2015 3Q

CNPC cuts forecast for Chinese gas demand amid economic slowdown (30 September 2015): China may consume less natural gas by 2020 than previously estimated, partly because of a slowdown in the world’s second-biggest economy, said a China National Petroleum Corp. research body. CNPC’s Economics and Technology Research Institute lowered China’s natural gas demand forecast to 269 billion cubic meters in its worst-case outlook through the end of the decade, according to a presentation Wednesday by Wang Zhen, deputy director general at CNPC’s policy research office. The institute previously estimated that China would consume about 300 billion cubic meters of the fuel by 2020.

Fluor, Sasol to partner on projects in South Africa (28 September 2015):  The primary objective of the agreement is for Fluor and Sasol to collaborate on small and mid-sized oil and gas projects. Fluor will also share its expertise on proprietary engineering and project execution tools and systems with selected Sasol Group Technology employees through on-the-job participation.

Nobody is making money off U.S. natural gas exports, Engie says (25 September 2015):  Just as gas export-terminals are preparing to start up along America’s Gulf Coast, the oil-price crash has made it unprofitable to send the U.S. fuel abroad, according to the North America head of power and natural gas supplier Engie. It costs about $2 to liquefy gas and another $3 to take it from the U.S. to Asia, said Zin Smati, president and CEO of Engie’s GDF Suez Energy North America. Engie changed its name from GDF Suez SA in April. Those costs used to leave plenty of profit margin when the gap between LNG prices in Asia and natural gas in the U.S. was more than $14 per million British thermal units. Now, the spread is less than $5, according to data compiled by Bloomberg.

Global LNG market is heading toward a surplus, BRG analyst says (23 September 2015): Countries attempting to import more LNG could increase an already growing advantage over suppliers worldwide in the next few years, a market analyst suggested. “Demand growth could be slow for the next few years, but as lower prices sink in, it could start to grow,” said Christopher Goncalvez, a managing director in Berkeley Research Group’s Washington office. “Japan is a huge wild card as it ponders whether to reactivate its idled nuclear power capacity. That creates so many uncertainties.”

MARKET WATCH: NYMEX oil price rebounds on signs of supply adjustments (22 September 2015): Oil prices rebound $2/bbl on the New York Market Sept. 21 on signs that the growth of US oil production might be slowing, but commodity prices resumed their zigzag pattern again in early trading on Sept. 22, giving up some of the previous day’s gains. Paul Horsnell, Standard Chartered head of oil research, said, “We think $50/bbl oil is too low an oil price for medium or long-term equilibrium.” He said that price is not sustainable for oil producers.

Asian LNG prices seen sinking as low as $4 in ‘ugly’ market (22 September 2015): The slump in LNG prices still has further to go, even after a plunge of 60% from last year’s peak, according to FGE, an energy consultant. LNG prices may sink as low as $4 per million British thermal units by 2017 because of a glut and probably won’t rise above $8 before 2020, FGE Chairman Fereidun Fesharaki said in a phone interview. That compares with the latest spot price of $7.10 for LNG shipped to northeast Asia, according to New York-based Energy Intelligence Group.

Second fire within a month hits Pemex’s Tula refinery (21 September 2015): Mexico’s Petroleos Mexicanos (Pemex) has extinguished the second fire within a 2-week period at its 315,000-b/d Miguel Hidalgo refinery in Tula, Hidalgo state. The latest fire, which occurred on Sept. 21 at 10:35 a.m. local time following a leak of an unidentified substance in heater BA-701 of the U-700-1 diesel hydrotreater, has been completely controlled, with one injury reported as a result of the incident, Pemex said.

Atlantic Coast Pipeline seeks FERC clearance for $5B interstate gas line (16 September 2015): Atlantic Coast Pipeline formally applied to the US Federal Energy Regulatory Commission (FERC) on Friday for permission to build a 564-mile interstate natural gas transmission pipeline.

ExxonMobil lets oil processing contract for West Qurna-1 field in Iraq (16 September 2015): ExxonMobil Corp. has let a front-end engineering design (FEED) contract to Kentz, part of SNC-Lavalin Group, for an oil processing facility that will increase production at West Qurna-1 field in Iraq. With its regional partner, Kentz is providing detailed design engineering, procurement, fabrication, construction, commissioning, and start-up of the facility, which will be capable of producing an average of 100,000 stb/d of crude.

Oil at $20 possible for Goldman as forecasts cut on glut (11 September 2015): The global surplus of oil is even bigger than Goldman Sachs Group Inc. thought and that could drive prices as low as $20/bbl. While it’s not the base-case scenario, a failure to reduce production fast enough may require prices near that level to clear the oversupply, Goldman said in a report emailed Friday. The bank cut its forecast for Brent and WTI crude through 2016 on the expectation that the glut will persist on OPEC production growth, resilient supply from outside the group and slowing demand expansion.

Fire hits Pemex’s Tula refinery (11 September 2015): Operations remain ongoing at  Petroleos Mexicanos’ (Pemex) 315,000-b/d Miguel Hidalgo refinery in Tula, Hidalgo, Mexico, after an early morning fire broke out at the production site on Sept. 9. The fire, which occurred following a leak of an unidentified substance from a fractured vent line in the area of the refinery’s burners at about 1:55 a.m. local time, was controlled and extinguished by 5:00 a.m., Pemex said.

Analysts: Low US gas prices, shale glut offer buying opportunity (10 September 2015): A supply glut that has kept US natural gas prices trading near a two-year low is a “buying opportunity” with the market set to tighten by the end of 2016, Societe Generale said. Natural gas futures fell in April to the lowest since June 2012 as supplies continued to flow out of US shale formations, adding to already-high stockpiles.

Unipetrol updates status of Litvinov ethylene complex, refinery (9 September 2015): Access to impacted units at the complex remains limited to a team of safety experts executing preventative checks designed to ensure working conditions are safe for maintenance crews at the site. Unipetrol said an assessment of the full extent of damages to processing units and a plan for necessary repairs will begin once company specialists receive clearance for full access to the complex. A joint investigation into the incident remains under way with a special team of Czech Republic police and fire officials.

Barclays sees energy exploration and production cuts topping $132 billion in 2 years (9 September 2015): To be the first back-to-back decline in spending since crude crash of the 1980s as producers poised to reduce development budgets by 3-8%in 2016

Nord Stream-2 gas pipeline expansion hurts EU unity, Poland says (8 September 2015): The planned expansion of a natural gas pipeline directly from Russia to Germany hurts European Union (EU) unity when dealing with the conflict in Ukraine, according to Poland’s president Andrzej Duda.

Eni to start digging offshore Egypt in January 2016 (7 September 2015): Eni plans to start digging early next year in the ‘super giant’ gas field it recently discovered offshore Egypt

Fire injures four at REG’s biorefinery in Louisiana (4 September 2015): The fire injured four people, REG reported, including one REG employee and three contractors. All are being treated at the Baton Rouge General Hospital. REG noted that emergency crews quickly responded to contain the fire, and it was declared completely extinguished by 4:20 a.m.

Formosa considers $9.4B complex (3 September 2015): Formosa Petrochemical Corp. is studying whether it’s feasible to build a $9.4 billion ethylene production complex in St. James Parish near Gramercy. The Taiwanese company expects to make the final investment decision by mid-2016. If built, the project on the west bank of the Mississippi River near the Gramercy bridge would create 1,200 jobs with an average salary of $84,500. The project also would generate 8,000 indirect jobs, according to Louisiana Economic Development.

New projects decline, but backlog holds strong (1 September 2015): Even after the recent downturn in oil and natural gas pricing, our analysis shows why downstream E&C companies can depend on a strong backlog to last through the decade.

Fire hits Syncrude’s Alberta oil sands upgrader (312015): An investigation is under way into a fire that occurred early on Aug. 29 at Syncrude Canada Ltd.’s upgrader in the Mildred Lake oil sands production area, about 40 km north of Fort McMurray, Alta.

UK approves $4.5-billion Culzean development in North Sea (31 August 2015): The UK Oil & Gas Authority has greenlighted development of high-pressure, high-temperature (HPHT) Culzean field in the central North Sea.

Amec Foster Wheeler to work on Vietnam’s Dung Quat refinery expansion (28 August 2015): The two-year contract includes the optimization of the refinery configuration, coordination of licensors, and the design for new units as well as the revamp of existing units. Amec Foster Wheeler was awarded a front-end engineering design (FEED) contract by PetroVietnam for their Dung Quat oil refinery expansion in Quang Ngai Province, Vietnam, officials announced on Friday. The contract is part of the $1.8-billion expansion and upgrading plan, which is planned to increase the plant’s annual processing capacity by 30%, according to project officials. 

East Africa becoming ‘oil and gas hotspot’, says report (2A recent report by Visiongain has highlighted the growing attractiveness of East Africa for oil and gas investors. The ‘East African Oil & Gas Market 2015-2025’ report stated that new discoveries and increasing reserve estimates meant the region was “fast becoming one of the world's most interesting oil and gas hotspots”, forecasting “tens of billions of dollars of investment over the next decade”.

INVISTA to license Green Chem’s FCC offgas technology outside China (27 August 2015): The process, which will be marketed as DTL process technology outside of China, is a dry-gas-to-liquids technology that allows for flexible conversion of light olefins, present in FCC offgas, into either gasoline and distillate or concentrated aromatics, significantly increasing their value.

Unipetrol: Litvinov ethylene plant restart likely to take months (26 August 2015): Unipetrol AS will not have a definite timeframe for restarting production at its Chempark Zaluzi Petrochemical Complex in Litvinov, Czech Republic, until it completes an investigation into the mid-August explosion and ensuing fire at the site’s 544,000-tonne/year (tpy) ethylene plant.

Exceed launches world’s first decommissioning collaboration tool (25 August 2015): The world’s first online information management system for the offshore decommissioning market has been launched by well management and performance improvement specialist, Exceed.

Oil price slump is hitting Saudi Arabia (24 August 2015): Low global crude prices have hit Saudi Arabia hard. With a considerable budget deficit, Saudi has been forced to begin borrowing from capital markets—$4 billion in July.

Fire hits PBF Energy’s Delaware refinery (21 PBF Energy Inc., Parsippany, NJ, is running its 190,000-b/sd refinery in Delaware City, Del., at reduced rates following a fire that broke out in the plant’s fluid catalytic cracker (FCC) on Aug. 21.

Fire at Shell’s Singapore refining plant injures six (21 August 2015): A fire broke out on Friday evening at Shell's Pulau Bukom refining and petrochemical complex in Singapore, leading to burn injuries for six contract workers. Three are in critical condition.

Fire breaks out at Kuwait oil refinery, Personnel at refinery evacuated, firefighting units on maximum alert Published (17 August 2015): All necessary precautions were taken to contain a fire that erupted shortly before noon at the heavy crude oil unit at Al Shuaiba oil refinery, the Kuwait National Petroleum Company (KNPC) said. KNPC Acting Chief Executive Officer Ahmad Al Jimaz said that the fire broke out at 11.30am and that all units at the refinery were shut and personnel were evacuated.

OPEC oil production of 31.4mn bpd highest since August 2012 (Oil production by OPEC nations in July has totalled 31.4mn bpd, up 120,000 bpd from June 2015

Unipetrol declares force majeure at Czech ethylene plant (14 August 2015): Unipetrol AS has shuttered production at its Chempark Zaluzi petrochemical Complex in Litvinov, Czech Republic, following an explosion and ensuing fire at the site’s 544,000-tonne/year (tpy) ethylene plant.

Final Al-Zour refinery package awarded (13 August 2015): Kuwait National Petroleum Company says the contract is worth $1.57bn

UOP technology drives China’s first dual plants for propylene, isobutylene (12 August 2015): The new unit, which is the first of three in China, uses Honeywell UOP’s C3/C4 Oleflex process technology to produce propylene, a building block for making plastics, packaging and synthetic fiber, and isobutylene, a component used for high-octane gasoline and synthetic rubber.

Lukoil tenders work on $2.5bn Iraq project (12 August 2015 ): Oil and gas field development will be delivered in three phases

India’s IOC plans capacity expansion at Barauni refinery (11 August 2015): State-owned Indian Oil Corp. Ltd. (IOC) has informed India’s federal government that it will increase crude oil processing capacity at the company’s 6 million-tonne/year (tpy) Barauni refinery in Begusarai District, Bihar.

Grand opening for expanded Suez Canal (6 August 2015): President leads nation in festive celebration to mark opening of $8.2bn project

Algeria to announce $2bn gas project prequalifiers (5 August 2015): Contractors in the running for Algerian field development project to be named within two weeks

Rosneft and ExxonMobil jointly bid for Mozambique exploration (Russia-based Rosneft and US-based ExxonMobil have filed joint bids to participate in the fifth license round organised by Mozambique’s Institute of National Petroleum (INP)

$700 million invested in Ghana offshore gas project (31 July 2015): ACCRA, Ghana (Bloomberg) -- The World Bank approved $700 million in investment guarantees for an offshore gas project in Ghana that will help the country address electricity shortages.

Kuwait’s KNPC awards $11.5B in contracts to build new Al-Zour refinery (29 July 2015): KNPC awarded 3.48 billion dinars ($11.5 billion) in contracts to companies including Tecnicas Reunidas and Daewoo Engineering & Construction Co. for a project to build its long-awaited, fourth refinery.

Saudi chemical firm SABIC to boost feedstocks via US shale investments (27July 2015): SABIC may use the feedstock in the US or export it to other countries like the UK, where SABIC has converted its crackers to process shale gas as feedstock to produce olefins.

Technip to modernize, expand two Egypt refineries (27July 2015): The Assiut investment has an estimated total value of $1.5 billion. The deal aims at maximizing diesel production and will introduce the most modern refinery technologies to Upper Egypt.

Market Watch (25 July 2015): Oil futures hover below $49/bbl

Al-Zour contracts to be awarded in August (22 July 2015) Kuwait’s oil minister says rapid progress on refinery megaproject is expected

Middle East Economic Review 2015, (15 July 2015) Lower oil prices have forced governments to review their spending plans, but the region will continue to invest heavily in strategic projects