Energy

South Korea awarded construction of UAE nuclear power contract

A South Korean consortium has been awarded a contract worth some US$20 billion (£12.5bn) to build four nuclear power plants in the United Arab Emirates. The group, led by the Korea Electric Power Corp (Kepco), beat bids from a US-Japanese group and a French firm. South Korean officials said the deal was the biggest single contract the country had ever won abroad. Though the world's third largest oil exporter, the UAE says only nuclear power can meet its energy demands. The nuclear reactors should all be in operation by 2020, by which time demand for electricity in the UAE is expected to have more than doubled. The first is scheduled to begin supplying power in 2017. As well as Kepco, the winning consortium includes Samsung, Hyundai and Doosan Heavy Industries, as well as US firm Westinghouse and Japan's Toshiba.

Egypt signs US$2bn refinery deal with China

Egypt's oil ministry says it has signed a memorandum of understanding with two Chinese companies to build a US$2 billion refinery that would be the largest such plant in the Arab nation. The statement on the Ministry’s website said the refinery would have an initial capacity of 15 million tons per year, to be expanded by another 15 million tons in the second phase of the project. It provided no date for when the project would begin. Under the terms of the deal, China's Rongsheng Holding Group and China National Chemical Engineering Co. Ltd., would retain ownership of the plant for 25 years. The new plant will produce refined products for the domestic market, as well as export to China. The deal was signed in Beijing.

Abu Dhabi awards US$5.6bn in gas field contracts

Abu Dhabi's state oil company says it awarded US$5.6 billion worth of contracts to begin developing the Shah natural gas field. The engineering, procurement and construction contracts come just days after ConocoPhillips said it was pulling out of the project. Abu Dhabi National Oil Company says it inked the deals in the last week of April. About US$3.6 billion worth of contracts for gas processing and sulfur recovery went to Italian energy contractor Saipem. Another US$1.5 billion utility contract was awarded to South Korea's Samsung. Spain's Tecnicas Reunidas and India's Punj Lloyd will share a US$463 million gas-gathering contract. ADNOC says it expects the desert facility to be complete by 2014.

Kuwait signs LNG purchase contracts with Shell, Vitol

Kuwait signed four year liquefied natural gas supply contracts with Royal Dutch Shell and Vitol Group as the Arabian Gulf state seeks fuel to run power generators during the summer months, an official said. The companies will supply between three and five cargoes a month in total starting in April through October, Abdullatif Al Houti, KPC’s managing director for international marketing, said at a conference in Kuwait. Shell will ship a minimum of two lots a month with an option for a third, and Vitol a minimum of one with an option for a second, he said. Al Houti, speaking on the sidelines of The Conference Connection’s Middle East Petroleum and Gas Conference, didn’t disclose the price for the shipments, saying the cost would be based on a formula linked to crude oil.

Greece, Qatar mull joint energy projects

Qatar said it was interested in investing €5 billion (US$6.66bn) to develop energy projects in debt-laden Greece. The two countries signed a non-binding memorandum of understanding to export Qatari liquefied natural gas (LNG) to Greece and build LNG terminals in the Mediterranean country. "I express the desire of Qatar for investments of €5 billion in Greece," the Gulf Emirate's Prime Minister Sheikh Hamad bin Jassim al-Thani said after meeting his Greek counterpart George Papandreou in Athens. "This is a most welcome proposal for Greece at this time of economic hardship," said Papandreou, whose country agreed a €110 billion bailout by the EU and the IMF to avoid default. Greece, the euro zone's least competitive economy, is starving for foreign investment to help balance its payments deficit. Qatar is the world's biggest exporter of LNG and its economy relies heavily on gas sales. The agreement includes plans for a €3.5 billion LNG terminal with a capacity of 7 billion cubic meters in western Greece, to be built by Qatar Petroleum, the Emirate's state oil company.

QSTP launches first solar energy project

An agreement for Qatar’s first solar energy project was signed at Qatar Science and Technology Park (QSTP). The facility will test nearly a dozen solar technologies and their applications including power generation and water desalination. A 35,000 square meter test site at the QSTP will be used for the tests. The facility is expected to produce 500kw of electricity by the end of its first phase. A memorandum of understanding for the joint study was signed in the presence of representatives of Chevron Qatar Energy Technology, GreenGulf and QSTP. As per the agreement, Chevron and GreenGulf will each invest up to US$10 million in the study program, with Chevron’s investment being part of an initial US$20 million commitment to QSTP. Technology tests are expected to commence in late 2010 and continue for two to four years. The research will be performed at QSTP.

Syria: Raising the bar

Syria's oil and gas sector is gearing up for a rejuvenation of sorts, with the minister of oil, Sufian Alao, announcing recently that the government expects oil production in the country to rise this year following 13 years of steady decline. The announcement came as the Syrian hydrocarbons sector prepared to welcome 265 companies from 41 countries to the Seventh Syrian International Oil and Gas Exhibition (SYROIL 2010), held in Damascus April 5-8. Oil production in Syria currently stands at around 383,000 barrels per day (bpd), a decline of around 7000 bpd from last year's average figure, and around 200,000 bpd below the all-time high of 583,000 bpd reached in 1993. While Syria's 13-year decline would appear to place it firmly in the rank of nations experiencing the phenomenon of "peak oil", the country nonetheless still has estimated reserved of some 2.5 billion barrels and expects to produce 2 billion barrels of oil by 2025. Alongside oil, Syria also currently produces 28m cu meters of gas a day, using around 20m cu meters for domestic electricity generation. Alao announced that he also expects gas production to rise this year. While turning around a long-term decline in oil production remains a significant challenge, it is not without precedent. Fellow Arab League member Oman managed to turn around its own steady decline in 2008 through the development of smaller fields and the use of enhanced oil recovery (EOR) techniques on existing fields. The Syrian government appears committed to a similar strategy, announcing at the start of SYROIL 2010 that eight new blocks are to be opened for exploration, development and production, with international companies invited to bid for production-sharing agreements before a September 15 deadline. (Source: OBG)

Iraqi officials, oil companies agree to drill 15 new oil wells

The initial development plan agreed by Royal Dutch Shell, Malaysian partner Petronas and Iraqi oil officials includes inviting oil service firms to drill 15 new wells, an Iraqi oil official said. The plan also includes building two new crude processing plants with a capacity of 50,000 barrels per day each and boosting capacity at an existing processor to 120,000 bpd from 100,000 bpd, the official said. The plan was put together at a meeting in the southern oil hub of Basra by officials from Iraq's South Oil Company (SOC) and executives of Shell and state-run Petronas. The two companies won the right to develop the 12.6 billion barrel Majnoon oilfield, one of the world's biggest, in the second auction held by Iraq last year of oilfield development contracts, and the contract was signed early this year. It is one of 10 oilfield development deals that could take Iraq to third place among oil producing nations from 11th now and boost its capacity to Saudi levels of 12 million barrels per day from around 2.5 million bpd currently.

Iraqi government forms new oil firm

The Iraqi Council of Ministers agreed to form the Middle Oil Company as a state-run firm with a capital of ID100 billion. “The firm will support national economy,” Dr. Ali al-Dabbagh, the official spokesperson of Iraqi government, said in a release. He said that the firm would be responsible for oil production within the middle part of Iraq.

Kuwait: Gassing up

With the world's fourth-largest oil reserves and synonymous as an energy powerhouse, many would find it surprising to learn that Kuwait is presently a net importer of gas. Therefore the discovery and development of its domestic gas resources are of vital importance to the country as it looks to not only secure and expand its foreign account balance, but also fulfill its growing domestic utility needs with a cleaner and more efficient alternative to oil. Kuwait is estimated to possess 8 per cent of global oil reserves and presently produces 2.78m barrels per day (bpd), accounting for roughly 3.5 per cent of global production, according to the ""BP Statistical Review of World Energy June 2009."" While it is ranked 18th in gas reserves, it currently extracts a very modest 140m cu feet per day (cfdp), a figure that is not sufficient to meet even its local requirements. Kuwait is also one of the world's largest per-capita consumers of electricity, especially in summer months when demand soars. It is expected that during the peak demand period of April 1 to late October of this year, Kuwait will be importing liquefied natural gas from global companies at a rate of 500,000 cfpd. In 2005, an estimated 35 trillion cf of non-associated gas was discovered in the country's northern fields. But to date, little extraction has taken place. In February, the country reached a deal with Royal Dutch Shell, valued at an estimated $700m that will entail the energy giant providing expertise and technology to help tap the complex reservoirs. The five-year ""technical services contract"" could ultimately see the output from several northern gas fields reach 1 billion cfpd. The move is considered a landmark deal in that not only will it provide a significant boost to the country's domestic utilities capacity, but it also signals a move towards greater collaboration and participation of international oil companies (IOCs) in the country's upstream activity. Sara Akbar, the managing director of Kuwait Energy, an independent oil and gas company operating across the region, told OBG, ""The Shell deal is a major turnaround for Kuwait, and should pave the way for IOCs to do more work in the country."" (Source: OBG)

Chevron and GreenGulf sign agreement to study solar energy in Qatar

Chevron Qatar Energy Technology QSTP-B, an affiliate of Chevron Corporation, and GreenGulf Inc., a Qatar-based renewable energy and clean technology company, announced the signing of a memorandum of understanding for a joint study to test solar energy technologies and their application in Qatar. The research will be performed at Qatar Science & Technology Park (QSTP). The project will collect and evaluate the data provided by technologies to be located at a 35,000 square meter solar test site at QSTP. The project will also study the performance of different photovoltaic and solar thermal technologies. The project supports QSTP’s strategy for assisting in the development of a national solar energy industry in Qatar. Solar technologies vary in their sensitivity to dust and heat and use different amounts of land and water, which can reflect their relative costs. Measurements obtained over a period of years under Qatar climate conditions are expected to help local planners evaluate, select and install technologies best suited to local conditions. Under the memorandum of understanding Chevron and GreenGulf will each invest up to US$10 million in the study program, with Chevron's investment part of an initial US$20 million commitment to QSTP. Technology tests are expected to commence in late 2010 and continue for two to four years.

Egypt nears completion of hybrid solar thermal plant

Egypt’s first large-scale solar thermal facility is nearing completion. A parabolic trough solar field, incorporating nearly 2,000 collector units and covering 130,000 square meters, has been installed at the Kuraymat project site, located about 100 kilometers south of Cairo. The solar power plant is scheduled to become fully operational in the fall. The technology for the solar field comes from Flagsol GmbH in Cologne, a joint venture of Solar Millennium AG and Ferrostaal AG, with construction work provided by the Egyptian company Orascom Construction Industries. The 150 MW power plant features a hybrid design, utilizing both natural gas and solar energy to generate electricity. It was commissioned via an international tender by the Egyptian New and Renewable Energy Authority (NREA) and is expected to cost over €250 million; the solar field accounts for about 30 per cent of this cost. The Global Environment Facility (GEF) awarded a US$50 million subsidy for the solar field. Egypt is also seeking funding and technical assistance to build a US$1 billion solar power plant along its Red Sea coast. According to a report in ArabianBusiness.com, the Egyptian government is conducting talks with Abu Dhabi’s state-owned Masdar clean energy company, as well as with three unnamed European firms.

S. Korean, Spanish, Indian firms on brink of Saudi refinery deals

South Korean, Spanish and Indian contracting firms are on the verge of winning contracts from Saudi Aramco and ConocoPhillips to build a new Saudi oil refinery, industry sources said. Saudi Arabia has switched its development focus to refining, petrochemicals and gas after completing a program to boost oil production capacity to 12.5 million barrels per day (bpd) last year. The 400,000 bpd Yanbu plant on the Red Sea coast is one of several at which the Kingdom is planning to raise refining capacity by more than 1.7 million bpd from 2.1 million bpd. The deals were pending Conoco's final investment decision on the joint venture refinery, the sources said. After considering bids submitted in January for packages to build the refinery, Aramco and Conoco have penciled in South Korea's SK Engineering to build a crude unit, Daelim Industrial for a gasoline unit, and GS Engineering to build a hydrocracker, industry sources said. Spain's Tecnicas Reunidas would build a coking unit and India's Punj Lloyd oil storage units, they said.

Japan seeking to seal deal on Saudi crude storage

Saudi Arabia could store in Okinawa up to 16 per cent of its term crude oil supply to Japan in a deal Tokyo hopes to seal by the year-end, a Japanese official said. The agreement would ensure that Japan, the world's third-biggest oil consumer, can tap the supply during emergencies, while Saudi Arabia, the top crude exporter, strengthens its position in the increasingly competitive Asian market. "It will probably be one to two VLCCs (Very Large Crude Carriers) a month," Hidenobu Teramura, director for petroleum policy at Japan's Ministry of Economy, Trade and Industry, said. Of the estimated four million barrels per day (bpd) of crude Japan imports, around 20pc or 800,000bpd come from Saudi Aramco, he said on the sidelines of the Asia Upstream conference organized by Global Pacific Partners. "How much (storage) Aramco would like to use is still under discussion," he said, adding the Saudi oil giant is still studying how it will use the tanks and the duration of the lease. The crude would become part of Japan's strategic reserves, he said.