Energy

Qatar looks at China to sell surplus LNG

Qatar is turning to China to market surplus in its soaring liquefied natural gas (LNG) output following a drop in gas prices and demand because of the global fiscal crisis and new discovery in the United States, said a Saudi bank. The world's top LNG exporter has already signed term contracts with China for the export of five million tons of LNG a year and is negotiating for a new deal for the supply of seven million tons, the Saudi American Bank (Samba) said. "Although Qatar stands to gain from a surge in LNG production over the next 24 months, it continues to face a depressed gas market due to excess supply, which has driven down spot prices," said Samba in a study. "Much of the cause for this is the unexpected emergence of shale gas in the US, combined with the global economic slowdown, which has reduced demand." The report said that while the profitability of Qatar's low-cost LNG operations are not under threat, the current market glut is forcing the country's main gas producers to adapt their marketing strategies. It said that although Qatar Gas and Ras Laffan companies have been locked in long-term sales to Japan and South Korea for most of the output of their earlier LNG trains, they were aiming for greater sales into the spot market for new trains, with a particular focus on the United States and Britain where they have established the necessary infrastructure.

17 foreign companies in Iran's US$200m oil tender

According to an Iranian news agency, seventeen European and Asian oil companies will compete in a US$200 million oil tender in Iran early in March, the managing director of North Drilling Company stated. Hedayatollah Khademi told the Mehr news agency that the companies are from Germany, France, Norway, China, India, the United Arab Emirates, Singapore, and Malaysia which are to take part in a tender in the field of drilling oil and gas wells. The tender is categorized into five sections and the winners will have a 50-per cent share with the North Drilling Company in each of the sections. Oil reserves in Iran rank third largest in the world at approximately 136 billion barrels as of 2007, although it ranks second if Canadian reserves of unconventional oil are excluded. This is roughly 10 per cent of the world's total proven petroleum reserves. Iran is the world's fourth largest oil producer and is OPEC's second-largest producer after Saudi Arabia.

Iraq signs deal with Gazprom group for Badrah field

Iraq signed a final deal with a group led by Russia's Gazprom to develop its eastern Badrah oilfield with estimated reserves of 100 million barrels of oil. Gazprom is partnering with Turkey's TPAO, Korea's Kogas and Malaysia's Petronas for the field, which is near Iraq's border with neighboring Iran. The consortium will invest a total of US$3.52 billion to pump 170,000 barrels of oil per day (bpd) from Badrah, KOGAS said in a statement. KOGAS said it would invest US$1.05 billion into the project. The group agreed to a US$5.50 per barrel fee at Iraq's second oilfield auction in December. Gazprom owns 40 per cent of the venture. KOGAS holds 30 per cent, Petronas 20 per cent and TPAO has a 10-per cent stake. Deals coming from the two oilfield auctions last year may raise Iraqi oil output capacity in seven years to 12 million bpd from the current 2.5 million bpd.

Securing energy resources for a sustainable future in Bahrain

As Bahrain looks forward to achieving higher income from its existing petroleum resources, the kingdom's national oil company Bapco is spearheading initiatives to maximize the use of available resources even while observing strict environmental compliance. At the helm of affairs in Bapco is Faisal Al Mahroos, acting chief executive, a veteran in the oil and gas industry, who is taking a pivotal role in taking the company on the path of a strategic investment program. Embracing new technology is key to Bapco's output maximizing efforts, says Al Mahroos. He continues: "The knowledge-sharing and spirit of collaboration which exists at an international event such as GEO is essential for innovation to flourish for the benefit of the hydrocarbons industry as a whole." The theme of GEO 2010 is Innovative Geoscience Solutions -- Meeting Hydrocarbon Demand in Changing Times. This is highly relevant for Bapco and the kingdom, since a principal focus is on initiatives to boost oil and gas output to meet future energy demand, he says.

Egypt to build wind farm with Abu Dhabi's Masdar

Egypt will sign a deal t with Abu Dhabi's Masdar to build a 200 megawatt wind farm, as part of a plan to generate 20 per cent of the country's energy needs from renewable sources by 2020, an official said. Egypt, an oil and gas producer, has been developing wind power along its eastern Red Sea coast. It already has wind farms at Zafarana and Hurghada in the area and now has installed capacity of 430 megawatts of wind energy. The plant will be located near Suez on Egypt's east coast.

S. Korean state export insurer to back UAE nuclear deal

South Korea's state-run export agency plans to offer comprehensive support to help finance arrangements for local contractors engaged in the construction of nuclear reactors in the United Arab Emirates (UAE). The US$20 billion reactor deal reached late last year is South Korea's largest ever overseas industrial plant project and marks the first time the country has exported reactors abroad, the Korea Export Insurance Corp (KEIC) said, according to Yonhap. The size of the project translates into increased demand for financing deals from banks and other institutions by companies building the four reactors in the UAE. "Once building contracts are signed there is expected to be a surge in demand for KEIC services that can ensure smooth financing from both local and overseas commercial banks," it said in a press release.

Kuwait signs a 5-year gas deal with Royal Dutch Shell

State run Kuwait Oil Company has signed a five-year service contract with Royal Dutch Shell to develop pure gas fields in the country's north, a Kuwait official and Shell said. Gas demand in the Gulf Arab state has outstripped supply, forcing the world's fourth largest oil exporter to import liquefied natural gas (LNG). Tight supply has been exacerbated by OPEC member Kuwait's adherence to the producer group's oil output restrictions since late 2008.

Oman: Boost continues

The Omani oil and gas sector’s significant investment in enhanced oil recovery (EOR) techniques has reaped rewards for the second year running, as newly released figures show the Sultanate’s daily production rose once again in 2009. Oil output increased to an average 812,500 barrels per day last year, a 7.4 per cent hike on 2008 production. The figures represent the second year of sustained production growth in the sector, reversing a trend of decline, which was first set in during 2001 when Omani oil production hit its peak of an average 956,000 bpd. According to media reports, the government hopes to increase production in the sector once again in 2010, hitting a production target of between 860,000 and 900,000 barrels per day. With state-owned Petroleum Development Oman (PDO) – the Sultanate’s largest oil producer – reporting to local media recently that it expects to keep production for 2010 neutral at an average 540,000 to 560,000 bpd, the extra growth will need to come from smaller operators and new concessions. In that spirit, the undersecretary to the Ministry of Oil and Gas, Nasser bin Khamis Al Jashmi, announced February 15 that the government anticipates awarding a total of 11 new oil exploration and production contracts in 2010. While the lead time of these contracts means any discoveries will not contribute to new production for at least three to four years, contracts signed in recent years are in the process of coming to fruition in 2010. Among some of the smaller companies engaged in specialized exploration in Oman is Harvest Oman, a local subsidiary of Harvest Natural Resources, an independent energy company operating in a number of countries including Venezuela and the US. Harvest signed an exploration and production sharing agreement with the Omani government last April to search for non-associated gas and condensate in the large Al Ghubar-Qarn Alam concession. Harvest announced earlier in February that it intends to drill two exploratory wells in 2011 with a view to beginning production. (Source: OBG)

Enel, Total get exploration license in Egypt

Italy's biggest utility Enel and France's energy group Total have won an offshore exploration license in the Nile Delta area aiming to boost resource supplies, Enel said. Total will have a 90 per cent stake in the joint venture with Enel and will be the project operator, the Italian group said in a statement. The companies aim to carry out exploration work in El Burullus block with an area of 2,516 square kilometers about 70 kilometers off the coast and at a depth between 100 and 1,600 meters. The initial exploration stage will last four years and will include conducting a three-dimensional seismic survey and drilling some wells. Enel said the project would help it get direct access to strategic supply sources, while a new cooperation agreement with Egyptian Electricity Holding Company will pave the way for new projects in energy efficiency and renewable energy.

Marubeni, oil major to drop Kuwait

Japanese trading house Marubeni and an oil major have decided to terminate contracts with Kuwait Petroleum Corp for naphtha, due to high premiums, traders said. KPC sealed the contract with at least two buyers at US$22.00 a ton to Middle East quotes on a free-on-board basis, the highest it had ever fetched. "The new premium is not workable for trading houses, as it is not possible for them to re-sell these cargoes to petrochemical petrochemical plants at such high prices," said a trader. In total, the two companies hold a total volume of around 300,000 tons of naphtha for the 12-year period, which works out to an average of 25,000 tons a month. There was talk that KPC could have initiated the termination of the contract with the oil major, but this could not be immediately confirmed. "KPC has been stressing that it has limited full-range naphtha, and I think their high offers were in a way discouraging some buyers from renewing the contract," said another trader.

Qatar to spend US$1bn to capture flared gas

Qatar's two liquefied natural gas (LNG) producers Qatargas and RasGas have approved a US$1 billion project to capture gas that is currently burnt off when ships load LNG, they said in a statement in late February. The project would recover gas that was equivalent to around 600,000 tons of LNG, enough to power more than 40,000 homes, the companies said in the statement. The gas is currently burnt at the LNG jetty where tankers load in the industrial port of Ras Laffan. The project would be completed in late 2013 to early 2014, and would reduce greenhouse gas emissions at Ras Laffan, the companies said in the statement. It would collect boiled off gas from LNG ships for use either as fuel, or for reprocessing at LNG plants. LNG plants chill natural gas for export on specially designed tankers.

Saudi Arabia announces discovery of new natural gas field

Saudi Arabia announced the discovery of a new natural gas field in the north of the kingdom that officials said can produce more than 12 million cubic feet of gas per day. 'This well can produce greater quantities under normal production conditions,' Petroleum and Mining Minister Ali al-Naimi said. The state-owned oil giant Saudi Aramco is to oversee exploration of the gas field located some 90 kilometers east of the city of Tarif in the Jalamid area. Last year, Saudi Arabia said its gas reserves stood at 267 trillion cubic feet in 2008 and Aramco's daily gas production averaged 8.3 billion cubic feet per day. The kingdom recently announced it would invest around 450 billion riyals (US$120 billion) in oil and petrochemical projects over the coming six years.

Abu Dhabi, Conoco to award Shah gas deals

Abu Dhabi and ConocoPhillips plan to award AED36.8 billion of contracts in the first half of 2010 to develop their Shah gas project. State-run Abu Dhabi National Oil Company said in February it expected to see first production from the joint venture by late 2013 or early 2014. It is the first project the United Arab Emirates has undertaken to exploit a sour gas field. The field has a high content of potentially deadly sulphur dioxide, making it tougher to produce than conventional reserves. The project would treat around 1 billion cubic feet of gas from Shah, and pump around 540 million cfd of processed gas into the UAE network. The UAE holds the world's fifth-largest gas reserves, but has failed to keep up with rising domestic demand.

Saudi Arabia launches solar energy program

The Kingdom of Saudi Arabia has begun building the first solar-powered water desalination plant, the first step in a three-part program to introduce solar energy into the Kingdom. The program, launched by the King Abdulaziz City for Science and Technology (KACST), aims to help stabilize future power and water supplies inside Saudi Arabia through the creation of solar-powered desalination facilities. Water desalination is critical to providing clean drinking water around the world. Today, Saudi Arabia produces 18 per cent of the world's desalinated water. By building water desalination plants that run on solar energy, the Kingdom can reduce operational costs and in turn, reduce consumer costs. Prince Dr. Turki bin Saud bin Mohammad, KACST Vice President for Research Institutes said, "The solar energy program will reduce the cost of producing desalinated water and of generating power for use in the Kingdom, an oil-dependent nation, which has launched a national energy efficiency program." Saudi Arabia is a prime location to harness solar energy because of its year-round sunshine. The sun in Saudi Arabia emits about 7,000 watts of energy per square meter over an average of 12 hours every day. KACST and IBM have developed a research center to determine how best to harness and repurpose this solar energy and are preparing to implement this state-of-the-art technology.