Nigerian
Militants Military Attack
Xinhua News Agency 9/14/2008
Nigerian militants on early Sunday launched a series of attacks on oil
facilities and military targets in the oil-rich Niger Delta region,
blowing up a major trunk pipeline at Nembe creak and capturing oil and
gas stations in the area, according to a statement sent by the Movement
for the Emancipation of the Niger Delta (MEND) on Sunday. The
statement, reached here on Sunday, said the heavily armed MEND fighters
in hundreds of war boats filing out from different MEND bases across
the Niger Delta in solidarity to carry out destructive and deadly
attacks on the oil industry in Rivers state.
"By dawn, destroyed oil flow stations, gun boats, burst pipelines, dead
and injured soldiers trailed in the aftermath of the "hurricane". Some
specific locations include the Soku Gas Plant, Chevron Platform at
Kula, over 22 well armed soldiers sent as reinforcement were
intercepted, killed and dispossessed of their weapons, a major crude
trunk pipeline at Nembe creek was blown up at several points," said the
statement, signed by its spokesperson "Jomo Gbomo". It said the
operation would continue until the government of Nigeria appreciates
that the solution to peace in the Niger Delta is justice, respect and
dialogue.
The MEND statement also ordered that all international oil and gas
loading vessels entering the region to drop anchor in the high sea or
divert elsewhere until further notice. "Failure to comply is
taking a foolhardy risk of attack and destruction of the vessel," it
said.
Oil companies are also asked to evacuate their staff from their field
facilities. MEND, who is in fight with Nigerian government
forces, said in its previous statement sent on Saturday that 27
hostages, including five foreign oil workers, have been trapped in
fighting zone in Eleme-Tombia, a riverside community in the Degema
council area of Rivers State. It had also ordered on Saturday
that oil companies to move out their workers from the region within the
next 24 hours, "because a hurricane is about to sweep through oil
installations in the entire Niger Delta region", vowing to revenge the
"unprovoked attack, and to launch an oil war in the region.
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Poland Eyes 200 Bcm in
Gas Licenses Abroad
AFX News Limited 9/11/2008
Polish gas monopoly PGNiG wants to amass licences to extract 200
billion cubic metres of natural gas abroad, mainly in Norway and Libya,
its chief executive told Reuters on Thursday.
Michal Szubski also said the potential purchase of Polish government
stakes in local fertilisers Pulawy and Police will not interfere with
the Company's plans to buy shares in power producer Enea.
"Currently our proven deposits (of gas) in Poland stand at 100 billion
cubic meters," Szubski told Reuters on the sidelines of an economic
forum in Krynica, southern Poland. "I want our foreign licenses to be
double that and that means 200 billion."
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Kazakhstan Doubles Oil
Export Duty - $203.8/Ton
by Kadyr Toktogulov ALMATY Dow Jones Newswires, September 11, 2008
The Kazakh government will nearly double the export duty on crude oil
to $203.8 per metric ton from $109.91 in October, a government decree
published Thursday said. More than 40 oil companies operating in
Kazakhstan are subject to this duty, including KazMunaiGas Exploration
Production, Zhaikmunai and Karachaganak Petroleum Operating.
Kazakhstan's largest oil producer Chevron Corp.-led Tengizchevroil
doesn't pay the duty due to a stability clause in its contract.
The new export duty, which is linked to an average price of oil on
world markets, will come into effect in 30 days.
Elena Savchik, an oil and gas analyst at Renaissance Capital, said the
increase was expected by the market as it was linked to higher oil
prices this year and is based on a formula that the government had
announced. She said the doubling of the duty should already be
priced in the stock prices of public oil and gas companies that are
subject to the duty.
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Iraq Cancels No-Bid
Deals after US senators
complain
UPI 9/11/2008
The Iraqi government has canceled six oil contracts with foreign
companies awarded in June in a no-bid arrangement. One-year
contracts with Shell, Chevron, Total, BP, ExxonMobil and others, meant
to increase Iraqi oil production by a 500,000 barrels a day, were
canceled after Democratic U.S. senators complained the deals could
interfere with Iraqi efforts to pass an energy policy law and reach a
revenue-sharing agreement among Kurds, Sunnis and Shiites, The New York
Times reported Thursday.
To go ahead with the no-bid contracts "would be bad for Iraq and bad
for Iraqi-American relations," U.S. Sen. Charles Schumer, D-N.Y., told
the Times.
The contracts were viewed as relatively small by oil-industry standards
but they were seen as steps toward future contracts.
In announcing the cancellations at the Organization of Petroleum
Exporting Countries meeting in Vienna, Austria, Iraqi Oil Minister
Hussain al-Shahristani also said Iraq lowered its goal of producing 2.9
million barrels a day by the end of the year by 200,000 barrels, the
Times reported.
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Greece urgent need
of 1 bln m3 natural gas
BHMA September 11th, 2008 FOCUS News Agency
Athens. Greece finds itself in an urgent need of 1 billion cubic meters
of gas, Greek BHMA newspaper writes.
The newspaper states that Turkey turns to be the big obstacle for the
natural gas supply from Azerbaijan to Greece. According to diplomatic
sources, the recent visit of Greece’s Minister of Development Christos
Folias to Baku assured that Azerbaijan is ready to sell 3 billion cubic
meters of gas by 2010 but pointed at the difficulties caused by Ankara.
The key that opens the gas.
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Floating LNG Project - Dresser-Rand Award
Sept. 10, 2008
DRC announced today that Dresser-Rand has received a Letter of
Authorization to Proceed from Kanfa Aragon to supply the compression
equipment for the world's first floating liquefaction plant (FLNG), the
Flex LNG Ltd. LNGP1 destined for operation offshore Nigeria. The award
is for approximately $55 million. The floating liquefied natural
gas (LNG) unit will have a liquefaction capacity of approximately 1.7
MTPA.
Samsung Heavy Industries Co., Ltd. ("SHI") is the EPCIC
contractor for LNGP1, while Kanfa Aragon, a Sevan Marine subsidiary, is
the Engineering & Procurement contractor for the topsides
facilities of LNGP1 for SHI.
"Over the past three years we have identified LNG Liquefaction as a
strategic growth opportunity for the coming 5 to 10 year period. While
many of the land-based projects continue to experience delays in
permitting and partner funding, it now appears that the offshore
floating projects present a real and present opportunity. We are very
pleased to have been selected by Kanfa Aragon, SHI and Flex LNG to
supply the critical service equipment for this, the world's first
floating liquefaction unit," said Vince Volpe, Dresser-Rand's President
and CEO.
According to Kristian Utkilen, Technical Director of the
process designer and Engineering and Procurement contractor, Kanfa
Aragon, "Dresser-Rand was chosen on the basis of their compressor
technology and their gas turbine/compressor packaging concept, which
are drivers for minimizing total project risk as well as maximizing the
production of LNG."
Floating liquefaction units provide an economic means to
develop stranded gas reserves to help meet the world's growing demand
for natural gas. While the conventional, land based LNG projects focus
on an estimated 70-80 fields with gas reserves greater than 5 trillion
cubic feet ("TCF"), there are more than 1400 small to medium sized
fields with reserves between 0.25 and 5 TCF. This provides a target
market of approximately 150 TCF, which can be developed using floating
LNG technology.
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Wind increasing dependence on imported natural
gas
By EDGAR GÄRTNER September 11, 2008
Wind power is clearly not reducing the dependence on
imported
fuel, contrary to the frequent claims of its proponents. In fact the
experience from Germany and Spain shows that it is increasing the
dependence of imported natural gas. And that's not energy
security.
Mr. Gärtner is a specialized writer on energy and chemicals issues
based in Frankfurt.
Wind turbines generate electricity very irregularly,
because the
wind itself is inconsistent. Therefore wind turbines always need backup
power from fossil fuels to keep the electricity grid in balance. Gas
turbines are the best way to do this. They are able to respond quickly
and push power production when wind generators stop suddenly. They can
be turned on and off almost instantly, whereas traditional coal-fired
plants need to be maintained in a very inefficient standby mode if they
are to respond to large fluctuations in power demand.
A proliferation of windmills, then, can become a windfall for gas
sellers. Just look at the cases of Spain and Germany, Europe's leading
producers of wind power. By the end of 2007 Spain had 14,700
megawatts (MW) of installed wind
capacity, according to Enagás, which manages the national gas network,
producing 8.7% of the country's total power supplies. Most of these
wind generators are located in scarcely populated areas, while the
power consumption is concentrated in big cities with their many
air-conditioned buildings. The peak load of the Spanish power grid is
thus in the hot summer months—but this is precisely the time of year
when there usually isn't much wind.
For this reason, more and more gas turbines are being installed near
consumers in the suburbs of Spain's cities. Only last year, Spanish
power providers added 6,400 MW of gas-turbine power capacity, taking
the total installed capacity of gas turbines to 21,000 MW. Natural gas
has become the main source of electricity generation in Spain, and
according to Enagás, 99.8% of the gas used in Spain is imported. Most
of this comes via pipeline from Algeria, but the import of liquid
natural gas (LNG) by ships will increase.
Following Russia's invasion of Georgia, a vital link
between Europe and the energy resources of Central Asia, energy
security is back at the top of Europe's agenda. For years now, many
Europeans thought that a major part of their future energy security
might come from wind turbines and solar panels. Industry, too, has
suggested that this may be the case: At this summer's World Petroleum
Congress in Madrid, most major oil and gas companies presented new
plans for big renewable energy projects. But this renewables push,
particularly when it comes to wind, is probably just a very clever
short-term business strategy that will not improve Europe's
geopolitical situation.
In Germany, more than 20,000 wind turbines with a total capacity of
21,400 MW are now "embellishing" landscapes. Wind power's share of
total electricity generation has risen in line with that of natural gas
since 1990. Germany's gas consumption for power generation more than
doubled between 1990 and 2007, and now represents 11.7% of the
country's total power generation. The country imported 83% of its
natural gas supplies.
Today part of the wind power backup in Germany is still done by old
coal-fired plants. But the Greens and even parts of the governing
Christian and Social Democratic parties are fervently opposed to the
construction of new coal plants. So many old power stations will
probably be replaced by gas turbines. The green opponents of new
coal-fired plants are nowadays the most dependable allies of the big
gas companies such as Gazprom, Shell or BP.
Most European countries force consumers to subsidize electricity from
wind power. This makes "renewables" a very safe investment compared
with other energy businesses, where swings in commodity prices can be
large. As Europe's big integrated oil and gas companies—such as Shell,
BP and Total—invest more and more in LNG, they are also lobbying hard
for a world-wide carbon-emissions trading system that would further
increase the advantage of gas over coal.
In the U.S. the same thing is happening. The problem for the natural
gas industry in the U.S. is that gas is still relatively inexpensive
compared with market prices elsewhere in the world. There are no
facilities for LNG export. This may explain why Shell, BP, Chevron and
T. Boone Pickens are investing in wind power. It's a clever strategy to
add value to their gas assets by boosting demand.
These gas players can afford to lose money on wind power in the short
term to reap huge profits in the long term. In fact, this was the
strategy first implemented by Ken Lay of Enron in 1990s. Enron was the
power and gas company that started the first large-scale manufacturing
of wind power in the U.S. It also brought up the ideas for a
cap-and-trade system, to increase the competitive edge of gas over coal.
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Iraq agreement
provides for several LNG export facilities
Iraq Marginal Cost For Oil Projects Is $70-$80/Bbl
The Iraqi oil minister also confirmed that the Iraqi government has
approved and will soon sign a joint-venture gas development deal with
oil major Royal Dutch Shell PLC.
Around 700 million cubic feet of natural gas are
burned off each
day from oil fields in the Basra region because there is no
infrastructure to utilize it. The Iraqi government wants to use the gas
for domestic electricity generation. A statement from the Iraqi
government said the agreement also provides for construction of several
liquefied natural gas export facilities.
Iraq is now producing 2.5 million barrels a day and
aims to increase that level to pump 2.7 million barrels a day by the
end of this year, Shahristani said. OPEC, gathering for its third
meeting of the year on Tuesday, is widely expected to hold output
steady as it surveys oil prices that have fallen sharply over the past
few months.
Shahristani said the government has approved an agreement with Shell to
jointly develop domestic gas infrastructure in the country's south. He
said he expects the deal will be signed within a couple of days.
The Iraqi government will hold a 51% stake in the venture with Shell,
the oil minister said. A Royal Dutch Shell spokesman earlier
Tuesday said Shell expects to sign the agreement with the Iraqi
government in the near future. Iraq's government approved the $3
billion-$4 billion joint venture between Shell and the state-run South
Oil Co. over the weekend. "The role of the joint venture will be
to capture and commercialize natural gas in the Basra Governorate in
South of Iraq," said the Shell spokesman.
Shell agrees landmark $4.0 bln gas deal with Iraq
BAGHDAD (AFP)
Iraq has the world's third-largest oil reserves, while
its natural
gas reserves are also huge and almost completely untapped.
According
to US-based industry report the Oil and Gas Journal, Iraq holds 112
trillion cubic feet (3.36 trillion cubic metres) of proven gas
reserves, the world's 10th largest. "Gas in Iraq is much less
developed than oil," said Walid Khadduri, a consultant and energy
analyst for Middle East Economic Survey.
Iraq's energy industry is in dire need of modern equipment and
technology after production facilities went into decline during the
decade of crippling UN sanctions that followed the 1990 invasion of
Kuwait. Iraq has called on international firms to help it develop
its
energy resources. In June, it agreed to invite 35 companies to bid on
service projects but failed to sign expected technical support deals
with six other energy majors.
The oil ministry threw open six oilfields and two gas fields for
international bidding for the 35 companies for which contracts are
expected to be signed next June. The separate preliminary
agreements
with the six energy majors were meant to open the way for longer-term
contracts but are now likely to be scrapped, Jihad said. "After
delays
and differences with the companies over the length of contracts, the
ministry is now inclined to bypass that stage and focus on longer-term
development contracts," he added.
Last month, China became the first foreign group to reach an agreement
with Iraq in a three billion dollar deal to exploit oil. It
revived a
1997 contract granting China the rights to develop the Al-Ahdab oil
field in central Iraq, although again the new arrangement is only a
service agreement and includes no revenue sharing.
Royal Dutch Shell will form a gas venture with energy-rich Iraq worth
up to four billion dollars, the oil ministry said Tuesday of the first
Western oil major to do a deal with the central government since the
2003 invasion. The venture to capture unwanted gas burned off
during oil production, for domestic consumption and export, is expected
to be signed in Baghdad next month, ministry spokesman Assem Jihad told
AFP. The deal with the Anglo-Dutch company is estimated to be
worth between three billion and four billion dollars (2.13 billion-2.84
billion euros), the Financial Times newspaper said.
In the past two years, several other energy majors have signed
contracts with Iraq's northern Kurdish administration, much to the
annoyance of Baghdad. Oil Minister Hussein al-Shahristani has
repeatedly warned the Kurds their contracts would be considered invalid
in the absence of a national oil law. Iraq's cabinet approved the
contract, giving state-owned Southern Oil Co 51 percent and Shell 49
percent of the venture, to be based in the southern city of Basra.
The project is intended to make use of the 21 million cubic metres (700
million cubic feet) of gas -- roughly enough to meet the demand for all
of Iraq's power generation -- that the oil industry burns off for
safety reasons, the FT said.
"Europe is looking for supplies of gas from Iraq," Jihad told the
paper. "Security used to be a deterrent, but now companies feel that
security has improved and this will encourage others to come in."
Analysts welcomed the tie-up, saying liquefied natural gas for export
could be used to meet booming demand in the fast-growing economies of
the Middle East, especially the Gulf. "There are untapped
resources in Iraq, and if Shell can help develop them there is loads of
potential for gas," said Michael Corke, a vice president in Dubai of
energy consultancy Purvin and Gertz.
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No Egyptian gas for
Lebanon until at least January
Amount has also been halved - and cost remains a mystery - electricty
promised is probably unavailable
Daily Star staff, September 10, 2008 BEIRUT
Energy and Water Minister Alan Tabourian said on Monday that promised
Egyptian natural gas supplies to Lebanon had been delayed to January
2009. Speaking to reporters after returning from an official visit to
Cairo, Tabourian added that Egyptian gas to Lebanon has been slashed by
half for no apparent reason.
Egypt was supposed to send the natural gas in July or August of this
year in order to operate the generating station at Beddawi. Beddawi is
one of the two plants in Lebanon designed to run on gas. But these two
stations, which were built in 1996 at a cost of $600 million, have
operated on fuel oil instead of gas for the past 10 years.
"The Lebanese team which traveled to Egypt was surprised to find out
that the natural gas shipment has been delayed to January 2009 instead
of this month," the minister said. He added that the gas shipment
- which will be carried through a pipeline crossing Egypt, Jordan
and Syria - can only operate one out of the two units at the Beddawi
plant. The Egyptian gas was supposed to reduce Lebanon's energy
bill by $300 million a year.
"Egypt will ship 30 million cubic feet of gas in the first quarter of
2009," the minister said. It is also not clear what the actual
cost of the Egyptian gas will be. In addition to the natural gas,
Egypt intends to supply Lebanon between 150 MW and 450 MW of
electricity in the middle of this month. Lebanon's current
electricity output is less than 1,600 MW, while its actual needs are
close to 2,300 MW.
Tabourian said earlier that if Egypt supplied Lebanon with electricity
on time then the severe power rationing would be drastically
reduced. Most areas in Lebanon have been experiencing severe
power rationing thus summer due to the heavy consumption during the
summer season. Apart from Beirut, many parts of the country
experience more than 12 hours of power cuts every day.
Prime Minister Fouad Siniora visited Egypt last month to persuade
officials to speed up the delivery of both gas and electricity to
Lebanon.But some energy experts have expressed doubt that Egypt will be
able to supply Lebanon with gas and electricity according to the
schedule.
Chafic Abi Said, former director of research at Electricite du Liban,
said the most important thing is to speed up the construction and
installation of the high-voltage lines that passes through Jordan and
Syria. "We must first know if all the installations have been
completed before asking how much Lebanon will benefit from the
additional power," he said.
He strongly favored the import of liquefied natural gas (LNG) from
countries like Qatar. "But first we must invest in the construction of
terminals and other facilities that will receive the LNG from tankers
and then ship them to the power plants," Said added.
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Australia northwestern Nexus Crux Project
By Angela Macdonald-Smith Sept. 10 Bloomberg
LNG Potential
Crux has proven and probable reserves of 75 million barrels of
condensates. Production is forecast to be 38,400 barrels a day,
generating pretax cash flow of about A$1 billion a year, Tchacos said
in July. The final cost of developing the project is yet to be
determined and won't be more than $1.4 billion. Partners are due in the
fourth quarter to approve the project for development, and production
is scheduled to start about the end of 2010. Nexus previously sold the
natural gas reserves within the Crux field to Royal Dutch Shell Plc's
Australian unit for A$52 million.
Any additional discoveries near Crux may yield enough gas to justify
expanding the project to include liquefied natural gas, Tchacos said in
July. Nexus will be in a stronger position to consider LNG production
should the agreement for the sale be completed, he said today.
Nexus Energy Ltd., developer of the proposed $1.2 billion
Crux natural gas liquids project in Australia, signed an initial accord
to sell a 25 percent stake in the venture for $275 million to help
finance it. The buyer, a "financially capable international energy
company" that Nexus didn't identify, will also fund $34 million of
Nexus's costs for three wells in return for a 20 percent stake in a
nearby exploration permit, the Melbourne-based company said today.
The transaction values the
Crux area, off northwestern Australia, at about A$1.5 billion, it said.
Nexus last year sold 15 percent of the Crux project in the
Browse Basin to Japan's Osaka Gas Co. for A$75 million, reducing its
holding to 85 percent. Nexus said in July it invited a shortlist of
companies to assess the project for the potential sale of a further
stake to assist with financing.
The sale "demonstrates the rapidly increasing value of the Crux asset,
together with the near-field potential in exploration permit AC/P41,"
Nexus Managing Director Ian Tchacos said in a statement to the
Australian stock exchange. "The funding from this current transaction
is expected to provide a significant contribution to funding Nexus's
share of the Crux liquids project and enhance our ability to secure
project finance on favorable terms."
Nexus Energy dropped 2
cents, or 1.4 percent, to A$1.375 in Sydney trading, after earlier
rising as high as A$1.465.
Nexus will announce the buyer after board approvals, due by
Oct. 8, are obtained, said Jodie Phillips, investor relations manager.
Osaka Gas has a preemptive right over the stake, she said, adding that
Nexus isn't using an external adviser for the transaction.
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 South Stream Serbia's Ratifies Energy Deal with Gazprom
AFX News Limited 9/9/2008
Serbia's parliament ratified an accord on Russian investment in the
Balkan country's oil and gas industry by a vast majority on
Tuesday. The deal clears the way for Russian gas giant Gazprom to
build a pipeline in southern Serbia and an underground gas storage
facility in northern Vojvodina province, and to buy the Serbian oil
monopoly NIS. Out of 238 deputies present at the televised
session, 212 MPs voted for the accord, 22 were against it and four
abstained from the vote.
The accord, signed in January in Moscow, was widely seen as increasing
Russia's energy presence in the region and confirming the two
countries' political links. Gazprom offered to pay 400 million
euros for 51 percent of NIS and to invest 500 million euros in the
company.
At the time when the deal was signed, Serbian officials
estimated that Russian investment would be worth at least 1.5 billion
euros. But a consulting company estimated that oil monopoly NIS
alone is worth 2.2 billion euros: "We estimate that fair market value
of 100 percent of capital of the Oil Industry of Serbia (NIS)... is 2.2
billion euros," Deloitte Consulting said in the report published on the
Serbian government's website.
Some politicians in Serbia, including Deputy Prime Minister Mladjan
Dinkic, consider the offer too low and have urged that new negotiations
with the Russian side be launched on the NIS price.
Energy Minister Petar Skundric said last week that the deal was "one of
the most important strategic projects" for Serbia.
Gazprom also promised to ensure passage via Serbia of the planned
900-kilometre (560-mile) South Stream pipeline to transport gas from
Russia to southern Europe.
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 Iraq Agrees to Landmark $4B Gas Deal with Shell
Agence France-Presse 9/9/2008
Anglo-Dutch energy giant Royal Dutch Shell has agreed a gas joint
venture with Iraq worth up to $4 billion, the Iraqi oil ministry and
the Financial Times said on Tuesday. The deal, which will see the
gas extracted from Iraqi fields being both sold in Iraq and abroad,
will be signed next month, ministry spokesman Assem Jihad told Agence
France-Presse.
Shell will become the first Western oil group to sign a deal with
Baghdad since the U.S.-led invasion of 2003, with a venture the FT
estimated to be worth about $4 billion. Iraq's cabinet has agreed
to the contract, which gives the state-owned Southern Oil Company 51
percent and Shell 49 percent in the venture. "Our joint venture
partnership is for the long term, because the investment to extract is
a long process," Jihad told AFP. He had told the FT that Europe
was looking for supplies of gas from Iraq.
"Security used to be a deterrent but now companies feel that security
has improved and this will encourage others to come in," he added.
Shell told the FT, "We are delighted with the government's decision and
look forward to signing the agreement in the near future."
Last month China became the first foreign group to reach an agreement
with Iraq in a three billion dollar deal to exploit oil that revived a
1997 contract granting China rights to develop the Al-Ahdab oil field
in central Iraq.
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