Peru starts up
Pagoreni gas-condensate field
The Peruvian government reported that the six-member Consorcio Camisea
has begun production of natural gas at Pagoreni field on Block 56 in
the Cuzco region and part of the Camisea gas-condensate project.
The consortium comprised of Plus-petrol Peru Corp., Hunt Oil, SK
Energy, Tecpetrol, Sonatrach, and Repsol YPF SA, said it will initially
produce gas at six wells on the block.
The consortium said Pagoreni means an increase in the production of
liquids of as much as 45,000 bpd and an increase in gas production from
500 MM cfd to 1.26 bcfd.
Gas is piped to the 450-MMcfd Malvinas gas-processing plant near the
Camisea fields and is then transported to Pisco, where naphtha,
propane, butane, and diesel are extracted.
The consortium said the launch of production from Block 56 marks the
exploitation of a new reserve of 3.4 tcf of gas and 227 million bbl of
NGL, increasing the Camisea reserves to 14.8 tcf
Development of Block 56, in which the consortium has invested some $850
million, is also being referred to as the second phase of the Camisea
project as it is adjacent to Block 88, which went into production in
mid-2004.
Welcomed production
The Block 56 production will be welcome in Peru, which is seeing demand
growth for gas. In fact, demand has grown so quickly that the pipeline
transporting gas from Camisea to the capital region has reached
capacity. The pipeline is operated by a consortium known as
Transportadora de Gas del Peru SA, or TGP. According to the energy and
mines ministry, TGP has a contract to increase capacity in the
westbound pipeline to 450 MMcfd from the current 290 MMcfd.
Earlier this month, the Peruvian government awarded Conduit Capital
Partners LLC subsidiary Kuntur Transportadora de Gas, SAC (Kuntur), and
a 30-year concession contract to build a southbound 700-km pipeline to
carry gas from Camisea to the port of Ilo in southern Peru.
Development and construction cost for the pipeline, known as the
Gasoducto Andino del Stir (GAS), is estimated to be $1.4 billion.
Construction is due to begin in 2010, with operations expected to begin
by yearend 2012.
Conduit said the pipeline will deliver “attractively priced gas that is
expected to help spur economic growth in Peru’s southern region, which
will begin facing power shortages as soon as
2011.”
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Kurdish natural gas
production Dana, Crescent
Eric Watkins Oil Diplomacy Editor LOS ANGELES, Oct. 6
Dana Gas and equal partner Crescent Petroleum have started natural gas
production in Iraq's northern Kurdistan region after commissioning the
first stage of a $650 million project.
The two companies said they have started production of 75 MMcfd of gas
from Khor Mor field. Output is expected to gradually reach 300 MMcfd in
first half 2009. Gas produced will feed a electric power plant in
Erbil province, while
in a later stage the project would feed another power plant under
construction in Suleimaniya province. The total power generation of the
two plants would be 1,250 Mw. Gas from Khor Mor field will be
transported by a 180-km pipeline to
feed the two plants.
In April 2007 the Kurdistan regional government awarded the two
companies a service contract to develop, process, and transport gas
from Khor Mor field on a fast-track basis, and to appraise and develop
the nearby Chemchamal gas field. Khor Mor field has never been
fully developed and has not operated
since 1991. The field has estimated gas reserves of 1.4 tcf.
Chemchamal, which has never been appraised or developed, has estimated
reserves of 2.2 tcf.
Crescent and Dana also are developing a 'Gas City' business park in the
area using gas as a feedstock for industries such as petrochemicals,
steel, building materials, fertilizers and manufacturing.
Kurdistan Gas City, which will include industrial, residential, and
commercial components in an integrated city, has a targeted initial
basic infrastructure investment of $3 billion.
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Long-term gas supply
security a threat as demand rises
Doris Leblond OGJ Correspondent PARIS, Oct. 7
Over the last 18 months, natural gas prices have continued to rise
steadily in both established and new markets "not only a reflection of
higher demand, but also of a delayed supply response," said Nabuo
Tanaka, executive director of Paris-based International Energy Agency,
in his introduction of the 2008 Natural Gas Market Review.
"Investments uncertainties, cost increases, and delays continue to be a
major problem in most gas markets and are continuing to constitute a
threat to long-term security of supply," Tanaka stressed. These factors
no doubt will be compounded by the world financial turmoil, which has
erupted since the review was published and which will forcibly result
in a credit squeeze for energy investments.
Investment lag
Ian Cronshaw, head of IEA's Energy Diversification Division, who
designed and managed the review, was already concerned that increasing
gas demand, especially for power generation, was not being met by
sufficient investment. While he said projects currently under way will
proceed, he also said the lag in LNG investments beyond 2012 "is a
concern for all gas users in both the IEA and non-IEA markets."
The review pointed out other issues that pose a threat to long-term
supply security: the escalation of engineering, procurement, and
construction costs (EPC); the tight engineering market; and the growing
propensity of producing countries to reserve a greater share of gas
production for their own growing domestic markets.
High natural gas prices, which also are pushing up electricity prices
because of the close link being established between gas and power, have
not slowed demand in consuming markets either inside the IEA or
nonmember countries. In the US gas demand grew by 6.5% in 2007 and
about 4% in first-quarter 2008. In Japan, growth in 2007-08 was 9% on
the back of a 50% lower nuclear power utilization. In Europe, gas
consumption was dampened by warm weather but in early
2008, growth jumped to more than 8%, most notably in Spain, where
first-half 2008 demand increased by 20% despite an economic slowdown.
Meeting gas demand
To meet this growing demand LNG trade is on the way to playing a
stronger role in regional markets within the Organization for Economic
Cooperation and Development (OECD) countries in the short and medium
term, forecasts the review. While LNG is already pivotal in OECD
Pacific, it is expected to reach 20% in Europe, where imports will
account for over half of total supplies.
In North America, indigenous production will still supply more than 90%
of expected demand by 2015, yet LNG imports are expected to more than
double 2007 levels.
Increasing LNG trade will globalize regional gas markets, a trend that
seems irreversible, says the review. Driving global interactions are
the prevalence of more producing and consuming countries, a growing
dependence on external markets in OECD Europe, tighter balances,
increasing volumes of spot and short-term LNG, and higher gas prices.
To benefit from globalization of the gas
market, improved transparency on flows and prices and more-competitive
internal markets are needed. Interregional competition will improve
global gas security in the long term. The review
notes liquidity on European hubs—both on the UK's National
Balancing Points and on most continental hubs—has "grown considerably,
promoting more flexible market responses, more transparency, and
more-accurate price signals."
Gas traded among regions will grow to 17% in 2015 from 13% in 2005,
with LNG accounting for about 84% of the increase in interregional
trade as exports grow to some 400 billion cu m in 2015 from 192 billion
cu m in 2005.
Gas supply sufficient
Examining gas supply, IEA's review sees worldwide gas resources more
than sufficient to meet global demand, which it establishes at 3.689
trillion cu m by 2015, up from 2.854 trillion cu m in 2005, always
subject to timely investment. The biggest regional increase in absolute
terms is in the Middle East, but there is also a marked increase in
Africa and Latin America. All told, production is expected to increase
in all major regions except OECD Europe, where North Sea output is
declining. North American production growth should slow after 2015.
Natural gas supplies will continue to come mainly from conventional
sources but coalbed methane and other nonconventional supplies, such as
shale gas, should be playing a growing role in some regions, notably
North America. The great uncertainty, however, is how major
resource holders will meet
increasing demand, rapidly rising costs, and development of more-remote
gas.
Pipeline delays
Looking at the needed infrastructure to deal with increasing gas flows,
both regional and global, Tanaka was concerned that "progress on major
pipelines, outside the United States is slow." Improvements to market
functioning are especially urgent in Europe, he noted, because of the
region's growing demand for gas. Also needed in Europe are greater
cross-border gasline connections. Noted, also, were the many
delays in pipeline infrastructure
development last year globally as well as increased costs. Particularly
mentioned were Nabucco and Nord Stream in Europe and the Alaska
pipeline in North America.
In LNG there are similar trends, as many projects are planned but not
all are going ahead. In this area, the review notes the unprecedented
and major expansion in regasification capacity worldwide, which risks
being underutilized for it greatly exceeds liquefaction capacity. On
the other hand, concedes the review, this could be a source of
flexibility. The review is prolific and detailed on all these
developments. It also
includes data and forecasts on OECD and non-OECD regions to 2015 and
in-depth reviews of five OECD countries and regions, including the
European Union.
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US replaced more than
twice 2007 gas used
By OGJ editors HOUSTON, Oct. 18
The US replaced more oil reserves than the country used in 2007 and
added more than twice the amount of gas used that year, the US Energy
Information Administration said Oct. 17. The oil additions were
the first in 4 years, and the gas additions set
a record, the agency said. Operators added 2 billion bbl of
proved oil reserves in 2007, a year in
which the country produced 1.7 billion bbl. They added 46.1 tcf of
proved dry gas reserves while producing 19.5 tcf.
The changes brought yearend 2007 reserves to 21.3 billion bbl of oil
and 237.7 tcf of gas. That left the country with 13% more proved gas
reserves and nearly 2% more proved oil reserves than yearend 2006.
"The dry natural gas reserve additions mostly reflected the rapid
development of unconventional gas resources including shale, coalbed
methane, and tight low-permeability formations," EIA said. It said
shale proved reserves rose 50% in 2007 and now account for 9% of the US
total.
Texas had the nation's largest year-to-year increase in dry gas
reserves, adding 10.3 tcf or 17%. Wyoming added 6.2 tcf or 26%,
Colorado grew 4.7 tcf or 27%, and Utah climbed 1.2 tcf or 24%. The Gulf
of Mexico federal region fell 1 tcf or 6%, and New Mexico was off .7
tcf or 4%.
Alaska's year-to-year proved oil reserves were up 284 million bbl or
7%, including 45 million bbl in new field discoveries. Texas was up 251
million bbl or 5%. North Dakota had the third largest gain, 70 million
bbl or 17%, due to rapid development of unconventional oil in the
Bakken formation.
The US produced 76 billion bbl of oil in 1977-2007, more than twice the
proved reserves estimated in 1977, EIA noted.
Coalbed gas reserves grew 11.5% in 2007 to 21.8 tcf and account for 9%
of US dry gas reserves.
Natural gas liquids reserves, which represented 30% of total liquid
hydrocarbon proved reserves in 2007, climbed 8% to 9.1 billion bbl in
2007. NGL reserves include condensate.
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Australia Woodside lets contract for Pluto LNG project
Rick Wilkinson OGJ Correspondent MELBOURNE, Oct. 22
Woodside Petroleum Ltd., Perth, has awarded a $115 million (Aus.) civil
works contract for the Pluto LNG project in Western Australia to
Paladio Group unit Decmil Australia.
This follows last month's $80 million (Aus.) contract awarded to Decmil
for construction of site accommodations on the Burrup Peninsula.
The latest contract requires Decmil to supply and install concrete
foundations and pedistals, underground electric, and hydraulic services
for the storage and loading facility of the Pluto project.
The work will begin in
November. First LNG from Pluto is expected in
late 2010.
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Cameroon: Nigerian Gunmen Threaten French Hostages
AFX News Limited 10/31/2008
Gunmen in speedboats seized 10 mostly French crew members in an attack
on an oil vessel off Cameroon on Friday and threatened to kill them
"one by one" if the Cameroonian government did not meet their
demands. A spokeswoman for oil services firm Bourbon said the 10
kidnapped workers were among 15 employees on board the vessel "Bourbon
Sagitta," contracted by French oil major Total , when it was attacked
early on Friday.
Two allied militia groups from Cameroon's Bakassi peninsula claimed
responsibility and threatened to start killing the hostages if the
Cameroonian government did not meet their demands within three days.
Bakassi was handed over to Cameroon by Nigeria earlier this year after
a decades-long border dispute. Many Nigerian residents opposed the
handover and militia groups similar to the well-armed gangs of
Nigeria's nearby Niger Delta have sprung up.
"I personally led the attack during which we seized 10 men whom we are
holding as I am talking to you now," Colonel Ebi Dari, a Niger Delta
Defence and Security Council (NDDSC) commander, told Reuters in
Cameroon by phone. "If the Cameroon government does not respond
to our requests in three days' time, we will start killing them one by
one," Dari said. He said the attack was carried out jointly with
another group called the Bakassi Freedom Fighters (BFF).
DEMANDS
Dari did not detail his demands, but said Cameroon's government should
contact the groups, which began a string of attacks on Cameroonian
military forces in the run-up to Bakassi's handover on Aug. 14.
Before that, the NDDSC had demanded Cameroon and Nigeria renegotiate
the terms of a World Court ruling that recognised Cameroon's ownership
of Bakassi, which the group said ignored the views of local
people. Since the handover, the NDDSC has also demanded
compensation for Nigerians from Bakassi who chose to leave and settle
in Nigeria, along with the release of two militia members seized by
Cameroon during one of the attacks.
Dari said those kidnapped comprised seven French, two Cameroonians and
a Senegalese, though Bourbon said there were only six French citizens
along with one Tunisian worker. The company said no one was hurt
in the attacks.
Gunmen in three speedboats attacked the ship while it was helping an
oil tanker loading crude oil at an offshore oilfield in the Gulf of
Guinea, the company spokeswoman said. She said the company was
working closely with the French Foreign Ministry for the quick release
of the hostages.
Heavily armed gunmen in fast launches have in the last year preyed on
oil installations, oil and fishing boats and even coastal towns in a
region that contains the main African source of crude oil exported to
the West and China. The nearly 2,000 miles of coast are largely
uncontrolled and vulnerable to attack.
Other Gulf of Guinea states
that have seen similar attacks this year include Nigeria, Equatorial
Guinea and Benin.
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Kenworth
T800 LNG truck now taking orders
Posted by: Craig Zwiener KIRKLAND, Wash., October 31, 2008
The new Kenworth T800 Liquefied Natural Gas (LNG) truck brochure
featuring Kenworth’s latest low emissions solution is now available
from Kenworth dealers in the United States and Canada.
Kenworth T800 LNG powered tractorA typical Class 8 LNG truck may reduce
nitrogen oxide (NOx) and greenhouse gas emissions by up to 33 percent
and 20 percent, respectively, compared to a diesel-fueled truck. The
cleaner burning LNG fuel typically costs about $1 per gallon less than
the diesel equivalent fuel.
Kenworth is the first heavy duty truck manufacturer to offer an LNG
fuel system based on the Cummins ISX platform as a factory-installed
option, providing optimum system integration. The Kenworth T800’s
LNG-fueled engine provides up to 450 hp and 1,650 lb-ft of torque and
offers outstanding performance and efficiency. The T800 offers manual
transmission options, a large dash-mounted display to monitor the LNG
level, and certification from the Environmental Protection Agency (EPA)
and California Air Resources Board (CARB). Kenworth is now taking
orders for T800 LNG trucks.
Kenworth Truck Company is the manufacturer of The World’s Best(R) heavy
and medium duty trucks. Kenworth is an industry leader in providing
fuel-saving technology solutions that help increase fuel efficiency and
reduce emissions. The company’s dedication to the green fleet includes
aerodynamic trucks, medium duty diesel-electric hybrids, liquefied
natural gas trucks, and the Kenworth Clean Power(R) no-idle system. In
addition, Kenworth is the recipient of the 2008 J.D. Power and
Associates awards for Highest in Customer Satisfaction for Over the
Road and Vocational Segment Class 8 trucks. Kenworth’s Internet home
page is at www.kenworth.com. Kenworth. A PACCAR Company.
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China,
Russia Sign Key Siberian Oil Pipeline Deal
Dow Jones Newswires 10/28/2008 MOSCOW
Russia and China signed a long-awaited deal Tuesday to build a new
Siberian oil pipeline to boost energy exports to China during a visit
to Moscow by Chinese Prime Minister Wen Jiabao. The pipeline
would run from the East Siberia-Pacific Ocean trunk pipeline, which is
still under construction, to the Chinese border, officials said.
Capacity is expected to be about 15 million metric tons a year.
The deal was signed by Chinese state oil major CNPC and Russian state
pipeline monopoly Transneft in the presence of Russian Prime Minister
Vladimir Putin and China's Jiabao.
The agreement is "on the principles of construction and use of the
pipeline between Skovorodino and the Chinese border," officials said,
without giving further details.
Rosneft, Russia's biggest oil major, currently supplies China with oil
by rail. Despite being China's neighbor, Russia is only the
fifth-largest supplier of crude oil to the energy-hungry Chinese market.
The branch pipeline is planned to run some 70 kilometers from
Skovorodino in Siberia to the Chinese border and will eventually supply
the oil hub of Daqing in northern China.
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