the North West Shelf LNG project, operated by Australia's Woodside
Petroleum Ltd Woodside, and Chevron's own proposed 15
million-tonnes-per-year Gorgon LNG project, currently Australia's
biggest planned resources project.
|
China starts 13.6 billion U.S. dollars gas pipeline
www.chinaview.cn 2008-12-19 BEIJING, Dec. 19 Xinhua
China has started construction on a gas pipeline from the western
Ningxia Hui Autonomous Region to the southern Guangdong Province, China
National Petroleum Corporation (CNPC) told Xinhua Friday. The eastern
part of the second west-east gas pipeline, was approved by the
country's State Council, or Cabinet, on Nov. 12. Construction started
on Dec. 11 and 12 at four sites in the provinces of Henan, Hubei,
Jiangxi and Guangdong.
The pipeline will stretch 2,477 kilometers from
Zhongwei, in the western part of Ningxia Hui Autonomous Region, to
Guangzhou, capital of the southern Guangdong Province and cost 93
billion yuan (13.6 billion U.S. dollars). Construction on the western
section from Zhongwei to Khorgos in Xinjiang Uygur Autonomous Region,
began in February, and is expected to be finished by 2009.
The pipeline will be linked with a Central Asia gas
pipeline currently under construction at the end of 2009 and
operational in2011. The capacity of the pipeline will be 30 billion
cubic meters per year. It will be mainly supplied by the Central Asia
gas pipeline. After the pipeline is put into use, the proportion of
natural gas in China's primary energy consumption will probably be
increased by one to two percent. That will also help save 76.8 million
tonnes of coal a year, which will cut emissions of carbon dioxide by an
estimated 130 million tonnes a year, sulfur dioxide by 1.44 million
tonnes, and dust 660,000 tonnes, the company said. Gas will be
transmitted to the eastern, southern and middle part of the country as
well as the regions the pipeline runs through.
|