Thursday, January 31, 2013

SINGAPORE: Rotary Engineering secures S$300 million contract to build storage tank for Tankstore.

(EnergyAsia, February 1 2013, Friday) — Singapore Exchange-listed Rotary Engineering Limited said it has secured a S$300 million contract to build a 800,000-cubic metre oil storage tank on an island south of Singapore. (US$1=S$1.25).

Rotary said it has been appointed by Tankstore Limited as the main engineering, procurement and construction (EPC) contractor for the expansion of its oil terminal on Pulau Busing. The engineering firm has begun work on the two-year project located on a plot of the island owned by state-owned JTC Corp and leased to Tankstore.

Chia Kim Piow, Rotary's chairman and managing director, said the award has boosted the value of the company's orders to S$750 million.


Wednesday, January 23, 2013

MALAYSIA: BASF pulls out of proposed specialty chemicals venture in Johor

(EnergyAsia, January 23 2013, Wednesday) — Germany's BASF and Malaysian state energy firm Petronas said they have terminated an agreement to jointly develop a specialty chemicals venture that was part of a proposed RM120-billion oil-petrochemical complex to be developed in the southern state of Johor. (US$1=RM3.05).

According to the heads of agreement the companies signed last March, BASF would have a 60% stake in the new joint venture to own, develop, construct and operate new plants to produce isononanol, highly reactive polyisobutylene, non-ionic surfactants, methanesulphonic acid and precursor materials. The plant was to form part of Petronas's proposed Refinery & Petrochemical Integrated Development (RAPID) complex in the coastal town of Pengerang, located north of Singapore.

In separate statements, the two companies said they decided to terminate the March 5 agreement as they "were unable to come to an agreement on the terms and conditions for the implementation of the proposed venture."

However, they affirmed their commitment to continuing their existing long-term partnership at the BASF Petronas Chemicals in Pahang state.


Sunday, January 13, 2013

MONGOLIA: Reduced dependence on China with Noble Group’s participation in coal and rail project

(EnergyAsia, January 14 2013, Monday) — Mongolia may have found a way to export coal by sea, thus reducing its current overwhelming dependence on land-based sales to China.

Singapore-listed commodities trader Noble Group has agreed to invest in a multi-billion-dollar coal and rail development project in Mongolia that will include the use of a Russian Far East port to open up exports to other markets, according to its Australian developer Aspire Mining.

Aspire said Noble will help pay for the development and connection of a proposed A$1.25 billion 580km railway line to the existing Trans-Mongolian trunk line to facilitate exports from the Ovoot coking coal project in northern Mongolia to China and Russia. The mine is expected to start producing in 2014, while the proposed Northern Rail line is due to start up in 2016.

Apart from satisfying Chinese demand, Aspire said the deal will enable it to use Noble's Russian Far East port to reach markets beyond China. Mongolian coal has yet to be exported by sea as the massive landlocked country does not access to an ocean-going port.

"Access to seaborne markets is a key part of Aspire's development strategy for its world class Ovoot project. Mongolian coking coal is largely being sold to Chinese steel producers and it is a key part of Mongolian development policy to establish access to seaborne markets, to provide pricing tension with Chinese customers and establish seaborne price benchmarks for Mongolian coking coal," said Aspire.

Noble will have up marketing rights for up to 20% of the coal output from Ovoot, which is estimated to hold one of the world's second largest coking coal reserves.

As part of their agreement, Noble will also raise its shareholding in Aspire from 10.1% to 14.9% by acquiring 35 million shares for A$2.8 million, or eight Australian cents a share. (US$1=A$0.96).


Wednesday, January 9, 2013

Coal use for electricity generation at 20-year low in 2012, says EIA

(EnergyAsia, January 10 2013, Thursday) — Faced with competition from cheap natural gas, US coal consumption for power generation fell to a 20-year low of 829 million short tons (mmst) in 2012, said the Energy Information Administration (EIA). In 2011, the US consumed 932.5 mmst of coal for power generation.

But that downward trend will likely reverse this year as improving natural gas prices and rising electricity demand in the US will help coal demand recover, said the agency. Natural gas prices slumped to a 10-year low of around US$1.80 per million BTU last April. For the year, the natural gas price averaged US$2.77 for a 13-year low.

With natural gas well above US$3 in recent months and holding, US coal consumption for power generation could recover to grow by 5% this year, said the EIA.

On the supply side, it expects US coal production to fall by 3.6% in 2013 after declining by 6.3% last year.

The agency expects US coal production to recover in 2014 as inventory draw slows down and domestic consumption stabilises.

US coal exports are seen falling after reaching a record 124 mmst in 2012.

"Continuing economic weakness in Europe and lower international coal prices are expected to contribute to lower coal exports in 2013. US metallurgical coal exports could be reduced if China removes an export tariff on Chinese coke, which steel producers import in lieu of metallurgical coal," said the EIA.



Tuesday, January 8, 2013

UPSTREAM: Russia’s gas industry threatened by shale development in the US and Europe, says consultant

(EnergyAsia, January 9 2013, Wednesday) — Russia's leadership in the natural gas business could come under threat from rising exploitation and production of shale reserves in the US, and potentially from Europe and other parts of the world.

According to US-based GBI Research, shale prospects in Europe may well reshape the continent's energy market dynamics by easing the continent's traditional reliance on Russian natural gas.

Last year, Russia accounted for around a third of Europe's 16.5 trillion cubic feet (tcf) of natural gas imports, said GBI Research.

Europe holds around 3,500 trillion cubic feet of unconventional gas reserves including tight gas, shale gas and coalbed methane (CBM), sufficient to meet 60 years of consumption, according to the International Energy Agency (IEA).

The US could also dent Russia's interest by competing to supply gas to Asia's fast growing markets at much lower prices.

But, Russia is not completely disadvantaged, said GBI Research as Europe faces a number of geological, legal, environmental and political challenges to exploit its shale gas potential.

For all its potential, the US too must iron out market issues before it can realise the potential of its possession of abundant shale reserves and efficient gas-fired power plants, said another consultant, GlobalData.

In a recent report, GlobalData states that natural gas producers must continue to proceed with caution in developing the fuel to meet long-term demand in the US and beyond.

Firstly, the huge surge in natural gas production is a recent development in the US, and it remains to be seen if its shale plays are sustainable.

In its 2011 annual energy outlook, the US Energy Information Administration (EIA) estimated that the Marcellus shale region holds technically recoverable reserves of 400 trillion cubic feet (tcf), nearly five times as much as the estimated 84.2 tcf provided by the US Geological Survey (USGS). Last year, the EIA updated its figure to 140.6 tcf.

Secondly, while gas is thought to emit less carbon than oil and coal, GlobalData said gas-fired plants are still responsible for a substantial amount of pollution. With emissions targets to meet, the US government will focus on commercialising renewable energy-generated electricity.

According to GlobalData, natural gas will account for just over 39.5% of US electricity production by 2020, down from more than 41% in 2011. The consulting firm expects renewable energy to take market share away from natural gas.


Friday, January 4, 2013

CHINA: Sinopec, ConocoPhillips to jointly research development of Sichuan shale gas

(EnergyAsia, January 4 2013, Friday) — China Petroleum & Chemical Corporation or Sinopec, and US oil and gas company ConocoPhillips have begun a joint study to explore and develop in western China's Sichuan basin over the next two years, the two companies have announced.

Sinopec Exploration Southern Co, a subsidiary of the Chinese state-owned major and Asia's largest refiner, said the partners signed the agreement last month city to explore, develop and produce shale gas in a 3,917-km area in Qijiang in Sichuan province.

"This cooperation will be of great significance to the general evaluation on the exploration potential of the marine Paleozoic shale gas in the southeast Sichuan area and will help improve Sinopec's technology in the exploration and development of shale gas," said Sinopec.

According to both the Chinese and US governments, China holds the world's largest reserves of unconventional gas. China's resource ministry estimates the country holds as much as 25.1 trillion cubic metres of shale gas reserves, sufficient to meet more than 200 years of its domestic demand. The US Energy Information Administration has a higher estimate of 31 trillion cubic metres.



Wednesday, January 2, 2013

INDONESIA: Canada’s MicroCoal International to build power plant in South Kalimantan

(EnergyAsia, January 3 2012, Thursday) — Vancouver, Canada-based Carbon Friendly Solutions Inc said its wholly-owned subsidiary, MicroCoal International Inc (MCI), has signed a binding letter of intent with two companies to build a coal-fired power plant in Indonesia, its first in Asia.

MCI, Carbon 2 Power Ventures Inc, also of Vancouver, and PT Wijaya Tri Utama (PAK) of Indonesia, will jointly develop the plant at PAK's existing 15MW Banjarmasin power plant in South Kalimantan over a period of six and 12 months.

MCI and PAK will provide project financing while Carbon Friendly Solutions will focus on developing clean energy technology, renewable energy and forestry projects.

MCI focuses on developing a process to convert low rank coal to more expensive high rank coal.

Slawek Smulewicz, Carbon Friendly Solutions (CFS)'s CEO, said:

"The installation of this commercial MCI plant in Indonesia is a significant step that will facilitate CFS to market MicroCoal technology in Indonesia, and other key Asian countries. In the next 10 years, approximately 65% of the power plants capacity addition is expected from coal. The majority of the Indonesian coal reserves are low rank (high moisture) coal, which is suitable for our technology."

According to Carbon Friendly Solutions, MCI has spent four years developing an internationally proven and patented process to convert low rank (low BTU) coal to more expensive high rank (high BTU) coal.