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Vol. 50, n° 15, November 8, 2011
Main news LNG: Processing •••• Pacific Rubiales wants to develop a liquefied natural gas export project on Colombia's Caribbean coast
with an initial capacity of 70 million cubic feet per day. LNG: Supplies- Imports - Exports •••• Kuwait will import up to 42% more liquefied natural gas in 2011. •••• The first liquefied natural gas import project of 400-500 million cubic feet is signed between Overseas
Private Investment Corporation and Pakistan Gasport Limited. LNG: Storage • YPF plans to build a liquefied natural gas terminal and regasification plant in the Argentine port city of
Bahia Blanca. • Minister of Economic Affairs said that Taiwan's gas-fuelled power generation capacity will increase 67%
by 2030. Natural Gas: Production • Total signed with Novatek the final agreements to jointly develop the Yamal LNG project with a 20%
share. Natural Gas: Reserves • Videocon Industries and Bharat Petroleum Corp said that the gas discovery they made off Mozambique
may hold at least 10 trillion cubic feet of reserves. Natural Gas: Transportation - Distribution • Gaz System said that it received five applications for access to the Polish leg of the Yamal natural gas
pipeline. Natural Gas : Supplies- Imports - Exports • Deputy Prime Minister Omurbek Babanov said that Kazakhstan has agreed to sell natural gas to
Kyrgyzstan. • The Turkish state gas pipeline operator Botas informed Gazprom that it will end its contract for the
delivery of natural gas. Natural Gas : Storage • Regulatory Commission approved the application of Tricor Ten Section Hub, LLC to construct and
operate a new underground natural gas storage project near Bakersfield LNG Processing p. 2 /. Supplies-Imports-Exports p. 2 / Storage p. 3 NGL Transportation-Distribution p. 4 Natural Gas Exploration-Discovery p. 4 / Production p. 4-5 / Reserves p. 6 Processing p. 6-7 / Transportation-Distribution p. 7-8 Supplies-Imports-Exports p. 9 / Storage p. 10 Use for Power Generation p. 10
Cedigaz News Report - Vol. 50, n°15 November 8, 2011
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LNG
PROCESSING COLOMBIA: Planned project – CNR50/15/1 Pacific Rubiales said recently it would develop a liquefied natural gas export project on Colombia's Caribbean coast with an initial capacity of 70 million cubic feet per day . "It's a project where we put in the gas and the port, and Exmar NV is going to put the liquefaction plant and (the barge)" Pacific Rubiales Chief Executive Officer Ronald Patin said. The first phase of the project is expected to be completed in two years, according to the firm. (October 6, 2011)
SUPPLIES - IMPORTS – EXPORTS CANADA: Supply contract – Talks – CNR50/15/2 The chief executive of Enbridge Inc said recently that the company would prefer to supply natural gas to the Kitimat liquefied natural gas plant in British Columbia over any other export project in western Canada. Enbridge is interested in joining one of two proposed Canadian LNG projects to ship natural gas to Asia, but the location of Kitimat has attracted Enbridge more than Royal Dutch Shell's project in Prince Rupert, also in British Columbia, company head Patrick
Daniel said. "Kitimat is the preferred project. Pipelining into Kitimat is relatively straight forward compared to Prince Rupert, which is the other proposed port," He said. Kitimat, which is expected to begin exports by 2015, is a joint venture between gas producers Apache Corp, EOG Resources and Encana Corp. Enbridge plans to build a natural gas pipeline along the route of the proposed Gateway oil line, which would transport natural gas from Horn River and other natural gas fields to the coast by 2016, Daniel said. (October 6, 2011)
INDIA: Supply contract – CNR50/15/3 BG Group signed recently a Heads of Agreement (HoA) with Gujarat State Petroleum Corporation (GSPC) for the long-term supply of up to 2.5 million tonnes pe r annum of liquefied natural gas. The HoA sets out the basis on which BG Group proposes to sell the LNG volumes to GSPC for up to a 20-year period beginning as early as 2014. The LNG volumes will be sourced from the Group’s global supply portfolio. BG Group and GSPC intend to complete negotiations and execute a fully-termed LNG sales and purchase agreement early in 2012. (September 30, 2011) KUWAIT: Supply forecast – CNR50/15/4 Kuwait will import up to 42% more liquefied natural gas in 2011as it extends its buying period by a month into November. The country expects to import 43-47 cargoes in 2011 , compared with 33 in 2010 and 11 in 2009, said state-owned Kuwait Petroleum (KPC). Kuwait began importing LNG in 2009 on a seasonal basis. LNG imports were to be a temporary solution until 2013 while domestic gas resources were developed, but KPC is now considering a permanent import facility to meet soaring demand. The country uses Excelerate tankers as a floating import terminal.
Excelerate vessels, which can regasify LNG onboard the tanker, have a capacity of around 5.2 million tonnes a year, or around 600 million cubic feet a day. Kuwait’s gas industry, meanwhile, produced 415 billion cf, while consumption was 513 billion cf. Kuwait is set to import more LNG to feed its power sector . Electricity generating capacity stood at 11.3 gigawatts (GW) in 2008, but Kuwait plans to add another 16 GW by 2014, mainly gas-fired turbines. The Oxford Energy Institute estimates demand could climb to 6.36 billion cf by 2015. (October 5, 2011)
PAKISTAN: Supply deal – Agreement – CNR50/15/5 The first liquefied natural gas import project of 400-500 million cubic feet was recently signed between Overseas Private Investment Corporation (OPIC), an American company, and Pakistan Gasport Limited (PGP). The project’s capacity will be 400-500 million mmcfd. Starting in January 2012 , the project will complete within a year. (October 9, 2011)
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Cedigaz News Report - Vol. 50, n°15 November 8, 2011
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STORAGE
ARGENTINA: Planned project – CNR50/15/6 YPF, Spanish oil major Repsol-YPF’s Argentine unit, plans to build a liquefied natural gas terminal and regasification plant in the Argentine port city of Bahia Blanca , company spokespersons said recently. The plant, scheduled to come online in March 2013 , will feed between 14-20 million cubic meters per day of
regasified imported LNG into the national gas pipeline network via a connection with distributor Transportadora de Gas del Sur, they said. In a second stage, the supply of gas will increase to as much as 25 million cmd. YPF will carry out this project as a joint venture with state-owned Empresa Nacional de Energia. (September 29, 2011)
INDONESIA: Planned project – Agreement – CNR50/15/7 Energy World (EWC) said recently that it plans to build a 3mn t/yr LNG import terminal and associated regasification and marine facilities in East Java , Indonesia. EWC has signed an initial agreement with the East Java provincial government, which will assist the firm with land provision, licensing and other approvals needed for development of the project. EWC plans to expand the terminal and build a gas-fi red power station in a second phase . Construction of the project is likely to take 18-24 months once the relevant approvals are granted. (October 7, 2011) KENYA: Planned project – CNR50/15/8 The energy ministry's permanent secretary, Patrick Nyoike said recently that Kenya expects a planned liquefied natural gas terminal to cost $500 million and take 3-5 years to build once it floats a tender in February 2012 . The LNG terminal at the port city of Mombasa will have two storage tanks, each holding some 35,000 tonnes of gas. "We are going to tender, may be in three
months we will deliberate and award the contract," Nyoike said. "We are making it a private sector initiative. All what we are doing is to provide land for the facility at Dongo Kundu (Mombasa)," he said. A recent EAC study shows that a pipeline to move natural gas from Dar es Salaam to the Kenyan port city of Mombasa would cost up to $630 million. (October 5, 2011)
POLAND: Planned project – Funding – CNR50/15/9 The European Commission decided recently to award Poland some 211.1 million Euros towards the construction of an LNG terminal at Swinoujscie in North West Poland. Construction of the facility began in March 2011, and the EU grant takes the investment fund to 45 percent of the necessary cost of the terminal. In November 2010, the project received an initial grant of 55 million Euros. It is hoped that the Polish terminal will be ready to begin functioning in July 2014. (October 7, 2011) TAIWAN: Planned project – Expansion – CNR50/15/10 Minister of Economic Affairs Shih Yen-shiang said recently that Taiwan's gas-fuelled power generation capacity will increase 67% by 2030 . Shih Yen-shiang said gas-fuelled power generation would reach 15 GW in 2011, or 35% of total power generation capacity. "By 2030, the installed natural gas generating capacity will grow to 25,000 megawatts” he added. Shih said the government has developed plans to build more natural gas storage tanks and transport pipelines on the island as part of its 30-year energy development plan. Taiwan's Council of
Economic Planning and Development approved a plan in September 2011 by state-owned CPC Corp. to add three 160,000-cubic meter LNG storage tanks at its Taichung LNG receiving terminal in central Taiwan. The additional storage tanks would boost the capacity of the Taichung receiving terminal to 5 million mt/year from the present 3 million mt/year. The expansion is due to start in July 2012 and slated for completion by end-2018. Taiwan imported a total 11.14 million mt of LNG in 2010, according to data from Taiwan's Directorate General of Customs. (October 10, 2011)
Cedigaz News Report - Vol. 50, n°15 November 8, 2011
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NGL
TRANSPORTATION-DISTRIBUTION UNITED STATES: Planned project - Open season – CNR5 0/15/11 Enterprise Products Partners L.P . through its Texas Express Pipeline LLC subsidiary, announced recently the start of a binding open commitment period for available capacity on a new natural gas liquids pipeline being developed by the company. The pipeline would originate from Skellytown, Texas in Carson County and extend approximately 580 miles to NGL fractionation and storage facilities in Mont Belvieu, Texas. The project is part of a recently announced joint venture that includes Enbridge Energy Partners, L.P. and Anadarko Petroleum. Initial capacity on Texas Express will be approximately 280,000 barrels per day which can be readily expanded to approximately 400,000 BPD or more depending on shipper interest. The pipeline is expected to begin service in the second quarter of 2013. (October 5, 2011)
NATURAL GAS
EXPLORATION – DISCOVERY IRAQ: Auction delayed – CNR50/15/12 Iraq delayed recently an auction due in 2012 for a dozen oil and gas exploration blocks to provide bidders with more information about the areas on offer and contracts, the oil ministry said. "The bidding round was supposed to start at the end of January 2012, but it has been delayed until the first week of March 2012 ," ministry spokesman
Assem Jihad said. He added that the delay was "to give time for the companies to review the details of the contracts, and also because of Christmas vacations in Europe" The blocs are located in the provinces of Basra, Najaf, Babil, Muthanna, Diwaniyah and Dhi Qar, south of Baghdad, Nineveh and Diyala to the north and Anbar to the west. (October 10, 2011)
UNITED KINGDOM: Discovery – CNR50/15/13 E.ON AG said recently that its exploration and production unit has found natural gas in a UK North Sea field, which it owns with Dana Petroleum E&P, a wholly-owned subsidiary of Korea National Oil Company. E.ON has encountered gas on the UK Tolmount prospect which is located in Block 42/28d in the UK Southern North Sea to the west of the E.ON-operated Babbage gas field. The well test flowed at a maximum stable rate of 50 million standard cubic feet of gas per d ay. (October 10, 2011)
PRODUCTION INDIA: Planned project – Drilling campaign – CNR50/15/14 Reliance Industries Ltd (RIL), the operator of the Panna Mukta and Tapti (PMT) oil and gas fields in India, recently warned the government that the lack of timely clearances to carry out drilling operations in the gas wells will result in a huge loss of gas production , running into 80 billion cubic feet over the six-year period beginning 2013. RIL is a joint-venture partner in the PMT gas fields along with British Gas and state-owned ONGC on the western offshore. RIL had sought the petroleum ministry and the DGH's
approval for the work programme and budget for further development of these fields during 2011-2012. In response, the DGH and the petroleum ministry took the position that they would only approve the drilling of development wells on the condition that the contractors (RIL-BG and ONGC) do not cost recover any of capital expenditure incurred in relation to such drilling. "It is contrary to the terms of the Tapti PSC to subject the approval of works to carry out the overall development of the fields to the issue of cost recovery. The two issues are distinct and separate," RIL said in its letter. (October 6, 2011)
Cedigaz News Report - Vol. 50, n°15 November 8, 2011
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PERU: Ongoing project – Royalties – CNR50/15/15 Peru said recently that negotiations over royalties paid by the consortium operating the giant Camisea natural gas field could be delayed. President Ollanta Humala's government said it seeks to correct market distortions through the negotiations so that royalties paid on exported fuel are always higher than those paid on fuel used domestically . In the negotiations, Peru also wants to ensure that gas in lot 88, one of the consortium's largest, is reserved for the internal market. "The royalties are going to take some time, but the liberation of lot 88 is not going to take long," said Aurelio Ochoa, head of the Perupetro agency in charge of negotiating for the government. Ochoa explained that currently, gas that is consumed domestically pays a royalty of $1 per each million BTU, while fuel that is exported brings in about $2.30 per million BTU. However, he said that when Peru begins to export gas to Mexico, the royalty would be only $0.19 per million BTU, considerably less than the local market rate. Repsol-YPF, responsible for exporting liquefied natural gas in Peru, has signed an agreement with Mexico, where it will initially send 100 to 120 million cubic feet and then increase to 420 million cubic feet in four years, according to Ochoa. (October 6, 2011) RUSSIA: Planned project – Partnership agreement – CNR50/15/16 Total signed recently with Novatek the final agreements to jointly develop the Yamal LNG project , becoming the main international partner on this gas liquefaction project with a 20% share. Novatek intends to keep at least a 51% interest in the project . The relevant Russian authorities authorized this acquisition on August 22nd, 2011. The Yamal LNG project will develop the South Tambey field located in the arctic area of the
Yamal peninsula. The resources of this condensate and gas field will allow production of more than 15 million tons of LNG per year . With this project, Total will have access to proved and probable (2P) reserves of approximately 800 million barrels of oil equivalent (boe) within the licence duration and to a plateau production of about 90,000 boe per day. The project has been declared of national interest by the Russian authorities. (October 6, 2011)
RUSSIA: Planned project – Approval – CNR50/15/17 Gazprom recently received the exploration and production license for the major Kovykta gas field in East Siberia, the company said. "The license is re-issued for Gazprom, in line with the decision of Russia's Subsoil Agency," it said. The field's ABC1+C2 reserves under Russian classifi cation, which roughly correspond to proven and probable reserves under in ternational standards, are estimated at 1.5 trillion cubic meters of gas and 77 million mt of c ondensate , according to Gazprom. Gazprom has said previously it does not expect the field's development before 2017 at the earliest. Peak production at the field is estimated at 40 Bcm/year. Kovykta gas contains a high share of helium and Gazprom is considering the construction of petrochemical facilities, to which it could invite foreign investments. (October 7, 2011) SRI LANKA: Planned project – CNR50/15/18 The petroleum minister said recently that Sri Lanka will take 18 to 24 months to reach commercial production of natural gas in the Mannar Basin offshore , where Cairn India Ltd.
has discovered a gas deposit. Cairn India, a subsidiary of Cairn Energy Plc, confirmed the first discovery of the natural gas in Sri Lanka, but has yet to establish commercial production schedule. (October 4, 2011)
TIMOR LESTE: Planned project – Talks – CNR50/15/19 Woodside Petroleum agreed recently to revisit the concept of processing gas from the Greater Sunrise gas field on East Timorese soil. Development of the Timor Sea gas field has stalled because Woodside and its joint-venture partners want to use a floating facility to process the gas against East Timor's desire for an onshore plant that would create jobs. According to the East Timor government, the new chief executive, Mr Coleman, indicated during those recent talks tha t an onshore facility was not off the table . While a floating platform remains Woodside's preferred option, the company did not deny it had offered to reconsider the onshore option during the recent talks with East Timor. ''Woodside recently held good meetings with the Timor-Leste government and we are focused on finding a solution to develop Greater Sunrise,'' a spokeswoman for the company said. Timorese President, Jose Ramos-Horta, suggest a final agreement is still a way off. ''The difference of opinion between us and the consortium [remains], and on our side we're extremely worried about the risks of [the floating option] and the cost,'' he said. (October 10, 2011)
Cedigaz News Report - Vol. 50, n°15 November 8, 2011
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RESERVES
AUSTRALIA: Planned project – Estimated resources – CNR50/15/20 The Greater Zola field off Western Australia is likely to hold more than 2 Tcf of gas and has attracted the attention of several large international companies, junior partner Tap Oil said recently. Tap Oil said an independent expert, RPS Energy Services, had confirmed that the Zola-1 exploration well in Carnarvon Basin permit WA-290-P had delineated a mean contingent resource of 378 Bcf , within a range of 209 Bcf to 584 Bcf. The Zola-1 well was drilled in February 2011. The Greater Zola structure comprises several fault blocks along the Alpha Arch, south of the giant Gorgon gas field. The structure's gross
prospective resource was put well above the pre-drill estimate of 1-2 Tcf at a mean of 2.3 Tcf, within a range of 1.5 Tcf and 3.3 Tcf . The Zola discovery is in permit WA-290-P, which is operated and 30.25% held by Apache Energy. Tap owns 10% of the permit, alongside Australian partner Santos with 24.75%, Austria's OMV with 20% and a local subsidiary of Japan's JX Nippon Oil & Energy with 15%. The Zola-1 well is located 27 km southwest of the 40 Tcf Gorgon gas field being developed by Chevron. The field is also close to the gas pipeline to be built to supply Chevron's Wheatstone LNG production hub near Onslow in Western Australia. (October 10, 2011)
IRELAND: Estimated resources – CNR50/15/21 Providence Resources which is shortly due to commence the biggest drilling campaign in Irish waters, said recently that tentative results from new technical third party seismic studies suggest the St George’s Channel-based discovery could actually measure up to 300 billion standard cubic feet , rather than the initially forecast 100bn standard cubic feet. The overriding significance of the tests is that the potential extension to the Dragon gas field is in Irish waters. Providence controls 25% of the existing portion of the field, which lies in British waters. The company, however, owns 100% of the field lying in Irish waters. Providence is to drill at the Dragon field in 2012. (October 8, 2011) MOZAMBIQUE: Estimated resources – CNR50/15/22 Videocon Industries and Bharat Petroleum Corp said recently that the natural gas discovery they made off Mozambique may hold at least 10 trillion cubic feet of reserves . Anadarko Petroleum Corp, the operator of the Area-1 in Rovuma basin off Mozambique where the two Indian firms are minority partners, encountered "excellent quality" 73 net meters of natural gas
pay at the Camarao exploration well. The operator carried out appraisal of the discovery and has confirmed that the discovery is connected to previously announced Windjammer and Lagosta discoveries. Anadarko, which holds 36.5% interest in the block, plans to put up plants to liquefy the gas. The two LNG trains will have a capacity to produce 5 million tonne of liquid fuel each. (October 5, 2011)
RUSSIA: Estimated resources – CNR50/15/23 Gazprom announced recently that it discovered a natural gas field associated with its Sakhalin project. The field was the second discovery for Gazprom in the Kirinsky prospect within the Sakhalin III project. An estimated 2.25 billion barrels of oil and 1.7 trillion cubic feet of natural gas are in the Sakhalin region. Most of it is in the Kirinsky prospect that was initially scheduled to start producing gas in 2014. (October 7, 2011)
PROCESSING ABU DHABI: Planned project – Engineering – CNR50/15 /24 A consortium between Babcock Borsig Service (BBS), the project leader, and Pall Corporation , a global provider of filtration, separation and purification solutions, has been awarded a contract for a hydrocarbon condensate dewatering initiative in the Middle East. The BBS/Pall consortium will carry out detailed engineering, procurement, construction and commissioning activities (EPC) at an Abu Dhabi Gas Industries Ltd. (GASCO) gas complex in the U.A.E. The scope of the project is to remove water and contaminants from hydrocarbon condensate thereby reducing the possibility of downstream corrosion at the GASCO complex near Abu Dhabi City . Shipments and construction will begin in March 2012. The entire project including commissioning is scheduled to be completed by December 2012. (September 29, 2011)
Cedigaz News Report - Vol. 50, n°15 November 8, 2011
7
BOLIVIA: Planned project – Engineering – CNR50/15/25 Tecnicas Reunidas received recently a contract to build a natural gas processing plant in southeastern Bolivia, state energy company YPFB said. "Tecnicas Reunidas has won the engineering and will provide the construction for the liquid separation plant of Gran Chaco ," Carlos Villegas, head of YPFB said. The plant, located in Bolivia's Chaco region near the border with
Argentina, will process up to 32 million cubic metres of natural gas a day to extract thousands of tonnes per day of liquefied petroleum gas, natural gasoline and ethane. The natural gas will be pumped into Argentina at a volume that could rise to 27 million cubic metres per day by 2020 from an average 7.4 million cubic meters per day now. The plant is expected to be functional by the first half of 2014, YPFB said. (October 8, 2011)
NIGERIA: Ongoing project – Gas flaring – CNR50/15/2 6 Pan Ocean Oil Corporation commenced recently a campaign against gas flaring by processing gas from its gas processing plant in Delta state, south-south Nigeria. The Ovade-Ogharefe, Gas processing plant said to be the largest in West Africa earns carbon credits for its operations under the Clean Development Mechanism (CDM) of the Kyoto Protocol where its operations registered was established. The gas plant is currently the largest carbon emission reduction project in West Africa. The Ovade-Ogharefe gas processing plant comprises of two phases, Phase one is a 130-mmscfd gas compression plant and phase two of the gas processing plant will produce liquefied petroleum gas, propane and other related gas products. (October 4, 2011) UNITED STATES: Planned project – Agreement – CNR50/15/27 Magnum Hunter Resources Corporation announced recently that its wholly-owned subsidiaries, Eureka Hunter Pipeline, LLC and Triad Hunter, LLC have entered into definitive services agreements with MarkWest Liberty Midstream & Resources , L.L.C., a partnership between MarkWest Energy Partners, L.P. and The Energy & Minerals Group. The Agreements provide for long-term midstream processing and related services in the liquids-rich Marcellus Shale. This will include natural gas produced in Northwestern West Virginia that is gathered through the Eureka Hunter Pipeline System, including equity production for Triad Hunter and other third party producers. Pursuant to the Agreements, Eureka Hunter has sold its under-construction 200 MMCFE per day capacity Thomas Russell cryogenic natural gas processing plant to MarkWest Liberty. MarkWest Liberty will now install this new plant, to be named the "Mobley 2" plant, adjacent to MarkWest's 120 MMCFE per day capacity gas processing plant
named the "Mobley 1" plant. Mobley 1 is currently anticipated to be in commercial operation in the second quarter of 2012. Mobley 2 is expected to be in service in the third quarter of 2012. The completion of both Mobley plants will increase MarkWest Liberty's total gas processing capacity by 320 MMCFE per day . Natural gas liquids handling services will be provided by MarkWest Liberty, with fractionation services anticipated to be handled at its Houston, Pennsylvania processing and fractionation complex. Eureka Hunter will extend its 20 inch gas gathering system to the Mobley processing complex on or before May 1, 2012 in order to begin delivering unprocessed natural gas production to both Mobley Plants for processing. Eureka Hunter will be gathering both Triad Hunter's and other third parties' natural gas production for delivery to MarkWest Liberty's Mobley processing complex. Initial delivery volumes from Eureka Hunter to the Mobley complex are currently estimated to be in the 50 - 75 MMBTU per day range. (October 5, 2011)
TRANSPORTATION-DISTRIBUTION INDIA: Planned project – CNR50/15/28 Gujarat State Petronet Ltd (GSPL), the gas transportation arm of the GSPC Group, plans to invest on expanding its network of gas pipelines in the state over the next five years. A GSPL official said that the listed company has estimated that the volume of gas supplies in Gujarat would increase from around 35 million metric standard cubic metres per day in Mar ch 2011 to 45 mmscmd in the next couple of years . The company, which has so far laid a 1,900-km-long gas pipeline network across Gujarat, will be extending it up to 2,400 km in the next five years. (October 7, 2011)
Cedigaz News Report - Vol. 50, n°15 November 8, 2011
8
KAZAKHSTAN: Planned project – Partnership – CNR50/15/29 The European Union invited recently Kazakhstan to take part in the Trans-Caspian Gas Pipeline project, European Union Energy Commissioner Guenther Oettinger said. The Trans- Caspian pipeline is supposed to connect the Turkmenistan and Azerbaijan shores of the Caspian Sea to export gas via Azerbaijan to Europe. The expected annual capacity of the Tengiz (Kazakhstan) Turkmenbashi (Turkmenistan) Baku (Azerbaijan) Tbilisi (Georgia) Erzurum (Turkey) route amounts to 20-30 billion cubic meters of gas. "This pipeline will become a very important
contribution to the development of the Southern Gas Corridor. Not many people know that this is the first time the EU suggested signing an international contract aimed at supporting an infrastructure project. It shows how important the project and cooperation in the region are important for the EU and all its 27 member states. We will welcome corresponding participation of Kazakhstan in the Southern Corridor in the future," Oettinger said. Kazakhstan’s oil and gas minister replied that the country does not currently have the energy resources to join the proposed Trans-Caspian natural gas pipeline. (October 4, 2011)
POLAND: Planned project – Capacities – CNR50/15/30 Gaz System , Poland's gas pipeline operator said recently that it received five applications for access to the Polish leg of the Yamal natural gas pipeline that connects Russia and Germany. The companies want to import around 5.5 billion bcm of gas annually , or more than twice the available capacity. "Gaz System will allow access to free capacities starting from November 20111 based on filed motions," the operator said. (October 7, 2011) TANZANIA: Planned project – CNR50/15/31 Government signed recently a loan agreement with the Chinese government to construct a natural gas pipeline from Mnazi Bay in Mtwara Region and Songo Songo in Kilwa district to the capital Dar es Salaam. Construction of the 330 mile-long natural gas pipeline will begin in
November 2011 when Chinese experts will begin evaluating the project, which has an expected completion date of March 2013 . In addition to the natural gas pipeline the loan will also finance the construction of two gas processing plants. (October 4, 2011)
UNITED STATES: Planned project – Agreement – CNR50/ 15/32 El Paso Corporation announced recently that its wholly-owned subsidiary, Tennessee Gas Pipeline Company (TGP), has executed long-term agreements for the MPP project which will expand TGP's 300 Line in Pennsylvania . The 240,000 dekatherms per day (Dth/d) project includes approximately 8 miles of 30" pipeline looping and modifications to four existing compressor stations in Pennsylvania to provide natural gas transportation from the Marcellus Shale supply area to existing delivery points on the TGP system. All of the capacity is subscribed through agreements with Chesapeake Energy Marketing, Inc., a wholly-owned subsidiary of Chesapeake Energy Corporation for 140,000 Dth/d and Southwestern Energy Services Company, a wholly-owned subsidiary of Southwestern Energy Company for 100,000 Dth/d. TGP anticipates filing a certificate application fo r the project with the Federal Energy Regulatory Commission in late 2011 . Pending regulatory approvals, construction would begin in 2013, with a November 1, 2013 in-service date. (October 7, 2011) UNITED STATES: Planned project – Open season – CNR50/15/33 Alliance Pipeline , which is owned by Veresen and Enbridge, started recently an open season to identify further shipper demand for its proposed 124 km, 12 inch diameter Tioga natural gas pipeline lateral in North Dakota , United States. The Tioga Lateral will connect Hess Corporation’s Tioga field processing plant in the Bakken region
of North Dakota to natural gas liquid processing facilities at the terminus of the 3,719 km, 42 inch diameter Alliance mainline system near Sherwood, North Dakota. The pipeline, which will have an initial design capacity of approximately 120 MMcf/d , is expected to be in service by the third quarter of 2013, subject to regulatory and other required approvals. (September 29, 2011)
Cedigaz News Report - Vol. 50, n°15 November 8, 2011
9
SUPPLIES - IMPORTS – EXPORTS AUSTRALIA: Supply Contract – CNR50/15/34 Energy Company ERM Power secured recently a deal to sell gas from its Gingin reserves to aluminium giant, Alcoa . Under the agreement, ERM will provide Alcoa with 15,000-terajoules of gas from its Gingin and Red Gully fields , north of Perth. Alcoa will make a staged pre-payment, allowing ERM to fund the construction of a gas and condensation plant. The company expects to start supplying Alcoa with gas by November 2012. The deal still requires approval from Alcoa's parent company. (October 5, 2011) KAZAKHSTAN to KYRGYZSTAN: Supply contract – Agreement – CNR50/15/35 Kyrgyzstan 's acting Deputy Prime Minister Omurbek Babanov said recently that Kazakhstan has agreed to sell natural gas to Kyrgyzstan at a much lower price than Kyrgyzstan has been paying to Uzbekistan for gas supplies. Babanov said Uzbekistan is currently charging $305 per
1,000 cubic meters, while Kazakhstan is prepared to sell gas to Kyrgyzstan for $195 per 1,000 cubic meters . Babanov said Kyrgyzstan's current gas is some 300 million cubic meters of gas annually, and he added that Kazakhstan would sell 240 million cubic meters per year to Kyrgyzstan under the new agreement. (September 29, 2011)
POLAND: Planned project – Import capacities – CNR50 /15/36 Polish gas pipeline operator Gaz-System offered recently a number of firms access to import capacity on its Lasow interconnector on the border with Germany . The Polish company offered 500mn m³/yr of additional capacity from January 2012 as a result of expansion of the interconnector to 1.5bn m³/yr from 1bn m³/yr. The new capacity will be available by the end of 2011. The Polish companies are interested in increasing imports from Germany as that would reduce the cost of supplying gas to buyers in western Poland. Poland used all of its available German interconnector capacity in 2010, importing more than 1bn m³, just over 10pc of its total imports. Most of the gas imported from Germany in 2010 and 2011 was imported by PGNiG under its contract with VNG. (October 7, 2011) RUSSIA to TURKEY: Supply contract – Cancellation – CNR50/15/37 The Turkish state gas pipeline operator Botas recently informed Gazprom that it will end its contract for the delivery of natural gas to Turkey via the western route. "Russia has failed to take steps that would satisfy the Turkish side. Proceeding from this, Botas has officially informed
Russia that it will not extend the agreement," a newspaper reported, referring to sources in the Turkish Energy Ministry. Turkish Energy Minister Taner Yildiz said that Turkey had decided not to prolong its 25-year old deal with Moscow on natural gas supplies expiring in December 2011. (October 2, 2011)
TANZANIA: Ongoing project – CNR50/15/38 ORCA Exploration Group , managed recently to significantly increase the supply of natural gas to Dar es Salaam power generation from 37 million cubic feet per day to 57 MMcfd . The increase, according to Orca, is due to the re-rating of gas processing facilities on Songo Songo Islands. Orca Chairman and Chief Executive Officer, David Lyons said out of the total gas supplied, 48MMcfd is sold directly to power generating firms compared to 30 MMcfd in 2010. "Orca is committed to invest the capital in natural gas exploration and development to ensure that it can deliver the 200 MMcfd from its Songo Songo l icence acreage in parallel with the government announced infrastructure developments," Mr Lyons said in the statement. Currently the economy is facing a shortage approximately 200-300 MW of power due to drought that has depleted hydroelectric dams which supply over 500MW to the national grid. To accelerate the delivery of increased gas volumes to Dar es Salaam, the government through Ministry of Energy and Minerals will invest in a gas pipeline and processing plants in Mtwara and Lindi regions to Dar es Salaam. Minister for Energy and Minerals, William Ngeleja said over 530 kilometres pipeline from Mnazi Bay to Dar es Salaam via Kilwa will be constructed soon. (October 2, 2011)
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Cedigaz News Report - Vol. 50, n°15 November 8, 2011
10
STORAGE NETHERLANDS: Ongoing project – Suspension – CNR50/15/39 Construction of Europe's biggest gas storage project, at the Bergermeer field in the Netherlands, will not increase the risks of tremors locally , a court-appointed commission found, the field's operator said recently. In August 2011, the top court in the Netherlands ordered the suspension of the Bergermeer gas storage project citing objections by environmentalists and local residents. It appointed an independent commission to review all aspects of the
construction, and will announce its final decision by year-end . Abu Dhabi Energy Company, the operator and major shareholder in the gas storage facility, said that the independent commission had concluded that gas injection would have a positive effect on the structure's stability. "Any earth tremor would not exceed the maximum limit which has been constantly viewed as acceptable for gas production and storage activity in the Netherlands," Taqa said. Taqa has already injected around half of the gas the site can hold. (October 5, 2011)
UNITED STATES: Planned project – Expansion – CNR50/ 15/40 AGL plans to expand the natural gas storage operations at Lake Peigneur near the Iberia Parish border. Expansion plans call for the underground natural gas storage facility to be expanded from two caverns to four, increasing the storage capacity from 9.4 billion cubic feet of gas to about 21.4 bi llion cubic feet . Richard Hyde, AGL’s senior director of government affairs said AGL applied for a permit to begin the process in June with the Louisiana Department of Natural Resources, and the plans were currently still under review. (October 10, 2011) UNITED STATES: Planned project – Approval – CNR50/15/41 Regulatory Commission approved recently the application of Tricor Ten Section Hub , LLC to construct and operate a new underground natural gas storage project near Baker sfield, California. The Ten Section Hub facility is designed to hold 32.5 Bcf of gas, of which 22.4 Bcf is working gas , and will offer customers up to four-turns of high-speed deliverability. Ten
Section Hub will offer up to 1.0 Bcf per day of withdrawal service and up to 0.8 Bcf per day of injection service . In addition to providing 32.5 Bcf of storage field capacity with a working capacity of 22.4 Bcf, the certificate issued by FERC authorizes Tricor to construct a 21-mile-long, 36-inch diameter bi-directional header pipeline in order to connect the storage facility to the Kern River/Mojave interstate pipeline at Wheeler Ridge. (October 4, 2011)
USE FOR POWER GENERATION UNITED KINGDOM: Planned project – Approval – CNR50/ 15/42 ScottishPower received recently approval from the Scottish government for a new 1,000MW combined-cycle gas turbine power station in East Lothian, Scotland. The new power plant will replace the company's 1,200MW Cockenzie coal-fired power station on the site. The existing coal-fired plant, which commenced operation in 1967, is set to close by the end of 2015. The new power station will be carbon capture ready and will be required to fit full carbon capture and storage technology once it is commercially and technically proven. The government has also approved a separate application for a 17.5km pipeline from the existing gas network at East Fortune to the new power station. (October 6, 2011)
CEDIGAZ NEWS REPORT is an internal publication of C EDIGAZ, edited by Thierry Rouaud with collaboration of Catherine Charlier. 11 eett 44,, aavveennuuee ddee BBooiiss PPrrééaauu,, 9922885522 RRuueeiill--MMaallmmaaiissoonn CCeeddeexx,, FFrraannccee TTeell.. ++3333 11 4477 5522 6600 1122 -- FFaaxx ++3333 11 4477 5522 7700 1144 WWeebbssiittee :: hhttttpp::////wwwwww..cceeddiiggaazz..oorrgg CCoonnttaacctt :: iinnffoo@@cceeddiiggaazz..oorrgg
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