may 07 update

The plant, about 10 miles from Salt Lake City, can process 26,000 barrels of oil a day into gasoline, diesel and jet fuel, Astin said. The plant supplies fuel to Utah and Idaho.

U.S. Refinery Breakdowns on the Rise

Refineries across the country are breaking down with unusual frequency this year, boosting prices at the pump and endangering workers and communities.

The rash of oil plant problems may not be a coincidence. The breakdowns stem from the hard use of aging equipment, a shortage of trained workers, corporate cost-cutting and ownership changes, refinery experts say.

In the first six weeks of 2007, there were 43 incidents involving pipeline leaks, chemical releases, plant breakdowns and fires, more than has been typical, Kim Nibarger, a safety expert for the United Steelworkers Union, told Congress during a hearing on refinery safety.

Several of the accidents left employees injured. The incidents, coupled with an abnormal number of maintenance projects and mishaps, recently pushed the average per-gallon cost of gasoline higher.

"Refineries are potentially dangerous places, but they can be managed in a safer manner," said Dave Campbell, secretary-treasurer of the steelworkers local that represents refinery workers in Southern California. Campbell said tighter regulation and greater government scrutiny made California refineries safer than others, but he added that those safeguards could be undermined by budget cutting, production demands and other pressures.

"The trend has been to decrease staff," Campbell said. "Some of our operating units are understaffed. I've had people complain about the overtime."

Such comments indicate that California plants may share some of the same stresses that were at play two years ago, when an explosion and fire at a BP refinery in Texas killed 15 and injured 180. That incident was the nation's worst workplace accident since 1990, triggering regulatory and criminal investigations as well as last week's hearing before the House Education and Labor Committee.

The U.S. Chemical Safety Board, an independent federal agency, released its report on the March 23, 2005, tragedy in Texas City, concluding that "organizational and safety deficiencies at all levels of BP caused this terrible accident," according to board Chairwoman Carolyn Merritt. The oil giant cut training, maintenance and staffing budgets, ignored safety recommendations stemming from other fatal accidents, failed to invest in refinery improvements and allowed unsafe practices to persist, the report said.

The board also criticized the Occupational Safety and Health Administration's inspection record at the BP plant and elsewhere.

BP has taken responsibility for the accident but has disputed some of the board's findings, particularly the notion that funding cuts played a role in the incident.

Rep. George Miller, D-Calif., the committee chairman, told reporters after the hearing that he would write legislation to improve refinery worker safety.

"I think the situation screams out for legislation," Miller said. "Clearly the status quo is lethal to American workers, and that's unacceptable."

London based BP, operates five U.S. refineries, including a large fuel-making operation in Carson, Calif.

An independent-panel report commissioned by BP that was released in January concluded that "BP's Carson refinery appears to have a generally positive, trusting and open environment with effective lines of communication between management and the work force," retired Adm. Frank Bowman, a member of the study group, testified last week. He added, however, that the panel found "apparent complacency toward serious process safety risks at each refinery."

An unusually active maintenance schedule at many of California's 14 fuel-making plants over the last few months left the state vulnerable to outages and the resulting price surge. Mishaps further strained fuel production and left inventories low, said Claudia Chandler, the California Energy Commission's assistant executive director.

The agency asked Valero Energy Corp. to postpone a project that would have cut production at its Wilmington refinery starting in mid-April. That facility produces about 14 percent of Southern California's gasoline.

Valero spokesman Scott Folwarkow said the company agreed to postpone the shutdown for a few months.

Valero, based in San Antonio, has suffered several refinery mishaps in recent months. The most serious came in mid-February, when an explosion and fire ripped through the company's McKee refinery in west Texas, injuring 19 people.

Some injuries also have occurred at California refineries. A recent fire at Chevron Corp.'s Richmond refinery extended the plant's down time by a month. It also injured one employee and led to a precautionary evacuation of nearby neighborhoods. And in early February, a fire at Shell Oil Co.'s Wilmington plant sent four workers to the hospital, one with critical burns.

Despite those incidents, an official with California's Division of Occupational Safety and Health praised the safety record of refineries in the state, which he described as substantially better than that of plants in states who don't conduct their own safety inspections.

"Our record speaks for itself. ... There has been a significant drop in fatalities and accidents compared to the 1990s," said Clyde Trombettas, manager of the Northern California process safety management unit.

Graham Corp. Wins $5 Million Refinery Contract

Graham Corp. in Batavia, NY said it has been awarded a $5 million contract to manufacture an ejector system for a Gulf Coast oil refinery.

Graham, which designs and builds vacuum and heat transfer equipment already has equipment at the refinery. The new system will be used to modify the existing equipment and will improve the overall refining process, the company said.

It did not name the refinery or provide a more precise location.

“We continue to see strong demand for Graham products in key markets, such as the refining market,” said Jim Lines, the company’s president and chief operating officer.

Graham said is expects to deliver the ejector system in the third quarter of fiscal 2008.

Jacobs Gets 2 Deals with BP Products

Jacobs Engineering Group Inc. on April 12 said it received two engineering, procurement and fabrication packages from BP Products North America Inc. for a planned $3 billion Canadian Heavy Crude Refinery Upgrade program in Indiana.

Financial terms of the projects were undisclosed.

One contract includes licensing, design and fabrication of sulfur recovery facilities. The other contract includes revamping several hydroprocessing units.

Energy Efficiency Helps ConocoPhillips’ Montana Refinery Earn EPA Honor

A petroleum refinery operated by ConocoPhillips in Billings, MT is the first in the nation to earn the Environmental Protection Agency’s Energy Star for superior energy performance. The refinery's design, operations and maintenance practices place the refinery in the top 25 percent of refineries nationwide in terms of energy efficiency.

“I applaud ConocoPhillips' Billings Refinery for being one of America’s energy all-stars,” said EPA regional administrator Robert E. Roberts. “Energy is a significant expense for manufacturers, and this facility is demonstrating that energy efficiency is a solid economic and environmental investment."

A combination of the facility's energy-efficient design and a focus on sound operations places the Billings refinery's Energy Intensity Index (EII) in the top 25 percent of refineries with similar crude capacity. The plant is particularly efficient in capturing and recycling thermal energy, a large requirement in making fuel. Specifically, the refinery uses a heat-recovery system that captures heat from a crude tower to preheat cold crude – a measure that yields considerable energy savings. The plant also has an intensive steam trap maintenance program, a practice that provides for the efficient separation of condensed water from the steam system and returns hot water to the boilers to generate more steam.

Energy Star is a government-backed program that helps businesses and consumers protect the environment through superior energy efficiency. In 2006 alone, American consumers and businesses, with the help of Energy Star, saved $14 billion and prevented greenhouse gas emissions equal to those from 25 million vehicles.

EPA awards the Energy Star to refineries in the top 25 percent nationwide for energy efficiency based on the Solomon Associates Energy Intensity Index system (“Solomon-EII”). EPA works closely with the petroleum refining industry as well as eight other industries to promote strategic energy management at all levels across corporations.

The manufacturing sector is one of the newest parts of the Energy Star program, a growing list of partners vital to meeting the Bush Administration’s goal of reducing greenhouse gas intensity by 18 percent by 2012. EPA works closely with manufacturing partners to promote effective energy management strategies and provides tools and assistance to help facilities reduce energy use. Manufacturing plants that earn the Energy Star measure, track and benchmark energy use compared to similar plants nationally. Many participating companies report substantial environmental, cost and energy benefits while receiving recognition for their leadership. Partners expected to join in upcoming months include food processing plants, pharmaceutical manufacturers, and water and wastewater treatment facilities.

The manufacturing sector consumes about one-third of the energy used in the U.S. and contributes about 28 percent of greenhouse gas emissions. U.S. petroleum refiners alone spend more than $8 billion annually on energy. If energy use across the industry were reduced by five percent, the energy saved could produce electricity for over one million households and prevent the emissions of more than 25 billion pounds of greenhouse gases.

Judge Temporarily Blocks Western Refining's $1.3 Bln Giant Acquisition

A federal judge in New Mexico has granted an injunction sought by the Federal Trade Commission to block the proposed acquisition of Giant Industries Inc. by Western Refining Inc.

The ruling came after a hearing April 13, and puts the proposed $1.3 billion deal on hold while the FTC prepares to make its case in court. Officials of Scottsdale, Ariz.-based giant and El Paso, Texas-based Western Refining have vowed to fight the government agency in court.

In filing a court complaint, the FTC said the acquisition would eliminate competition for refined petroleum products in the northern New Mexico area, where the operations of Giant and Western Refining overlap.

Western Refining agreed to buy Giant for $83 per share last August, plus assuming $280 million in debt, but lowered the price to $77 per share in November after a pair of refinery fires dimmed Giant's financial performance.

Toxic Refinery Releases On Rise In Bay Area

The level of toxins being released into the air by major Bay Area refineries may be on the rise, creating air pollution that regulators tried to limit two years ago by ordering the refineries to cut back on their emissions.

In 2005, regulators -- after years of community complaints -- told Bay Area refineries to come up with plans to reduce incidents of flaring, which is a process that happens when refineries release toxic chemicals.

But a new report says that at some plants, incidents of flaring may have actually increased.

The 2005 rule requires each refinery to reduce the hazards of their flares by setting up a program called a flare minimization plan. The refineries were given a grace period before submitting their plans.

But during the grace period, some refineries have increased their flaring, according to a report by Oakland-based Communities for a Better Environment, which analyzed three years of data from five East Bay refineries.

The Shell refinery in Martinez eliminated flaring from the "dirtiest flaring type of processes," said Greg Karras, a senior scientist with CBE.

But both Chevron and ConocoPhillips had emitted 30 to 50 times more pollution per flare than Shell, according to Karras.

"We found, to our surprise, that despite this first-of-its-kind flare rule, adopted in 2005, Chevron's flaring has been increasing drastically," he said, adding that the increase was by 80 percent.

Chevron spokesman Den O'Hair said, "I haven't seen those numbers, but our flaring has been consistent over the last several years. Our flaring is minimal, and I think it's going to get even better."

A ConocoPhillips spokesman disagreed with the report, saying he thought the data would show the company has the least amount of flaring of any of the refineries.

Contra Costa County Gets Mixed Reviews over Rodeo Refinery's Expansion Plan

Local residents turned out in force April 25 at a Contra Costa County Planning Commission meeting, about half opposing and the other half supporting ConocoPhillips Co.'s plan to increase refining capacity and output at its Rodeo refinery by 30 percent.

Supporters said the refinery has been a good neighbor and welcomed the addition of new jobs while critics accused the company of having a checkered safety record.

Under its "Clean Fuels Expansion Project," the refinery would increase production by up to 1 million gallons per day -- 30 percent over current levels -- by upgrading and adding new equipment enabling it to process heavy gas oil (HGO), which is a by-product currently produced at the plant and exported.

ConocoPhillips officials asked the commission to approve its plans during the meeting in Martinez. But after three-and-a-half hours, the commission suspended the meeting and its decision until May 8.

The expansion includes construction of a hydrogen plant with a capacity of 120 million standard cubic feet per day, a hydrocracker with a capacity of 23,000 barrels per day, a sulfur recovery unit with a capacity of 200 tons per day, and a butane rail loading facility.

"Our project is going to increase California's supply of clean-burning gas and diesel by 1 million gallons per day,'' Mark Hughes, spokesman for ConocoPhillips, told commissioners, adding that the changes would not expand the "footprint" of the facility.

Hughes said the expansion would create hundreds of new jobs at the refinery.

Upgrades would also be made to units that blend and process fuel and to the refinery's sulfur recovery plant, and would increase sulfur storage capacity. Further upgrades would be made to pumps, heat exchangers, piping, instrumentation and utilities.

The new equipment would be constructed on approximately 9 acres west of I-80, within the refinery's 495-acre developed area. Critics say the expansion goes against the state's efforts to cut greenhouse gases and increases the risk of toxic contamination of residents in Crocket and Rodeo.

"We have no reason to believe they would keep their promises,'' said Carla Perez, a member of the watchdog group Communities for a Better Environment in Oakland.

The watchdog group said higher production would increase the emission of sulfur oxides, nitrogen and other contaminants, and result in increased flaring -- burning off waste of flammable gas and liquids during unplanned over-pressuring of plant equipment.

It also questioned the quality of a county environmental impact report on the proposal.

Among the supporters was Michael Roth, superintendent of John Swett Unified School District, who said the refinery has been a good neighbor that supports local schools.

County officials said it's not clear that increased production at the refinery would result in more flares. And Randy Sawyer, director of the county hazardous materials program, said the refinery in recent years has had no major safety problems.

"For the last few years ConocoPhillips has been operating from a safety record standpoint very well. They've had some flaring incidents, but the (overall) safety record has been (good)," said Sawyer.

ConocoPhillips has the smallest output of any oil refinery in the county. It produces a little more than 100,000 barrels per day. Chevron's Richmond refinery produces more than 225,000 barrels per day. Shell and Tesoro in Martinez each produce about 160,000 barrels per day.

Compressor Loss Causes Flare-up at Chevron Refinery

Chevron Corp. lost a flare-gas compressor April 23 at its refinery in Richmond, CA causing "overpressuring, flaring," said the report on the state's Office of Emergency Services Web site. A company spokesman was not immediately available for comment.

The Chevron refinery has a processing capacity of 240,000 barrels a day and accounts for 23 percent of San Ramon-based Chevron's U.S. refining capacity.

A recent report from an environmental group said the Chevron refinery sees more flare-ups than its neighboring refineries.

Oakland-based Communities for a Better Environment said recently that Chevron's Richmond refinery is the only one of five Bay Area oil refineries to report an increase in major flaring episodes since June 2005 compared with the 18 previous months.

Representatives for Chevron and an oil industry group said all the refineries, including Chevron, have made substantial long-term progress in reducing pollution from flares.

Chevron had more than the usual number of flaring episodes during 2006 because it did major maintenance that required equipment to be turned off, leaving gases in equipment that must be burned off, spokesman Walt Gill.

He added that Chevron is doing all it can to limit flare emissions without jeopardizing plant safety.

West Texas Refinery Back In Operation after Fire

Oil refiner Valero Energy says its West Texas refinery that was knocked out by a fire in February is back in operation.

The McKee refinery had been off since a February 16th explosion in the propane de-asphalting unit. That's where fuel is processed at high temperatures.

A company spokesman says the crude unit and reformer are back up, and the refinery is processing crude.

It will likely take several days to recommission the refinery, but it should be able to reach throughput of 85-thousand barrels per day by the end of April.

Total Fined $2.9 Million for Texas Refinery Pollution

Total's U.S.-based petrochemical unit will pay a $2.9 million penalty for pollution violations at its Port Arthur, Texas, refinery and spend another $37 million to upgrade the facility, the Environmental Protection Agency said May 1.

The settlement is part of the EPA's national effort to reduce air emissions at U.S. refineries. The agency has forced 86 refineries in 25 states to address environmental problems and invest more than $4.5 billion in new pollution control technologies.

Under this latest settlement, the changes Total plans to make to its refinery will significantly reduce the plant's pollution, cutting annual emissions of sulfur dioxide by more than 800 tons, nitrogen oxides by 180 tons and carbon monoxide by 120 tons.

Total will also reduce emissions generated by flaring -- the process by which byproduct-gas from the refining process is burned-off in a flaring device.

Under the settlement, penalties will apply to the future flaring of both acid gas and hydrocarbon gases that contain hydrogen sulfide and sulfur dioxide.

This is the EPA's first refinery settlement to include fixed penalties for the flaring of hydrocarbon gases. The agreement with Total is subject to a 30-day public comment period and final court approval.

DEQ Planning to Cite ConocoPhillips’ Montana Refinery over Plume

A white plume visible for three days from the ConocoPhillips refinery in Billings, MT exceeded air quality limits and generated complaints from residents, a state official said May 1.

Jim Hughes, an environmental specialist in Billings with the Montana Department of Environmental Quality, said he has requested information from ConocoPhillips and will recommend that the department issue a violation letter.

The plume's effect and the number of complaints "warrant a state enforcement action," Hughes said.

Refinery Manager Mike Wirkowski said that the white plume coming from the smokestack was normal venting of fine powdered clay material as the plant was starting up after being down for scheduled maintenance. The material and steam get circulated in the plant's main processing unit and some gets vented to the atmosphere during startup, he said. During normal operations, the material is recaptured and recycled. Wirkowski said the material is not hazardous.

The plume was a little worse this time and is lasting longer than it did four years ago during the last plant shutdown, Wirkowski said.

During this maintenance session, the refinery installed a new piece of equipment to further control particulates from its main fuel-processing unit, called the fluid catalytic cracker, or "cat cracker." Wirkowski said it takes a while to learn to operate new equipment and to understand its subtleties.

"We have been doing that," he said. "But it's still not where we want it yet and not where we need it to be."

Plant operators were working on the issue 24 hours a day, he said. At this point in a startup, the plant usually would be where it needs to be, he said. Having a plume that is "still elevated" is "what surprises us," he said.

The refinery should be back to full operating capacity in a few days, Wirkowski said.

The plume appeared April 28, when ConocoPhillips began bringing the plant online.

Visible emissions can occur when refineries start up or shut down. Refineries "need to use reasonable precautions to control particulate material," Hughes said.

An eight- to 24-hour period may be reasonable for getting opacity under control, Hughes said. The ConocoPhillips plume lasted about three days.

"I don't think that's a reasonable amount of time." he said. "That's too long."

Valero Energy to Sell Lima Refinery to Husky Energy for $1.9 Billion

Valero Energy Corporation announced that it has agreed to sell, subject to regulatory approvals, its 165,000 barrel per day refinery in Lima, Ohio to Husky Energy Inc. for $1.9 billion, plus net working capital estimated at $200 million to be valued at closing. The Boards of Directors of both companies have approved the transaction and the sale is expected to close during the second quarter.

Bill Klesse, Valero's Chairman and Chief Executive Officer said "This is an excellent outcome for Valero, for the Lima employees and their community. They are going to have a great new operator of this facility for the long term. Husky is a leading Canadian energy producer who will now have the opportunity to expand their system and create a home for their growing supply of heavy Canadian crude oil. Introduction of new heavy crude supplies into the U.S. market from Canada should make a significant contribution to long-term energy supply security, particularly for the Midwest region."

Valero had announced in February that as part of its strategy of improving its returns by focusing on operations and financial performance, it was exploring strategic alternatives for the Lima refinery, which it had acquired through its 2005 purchase of Premcor Inc.

BRAZIL

Skanska Gets $109 Million Contract for Propane Plant in Brazil

Skanska has secured a contract to build a propane production unit at Presidente Getúlio Vargas Refinery (REPAR) in Brazil. The total contract value is US$109 million. Skanska’s share is 70 percent, US$76.3 million, or about SEK 535 million, which will be included in order bookings for the second quarter of 2007.

The customer is Petrobras, the state-owned Brazilian oil company that is one of Skanska’s repeat customers in Latin America.

The work relates to the construction of a propane unit with the capacity to produce 180,000 tons per year. The scope of the contract includes detailed engineering, procurement, civil and electromechanical construction and assembly, commissioning and start-up assistance of the plant. The refinery is located near Curitiba in the south of Brazil.

The project will start immediately and is scheduled for completion in 25 months. The partner in the consortium is the Brazilian engineering company Engevix.

Mittal`s 49 Percent Bathinda Stake Violates Contract with ONGC

Steel tycoon L N Mittal`s, acquisition of a 49percent stake in Hindustan Petroleum`s US$3 billion Bathinda refinery, is said to have violated his pact with ONGC, to pursue hydrocarbon opportunities exclusively with the company, reports Business Standard.

Mittal signed a joint venture agreement in July 2005 with the state-run firm to form ONGC-Mittal Energy (OMEL), for acquisition of oil and gas fields, refinery business and LNG projects. He however pursued it alone, by investing Rs 33 billion in the Bathinda refinery.

Mittal, independently bought a 50 percent stake in a Kazakhstan oil firm from Russia`s Lukoil for US$980 million and acquired a 3 percent stake in the US$6 billion Chevron-operated Olokola LNG (OK-LNG) project in Nigeria.

An ONGC official, said that the July 2005, agreement had earmarked 27 countries, for exclusive pursuit of hydrocarbon opportunities by OMEL. The agreement stated that, Mittal shall offer ONGC Videsh, a partnership in any venture or business opportunity it wishes to undertake, in the hydrocarbon sphere. No such restriction was placed on ONGC, and Nigeria and Kazakhstan fall under the 27 exclusive countries marked for OMEL.

In event of Mittal, being desirous of undertaking any venture or business opportunity in the hydrocarbons business in areas other than the Territories (27 countries), Mittal shall invite OVL, to participate in such venture or business opportunity together with Mittal.

Brazil Refinery to get $109 Million Propane Production Unit

Skanska has secured a contract to build a propane production unit at Presidente Getúlio Vargas Refinery in Brazil. The total contract value is US$109 million. Skanska's share is 70 percent, US$76.3 million. The customer is Petrobras. The work relates to the construction of a propane unit with the capacity to produce 180,000tpy. The scope of the contract includes detailed engineering, procurement, civil and electromechanical construction and assembly, commissioning and start-up assistance of the plant.

The refinery is located near Curitiba in the south of Brazil. The project will start immediately and is scheduled for completion in 25 months. The partner in the consortium is the Brazilian engineering company Engevix.

CANADA

Flint Energy Services Signs $1 Billion Asset Management Services Contract with Suncor Energy

Flint Energy Services Ltd. ("Flint") has announced that its 50 percent owned subsidiary, Flint Transfield Services Limited ("FT Services"), has signed a five year, $1 billion contract with Suncor Energy Inc. ("Suncor") for the provision of asset management services at Suncor's Fort McMurray, Alberta oil sands operations and its Sarnia, Ontario refinery operation.

FT Services is owned 50% by Flint and 50% by Transfield Services of Australia. The other companies participating with FT Services in providing services under the contract are Calgary-based Colt Engineering Corporation, and ThyssenKrupp Safway Inc.

The contract includes maintenance shutdown and turnaround services for Suncor's Fort McMurray oil sands and Firebag in-situ facilities and the Sarnia refinery; contract maintenance services to the oil sands extraction, upgrading and Firebag facilities, and the Sarnia refinery; and site-wide maintenance services at the oil sands operations. Additional services under the contract will include engineering and construction for select sustaining capital projects.

The negotiations between FT Services and Suncor previously announced on February 5, 2007 successfully concluded a rolling five year, performance-based agreement with an anticipated value in excess of $1 billion in revenues over the initial term.

FT Services will continue to ramp up over the next six months and will assume responsibility for the delivery of maintenance services in Fort McMurray in the third quarter of 2007 and Sarnia late in the fourth quarter of 2007 or early in the first quarter of 2008. All efforts continue to be focused on a smooth transition, and an on-going commitment to safety and reliable operations.

Suncor Energy Begins Planned Maintenance at Sarnia Refinery

Suncor Energy Products Inc., a wholly owned subsidiary of Suncor Energy Inc. says maintenance on the refinery‘s alkylation and catcracker units in Sarnia was to begin April 25.

The company expects the work to be complete in June, including shutdown and start-up. Suncor says the refinery‘s hydrocracker unit is scheduled to be shut down, as well for about eight weeks starting in August to makes changes for the refinery to process sour crude oil.

“Suncor will focus on completing the maintenance work in a safe manner while minimizing any impacts on our neighbors, customers and the environment,” the company said in a release April 24. “Although this maintenance work may result in an increase in flaring, noise and traffic related to Suncor‘s operations, necessary precautions have been taken to ensure these disruptions are kept to a minimum”.

Last month, Flint Transfield Services Ltd. received a five-year, $1 billion contract from Suncor Energy to provide asset management for Suncor operations in Sarnia and Fort McMurray, Alta.

COLUMBIA

Switzerland's Glencore to Invest $2 Billion in Colombian Oil Refinery Upgrade

State-owned oil company, Ecopetrol and Switzerland's Glencore International AG will more than double planned investment at Colombia's second largest oil refinery, Ecopetrol's CEO Javier Gutierrez said April 23.

The US$2 billion (€1.5 billion) upgrade to 150,000 barrels a day of production, from a current 80,000, will be partly financed by the proceeds from Ecopetrol's US$631 million sale last year to Glencore of a 51 percent stake in the refinery in the Caribbean port of Cartagena.

The remainder will come from the cash generated by the refinery and from debt to be sold by the new company, said Federico Maya, Ecopetrol's vice president.

Previously the companies had planned to spend US$880 million (€650 million) to produce 140,000 barrels of lower-quality fuel oil.

Ecopetrol's CEO reiterated that Brazilian state-owned oil company Petroleo Brasileiro SA, or Petrobras, is negotiating with Glencore to buy a stake in the Refineria de Cartagena SA refinery.

Petrobras lost out to Glencore in an auction for control of the refinery last August.

Colombia's Congress has authorized the government to sell a 20 percent stake in Ecopetrol — Colombia's biggest company — in an effort to boost investment in oil exploration and production.

Colombia is expected to become a net oil importer in 2012.

CUBA

Compressor Loss Causes Flare-up at Chevron Refinery

The Chevron refinery has a processing capacity of 240,000 barrels a day and accounts for 23 percent of San Ramon-based Chevron's U.S. refining capacity.

A recent report from an environmental group said the Chevron refinery sees more flare-ups than its neighboring refineries.

Representatives for Chevron and an oil industry group said all the refineries, including Chevron, have made substantial long-term progress in reducing pollution from flares.

He added that Chevron is doing all it can to limit flare emissions without jeopardizing plant safety.

2. ASIA

CHINA

Foster Wheeler Wins Coker Heater Contract for New COPC Refinery in China

Foster Wheeler Ltd. has announced that its subsidiary Foster Wheeler USA Corporation, part of its Global Engineering and Construction Group, has been awarded a contract by CNOOC Oil & Petrochemicals Co., Ltd. ("COPC") for the thermal design, engineering, procurement, and material supply of two delayed coker heaters.

The heaters will be installed in a new four-drum delayed coking unit, which will be part of the new COPC Huizhou refinery at Daya Bay, Guangdong Province, People's Republic of China. This latest contract follows the 2005 award to Foster Wheeler of the process design package for the new delayed coking unit, which will be based on its leading Selective Yield Delayed Coking (SYDEC(SM)) process.

The terms of the award, which were included in the company's fourth-quarter 2006 bookings, were not disclosed.

China Boom Promotes Trade and investment with Arab Countries

Examples of the booming trade and investment between China and the Arab countries of the Gulf, compiled by the Dubai-based Gulf Research Center:

Saudi Arabia plans to build a huge crude oil storage facility on southern China's Hainan Island; the capacity of the tank farm will be 25 million to 30 million metric tons.

Kuwait plans to build a $5 billion refinery in southern China's Guangdong province.

China's Sinopec is building a refinery with Aramco in Fujian and another joint refinery venture is planned in Qingdao.

In October, China and Iraq revived a $1.2 billion deal signed by Beijing with the Saddam Hussein government in 1997 to develop Iraqs Al-Ahdab oil field.

INDIA

Reliance Places Order with Sandvik for Jamnagar Refinery Complex

Reliance Petroleum has ordered a Rotoform sulfur pastillation plant from Sandvik Process Systems for its Jamnagar refinery complex in Gujarat, India.

Sandvik will supply 8 Rotoform HS (high speed) steel-belt-based pastillators, plus conveying, storage and loading facilities. Start-up is scheduled for February 2008. Rotoform HS provides twice the capacity of the Rotoform 3000 pastillator on which it is based.

The key improvement is an increase in the diameter of the “shell” that deposits the molten sulfur on the belt from 80mm to 250mm. By reducing the centrifugal force on the droplets, this allows the Rotoform HS to run at higher speeds while still delivering well-shaped pastilles.

Other key features of the Rotoform HS are the ability to deliver product conforming to the widely accepted Sulfur Development Institute of Canada specification, low hydrogen sulfide emissions, and a low offloading temperature for the solidified sulfur.

Mittal`s 49 Percent Bathinda Stake Violates Contract with ONGC

Steel tycoon L N Mittal`s, acquisition of a 49% stake in Hindustan Petroleum`s US$3 billion Bathinda refinery, is said to have violated his pact with ONGC, to pursue hydrocarbon opportunities exclusively with the company, reports Business Standard.

Mittal, independently bought a 50% stake in a Kazakhstan oil firm from Russia`s Lukoil for US$980 million and acquired a 3% stake in the US$6 billion Chevron-operated Olokola LNG (OK-LNG) project in Nigeria.

ONGC to Raise $1.65 Billion for Refinery Expansion

India’s Oil and Natural Gas Corp is looking to raise up to Rs70 billion ($1.65 billion) over the next six months to fund the expansion of its Mangalore refinery, its chairman said on April 16.

The project will raise the refinery’s capacity to an annual 15 million tonnes by 2010. “We are talking to various bankers to borrow 60-70 billion rupees for Mangalore refinery expansion. In the next six months, we have to tie up the funds,” the firm’s chairman R S Sharma told reporters. Sharma said India’s top state-run explorer planned a capital expenditure of Rs180 billion for the year to March 2008, up from Rs150 billion the year before.

“Of this, exploration is one-third or about Rs50 billion. The remaining will be largely invested for various enhanced oil recovery or improved oil recovery schemes,” he said. Shares in the company were trading 2.2 per cent higher at Rs890.80 in a firm Mumbai market. On ONGC’s plans to set up a new 300,000 barrels per day refinery in southern India, Sharma said a feasibility report should be completed in the next 2-3 months.

State-run project consultant Engineers India Ltd and investment banker SBI Capital Markets Ltd were working on project details, he said. “The project should take off first, and then we will go for an IPO, which may take 2-3 years,” Sharma said.

The new refinery is expected to be set up through a special purpose vehicle owned by ONGC arm Mangalore Refinery and Petrochemicals Ltd, which will hold a 46 per cent stake.

“But we think MRPL’s balance sheet cannot take 46 per cent because of its debt-equity structure and size of reserves, so at a later date we have to work on this,” Sharma said. Infrastructure lending firm IL&FS and others are likely to have 51 per cent. A firm run by the state government of Andhra Pradesh will get the remaining three per cent.

Reliance Petro Spends $4.6 Billion on Refinery

Reliance Petroleum Ltd., which is building a $6 billion refinery, has spent $4.6 billion up to March 31 on the project, the company said April 25.

Work on the 580,000 barrel per day (bpd) refinery at Jamnagar is nearly 50 percent complete and is expected to be commissioned by December 2008, the subsidiary of Reliance Industries Ltd. said in a statement.

Reliance Petroleum, in which oil major Chevron Corp. owns a 5 percent stake, said the amount already spent was more than what was earlier projected by March because of advance payments to contractors.

The refinery is being built near a 660,000 bpd refinery of Reliance Industries.

MALAYSIA

Malaysia Plans 320km Pipeline and 200,000 Bpd Refinery Project

A proposed Malaysian pipeline project will cover the 320km between the northern provinces of Kedah and Kelantan. The project would allow oil shipped from the Middle East to bypass the Malacca Straits on the country's western coast.

Tankers would offload crude oil from the Middle East in the coastal town of Yan in Kedah for refining. Oil and oil products would then be transported through the pipeline across the north of Malaysia to Bachok on Kelantan's coast for tankers to distribute through the South China Sea to Asian countries including Japan and China.

In addition to the pipeline, there are plans for a 200,000bpd refinery on the coast to be constructed by a joint venture between Malaysia-based SKS Development and the National Iranian Oil Co.(NIOC). Malaysia-based SKS Ventures, based on a buyback contract, will implement the development of the upstream section of the two gas fields.

Another long-term 25 yr contract will cover the downstream section of the gas fields project. When developed, Golshan will produce over 70 million cum of gas per day and Ferdos 25 million cum. Some government officials have been cautious about final commitment to the pipeline and refinery project but others have mooted a definite schedule for the refinery to be in operation by 2010 and construction on the pipeline to start in 2008 with completion by 2015.

PAKISTAN

Pakistan’s Indus Refinery Signs Contract with Descon Engineering

The Indus Refinery Limited (IRL), a joint venture between Middle East- based investors and local sponsors, signed a contract on April 14 with Descon Engineering Limited which will provide civil works for IRL’s 100,000 barrel per day petroleum refinery located on National Highway near Port Qasim.

Under the scope of the contract, Descon will provide all personnel, equipment and services to complete IRL’s earthworks, grading, paving, underground piping, underground electrical trenches, tank dikes and concrete foundations and slabs.

The contract is expected to take 20 months to complete and is scheduled to allow for ongoing mechanical re-erection and electrical and instrumentation work.

Kuwait to Welcome Midrock’s $2 Billion Investment in Lube Refinery, Naptha Cracker Projects

The President of Kuwait’s Midrock Tussanina Company Sheikh Humoud Al Sabah called on the Federal Minister for Petroleum and Natural Resources Amanullah Khan Jadoon in Islamabad on April 24 and briefed him about his company's $2 billion Petrochemical Complex at Port Qasim Karachi.

During the meeting, the President of Midrock informed the minister that the government of Sindh had allocated 500 acres of land at Port Qasim for the proposed Lube Oil Refinery, Naptha Cracker and petrochemical complex. He said Midrock was also looking to invest in oil refinery and LPG terminal projects at Gwadar.

The minister said that there existed a lot of potential for the investors in oil and gas projects and the government would facilitate them in this regard.

He said that the government was exploiting the untapped hydrocarbon deposits and alternate energy resources to sustain the GDP growth rate of above 7 percent per annum of the country.

He noted that President Musharraf's visit to Kuwait in December 2005 had opened up new avenues of multi faceted cooperation between the two countries. The minister said that the government would welcome the Midrock investment in the petroleum projects and assured his cooperation in this regard.

Ambassador of Kuwait Faisal A Mulafi, Additional Secretary Petroleum Shaukat Hayat Durrani and members of the Midrock delegation were also present during the meeting.

PHILIPPINES

Russia Considers Building Oil Refinery, Storage in Philippines

Russian Ambassador to the Philippines said on April 24, that Russia is laying the infrastructure to become a major oil supplier to Asian countries and is considering proposals to build an oil refinery and storage facilities in the Philippines to serve Southeast Asia.

Southeast Asian countries have expressed interest in Russia’s plans to become an important energy provider in the region and Moscow should carefully plan how it could assume that crucial role, Ambassador Vitaly Vorobiev told foreign correspondents.

“The countries of Southeast Asia ... they’re waiting for further explanation of Russian intentions,” Vorobiev said, quoted by the Associated Press. “There should be some kind of concept how to position Russia in this respect. We didn’t pay much attention to this area and we started to change our mind-set only in 1990s,” he said.

Russia would be interested not only in “buy and sell operations” but could invest in oil refineries and storage.

Many energy-hungry Asian economies have long been dependent on Middle Eastern oil, but fears of supply disruptions due to sporadic conflicts in the volatile region have prodded countries like the Philippines to turn to possible alternative sources like Russia.

An ambitious project, involving the construction of an oil pipeline from East Siberia to Russia’s Pacific coast, could bring larger volumes of oil — possibly at cheaper prices — to Asian countries, Vorobiev said.

Backed by the Kremlin, the 2,550-mile pipeline could be completed in three to four years, he said.

VIETNAM

Prime Minister Demands Dung Quat Oil Refinery Construction get back on Track

Viet Nam’s Prime Minister Nguyen Tan Dung visited the site of the Dung Quat oil refinery in the central coastal province of Quang Ngai, and left a clear message that delays in the construction schedule were hampering development of the nation's oil industry.

The Government leader said that the refinery is already six months behind schedule and further delays would be costly for both the oil industry and the nation's development as a whole.

He asked French based EPC contractor Technip to take a firm hold of the schedule and quicken the pace of construction in order to meet the self imposed deadline it committed to the Vietnam Oil and Gas Group.

Technip and the Vietnam Oil and Gas Group must work to meet the commitments and conditions that were outlaid in a contract they signed with the Vietnamese Government, concluded the Prime Minister.

Oil Refinery Part of $35 Billion worth of Big Projects to be Initiated in Vietnam

Vietnam’s Ministry of Planning and Investment has revealed a list of 40 big projects which are going to be developed in Vietnam, capitalized at $35 bln in total. These include power plants, and the fields of industry and high technologies.

Oil refinery projects are also listed. These include the $1.53bln oil refinery complex No 3 in Ba Ria – Vung Tau to be invested in by Thai Chemicals Group and PetroVietnam; and a 1mil tonne/year oil refinery worth $1.2bln to be invested in by Singapore’s SP Chemicals Company.

3. EUROPE / AFRICA / MIDDLE EAST

ICELAND

150,000 Bpd Refinery could be Built in Iceland’s Westfjords

Icelandic and Russian entrepreneurs are working on plans to construct an oil refinery in Iceland’s Westfjords within four years.

The plans are being worked on by the Icelandic company Íslenskur hátaekniidnadur (“Icelandic Hi-Tech Industry”), owned by Ólafur Egilsson and Hilmar F. Foss, and the Russian company Katamag-Nafta, the daughter company of The Geostream Services Group, a Russian high-tech service company cooperating with LUKOIL.

The idea is for the station to be able to produce 150,000 barrels a day and to employ 500 to 700 people. One fifth of the employees would require a university degree.

Raphael Baron at Katamag-Nafta said in an interview with RÚV that the Westfjords were the perfect location for an oil refinery.

“Iceland happens to be in the middle between Europe and the United States. The oil shipping routes already go very close to Iceland; all they need to do is make a left turn to come to Iceland to have the oil refined and add tremendous value to it,” Baron said.

Baron pointed out that there is enough energy in Iceland to power such an operation.

The process of refining oil causes pollution, but the organizers of the project claim that the fuel produced is cleaner than the fuel which is imported to Iceland, so once Iceland’s car and ship fleet would use the fuel produced in the oil refinery, the total pollution in Iceland would be reduced.

Halldór Halldórsson, mayor of the Westfjords’ capital Ísafjördur, told RÚV he is still pondering on the idea of an oil refinery, but that likes the idea very much, especially regarding the jobs that would be created.

But Halldórsson said the idea would only be accepted if it would coincide with the Westfjords’ policy of not embarking on any heavy industry projects and said it was important for the issue to be discussed in detail.

“According to what they [the organizers of the project] are saying the pollution would be circa one tenth of the pollution an aluminum smelter would produce and that the electricity usage is only a fraction of what they [the smelters] are using,” Halldórsson said.

Therefore, the oil refinery would not be a heavy industry project, Halldórsson concluded.

“We consider this a hi-tech industry. Heavy industry is, according to dictionaries, defined as something that requires a lot of energy. The main issue of dispute regarding heavy industry are the dams and the damage to the highland,” said Ólafur Egilsson in an interview.

“We don’t need anything like that because the refinery only requires 15 megawatts of energy,” Egilsson stated.

“The financing would be Russian, American and partly Icelandic,” Egilsson said. “What would happen next, after the Westfjordians have reached a decision, is to begin an efficiency evaluation and get all the facts to the table.”

GERMANY

Jacobs Announces Refinery Revamp in Bavaria

Jacobs Engineering Group Inc. has announced that it has been awarded a contract by Bayernoil to provide basic and detailed engineering, procurement, and construction management services at the Vohburg refinery in Bavaria, Southern Germany.

Although the contract value was not disclosed, officials noted that the total investment cost is approximately US$60 million.

For the project, Jacobs will focus primarily on the logistics area and the revamp of an existing Merox unit. They will establish a 15-20-person site team, supported by staff in Jacobs' home office in Cologne. The project is scheduled for completion early in 2009.

IRELAND

Irish EPA Hears Objections to its Proposed Decision on Gas Refinery in Mayo

Ireland’s Environmental Protection Agency (EPA) convened an oral hearing in Mayo to listen to objections and concerns about its Proposed Decision to license Shell E&P Ireland to develop a gas refinery and combustion plant at Bellanaboy Bridge. If approved, the proposed decision provides for the processing of 9.9 million cubic meters of natural gas per day that will be exported to the Bord Gais Eireann (BGE) distribution network.

Anyone who lodged a valid objection has an automatic right to attend and to participate fully at the hearing. 13 valid objections were made to the proposed decision, including one from the applicant. The hearing was open to the public.

Following the Oral Hearing, a report and recommendation will be submitted to the EPA Board and a final decision on whether or not to grant a license will be made.

Statoil Plans Heighten Concern over Ireland’s Controversial Corrib Pipeline and Bellanaboy Refinery

Campaigners opposed to the controversial Corrib gas pipeline and refinery at Bellanaboy have said that possible plans by Statoil to use the pipeline to transport gas from a field four times bigger than the Corrib field have reaffirmed fears that the site will be used for further development.

Statoil, who is one of the partners along with Shell in the Corrib gas project, has begun searching for gas in an adjacent area off the Mayo coast and they have confirmed that if any gas is found it is possible that Statoil could use the Corrib gas pipeline being built by Shell to transport it.

Statoil co-owns the exploration rights to the two areas it plans to explore with Shell, but unlike the Corrib gas project, Statoil is the senior partner and is solely responsible for the exploration work. The companies have held on to one of the two areas since 1994 and secured the rights to explore another area last year. The size of the two areas totals 1,970 square kilometers compared to 467 square kilometers for the area that produced the Corrib gas find.

The news of the gas exploration work and the possibility of using the Corrib gas pipeline came as little surprise to the opponents of the Corrib gas project who said they have constantly raised the issue of further development of the site. Dr Mark Garavan said there is a potential for more gas finds off the Mayo coast and the real reason for the development of the Bellanaboy site is for further expansion.

“That news has come as no surprise, it has been one of the arguments we have been making for years. Bellanaboy as a development was never only about Corrib but it is clearly going to be about the development of further gas fields in the north east Atlantic. The reason Shell and the Corrib developers were so eager for a land base for a refinery site was for the expansion of a development of a future well and it accounts for the reason for a high pressure pipeline. We always argued that this was not just about Corrib, and what’s really the real issue here is the development of a site with the capacity for expansion,” said Mark Garavan.

A spokesperson for Shell to Sea, John Monaghan told The Mayo News that at all the planning stages they have always tried to highlight the issue of expansion at Bellanaboy, but this was refuted by the developers, who said it was a once-off. He said the news that Statoil would look to use the site is confirmation that the site will not just be about Corrib and will lead to the increase in the industrialization of a rural area.

“This is confirms the statement of the Department of the Marine, Communications and Natural Resources who have been promoting new licenses to explore in Atlantic waters and have advertised the Corrib infrastructure as potentially reducing the development costs of any other find. The developers were never pushed on the future expansion of the site and it seems our fears are coming true and are well-founded,” he said.

In light of the new exploration of the gas field, Independent TD, Dr Jerry Cowley called for the re-negotiation of the gas exploration deals to ensure that Ireland benefits from the new finds. He said that at present the Norwegian Government will be the beneficiaries of the Corrib gas find while Ireland will receive nothing from the riches of the gas coming ashore.

Efforts to contact a Shell representative on April 16 failed.

NORWAY

Statoil Announces $166 Million Environmental Upgrades for Mongstad Refinery

The state-controlled oil company Statoil ASA April 13 announced a major environmental upgrade of its Mongstad refinery, on Norway's west coast, that it said will also improve operational efficiency.

The Stavanger-based group said it plans to invest 1 billion kroner (US$166 million, €123 million) over the next three years in the upgrade of the oil refinery north of Bergen, the main city on Norway's west coast, to help meet stricter current and future emission standards.

The Statoil Mongstad Environmental Investment Project includes construction of a more efficient sulfur recycling facility, building a tower to strip such pollutants as hydrogen sulfide and ammonia from wastewater, called sour water, and creation of a safer, more environmentally contained system for handling amines, an organic compound that resembles ammonia.

"This means we are well equipped to meet future environmental regulatory requirements. It also lays the groundwork for later investments we will make at Mongstad," said Bjoern Kaare Viken, vice president for Statoil Mongstad.

The project also has operational benefits, such as isolating different systems at the refinery so if there is a problem in one area, other parts of the refinery can keep running, instead of everything being shut down under the current design, a statement said.

SLOVENIA

Slovenia’s Government Looking for Investor to Rekindle Nafta Lendava Refinery

The government of Slovenia is looking for a strategic partner for the refinery Nafta Lendava. In line with government plans, the refinery is meant to be sold by the end of the year. However, the Economy Ministry said it would give priority to finding a suitable investor rather than selling in time.

The ministry said the goal was to find a buyer that would invest in getting the refinery on its feet again and ensuring its long-term operations.

The interest in the refinery in the northeastern-most part of Slovenia on the border with Hungary has been expressed by a number of foreign investors, the ministry says.

In August last year, the state and Russian oil giant Lukoil signed a letter of intent on cooperation in the privatization. Economy Minister Andrej Vizjak and Lukoil CEO Vagit Alekperov agreed at the time that the two sides would draw up concrete plans for the privatization of Slovenia's lone refinery.

No proposals have been unveiled to the public as yet, but the Economy Ministry explained to STA that the letter of intent does not oblige "the state to sell Nafta Lendava nor Lukoil to buy the company".

The ministry is tight-lipped about other potential foreign partners. According to the ministry, time will tell how serious the expression of interest really are, which is why its does not want to mention names at the moment.

While the ministry says the privatization procedure is moving ahead, the daily, Dnevnik wrote on that the privatization had been halted due to the possible entry of a foreign strategic partner. The paper says the decision to suspend the procedure was taken by the commission overseeing the sale.

Nafta Lendava chief supervisor Drago Siftar told the paper that the privatization was halted because of the arrival of a strategic partner who was willing to invest extensive funds into the company. Siftar added that the company in question was from the EU, but was not a major player on the global market.

The paper went on to write that the potential bidder could unveil its strategy of development for Nafta Lendava in the near future, after which the government would decide on the offer. The Economy Ministry denied these claims.

Nafta Lendava was established in 1945 and was a leading company in this part of Slovenia before it ran into trouble during the period of intense economic restructuring that followed Slovenia's independence in 1991.

The company, which is wholly owned by the state, completed debt restructuring in 2005 that has allowed it to re-launch operations.

The government confirmed privatization plans for Nafta Lendava on October 26, 2006, envisaging the sale of the whole stake by the end of 2007.

The government wants a buyer that will view Nafta Lendava as a strategic investment and has the funds to invest in the group's development.

SPAIN

Spain’s CEPSA Claims it never Went above Emission Limits

The petro-chemical refinery in San Roque of Cepsa has insisted that it never went above the legal emission levels of pollution established for its refinery plant.

The claims by CEPSA come after warnings by the Junta de Andalucia that it will be studying possible measures to restrict the activities of the company following the April 14 sulfur leak which affected some 2,000 residents in the surrounding area.

Responding to condemnation over the petro-chemical company’s continued pollution levels in the region. A spokesperson for the San Roque Refinery has expressed surprise at the reaction from the Junta de Andalucia, claiming that it already has a self imposed restriction on its operation after an agreement last year with the Junta de Andalucia itself.

In the meantime, the authorities in San Roque have called upon the regional authorities to clamp down hard on the activities of the refinery, and if need be to paralyze its operations until it is satisfied that there will be no repeat of the April 14 incident, calling on harsh penalties to be imposed once the full extent of the incident is determined.

SPAIN / HOLLAND

Double Contract Success for Peter Brotherhood in Spain and Holland

Peter Brotherhood has won two major orders to supply customers in Spain and Holland.

Spain-based companies Intecsa Uhde and Repsol YFP Madrid chose the company to supply a reciprocating gas compressor for the Repsol La Coruna Refinery, also based in Spain. Peter Brotherhood will design, manufacture, install and commission the compressor and delivery to the refinery is scheduled for July 2007.

The compressor is a two-throw reciprocating unit with one stage for make-up gas that compresses 99.9 % hydrogen from 20.4 bara to 49.2 bara and one stage for recycled gas that compresses 93% hydrogen from 48.6 bara to 63 bara. The package will comprise a concrete mounted compressor and main drive motor with separate oil and cooling water consoles.

Jacobs Nederland B.V. has also placed an order with the UK company to supply two API 618 reciprocating gas compressors. The company will design and manufacture two, four throw, three stage compressors which will be delivered to the Nerefco Oil Refinery in Europoort, Holland in October 2007 as part of a project being managed by Jacobs. Each compressor will compress 96.5% hydrogen used in the process of hydrofining diesel from 3.2 bara to 35 bara.

The equipment will be mounted on concrete plinths and will comprise of main drive motors, oil consoles, intercoolers and inter-stage separators. The compressors will also be fitted with Prognost NT condition monitoring equipment, which helps increase uptime by continuously monitoring each machine and identifying potential problems with its operation before they cause it to fail, Peter Brotherhood said.

UNITED KINGDOM

Jacobs Announces Refinery Revamp in Bavaria

Although the contract value was not disclosed, officials noted that the total investment cost is approximately US$60 million.

NIGERIA

$660 Million Refinery in Anambra, Nigeria to Reduce Fuel Scarcity

Managing Director of Orient Petroleum Resources Nnaemeka Nwawka says that a refinery to be built by the company will reduce fuel scarcity.

Nigeria currently imports virtually all its petroleum requirements due to failure of existing refineries to meet demand for the product.

Giving a situation report on the project at a session with the Anambra state executive council today in Awka, Nwawka said that construction of the refinery would cost $660 million.

When completed, he said that the refinery would create employment, provide a stable social system and fast track development of an infrastructure in Anambra.

To ensure peaceful co-existence with host communities, he said that town unions and youth organizations in host communities would be involved in the execution of the project.

At the session, Gov. Peter Obi of Anambra said that the state government was taking steps to establish levels of commitment towards the project.

It was learnt that the proposed refinery would be located at Otuocha in Anambra

The refinery would be executed in partnership with a Chinese firm that would bankroll 85 per cent of the cost of the project.

The proposed refinery would have an airstrip, staff quarters and a subsidiary firm that treats waste products.

TUNISIA

Qatar Plans 120,000 to 130,000 bpd Oil Refinery in Tunisia

State-owned Qatar Petroleum is studying building an oil refinery in Tunisia after the government there selected it to proceed with the plant, an industry source in Qatar said April 24.

“Tunisia selected Qatar Petroleum as the front-runner for the refinery project,” the source said.

“The project is still at a very preliminary stage, and Qatar needs to ensure it is bankable before it proceeds,” he added.

QP and British company Petrofac competed for the project. Both were pre-qualified as investors to build the plant.

The refinery would have capacity of 120,000 to 130,000 barrels per day (bpd) and be located at the coastal town of Skhira.

When Tunisia announced the tender for the project in December 2005, the plant had an investment cost of around $1.5 billion. Industry reports since then have pegged the cost closer to $2 billion.

Libya said in January that it was studying building the refinery jointly with Tunisia and international investors.

QP will transfer the project to a newly formed international investment arm, Qatar Petroleum International, once QPI is up and running and fully staffed, the industry source said.

QPI is looking at investment opportunities in the oil and gas industry globally.

Tunisia wants to boost its refinery capacity to meet rising demand for oil products as its economy expands. It has only one refinery, the 30,000 bpd Bizerte plant.

IRAQ

Iraq Awards $63.5 Million Refinery Deals

Iraq's oil ministry has awarded contracts worth $63.5 million to local firms for the construction of two 10,000-bpd oil refineries, in Arbil and Sulaimaniya, according to the Iraq Development Program. It is expected the refineries will ease the current chronic fuel shortages in the Kurdish north.

KUWAIT

GE Trans Supplies Generator Sets for Kuwaiti Oil Facility

GE Transportation’s stationary power business announced it has supplied Petrofac International, Ltd., Sharjah, United Arab Emirates, with five diesel generator sets that will provide standby power for a Kuwait Oil Company gathering center.

“This project marks an expansion into the oil and gas market in the Middle East for our reliable diesel gen-sets,” said John Manison, manager of GE Marine & Stationary Power, Erie, Pennsylvania, U.S.A. “These rugged gen-sets are designed with customer requirements in mind, such as operation in the harsh desert environment where many oil and gas fields are situated.”

The four GE 12V228 diesel gen-sets, each rated at 2.0 MW continuous, and one GE 16V228 genset rated at 2.5 MW continuous provided by Petrofac International will be used as part of a major upgrade project at a Kuwait Oil Company gathering center.

The diesel engines were manufactured at GE’s Grove City, Pennsylvania, facility. The company’s distribution partner, Intergen, Milan, Italy, packaged the generators for this project. The gen-sets are expected to be installed at the site by the end of the second quarter 2007, and operation will follow in late 2007.

MIDDLE EAST

Spiralling Costs to Stunt Middle East Refinery Growth

Spiralling costs in the energy sector could cut planned expansion of global refining capacity through 2011 by a fifth, mostly in the Middle East, an industry analyst said on April 16.

Projects to increase global refining capacity through 2011 totalled 10 million barrels per day but only 8 million bpd would be built, said Fereidun Fesharaki of FACTS Global Energy.

"Two million barrels of planned refining capacity are not going to happen in the Middle East and Asia, but mostly in the Middle East, due to cost escalation," he said on the sidelines of an energy conference in Dubai.

Increasing costs are hitting oil and gas projects throughout the world as the energy industry strains to bring online new capacity to meet rising demand.

Kuwait deemed the first round of bids for a giant new 615,000 bpd refinery too costly in February and has yet to decide how it will proceed with the project.

Exxon Mobil and Qatar Petroleum in February dropped plans to build a multi-billion dollar clean fuel plant in Qatar due to rising costs.

OPEC President Mohammed al-Hamli said earlier at the conference that rising costs of equipment and raw materials, as well as labour shortages, were also making it hard for producers to build new upstream capacity.

"The fact that the market is relatively balanced does not mean producers are not facing difficulties meeting their responsibility," he said.

But Hamli, who is also the energy minister for the United Arab Emirates, said that costs have not affected the country's planned investments in energy capacity expansion.

SAUDI ARABIA

South Korea Could Build $12 Billion KSA Refinery

South Korea is seeking to secure stake in a $12 billion Saudi refinery project, Seoul's energy ministry said on March 26.

South Korea's energy minister, Kim Young-joo, expressed interest in the Jubail and Yanbu refinery project in a meeting with Saudi Oil Minister Ali al-Naimi in Riyadh, the ministry said.

Naimi responded by saying he has a high regard for South Korean companies' expertise in building refinery facilities, the ministry said.

A Saudi official has said the refinery project, issued by Saudi Aramco, would be offered to the private sector and would be built with participation from foreign partners.

Top oil exporter Saudi Arabia aims to boost refining capacity at home to over 3 million barrels per day (bpd) from about 2.2 million bpd.

The kingdom has already signed deals worth $12 billion for two new refineries - one with France's Total at Jubail and one with U.S. ConocoPhillips in Yanbu - that are expected to produce a combined 800,000 bpd of products by the end of the decade.

SYRIA / TUNISIA

Syria and Tunisia to Enhance Cooperation in Oil and Industry

Minister of Petroleum and Mineral Resources Sufian al-Alaw discussed with Tunisian Minister of Industry and Energy Afef Chalabi on April 12 cooperation between the two countries in the oil field.

Mr. Alaw expressed hope to develop bilateral relations through exchanging expertise in the field of refining oil and marketing petroleum products in addition to utilize the Tunisian experience in exploring for oil

The Tunisian Minister expressed his country's desire to cooperate with Syria and offer expertise in all domains.

Both sides agreed to activate work to establish joint projects in the interest of both countries.

UNITED ARAB EMIRATES

UAE Hopes to Sell Mothballed Refinery within Weeks

The government of Fujairah in the United Arab Emirates is in talks with Swiss-based oil trader Vitol and other companies over the sale of a mothballed refinery it hopes to conclude within weeks, a government official said April 25.

The 100,000 barrels per day refinery could be restarted after the sale, he said. He declined to give an estimate for the value of the sale, or say which company was most likely to buy the refinery.

A Vitol spokesman declined to comment on the talks.

The plant has been shut since March 2003 due to poor refinery margins. Prior to that production was interrupted from 1998 to 2000 after the plant’s former owner, Metro Oil Corp, went bankrupt in February 1998. It has been used in the last few years for oil storage.

Fujairah, on the Gulf of Oman just outside the shipping chokepoint of the Strait of Hormuz, is one of the world’s largest ship refueling centres. Around 20 percent of global daily crude supply passes through the Strait.

The UAE is planning to build a large new refinery in Fujairah, with capacity of around 500,000 bpd.

It is also planning to build a 1.5 million bpd pipeline that will allow the UAE to export more than half of its crude exports from Fujairah, by-passing the Strait.

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