LNG CO2 Salof Kryopak turnkey engineers contractor gas processing acid recovery

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June-11-2008 Alaska Cook Inlet gas export extension approved 2 yrs Australia Santos Predicts Growth in Unconventional Gas Chilled Ammonia to help Remove Carbon Dioxide Iraq Eying First Field Tenders in June or Early July	June-11-2008 Peru TransCanada May Build Gas Pipeline Peruvian Natural Gas Output Rose to a Record Sakhalin-2 loan secured; year-round flow to begin Turkey: Otto Flows Gas; Kuze Arpaci-1- Edirne,

Iraq Eying First Field Tenders in June or Early July
by Hassan Hafidh Dow Jones Newswires 6/9/2008 AMMAN

The Iraqi oil ministry is planning to announce the first round of tenders to develop its vast oil fields, which are among the world's largest, at the end of June or the beginning of July, an Iraqi oil official said Monday.
"Iraq is going to announce the first round of tenders to develop super giant oil fields in southern and northern Iraq either at the end of June or the beginning of July," the official told Dow Jones Newswires by telephone from Baghdad.

The official named seven oil fields and two gas fields that would be included in the first tender announcement. They are North Rumaila, South Rumaila, Zubair, West Qurna, and Buzurgan in southern Iraq and Kirkuk and Bai Hassan in northern Iraq. The two gas fields are Akkaz in western part of the country and Mansouriya in the east.

Over the last few months, the ministry has been working to prepare contract models for these fields, the official said. The ministry has signaled that more restrictive service contracts may be used to develop these fields, rather than controversial production-sharing contracts.
The official said the ministry would hold a news conference to announce these new tenders.

Iraq is currently in the final stages of striking what are called Technical Services Contracts, or TSCs, with oil majors to help boost crude oil production in the country's largest producing fields. Iraqi oil sources said these TSCs could be signed as early as June. Each would last two years and could be extended for another year. Oil Minister Hussein al-Shahristani has threatened to cancel these TSCs if they aren't signed in June. The TSCs are designed to boost Iraq's crude oil production from producing oil fields.

Iraq wants to boost production by 600,000 barrels a day in six producing oil fields in northern and southern Iraq. They are Kirkuk in the north, West Qurna 1, Zubair, Missan, Rumaila and Luhais in the south.

Iraq is currently producing around 2.5 million barrels a day, a tiny fraction of its 115 billion barrels of proven crude reserves, the world's third largest.

So far BP PLC and Exxon Mobil Corp. have submitted TSC proposals to the Iraqi Oil Ministry, and at least three more oil majors are also expected to submit their plans to Iraq to develop to other oil fields.

Sakhalin-2 loan secured; year-round flow to begin
Eric Watkins OGJ.com Senior Correspondent LOS ANGELES, June 5
The Japan Bank for International Cooperation (JBIC) and four private-sector banks are finalizing plans to provide a $5.3 billion loan for the Sakhalin-2 oil and natural gas development project.
Japan's Nikkei newspaper reported that JBIC will lend about $3.7 billion, with Bank of Tokyo-Mitsubishi UFJ, Mizuho Corporate Bank, Sumitomo Mitsui Banking Corp., and BNP Paribas providing the remaining $1.6 billion.
The financial institutions are scheduled to sign a lending agreement with Russia's OAO Gazprom as early as June 15. Gazprom partners, Royal Dutch Shell PLC, Mitsui & Co., and Mitsubishi Corp. have already committed about $15 billion to the project.
JBIC and the three major Japanese banks plan to offer financing for the project to support efforts by Japan's public and private sectors to obtain a stable source of energy, the paper said.
The financing announcement followed reports last month that year-round production will begin from the Sakhalin-2 project this summer.

"The current plan is to start year-round production in the second half of 2008, after commissioning and testing of the pipeline has finished," said Ivan Chernyakovsky, a spokesman for the consortium.
Oil will then be transported along the 800-km pipeline to an ice-free export terminal on Sakhalin Island's southern tip. The project produces 80,000 b/d of oil.

Peruvian Natural Gas Output Rose to a Record
By Alex Emery June 4 Bloomberg
Peru's natural-gas production rose to a record in May as power plants operated by Endesa SA and Suez SA increased purchases of the fuel.

Gas output jumped to 338.8 million cubic feet a day, an increase of 21 percent from the previous month, on production gains at the Camisea and Aguaytia fields, state oil-licensing agency Perupetro said today in an e-mailed statement.

Peru, South America's fifth-largest natural-gas producer, has lined up $6 billion in investment commitments in its oil and gas industry in a bid to boost output. Peru is a net importer of oil, which has doubled in price over the past 12 months.

"We're working to ensure a more widespread use of gas, a cheap fuel which Peru has in abundance," Peru's Energy Minister Juan Valdivia said in a statement. "Unfortunately we have a crude production deficit, and can't handle international prices, which have an impact on domestic costs."

Peru plans to call for bids to build two natural-gas pipelines that could supply fishmeal plants and mining operations, President Alan Garcia said today. The pipelines will add to a south coast pipeline project that has drawn bids from Suez SA, Conduit Capital Partners LLC and Energy Transfer Partners LP.

"This way, Peru will use its gas and save the cost of a vast quantity of oil," Garcia said in an e-mailed statement. "We need to gasify the country with gas-powered buses and trucks to bring down transport costs."

Crude oil and liquid gas production fell 7.6 percent to 104,862 barrels a day in May because Buenos Aires-based Pluspetrol SA was repairing Peru's biggest liquid-gas plant.

Crude oil for July delivery fell $2.06, or 1.7 percent, to $122.25 a barrel at 2:38 p.m. on the New York Mercantile Exchange. Natural gas rose 19.9 cents, or 1.6 percent, to $12.42 per million British thermal units.

Turkey: Otto Flows Gas; Kuze Arpaci-1- Edirne,
Otto Energy 6/4/2008
Otto Flows Gas from Second Well - Kuzey Arpaci-1 Edirne, Western Turkey
Joint venture partners Otto Energy and Incremental Petroleum announced that the Kuzey Arpaci-1 well has tested at excellent flow rates from a tested section of only 5m in the lower reservoir.

Highlights:
# Kuzey Arpaci-1 flowed dry gas at a rate of 1.15 MMscf/d over the interval 462.8m to 467.5m at a stabilized rate of 1.15 MMscfg/d through a 1/2 inch choke.
# Another, shallower reservoir section is also present in this well and will be available for future production.
# This is the second confirmed commercial flow rate from the Edirne discovery wells.

Following the shut in period additional perforations will be added and the well will be flowed again and prepared as a future production well. The rig will then move to test the Arpaci 1 well, which was drilled in January 2006, before the 3D seismic was available.
Partners in the Edirne Gas project are Otto Energy with 35% and Joint Operators Incremental Petroleum (55%) and Petraco Energy (10%).

Chilled Ammonia Sniffs Carbon Dioxide
June 2, 2008 By Salvatore Salamone
We Energies, the Electric Power Research Institute and equipment and service provider Alstom have started a pilot project to test an ammonia-based absorption system to remove carbon dioxide from emissions of an existing coal-fueled power plant.

The pilot uses chilled ammonia to cool flue gas. Cooling increases the volume and rate at which carbon dioxide can be isolated in a highly concentrated form. The participants in this pilot believe the technology has the potential to capture up to 90 percent of the carbon dioxide from a plant's flue gas emissions, although the ability to store such releases is not yet possible.

One benefit of conducting this test in Wisconsin is that there will be a small cooling assist from Mother Nature. Summer and winter temperatures at the plant are naturally lower than for a plant in the South.

That small benefit aside, development of the technology at the heart of this pilot program has been a joint effort. Alstom, We Energies and more than about 30 companies from around the world worked together to advance this technology. One appeal of the approach is that it can be retrofitted to existing plants as well as work with new plants.

Construction of the absorber at We Energies' Pleasant Prairie, Wis., plant started in the fall. Similar projects are under way elsewhere. For instance, last year American Electric Power and Alstom signed a memorandum of understanding with the aim of bringing the same technology to full commercial scale by 2011. They are working on a plant with as much as 200 megawatts of capacity.

The 1.7-megawatt system used in the We Energies pilot is designed to capture CO2 from a portion of the coal-fired boiler flue gas at the Pleasant Prairie plant.

Over the next year, the participants will evaluate the technology in several areas. "We'll look at the sustainability and durability of the technology," says Hank Courtright, vice president of environmental and energy analysis sector at the institute. "And we'll look at the economics and performance."
Others emphasized this point. "The pilot plant is essential to test the technology," says Jean-Michel Aubertin, senior vice president of Alstom's energy and environment systems group. "We will look at the reliability of the operations."
Additionally, the group will see how close to the 90 percent capture rate this system can achieve and will look at the performance/cost analysis of this operational system versus other carbon capture technologies.
Participants in the pilot stressed that the objective here was to test technology for new plants "and to develop technology that can be applied worldwide to the installed base," Aubertin says.

Small Steps
The pilot project is just the beginning of what is envisioned as a longer-term commitment. "This is an important step, but a small step," Courtright says.

For instance, this project is designed to support 1.7-megawatt operations while the plant's capacity is about 1,000 times that. So, operational and technological successes demonstrated with this pilot will still need to be scaled up significantly.

Additionally, this project only deals with one aspect of the total carbon issue, which is to say the part that tries to capture the releases. A complete system would also have to address carbon storage. According to Aubertin and Courtright, this pilot is a catch and release program. The carbon that is captured will be released into the atmosphere, as it would have been anyway.

Operational costs must also be factored in. This pilot will examine such factors as cost to maintain the absorber and the energy required to run the absorber. If the chilled ammonia technology meets its expected potential, it might be used for other purposes in the future. For example, most of the attention today is focused on coal-fueled plants because they are so widely used and emit significant amounts of CO2.

If this technology proves out and CO2 emissions are cut by 90 percent, attention could be shifted to other types of plants. For example, natural gas-fueled plants emit about half the CO2 as compared with comparable coal plants. If the chilled ammonia technology cuts a coal plant's emissions so it is only emitting 10 percent of its current amount, the emissions of a gas-fueled plant would contribute more CO2 to the atmosphere than a coal-fueled plant.

Additionally, the participants in this trial hope to expand the usefulness of this technology to plants around the world. As noted, the work done to bring the chilled ammonia technology to its current state has already benefited from the cooperation of nearly three dozen organizations from around the world.

More information is available from Energy Central:
* Generation Technologies Topic Center http://topics.energycentral.com/centers/gentech/default.cfm

Australia Santos Predicts Growth in Unconventional Gas
By Angela Macdonald-Smith June 3 2008 Bloomberg

Unconventional sources of natural gas, such as coal seam and shale, are likely to increase their contribution to supplies of the fuel, said Santos Ltd., Australia's third-biggest oil and gas producer. These forms of gas make up about a third of the U.S.'s 24.5 trillion cubic feet of annual consumption and will become more important in Asia, David Knox, Acting Chief Executive Officer of Adelaide-based Santos, said today at an investor briefing. Santos may book its first unconventional gas resources this year, said Rick Wilkinson, vice-president of commercial operations.

Gas demand in eastern Australia may more than double in the next decade, driven by the introduction of carbon trading and the start-up of liquefied natural gas export projects in Queensland state, Santos said. Rising consumption will boost prices, said the company, operator of the Cooper Basin project, Australia's biggest onshore source of gas.

"This price increase will drive conventional reserves and unconventional resources growth in the Cooper Basin," Wilkinson said at the investor briefing, which was carried by Webcast. "It's not just a coal seam gas story. We've got a fantastic footprint to take advantage of that."

The Cooper Basin may hold about 7 trillion cubic feet of unconventional gas, Wilkinson said.

Santos gained 0.9 percent to A$21.92 in Sydney trading and was at A$21.92 at 10:19 a.m. local time, poised for a record close.

LNG Growth
Santos may have stakes in four LNG ventures by 2020, at Gladstone, Queensland state, the ConocoPhillips-operated Darwin plant in northern Australia, the Browse Basin off the northwest coast and at the Exxon Mobil Corp.-operated Papua New Guinea project, the company said in a presentation lodged with the Australian Stock Exchange. The four ventures may provide Santos with net LNG output of as much as 10.3 million tons a year by the end of the next decade, it said.

Santos last week agreed to sell a 40 percent stake in coal seam gas assets and the proposed Gladstone LNG project to Malaysia's Petroliam Nasional Bhd. for $2.51 billion.
The sale, assuming it takes effect Aug. 31, will reduce forecast 2008 output by about 500,000 barrels of oil equivalent, cutting the full-year production target to 55.5-57.5 million barrels, Santos said in the presentation. It will also trim Santos's forecast capital expenditure this year by A$75 million ($72 million) to A$1.425 billion, it said.

Peru TransCanada Says It May Seek to Build Gas Pipeline
By Ian McKinnon June 3 Bloomberg

TransCanada Corp., owner of Canada's largest natural-gas pipeline system, confirmed it may seek to build a gas pipeline in Peru as part of its strategy to supply expanding North American demand. "It's purely an exploratory activity at this point,'' spokeswoman Shela Shapiro said today in a telephone message. "The idea has some inherent possibilities."

Calgary-based TransCanada and Petroleo Brasileiro SA, Brazil's stated-controlled oil company, may become the third group to bid on the pipeline, President Alan Garcia said yesterday. The conduit may cost as much as $1.2 billion, and the South American country may call for bids "in the coming weeks'' if rival projects persist, he said in a broadcast by state television TV Peru.

TransCanada owns more than 59,000 kilometers (36,669 miles) of pipelines in Canada, the U.S. and Mexico, according to the company's Web site. The Peruvian project suits TransCanada's strategy of linking producing regions with North American consuming markets, Shapiro said.

"It's a logical fit for Peruvian gas to get into the North American market," she said. Gas futures in New York today rose to as much as $12.376 per million British thermal units, the highest since December 2005, as distributors compete to secure supply that can be stored for consumption during North America's winter, when demand peaks.

Dallas-based Hunt Oil Co. is leading a group planning to build a plant on Peru's coast to process 677 million cubic feet of gas in a liquefied form, or LNG. Exports to Mexico from the $3.9 billion project are forecast to begin in May 2010, closely held Hunt has said.

A LNG plant is "part" of TransCanada's exploratory efforts, Shapiro said, without elaborating.

Suez, Conduit Capital
Peru, South America's fifth-largest gas producer, is counting on $6 billion in oil and gas investment projects to double gas output and drive 7 percent annual economic growth over the next four years. Paris-based Suez SA and New York-based investment fund Conduit Capital Partners LLC are holding talks to submit a joint proposal for the pipeline. Energy Transfer Partners, a U.S. natural-gas transporter and propane marketer, has also fielded a bid.

Royal Dutch Shell Plc and TransCanada plan to appeal New York State's denial of permits for a proposed LNG terminal in Long Island Sound. New York Governor David Paterson on April 12 rejected the project because of potential environmental damage.

TransCanada rose 31 cents to C$39.59 at 3:54 p.m. in Toronto Stock Exchange trading. The company's stock has dropped 2.2 percent this year.

Cook Inlet gas export extension approved 2 YEARS:
US says Asia shipments won't cause Alaska shortage.
By WESLEY LOY wloy@adn.com June 3rd, 2008

JUNEAU -- The U.S. Department of Energy on Tuesday approved two more years of natural gas exports from Cook Inlet. Oil companies Conoco Phillips and Marathon had sought the extension to continue shipping gas to Asia, chiefly Japan. The extension lasts through March 2011 and allows the companies to export up to 98 billion cubic feet.

Natural gas once was plentiful in Cook Inlet, but in recent years worry has risen about known fields depleting.
The DOE's Office of Fossil Energy in Washington, D.C., said its review showed gas exports could continue without causing local shortages. "The record shows there is sufficient regional supply of natural gas to satisfy local and export demand through the authorization time frame," the agency said in its 71-page order. The extension, it added, "will continue benefits provided by the export to the Alaskan economy and international trade."

Since 1967, Conoco and its minority partner, Marathon, have held a federal license to export liquefied natural gas, or LNG, from a plant at Nikiski on the Kenai Peninsula. The plant cools the gas into a liquid that can be loaded onto special tankers for the voyage across the Pacific. State officials at first were reluctant to support continued exports from Cook Inlet, where gas fields are showing their age. But in January, the Palin administration agreed to support extending the export license, which was due to expire next year, after the oil companies made commitments to step up exploratory drilling around the Inlet. "By working together with the state of Alaska, we have been successful in achieving an outcome that is good for the state, the local economy and our ongoing business," said Erec Isaacson, a Conoco vice president. "The Kenai LNG plant directly employs approximately 58 company employees and is estimated to support 128 indirect jobs."

Conoco already has begun a drilling program in the Beluga River field, with one well started in the last week and a second planned, said company spokeswoman Natalie Lowman. The company also is getting ready to drill three wells from its North Cook Inlet offshore platform. "This is great news for the state and its residents," Palin said. "This extension will secure a future for the LNG operation and is another step toward ensuring energy supplies and energy security for Alaska."

Curtis Thayer, spokesman for Enstar Natural Gas Co., the main gas distributor for Southcentral Alaska, said his company also approved of further exports. This will keep the drill bit turning, and the liquefaction plant serves an important role storing gas for withdrawal in winter when demand can spike, he said. "If that plant wasn't there, we might be in a world of hurt," Thayer said.

State Rep. Mike Chenault, R-Nikiski, also was happy about the export extension, saying it's good to have the LNG plant for storage and as a market incentive for drillers. He's bullish on the Inlet's potential. "I still think there's a lot of gas out there," he said.

Not everyone supported more exports.
The DOE received a number of objections, including one from Chugach Electric Association, the largest electric power utility in the Anchorage area. The company raised questions about future availability of gas for use in its gas-fired power plants.