Oil Gas Energy

HOUSTON, Sept. 13 — Sinclair Tulsa Refining Co. plans a major expansion of its 70,000 b/d Tulsa refinery. The company said recent changes in federal and state tax law have been an encouraging factor in its decision.

The expansion project is expected to increase the facility’s output of ultralow-sulfur gasoline and diesel. A net reduction in actual refinery emissions, also could be realized after the expansion is completed, Sinclair said.

Three major components are involved in the project. These include the facility’s refining capacity, which will be increased by 45,000 b/d to 115,000 b/d; a new delayed coker unit, which will be added to increase refinery output of gasoline and diesel; and modifications to the plant to enable processing of a wider range of oil, including heavy, sour crude.

The delayed coker unit will use odor and particulate control technology that has been successfully demonstrated in California.

Sinclair recently applied to the Oklahoma Department of Environmental Quality for an air quality construction permit for the expansion project. The application indicates the expansion will be below the Prevention of Significant Deterioration significance thresholds for all criteria pollutants.

Assuming ODEQ approves the permit, construction work could begin in 2008, with project completion expected in 2011.

Sinclair also plans to install a flare gas recovery system to minimize flaring.

In addition, the company proposes to treat refinery wastewater to an acceptable level for discharging into Tulsa’s treatment system.

Earlier this year, a federal judge ordered STRC to pay a $5 million criminal fine and sentenced two of its former managers to 6 months of home detention and 3 years of probation for violating provisions of the US Clean Water Act (OGJ Online, Apr. 12, 2007).

The company and its two former employees previously admitted to knowingly manipulating refinery processes and wastewater flows and discharges to create unrepresentative samplings during mandatory sampling under the National Pollutant Discharge Elimination System permit program. The US Department of Justice said the manipulated samples were intended to influence analytical testing results reported to ODEQ and the US Environmental Protection Agency.

Source:

http://www.ogj.com/display_article/305895/120/ARTCL/none/Prong/Sinclair-Tulsa-plans-refinery-expansion/ 

LOS ANGELES, Sept. 13 — Royal Dutch Shell PLC has defended standards at its Argentina operations after authorities in the Latin American country closed a company refinery near Buenos Aires on environmental grounds.

A Shell spokesperson said all of the firm’s operations were, and are, conducted according to local legislation and strengthened Shell standards.

The spokesperson said Shell Argentina will respond after analyzing the documentation received and the allegations made by the environmental secretariat.

On its web site, Shell said the refinery began operations in May 1931 and that overhauls since then have made it one of the world’s "most modern" refineries.

The government said it ordered the closure as a precautionary measure, saying the plant was drawing water from the nearby Plate River estuary without necessary permits, that its procedures for handling residues were deficient, and that it lacked environmental impact studies.

In a statement, authorities also claimed they had conducted inspections for 13 days at the Shell refinery in the Dock Sud area of southern Buenos Aires and that they had found pollution in tests of soil samples.

The environment ministry said the closure would remain in effect until the problems were corrected by Shell.

The closure represents the latest clash between President Nestor Kirchner’s government and Shell. Problems began in 2005, when Kirchner called on the Argentine public to boycott Shell’s products after a price increase.

This year alone the government has levied some 30 fines against the company for various alleged violations.

In July, Kirchner’s government fined Shell for failing to meet domestic fuel demands as required by law, particularly as the country faced a wintertime power shortage.

Contact Eric Watkins at hippalus@yahoo.com.

Souce:

http://www.ogj.com/display_article/305858/120/ARTCL/none/Prong/Argentina-closes-Shell-refinery,-alleges-violations/ 

LONDON, Sept. 13 — Sonatrach has taken sole control of the Gassi Touil integrated gas project in eastern Algeria and dismissed Repsol YPF SA and Gas Natural SDG SA from the project development.

Sonatrach terminated the contract after months of political struggle between Algiers and Madrid over control. Media reports said Sonatrach blamed the companies for cost overruns and delays.

Repsol YPF and Gas Natural plan to launch international arbitral proceedings against Sonatrach, protesting that the project had been taken "through illegitimate means." They will seek damages and determination of whether the contract had been rightfully terminated.

This was the first project in Algeria to be awarded to a foreign consortium. However, to exert greater control over its national resources, Algeria within the past 18 months passed a law requiring Sonatrach to maintain a 51% stake in energy projects.

Sonatrach’s decision leaves the Spanish companies without access to huge reserves and supply contracts after they beat stiff competition to win the lucrative tender in 2004. For Repsol in particular, the effect is galling, as the company was also forced to revise downwards its oil and gas reserves in South America partly due to energy nationalizations in Bolivia and Venezuela.

The $7 billion Gassi Touil project involved exploration and production phases as well as construction of a 4 million-tonne/year gas liquefaction plant and marketing activities by 2009. Repsol YPF held a 48% stake, Gas Natural 32%, and Sonatrach 20%.

Contact Uchenna Izundu at uchennai@pennwell.com.

Source:

http://www.ogj.com/display_article/305912/120/ARTCL/none/Prong/Sonatrach-drops-Spanish-firms-from-Gassi-Touil-project/ 

BANGKOK, Sept. 17 — PTT PLC, Thailand’s largest integrated energy group, has awarded contracts worth $1.1 billion to Samsung Engineering Co. of South Korea to build two natural gas separation plants, each capable of processing 800 MMcfd of gas.

The plants will be built on a turn-key basis in Rayong, about 180 km southeast of Bangkok for completion in March 2010, reported PTT executives.

The plants form part of a new gas system PTT is constructing to ramp up gas throughput from the Gulf of Thailand to meet the country’s increasing appetite for energy.

PTT is completing a third trunk line that will provide a throughput capacity of 750 MMcfd, enhancing deliveries through decades-old transmission lines that are operating at capacity limits of 1,800 MMcfd (OGJ Online, June 22, 2007).

MUMBAI, Sept. 19 — Cairn India and India’s state-owned Oil & Natural Gas Corp. (ONGC), partners in Barmer field in Rajasthan, said they will not "go slow" in constructing a preheated pipeline to carry the waxy crude from the field.

This is despite the Rajasthan government’s saying it would build a refinery to process the oil, making the $750-million pipeline superfluous.

"The pipeline is the most feasible option and is likely to [be built] before the start of crude oil production," said a senior official of ONGC, Cairn’s 30% partner in the oilfield.

He said building a refinery with a capacity of about 7.5 million tonnes/year "would take around 40 months, whereas work on the pipeline is expected to take just 18 months," he said.

A Cairn India executive revealed that 83% of the pipeline engineering design work has been completed and that tenders for construction would open soon.

The Scottish explorer’s oil discovery in Rajasthan is the largest in the country since ONGC struck oil in Bombay High in 1972. Barmer field is expected to produce 150,000 b/d during its 4-year peak production period.

Pipeline vs. refinery
Although a refinery in Rajasthan would mean another buyer for the company’s crude oil, "we know the economics of the refinery are dubious," the Cairn executive said.

ONGC agreed: "There is simply not enough crude oil in the field to justify a new refinery. The state consumes only 5 million tonnes/year of oil products. With new refineries coming up in Bina [in Madhya Pradesh] and Bhatinda [Punjab], there will be no market for the Rajasthan refinery.

The price of the oil also must be resolved. Its poor quality, Cairn says, likely will garner the companies about 10% less than the Brent benchmark. Refiners, however, hope for a discount of more than 20%. "The contract allows pricing to follow the international prices of similar oil," Cairn said.

The pricing will determine how cost-effective a preheated pipeline would be. The cost of operating the pipeline and its heating stations would be higher than for normal pipelines. If Cairn does not get a good price, the gains may not justify the cost of the pipeline.

A buyer has yet to be finalized, but Cairn executive said talks were under way "with almost all refineries. The Bhatinda and Bina refineries are keen on taking our crude oil."

ONGC said a realistic date for production to begin is yearend 2009. Design must be completed, land acquired, heating stations built, and more wells drilled. "All of this has to synchronise with the start of production. Production may be delayed [for] some time."

Source:

http://www.ogj.com/display_article/306517/120/ARTCL/none/Prong/Rajasthan-refinery-no-deterrent-to-Cairn’s-plans/ 

HOUSTON, Sept. 21 — Motiva Enterprises LLC, Houston, said a final investment decision has been made that allows the company to proceed with a 325,000 b/d expansion of its 285,000 b/cd refinery in Port Arthur, Tex.

The expansion—essentially adding the capacity equivalent to a new refinery—will increase the refinery’s oil throughput capacity to 600,000 b/d, making it the largest refinery in the US.

The additional production capacity is expected to be online in 2010.

Motiva selected Bechtel Jacobs joint venture as the project’s engineering, procurement, and construction contractor. Construction is scheduled to begin this year.

The company expects to lower most types of emissions from refinery operations on a per-barrel basis by using advanced technology in all new system installations and replacing existing systems.

Source:

http://www.ogj.com/display_article/306795/120/ARTCL/none/Prong/Motiva-Port-Arthur-refinery-expansion-to-proceed/ 

HOUSTON, Sept. 25 — ExxonMobil Chemical Co. plans to expand its Rotterdam aromatics plant in Botlek, the Netherlands, making it the company’s largest paraxylene production facility.

The expansion will increase the facility’s production capacity by 25% for paraxylene and by 20% for benzene.

Construction is scheduled to begin this year.

The project involves building a heat-exchanger, reactor, and distillation column.

ExxonMobil will use its PxMax technology to produce paraxylene and benzene. The PxMax process improves selectivity, generates less waste, and reduces energy requirements in comparison to existing technologies.

The expansion project will be owned and operated by ExxonMobil Chemical Holland BV.

Source:

http://www.ogj.com/display_article/307086/120/ARTCL/none/Prong/ExxonMobil-to-expand-Rotterdam-aromatics-plant/ 

HOUSTON, Sept. 12 — GlobalSantaFe Corp. is adding to its deepwater drilling fleet and has signed a turnkey contract with Hyundai Heavy Industries Ltd. for a newbuild ultradeepwater drillship.

The vessel, to be built in Ulsan, South Korea, at an estimated cost of $740 million, is scheduled for delivery in September 2010.

It is a next-generation drillship that combines the best features of GSF’s drillships and semisubmersibles in a single unit, said GSF Pres. and Chief Executive Jon Marshall.

The vessel is an enhanced version of company’s GSF C.R. Luigs and GSF Jack Ryan drillships, which entered service in 2000. Like those rigs, it will be capable of drilling in as much as 10,000 ft of water and upgradeable to 12,000 ft.

Also, the rig will feature advanced dynamic-positioning capabilities, triple activity load paths, a derrick rated for 4 million lb, dual liquid-storage systems, larger quarters, and an efficient deck design that provides more space than previous-generation drillships.

Source:

http://www.ogj.com/display_article/305747/120/ARTCL/none/DriPr/GSF-orders-newbuild-ultradeepwater-rig/ 

LONDON, Sept. 13 — Development operator Norsk Hydro AS has started natural gas production from giant Ormen Lange field on the Norwegian continental shelf, with deliveries via the Langeled pipeline. Ormen Lange will meet as much as 20% of the UK’s gas needs.

The field, expected to supply 70 million cu m/day of gas and 50,000 b/d of condensate at peak rate, will position Norway as the world’s second-largest gas exporter after Russia.

Hydro is testing production from the field in the North Sea about 120 km from the Norwegian coastline, until the inaugural ceremony on Oct. 6, so gas flows may vary.

From a depth of 800-1,100 m, the gas is transported by pipeline through demanding subsea terrain to Nyhamna on the island of Gossen in the municipality of Aukra in More and Romsdal. After being processed, the gas will be sent through the 1,200 km Langeled subsea pipeline to Easington on England’s east coast.

Norway currently is the world’s third largest gas exporter, delivering 85 billion cu m/year. When Ormen Lange reaches plateau production in 2010, total gas exports from Norway will increase to 120 billion cu m/year, or 20% of Europe’s gas requirements.

Royal Dutch Shell PLC will assume operatorship from Hydro on Dec. 1.

Contact Uchenna Izundu at uchennai@pennwell.com.

Source:

http://www.ogj.com/display_article/305911/120/ARTCL/none/DriPr/Hydro-begins-Ormen-Lange-gas-production/ 

LONDON, Sept. 19 — Woodside Energy Ltd., Perth, has let an engineering contract to Technip for Enfield oil field work off Australia.

Technip will replace an existing spool with one having characteristics slightly different from its predecessor. The company also will carry out engineering, procurement, fabrication, and installation of a new spool, which will increase the field’s oil production.

Enfield oil production began in July through the Nganhurra floating production, storage, and offloading vessel with a production rate of 100,000 b/d and a storage capacity of about 900,000 bbl of oil.

Enfield is on production license WA-28-L and has estimated reserves of about 127 million bbl of oil. This field is in waters 550 m deep off North West Cape, Western Australia.

Project execution will be supported by Technip Subsea 7 Asia Pacific (TS7), a joint venture of Technip and Subsea 7 that implements subsea operations in the Asia-Pacific region. Offshore installation will be carried out by TS7’s Rockwater 2 construction vessel.

Joint venture participants are Woodside Energy 60% and Mitsui E&P Australia Ltd. 40%.

Contact Uchenna Izundu at uchennai@pennwell.com.

Souce:

http://www.ogj.com/display_article/306438/120/ARTCL/none/DriPr/Woodside-lets-work-contract-for-Enfield-oil-field/