REFINERY UPDATE

 

November 2007

 

McIlvaine Company

www.mcilvainecompany.com

 

 

TABLE OF CONTENTS

 

NDUSTRY ANALYSIS

1. AMERICAS

U.S.

Suncor Begins Planned Maintenance at Commerce City

AMEC Wins Contract for Next Phase of $5 Billion Ohio Clean Fuels Facility

Fire Extinguished at Kentucky Somerset Refinery

CB&I Wins $160 Million Alabama Refinery Contract

Chevron to Add $500 Million Gas Production Unit to Pascagoula Refinery

Chevron L.A. Refinery Operating after Brief Outage

Lamons Wins Five-year Multi-site Contract from Valero

Wyoming’s Interline Building New Refinery

Conoco Shuts Gasoline Unit at Texas Borger Refinery

ExxonMobil’s Lockwood Refinery Investigates Fire, Reports on Sulfur Dioxide

CANADA

CNPC in Oil, Gas Framework Deal with Zhuhai City

Mustang to Aid IAG in Expansion of Refinery in Regina

CENTRAL AMERICA

RIL Looking to Set up 350,000 Bpd Refinery in Central America.

COSTA RICA

China to Build Oil Refinery in Costa Rica

VENEZUELA

PDVSA Begins El Palito Refinery Units Restart

2. ASIA

CHINA

China's Chongqing Plans 10 mln t/year CNPC Refinery

Emirates Facambe Group Buys Refiney in Liaoning Province, China

CNPC in Oil, Gas Framework Deal with Zhuhai City

JAPAN

Saudi, Japanese Researchers Advance Plans for HS-FCC Refinery

Petrobras nears Exxon Japan Refinery Purchase

Sasol Awards Contract to Hitachi Zosen to Boost Synfuels Operation at Secunda Refinery

INDONESIA

Indonesia’s Dumai Refinery to be Closed for Maintenance Thirty to Forty Days

PHILIPPINES

Philippine Court Stops Sale of Petron's Refinery

SINGPORE

Foster Wheeler Wins ExxonMobil Contract for Singapore Project

VIETNAM

Construction of Viet Nam’s First National Oil Refinery in Progress

Vietnam's First Oil Refinery to Operate In Early 2009, Two more Planned

Viet Nam’s Prime Minister Agrees to $500 Million Refinery

3. EUROPE / AFRICA / MIDDLE EAST

FINLAND

Faulty Valves to Keep New Diesel Line at Finland Refinery Shut for Weeks

PORTUGAL

Galp Energia to Expand Porto Refinery in Portugal

SPAIN

Foster Wheeler’s Global Power Group Awarded Heat Recovery Steam Generator Contract for Spain’s BP Refinery

CHAD

China’s CNPC to Invest in Chad Refinery

MOZAMBIQUE

Mozambique Approves $5 Billion Refinery Project

NIGERIA

Germany’s Shark Petroleum, Nigeria to Build $1.8 Billion Refinery

Indian Oil to Follow Nigerian Rules for Refinery Project

SOUTH AFRICA

South Africa's PetroSA to Build $5.85 Billion Refinery

SYRIA

Syria Signs $1.5 Billion Agreement with Iran and Venezuela to Build Oil Refinery

UGANDA

Uganda’s Oil Find Creates Dilemma for Kenya Pipeline

WEST AFRICA

Texas Firms to Build $1.4 Billion Cote d'Ivoire Refinery

ZAMBIA

Zambia's Indeni Oil Refinery Resumes Production

RUSSIA

LUKOIL Launches New Units at Perm Refinery

KAZAKSTAN

Kazakhstan’s KazMunaiGas Seeks $3 Billion Loan to Purchase Refinery

TARTARSTAN

Fluor Selected For Refinery Project in Tatarstan

TURKMENISTAN

Turkmenistan’s Maryisk Oil Refinery Signs Modernization Agreement with Shell

IRAN

Iran to Apply Latest European Standards for 7 New Refineries

QATAR

Qatar Petroleum Plans 250,000 bpd Grassroots Refinery

SAUDI ARABIA / JAPAN

Revolutionary Refinery Design Initiative Moves Forward

 

 

 

 

INDUSTRY ANALYSIS

1. AMERICAS

   U.S.

 

Suncor Begins Planned Maintenance at Commerce City

Suncor Energy Inc. has begun a planned maintenance shutdown at a portion of its Commerce City, CO, refinery. The maintenance work is designed to maintain operational and environmental performance of its assets.

The refinery's East Plant crude unit and other associated processing units are expected to shut down and start up in a staggered sequence. Work is also scheduled for infrastructure, including electrical, utilities and the flare system. The maintenance outage is expected to last approximately one month. During the shutdown, the refinery is expected to continue to operate at approximately 65% of capacity.

"We have a solid plan," said Bill Buckalew, Suncor's general manager. "The true measure of our success for the planned maintenance will be our ability to complete it safely and without impact to our neighbors, customers or the environment."

Suncor has made arrangements to procure additional supplies of products and expects to honor all customer supply agreements during the shutdown period.

Government regulators with the State of Colorado have been informed of the maintenance shutdown.

 

AMEC Wins Contract for Next Phase of $5 Billion Ohio Clean Fuels Facility

Baard Energy has awarded AMEC Paragon a contract to provide engineering and project management services for the front-end engineering and design (FEED) phase of the US$5 billion Ohio River Clean Fuels project in Wellsville, Ohio. The value of the contract has not been announced.

 

This contract follows AMEC Paragon's initial work as owner's engineer and project management services provider for feasibility studies concerning the integration of various processes at the plant.

 

The FEED phase is scheduled to commence in November 2007.

 

The project is being undertaken in response to growing demand for more environmentally friendly fuels. The facility is expected to produce approximately 50,000 barrels per day of jet and diesel fuel and other liquid products from biomass, coal and other feedstocks. The new facilities will capture at least 80 percent of the carbon dioxide produced during refining. Much of the captured carbon dioxide will be used for enhanced oil recovery in the nearby Appalachian oil fields, with the remainder to be stored in underground caverns.

 

"With this project, AMEC is taking a leading role in the energy industry's efforts to develop facilities that address global environmental concerns," said Simon Naylor, President of AMEC's Natural Resources Americas business. "We are excited to progress this innovative and important work and to continue to help Baard Energy achieve its goals."

 

Baard Energy President and Chief Executive Officer John Baardson said, "Phase I of this project went smoothly and according to schedule. We are especially impressed with AMEC's intrinsic expertise in all of the diverse components of this project, and we view our work with AMEC Paragon as a solid model for future alternative fuel projects in the United States."

 

In addition to continuing in its role as owner's engineer and project management services provider, AMEC Paragon will provide FEED for the facility's site infrastructure, utilities, storage sections and feedstock handling. The company also will support engineering for the plant's liquid fuel production and upgrading facilities.

 

Fire Extinguished at Kentucky Somerset Refinery

A fire broke out in a gasoline-making reformer at Somerset Refinery Inc's 5,500 barrel-per-day refinery in Somerset, Kentucky, October 5 but was quickly extinguished, a top company official said.

 

No casualties or serious damage was reported in the fire, which broke out in the morning and was put out within 25 minutes, said Bill Spears, the chief executive of privately-held Somerset Refinery.

 

"The cause is under investigation. We're not really sure but most likely a feed line caught fire," Spears told Reuters. "No one was hurt. The fire was in one section of the refinery, our feed lines were cut and we isolated it quickly."

 

CB&I Wins $160 Million Alabama Refinery Contract

Chicago Bridge & Iron has won a $160 million contract for a refinery expansion project in Alabama.

 

The Woodlands-based engineering company will provide engineering, procurement and modular fabrication for a new 15,000-barrel-per-day unit built by Universal Oil Products LLC, a Honeywell company.

 

The unit is a 28 million standard-cubic-feet-per-day hydrogen plant using CB&I's proprietary Hyforming hydrogen technology, associated utilities and offsite facilities for the expansion project.

 

CB&I expects completion of its project in the first quarter of 2009.

 

Chevron to Add $500 Million Gas Production Unit to Pascagoula Refinery

On October 15, Chevron announced plans to build a gasoline production unit at its Pascagoula, Miss. refinery. The Pascagoula refinery is Chevron's largest wholly-owned petroleum refinery, processing 330,000 barrels of crude per day. The refinery suffered damages from a fire in mid-August, but Chevron expects repairs from that incident to be completed during the first quarter of 2008.

 

Chevron expects to break ground in early 2008 and complete the $500 million project by mid-2010. Construction of the new facility will create 700 jobs. The United States has not seen a new oil refinery built in three decades, leaving plant expansions as the only way to create new capacity.

 

When the new gasoline production unit reaches full capacity, Chevron expects its output to increase by 10%, or 600,000 gallons per day. According to company reports, the new unit will improve equipment reliability and utilization, while allowing the refinery to optimize product yields.

 

Chevron L.A. Refinery Operating after Brief Outage

Chevron Corp said operations were as planned on October 15 at its 260,000 barrel per day (bpd) Los Angeles market refinery in El Segundo, California, after a brief power outage on a unit October12.

 

Spokeswoman Lily Craig said she didn't have the name of the unit immediately available, but said the electrical power loss did not affect refinery production.

The refinery is carrying a planned two-month overhaul on a coking unit.

 

Lamons Wins Five-year Multi-site Contract from Valero

Lamons Gasket Co. said that it has won a multi-site contract for gaskets and bolts with Valero Energy Corp. The five-year contract encompasses Valero's 15 U.S. refineries, along with its facilities in Canada and Aruba.

 

The contract is the first of its kind for Valero and includes a Lamons e-catalog, which will be unveiled over the next few months.

 

Wyoming’s Interline Building New Refinery

The first new refinery built in Wyoming in almost 30 years is going up 20 miles north of Douglas, in the heart of the Powder River Basin. The new plant is the brainchild of Wyoming native Mike Williams, founder and president of Interline Resources.

Interline is building the plant on the ashes of their old Well Draw Gas Plant, a gas frac plant that produced propane, butane, natural gas, and ethane until it burned in 2002. The new plant, called NorthCut Refining LLC (a literary reference to Ayn Rand’s “Atlas Shrugged”), is a radically different kind of factory: a gas topping oil refinery that will produce gas and diesel.

Compared to Wyoming’s four other refineries, NorthCut’s planned 5,000 barrel/day production is quite small. However, its raw materials and markets are carefully planned.

Unlike the 60,000 barrel/day refineries, which prefer inexpensive Canadian sour crude, NorthCut will utilize local Wyoming sweet crude produced just a few miles away throughout the Powder River Basin.

The market for NorthCut’s products is also close by. NorthCut’s off-road (high sulfur) diesel could be utilized by the coal mining industry as well as agriculture. The ‘water white’ gasoline is perfect for the ethanol industry – which needs to denature the high proof corn fuel to make it fit for engines and unfit for human consumption (before the denaturing process, ethanol is essentially moonshine).

Construction began in August and the refinery is expected to be up and running by December.

 

Conoco Shuts Gasoline Unit at Texas Borger Refinery

ConocoPhillips shut a gasoline-producing fluidic catalytic cracking unit at its 146,000 barrel per day (bpd) refinery in Borger, Texas, on October 19, according to a notice filed with state pollution regulators.

 

The unit will be shut through Nov. 24, according to the filing with the Texas Commission on Environmental Quality.

 

ExxonMobil’s Lockwood Refinery Investigates Fire, Reports on Sulfur Dioxide

An ExxonMobil investigative team looking into an explosion and fire at Montana’s Lockwood Oil Refinery Oct. 17 has finished its field work, but a cause had not yet been determined.

 

Dale Getz, refinery spokesman, said October 30 that preliminary findings may be available later in the week.

The 60,000-barrel-a-day plant continues to operate at a reduced rate but is expected to meet all commitments to customers, Getz said.

ExxonMobil also has reported to state and local regulators emissions released during the incident as required by state and federal laws. The refinery said it emitted 685 pounds of sulfur dioxide during the incident. About 505 pounds of the pollutant came from burning gases at the flare, ExxonMobil said. The plant routed gases to the flare as it was depressurizing the hydrocracking unit, where the explosion occurred. Another 180 pounds of sulfur dioxide came from the fire.

Montana Sulphur & Chemical Co., which treats ExxonMobil's sulfur-bearing gases, also reported flaring sulfur dioxide in a major malfunction after the refinery fire.

Montana Sulphur & Chemical Co. said it flared 5,673 pounds of sulfur dioxide over almost three hours in the late afternoon on Oct. 18. The malfunction happened as it was operating on abnormally low gas flows after the fire at ExxonMobil, the company said.

A sulfur dioxide air monitor also showed higher hourly concentrations of the pollutant, Montana Sulphur & Chemical reported. The peak concentration was 0.12 parts per million, which is less than the standard of 0.50 ppm.

Jim Hughes, an environmental specialist with the Montana Department of Environmental Quality, said Montana Sulphur & Chemical got some hydrocarbons in the refinery's gas stream, which is not supposed to happen. Hughes said he has asked ExxonMobil to notify him about what caused the hydrocarbons to contaminate the gas stream to Montana Sulphur & Chemical.

Both ExxonMobil and Montana Sulphur & Chemical told regulators that their malfunctions were not caused by poor maintenance, careless operation, poor design or any other preventable equipment breakdown.

Refinery officials have said the explosion and fire may have been caused when piping in a high-pressure unit leaked hydrogen and hydrocarbon gases, which then ignited. The hydrocracker, where the fire occurred, is used to make low-sulfur diesel and is located in the center of the plant.

 

   CANADA

 

CNPC in Oil, Gas Framework Deal with Zhuhai City

China National Petroleum Corp (CNPC) signed a framework deal with the Zhuhai city government to cooperate in oil refining, sales and natural gas, it was reported on October 21.

The China Petroleum Daily gave no details on the terms of the deal, including the scale of investment and when cooperation would start in Zhuhai, a coastal city in the southern province of Guangdong.

PetroChina, CNPC's listed arm, plans to build a second south China refinery, with capacity of 200,000 barrels per day, in Zhuhai, and a company official expected no regulatory hurdles to the plan, state media reported in August.

A natural gas unit of CNPC also signed an agreement in July to take over a gas operator in Zhuhai and gained the rights to run gas networks in the city.

CNPC, China's top oil and gas producer and with a strong presence in north China, is building its first south China refinery in the Guangxi region, which it hopes to complete by 2009.

 

Mustang to Aid IAG in Expansion of Refinery in Regina

Mustang Engineering, a subsidiary of John Wood Group PLC, is providing engineering design services to International Alliance Group (IAG) for the proposed refinery expansion project at Consumers' Co-operative Refineries Ltd. (CCRL) in Regina, Saskatchewan.

IAG has been retained by CCRL as program managers for the 'grass roots' portion of the proposed expansion, which could increase the output of Saskatchewan's only oil refinery by 30 per cent.

The 'grass roots' expansion will include a fluid catalytic cracking (FCC) complex to support additional crude oil processing.

The decision to move forward with detailed design and construction of the project is slated for early 2008 and, if implemented, would be CCRL's second large expansion this decade.

The proposed expansion project, which could cost upwards of $1 billion, would take the refinery above 130,000 barrels per day of crude processing capacity.

 

   CENTRAL AMERICA

 

RIL Looking to Set up 350,000 Bpd Refinery in Central America. 

RIL, the Mukesh Ambani-promoted company, is looking at setting up a refinery in Central America. 

The company is considering a bid for building a 350,000 barrels a day oil refinery in one of the Central American countries of Costa Rica, Guatemala, Honduras and Panama. 

RIL already operates a 660,000 barrels a day refinery at Jamnagar, Gujarat. Another 580,000 barrels a day refinery is being constructed by its subsidiary Reliance Petroleum close to the existing refinery. 

 “Central America is coming up with a refinery. Then there are refineries in the U.S. and RIL’s own refinery in Gujarat. Demand for crude oil is continuously rising. RIL has a very good track record for finding oil and gas. It makes sense to buy into exploration assets wherever there is an opportunity,” a source said. 

Moreover, with crude oil prices hitting record levels of $90 a barrel recently, and still remaining strong at around the $88 a barrel mark, it is worth taking the risks involved with exploration, a Mumbai-based analyst said. 

Operators of oil and gas blocks commonly sell stake in blocks to other companies in order to share the risks involved. RIL has discovered oil or gas in 31 of the 50 wells it has drilled so far in India and could propel RIL to picking up the stake in the Peru oil blocks. 

RIL already has 11 overseas oil and gas assets, with the most recent being a block in Australia. The company is looking at buying into exploration and producing blocks in Africa, Latin America and West Asia. 

RIL also has two blocks in Iraq, three in Yemen (one of which is producing oil), one in East Timor, and two each in Oman and Colombia. 

It is also reported that RIL is also talking with the government-owned Indian Oil Corporation (IOC) for acquiring assets overseas. 

 

   COSTA RICA

 

China to Build Oil Refinery in Costa Rica

China will build an oil refinery in Costa Rica to help the Central American nation address its energy needs, Costa Rican President Oscar Arias announced.

 

Arias told Mexican Reforma newspaper, in an interview, the agreement with China means the chances for completion of an earlier Mexican refinery project in Costa Rica 'have now been significantly reduced.'

 

Former Mexican President Vicente Fox planned to build an oil refinery in Costa Rica as part of a regional energy program during his six-year tenure that ended in 2006.

 

'The Chinese project is significantly less ambitious and will serve just to address Costa Rican needs,' said Arias who was making an official visit to China.

 

   VENEZUELA

 

PDVSA Begins El Palito Refinery Units Restart

Venezuela's state oil company PDVSA said it began work on October 4 to bring back on line the cat cracker and alkylation units at its 135,000 barrels-per-day El Palito refinery after a power outage October 2.

The El Palito refinery has suffered repeated outages amid a spate of PDVSA refinery problems over the last year.

PDVSA said in a statement the refinery had been operating at its full capacity of 135,000 barrels per day until the units were taken off line.

The morning of the 4th, "the process began for the start-up of the units," PDVSA said in a statement.

Jesus Sanchez, the refinery's general manager said in a statement that process meant technicians had to first check equipment and infrastructure before PDVSA would proceed with restarting the units.

 

2. ASIA

   CHINA

 

China's Chongqing Plans 10 mln t/year CNPC Refinery

China National Petroleum Corp. (CNPC) plans to build a refinery with annual capacity of 10 million tonnes in Chongqing, at a cost of around $3 billion, the city's deputy mayor Huang Qifan said on October 15.

The output of the refinery, part of a planned new petrochemicals hub in the southwestern metropolis, will mostly be consumed locally, Huang said.

The city currently uses 6 million tonnes of fuel a year but expects this to increase over the next five years to a level where it would use up all the refinery's capacity, he said.

"The refinery will be in Changshou (district), and investment will be $3 billion. CNPC is working with us," Huang said.

"If most of our oil is brought in from the coastal refineries, that is not worthwhile," he said.

Due to the lack of both crude and refineries, fuel for Chongqing and Sichuan province that cannot be sent from Gansu province through a 1,250-km (777 mile) oil product pipeline, arrives by rail or in fuel tanker trucks.

Huang said feedstock might come from Myanmar, although several options were being examined. Chongqing is lobbying to be included on the route of a crude pipeline from China's energy-producing neighbor.

The pipeline to a deepwater port would help supply crude to one of China's more remote areas and allow importers to bypass the piracy-prone Malacca Straits, one of the world's busiest shipping channels.

Myanmar has at least 90 trillion cubic feet (tcf) of gas reserves, the world's 10th largest, and 3.2 billion barrels of recoverable crude.

 

Emirates Facambe Group Buys Refiney in Liaoning Province, China

Emirates Facambe Group has taken over a local refinery in Liaozhong Country, Shenyang City in Northern China's Liaoning Province.

 

The formal acquisition agreement was inked on Sept. 23, 2007, and a three-phase expansion plan of the new refinery was released at the same time.

 

Emirates Facambe Group will kick off a technical upgrade after the purchase, with projections for increasing the refinery's annual capacity to 200,000 tons. Then, the group will build a 1.5-million-ton heavy oil refinery in the petrochemical industrial park of the Shenyang offshore economic area in 2009. Finally, with the Chinese partners, the group will make efforts to lift the capacity to 8 million tons and make it a world-class chemical industrial base.

 

CNPC in Oil, Gas Framework Deal with Zhuhai City

China National Petroleum Corp (CNPC) signed a framework deal with the Zhuhai city government to cooperate in oil refining, sales and natural gas, it was reported on October 21.

The China Petroleum Daily gave no details on the terms of the deal, including the scale of investment and when cooperation would start in Zhuhai, a coastal city in the southern province of Guangdong.

PetroChina, CNPC's listed arm, plans to build a second south China refinery, with capacity of 200,000 barrels per day, in Zhuhai, and a company official expected no regulatory hurdles to the plan, state media reported in August.

A natural gas unit of CNPC also signed an agreement in July to take over a gas operator in Zhuhai and gained the rights to run gas networks in the city.

CNPC, China's top oil and gas producer and with a strong presence in north China, is building its first south China refinery in the Guangxi region, which it hopes to complete by 2009.

 

   JAPAN

 

Saudi, Japanese Researchers Advance Plans for HS-FCC Refinery

Engineering for a revolutionary new refinery design moved forward recently when members of an international research consortium approved plans that will put a 3,000-barrel-per-day semi-commercial facility online in 2010.

 

The step is the latest in an initiative by Saudi Aramco, Nippon Oil Co., and Saudi and Japanese researchers to create the world's first high-severity fluid catalytic cracking (HS-FCC) refinery, which converts low-value, heavy gas-oils into high yields of higher value feedstock suitable to supply petrochemical processes.

 

The configuration enhances production of light hydrocarbons, which are used as building blocks for plastic manufacturing, compared to traditional reactor designs.

 

This higher yield design makes this process potentially more valuable for developing integrated refinery and petrochemical complexes.

 

Saudi Aramco was represented at the Design Basis Review kick-off meeting for the first semi-commercial plant by Oil to Chemicals Research and Development Project team members Christopher F. Dean, Allan B. Fox and Mohammed H. Al-Tayyar.

 

The meetings were held at the Houston offices of Shaw Stone and Webster, which is preparing the front-end engineering package for the HS-FCC process.

 

Also present were representatives of Nippon Oil, Axens and Chiyoda, which will build the plant. This first plant will be constructed in a Nippon refinery and be in operation by 2010.

 

The HS-FCC project is a partnership in technology innovation with Saudi Aramco, King Fahd University of Petroleum and Minerals (KFUPM), Nippon and the Japan Petroleum Energy Center.

 

The project is part of Saudi Aramco's Downstream and Strategic Research Program under the Research and Development Center.

 

More than 12 years in development, the project was designed in three phases. The first two were a small, lab-scale testing facility at KFUPM and an extended operation of a 30 bpd demonstration plant at Ras Tanura Refinery.

 

The third and current phase is the design, construction and operation of the 3,000 bpd semi-commercial unit in Japan. A commercial-size 40,000 bpd design is also being developed at the same time.

 

Petrobras nears Exxon Japan Refinery Purchase

Brazil's state oil company Petrobras has entered the final stages of talks to acquire an Exxon Mobil group refinery in Okinawa, Japan, the Yomiuri Shimbun daily reported.

 

"It would be inappropriate to discuss or speculate on any particular opportunities that we may or may not be considering," an ExxonMobil spokeswoman in Tokyo told Reuters.

 

Petrobras has been negotiating to buy the 100,000 barrels per day Nishihara refinery operated by Nansei Sekiyu KK in the southern Japanese island of Okinawa, industry sources have said.

 

Nansei Sekiyu is 87.5 percent owned by TonenGeneral while Japanese trader Sumitomo Corp. owns the rest. It was reported that Petrobras is likely to acquire all of the 87.5 percent stake in Nansei held by TonenGeneral for several billion yen.

 

A Petrobras official declined to comment.

 

Oil traders have been closely following the development of the deal since it first emerged about about a year ago. One trader said recently that the two companies were likely to have entered the final stages of negotiations.

 

Petrobras Director Nestor Cervero said last month that talks were continuing but declined to speculate if and when a deal might be sealed.

 

Sasol Awards Contract to Hitachi Zosen to Boost Synfuels Operation at Secunda Refinery

Sasol has awarded a contract to Japanese manufacturer, Hitachi Zosen Mechanical Corp. (HMC), a wholly owned subsidiary of Hitachi Zosen Corp., to construct a Sasol Advanced Synthol (SAS) reactor.

The new SAS reactor is needed for Sasol to increase its 150 000 barrel a day (b/d) synthetic fuels operation at Secunda in South Africa by 20% to 180,000 b/d by 2015. Sasol uses its advanced Synthol reactors to produce synthesis gas, which is converted into a large range of valuable liquid fuels and chemical products.

"Sasol supplies about 35% of South Africa's liquid fuel needs. The Secunda expansion project will help us meet major growth opportunities in both our domestic and international markets. We will use both natural gas and coal as feedstock to produce our advanced range of synthetic transportation fuels," said Sasol executive director Benny Mokaba.

"We have constructed seven similar reactors for Sasol since 1998, and, as one of the leading reactor fabricators in the world, will continuously strive to supply high-quality and effective equipment that enhances the development of clean and environmentally friendly new energy resources," said Hisao Matsuwake, president of HMC.

The SAS reactor will weigh about 867 tons, be 8m in diameter and about 12 stories (38m) tall. Sasol currently uses nine SAS reactors at Secunda. Sasol has designed and perfected these reactors to convert coal and natural gas into high quality synthetic transportation fuels such as petrol, diesel and jet fuel, as well as a range of chemicals.

 

   INDONESIA

 

Indonesia’s Dumai Refinery to be Closed for Maintenance Thirty to Forty Days

Indonesian state-owned oil and gas company PT Pertamina will shut down its Dumai oil refinery in Riau for 30-40 days from late October or early November for maintenance work, processing director Suroso Atmomartoyo.

 

The shutdown will not affect fuel supply as Pertamina will cover the shortfall with increased output from its other five refineries, Pertamina spokesman Wisnuntoro said.

 

The Dumai refinery is capable of producing 170,000 barrels of oil per day, representing about 16 percent of Pertamina's total capacity of 1.05 million barrels a day.

 

   PHILIPPINES

 

Philippine Court Stops Sale of Petron's Refinery

A Philippine court stopped the government on October 16 from auctioning the refinery of oil giant Petron Corp. as payment for $38.4 million in delinquent real property taxes.

The Bataan Regional Trial Court issued a temporary restraining order on the public auction set for October 17.

The provincial treasurer has directed the sale of Petron's equipment and machinery in the Bataan facility, north of the capital city of Manila, allegedly for failing to pay taxes from 1994 to June 2007.

In issuing the order, the judge said the government's decision to sell the refinery to the highest bidder was premature.

The judge said the company was not given the opportunity to contest the assessment before the appropriate government agencies.

Petron, which is one of three major oil players in the Philippines aside from Shell and ChevronTexaco, objected to the sale before the trial court. It alleged the local government's assessment was "excessive." It claimed the provincial treasurer increased the taxes it is actually obligated to pay.

The refinery in the province supplies nearly 40 percent of the country's total fuel requirements or a daily average of about 180,000 barrels.

 

   SINGPORE

 

Foster Wheeler Wins ExxonMobil Contract for Singapore Project

Foster Wheeler Ltd. announced that subsidiaries in its global engineering and construction group and its joint venture partner have been awarded contracts by ExxonMobil Asia Pacific Pte. Ltd.

The contracts are for project coordination and services, and the engineering, procurement and construction of plant infrastructure for a second petrochemical complex in Singapore.

The Foster Wheeler contract value for this project was not disclosed and will be included in the company’s third-quarter 2007 bookings.

 

   VIETNAM

 

Construction of Viet Nam’s First National Oil Refinery in Progress

The Dung Quat oil refinery project has had 99 percent of its design completed, said Head of the project management Truong Quang Tuyen.

 

Tuyen, also Deputy General Director of the Viet Nam Oil and Gas Group (PetroVietnam), added that over 50 percent of equipment has been transported to the project site for installation.

 

Several sub-projects have made progress in construction. The sea damming work, for example, has finished the filling of stones onto the body of the dyke, which is 1,600 m long and 3.7 m high. The work is expected to complete on schedule for October of 2008.

 

Construction of a product loading port has also neared completion, bringing in confidence in putting it into operation by March of 2008.

 

Investors however have remained unsatisfactory with the pace, making the Technip contractor to mobilize all available resources and push on sub-contractors to speed up construction tempo to meet deadlines.

 

The project management board has so far recruited 800 local workers and is conducting the final recruitment of some 400 others. All the workforce will be retrained either at home or abroad to meet demands of the refinery which is scheduled to be commissioned in February of 2009.

 

Vietnam's First Oil Refinery to Operate In Early 2009, Two more Planned

Vietnam's first oil refinery, now under construction in central Quang Ngai Province, will become operational in the second quarter of 2009, said China's Xinhua news agency on October 22.

Experts are focusing on installing machines and equipment of the Dung Quat oil refinery, which will have an annual processing capacity of 6.5 million tonnes of crude oil, said Director of the management board of the Vietnam National Oil and Gas Group (PetroVietnam) Dinh La Thang.

The state-run group plans to build two other oil refineries in central Thanh Hoa province and southern Ba Ria Vung Tau province, which are expected to become operational by 2013.

The Nghi Son refinery in Thanh Hoa will have an annual capacity of 3-9 million tonnes, and the Long Son refinery in Ba Ria Vung Tau, 10-20 million tonnes.

Investment for Long Son can reach US$60 to US$120 billion.

Regarding Nghi Son, PetroVietnam is discussing cooperative issues with partners from Japan and Kuwait, he said.

Between January and September, Vietnam imported 9.2 million tonnes of petroleum products worth 5.1 billion dollars, up 8 percent and 9.4 percent over the same period last year, respectively, according to the country's General Statistics Office.

Meanwhile, it exported over 11.2 million tonnes of crude oil totaling nearly 5.8 billion dollars, posting respective year-on- year declines of 10.4 percent and 11.3 percent.

 

Viet Nam’s Prime Minister Agrees to $500 Million Refinery

Prime Minister Nguyen Tan Dung has agreed to license a US$500 million oil refinery project in the central province of Phu Yen, local authorities said October 26.

The joint venture between Technor Star Management Ltd from the UK and Russian oil and gas corporation Telloil, the Vung Ro refinery project, will have an annual capacity of three million tonnes of crude oil.

The project’s report on environmental assessment must be approved by the Ministry of Natural Resources and Environment before the start of construction, Prime Minister Dung said.

 

3. EUROPE / AFRICA / MIDDLE EAST

   FINLAND

 

Faulty Valves to Keep New Diesel Line at Finland Refinery Shut for Weeks

Faults have been identified in some of the valves on Neste Oil's new diesel line at the Porvoo, Finland refinery. As a safety measure, Neste Oil has decided to replace all valves of the type in question before starting up production again. Replacing hundreds of valves will mean that the line will be out of production for several more weeks. The total number of valves in the diesel line is tens of thousands.

The faults were identified during the recent brief maintenance outage. The company is investigating the reason for the problem together with the manufacturer and VTT Technical Research Centre of Finland. The valves were pressure-tested prior to the line being started up and no problems were encountered with them when it was running.

The valve problem will not affect the company's ability to supply its customers with products. The loss of output will affect Neste Oil's fourth-quarter figures, however, although it will not fundamentally impact the company's financial result for the year as a whole.

 

   PORTUGAL

 

Galp Energia to Expand Porto Refinery in Portugal

Galp Energia SA has let a contract to Fluor Corp. for front-end engineering and design and early procurement services of main equipment for a conversion project at its 91,000 b/cd refinery in Porto, Portugal. The contract's value was not disclosed.

 

The conversion project will add a grassroots vacuum flash and distillation unit, a visbreaker, a diesel hydrodesulfurization unit, and associated utilities and infrastructure. The project is part of Galp's investment program to increase production of diesel by 50,000 b/d as well as the utilization rate of its existing refineries. The revamp also will enable Galp to process heavier crudes.

 

Fluor offices in Madrid and in Camberley, UK, will carry out the refinery conversion work along with local Portuguese companies.

 

Fluor previously constructed an HDS unit for Galp's 213,000 b/cd refinery at Sines in 2002.

 

   SPAIN

 

Foster Wheeler’s Global Power Group Awarded Heat Recovery Steam Generator Contract for Spain’s BP Refinery

Foster Wheeler Ltd has announced that a subsidiary of its Global Power Group has been awarded a contract for a heat recovery steam generator (HRSG) by BP Oil Refineria de Castellon SA.

 

The boiler will be built at BP's oil refinery in Castellon, Spain. Foster Wheeler will design, supply and erect the HRSG, and will also provide start-up supervision for the HRSG, which will be coupled to a Siemens SGT600 combustion turbine, producing 26MWe (gross megawatt electric) of energy for the refinery. Commercial operation of the boiler is scheduled for the fourth quarter 2008.

 

   CHAD

 

China’s CNPC to Invest in Chad Refinery

China's quest for energy projects in Africa now include Chad, where the China National Petroleum Corp. plans to invest in a refinery joint venture.

 

The Xinhua news agency reported CNPC, China's largest oil producer, and its wholly owned subsidiary Engineering Ltd., have signed an agreement with the government of the landlocked oil-producing central African country to invest in a refinery north of the capital N'Djamena.

 

The report gave no financial or other details about the project other than saying the CNPC subsidiary will be responsible for all engineering construction.

 

Chad, whose neighbors include Libya and the Sudan, began producing oil in 2003 and has discovered 13 oil fields so far, the report said. The country has no refineries.

 

Since 1996 when it signed its first African oil exploration project in Sudan, China has invested in 27 major oil and natural gas projects in 14 African countries, Xinhua said.

 

   MOZAMBIQUE

 

Mozambique Approves $5 Billion Refinery Project

The Mozambican government on October 2 approved a project to build and operate on oil refinery in the district of Nacala-a-Velha, on the coast of the northern province of Nampula it was reported.

 

The refinery, known as the Ayr Petro-Nacala project, will cost about US$5 billion, while the initial capital is US$50 million.

 

The largest investor, with about 70 percent, is Ayr Logistics, a company registered in Texas that describes itself as providing a broad spectrum of logistics support throughout the world.

 

The other investors are a South African citizen, Colin Crorie, and the Mozambicans Luis Ferreira Mendes and Hercilio Varela de Almeida, who set up a Mozambique-registered branch of Ayr (Ayr Logistica Limitada) in November 2006.

 

The refinery, covering an area of 838 hectares, will be able to produce over 300,000 barrels of fuel a day, and will employ 450 Mozambican workers.

 

According to the government spokesperson, Deputy Education Minister Luis Covane, two-thirds of the fuel from the refinery will be exported, since the Mozambican economy cannot consume anywhere near the amount that will be produced.

 

Even 100,000 barrels a day is greater than Mozambique's needs, he noted.

 

Construction of the refinery will begin in the first half of 2008, accompanied by a training program that will involve 150 foreign technical staff.

 

This is a major project that will accelerate the development of that part of the country and of all of Mozambique, Covane said.

 

The crude oil for the refinery can be unloaded at Nacala port.

Although Nacala is widely regraded as the best deepwater harbor on the east African coast, it has, up until now, been under-used.

The port needs no dredging and is capable of accommodating very large vessels.

 

The refinery could cut the costs of the fuels that Mozambique currently has to import, and it doubtless will also be able to supply Mozambique's neighbors (notably Malawi and Zambia) at prices cheaper than those they are currently paying.

 

   NIGERIA

 

Germany’s Shark Petroleum, Nigeria to Build $1.8 Billion Refinery

German company Shark Petroleum and Investment GmbH and the government of Nigeria's north-central Niger state are to build a $1.8 billion refinery in the state, press reports said October 4.

 

The Guardian newspaper and several other papers said the company and the state government signed a memorandum of understanding for the construction of the refinery, which will have production capacity of 100,000 barrels a day.

 

Ahmed Ibeto, Niger state's acting governor, said in Minna, the state's capital, that the German firm would pay 92.5% of the cost of the refinery and the state would bear the balance of 7.5% of the investment in terms of providing infrastructure, securing refinery licenses and providing other necessary logistics, according to the Guardian report.

 

He said the refinery will be built at Baro, between the northern and southern part of Nigeria, the Guardian said.

 

Shark's Chairman Gunther Sommar said the refinery would be completed within four years, and his company will build two more in Nigeria's northern Bauchi and Katsina states, according to the report.

 

The administration of former President Olusegun Obasanjo, who relinquished power in May, awarded 18 licenses to private investors to build refineries in the countries. None has so far been built.

 

Nigeria has four refineries but they all operate below installed capacities and the country imports a large percentage of the 30 million liters of gasoline it requires daily.

 

Indian Oil to Follow Nigerian Rules for Refinery Project

Indian Oil Corp. would follow any procedures to secure a project to build an oil refinery in Nigeria in exchange for equity interest in oil blocks, a company official said October 15.

 

IOC, India's biggest refiner by volume, has been looking to set up a refinery in the Nigerian state of Edo.

The state-run company was told by the Nigerian government to participate in a competitive bidding round if it wants to set up a refinery, industry Web site IndianPetro reported.

"Once we get the (oil) blocks, only then will we look at setting up downstream operations there," said a company official. "As we have said previously, we'd follow whatever procedures that country has."

 

   SOUTH AFRICA

 

South Africa's PetroSA to Build $5.85 Billion Refinery

South African state-owned oil company PetroSA will build a $5.85 billion (39 billion rand ) oil refinery with production capacity of 200,000 barrels per day that is expected to launch in 2014/15, it said on October 24.

PetroSA's chief executive, Sipho Mkhize, said the refinery, to be funded through debt and equity, would probably be built at the deep-water Port of Coega, near Port Elizabeth.

"We anticipate that if everything goes well, we should have the refinery up and running by 2014/2015. But, as you know the construction industry is very tight... (and) that can delay the project substantially," Mkhize said.

South Africa has embarked on a multi-billion dollar infrastructure program, mainly in preparation for the 2010 Soccer World Cup, and faces shortages of building materials.

Mkhize said construction of the refinery was expected to start in 2010, with up to 20,000 jobs generated in one of South Africa's poorest provinces.

South Africa is a net importer of oil but is eager to reduce the dependency of Africa's largest economy on supplies from the Middle East and elsewhere. Mkhize said projections were that by 2020 South Africa would need an estimated 280,000 barrels per day. PetroSA would need to ramp up supplies to national fuel needs from its current 7 percent to 30 percent.

He said international partners will be solicited to invest in the refinery, with those bringing the most value favored.

"The funding for the project of this nature will be both debt and equity... co-investors will be invited to participate," Nkosemntu Nika, PetroSA's chief financial officer, said.

Earlier in the day, Nika said PetroSA, which manages South Africa's strategic oil inventory and exploration for oil and gas mainly in Africa, was on a sound financial footing.

 

According to its 2007 annual report, PetroSA realized a net profit of 2.79 billion rand, as spiraling crude prices made up for declining volumes, with the company's flagship Mossel Bay gas-to-liquid (GTL) plant, which produces 45,000 bpd, expected to run dry by 2015 unless satellite gas fields were exploited.

 

   SYRIA

 

Syria Signs $1.5 Billion Agreement with Iran and Venezuela to Build Oil Refinery

Syria's ministry of petroleum and mineral resources on October 29 signed an agreement for the establishment of an oil refinery with Iran, Venezuela and the Malaysian al-Bukhri Group in the area of Eastern Homs in Central Syria, the Syrian state news agency reported.

 

The refinery will be able to produce up to 140,000 barrels per day (bpd) and the investment is expected to reach 1.5 billion dollars.

 

The Syrian oil minister will meet Iran's deputy oil minister Mohammed Reza Neematzadeh, as well as Venezuela's director general of refineries, Roberto Delgado.

The agreement comes after recent sanctions imposed on Iran by the US government. The country currently has the world's second largest reserves of conventional crude oil.

 

   UGANDA

 

Uganda’s Oil Find Creates Dilemma for Kenya Pipeline

The pattern of trade between Kenya and its key partner, Uganda, is set for a drastic shift following the discovery of petroleum deposits in the neighboring country.

 

For several decades Kenya has heavily relied on petroleum to consolidate its export earnings from Uganda, a position that analysts say is now in danger -- at least in the long term. Though, not a producer of oil, Kenya has been importing crude for processing at its Mombasa-based refinery and onward export to Uganda and the wider Great Lakes region.

 

"Discovery of crude oil in Western Uganda will certainly change the supply pattern in the region," Mr George Wachira, the general manager at the Petroleum Institute of East Africa (PIEA) said.

 

Statistics from the Kenya Pipeline Company (KPC) show that in 2006 alone, Kenya exported 1.3 billion liters of petroleum to Uganda. This was, however, much lower compared to the previous years export volumes following Uganda's decision to directly import refined petroleum products rather than rely on the Mombasa refinery.

KPC said plans are under way to seize new business opportunities that may arise from discovery of oil in Uganda.

This means that the company may have to put up a new pipeline connecting the oil fields around Lake Albert to the refinery in Mombasa. "It all depends on whether the developers decide to put up a refinery in Uganda.

We are ready to partner in putting up a new pipeline for the crude as long as there are surplus volumes," Peter Mecha, the operations manager at KPC, said.

The refined oil would then be pumped back to Uganda and other markets through the existing pipeline. "The two pipelines would work in reciprocation; with one moving crude to the refinery while the other transports refined products to inland markets," said Mr Mecha.

KPC runs a- 450 kilometer-long pipeline system with a flow rate of 440 Cubic meters per hour running from the coastal town of Mombasa to Nairobi. It also has another 446 kilometer long pipeline with a flow rate of 160 Cubic meters per hour from Nairobi to western Kenya.

The Governments of Kenya and Uganda however plan to extend the existing Mombasa - Eldoret oil pipeline to Kampala through a project which entails installation of an 8-inch diameter, 320 km long pipeline from Eldoret to Kampala with an annual capacity of approximately 1,200,000 cubic meters.

The project is being promoted as a public-private partnership (PPP) with the private investment partner playing a leading role. The two governments shall own 24.5 per cent each of the equity based capital of the project and the private sector shall be the majority shareholder owning at least 51 per cent of the equity.

"The options open to Uganda are pushing crude oil through a new pipeline to the coast for export or refining at Mombasa, or constructing a local refinery in Uganda. The latter option is a more likely scenario," said Mr Wachira arguing that developing a new refinery infrastructure in Uganda could take a shorter time than having a pipeline to Mombasa.

The two explorer firms - Heritage and Tullow have already indicated that they may pump oil via a pipeline to the Kenyan coast, should they find more than 300 million barrels of crude from the Albertine basin.

The discovery of crude in the Lake Albert region, that lies on the border of Uganda and the Democratic Republic of Congo (DRC), by two explorer companies - Tullow Oil and Heritage Oil - puts pressure on the upgrading of the oil refinery in Changamwe to cater for extra volumes of crude.

The refinery is expected to be upgraded beginning December at a cost of Sh22 billion improve its crude capacity by between 70 and 85 per cent. Currently the facility handles 70,000 barrels of crude per day and 30,000 tonnes of gas.

Ugandan authorities have allocated Tullow three blocks for exploration of which two are in an equal partnership with Heritage.

So far the firms have successfully drilled eight wells within the blocs that have yielded crude with estimations that all the wells could provide an excess of a billion barrels of oil.

 

Analysts said this development would greatly reverse the direction of trade between the two countries should Uganda opt to trade in its oil.

 

   WEST AFRICA

 

Texas Firms to Build $1.4 Billion Cote d'Ivoire Refinery

Energy Allied International and WCW International, Inc. of Houston, Texas, are partnering with Petroci, the National Oil Company of Cote d'Ivoire to build, own and operate a 60,000 barrel per day crude oil refining facility and a strategic refined products storage facility in Abidjan.

 

Energy Allied International and WCW International will jointly develop this project and will have responsibility for providing the engineering, procurement and construction for the US$1.4-billion facilities. This 250-acre refinery will be located on a planned industrial site in the Port of Abidjan.

 

In July 2007, Energy Allied International and WCW completed a market and technical feasibility study for these facilities using The Shaw Group as a third-party technical expert. The financial advisory services were performed by Taylor-DeJongh from their Washington, D.C., offices. The very favorable results of the feasibility study were presented by Energy Allied International, Petroci Holding and WCW to Cote d'Ivoire President Laurent Gbagbo on July 24, 2007.

 

The President gave his firm commitment to this strategic development project for Cote d'Ivoire and granted approval to the joint project development team to proceed with the front end engineering and design (FEED). In parallel with the FEED development, Energy Allied International and WCW will finalize plans for the funding of the project with financial institutions.

 

This refinery for Cote d'Ivoire will process 60,000 barrels per day of West African crude and produce gasoline, jet fuel, diesel oil and butane for sale into West African markets. The process technologies designed into this refinery are sophisticated and highly flexible with respect to quality of crude feed, yet they are proven and in wide spread use in refineries today.

 

This region of West Africa today is short of the required capacity to produce these refined products and is presently importing in significant quantities from Europe and the Middle East. Upon completion in fourth quarter, 2011, this refinery will rank third in upgrading capacity of the 47 refineries currently operating in all of Africa.

 

Gbagbo said: "This refinery is a direct result of the successful conclusion of the peace process and the confidence that has been generated in the international and domestic investment community. The government of the Republic of Cote d'Ivoire welcomes this partnership of Energy Allied International and WCW International with Petroci to implement this important project. This signals the resumption of significant major investments in Cote d'Ivoire."

 

The Minister of Mines and Energy of the Republic of Cote d'Ivoire, Monnet Leon Emmanuel, said: "This refinery will bring state-of-the-art technology and complements the existing refinery operations in our country. Furthermore, the new refinery will create many direct and indirect local jobs, throughout Cote d'Ivoire, from construction, operations, support services and final products marketing."

 

Kassoum Fadika, Petroci Director General, said: "The implementation of this new refinery will be a much-anticipated next step in our vision to make Abidjan and Cote d'Ivoire a major center for refining and redistribution of high-end petroleum products along the West African Atlantic Basin."

 

This project will be led from Energy Allied International's headquarters office in Houston.

 

   ZAMBIA

 

Zambia's Indeni Oil Refinery Resumes Production

Zambia's Indeni Oil Refinery has resumed production, managing director Gerald Gueglio said on October 15, after a prolonged shutdown which sparked fuel shortages as suppliers gave copper mines priority.

 

Early in October, Zambia started rationing fuel following a shortage caused by the closure of its sole oil refinery.

"We are pleased to advise that Indeni has resumed production. Our crude processing rate is 100 cubic meters per hour (2,400 cubic meters) per day," Gueglio said in a statement.

Gueglio said Indeni was processing between 20 and 25 cubic meters of petrol, 40 to 45 cubic metres of diesel and 10 to 15 cubic meters of jet A1 fuel per hour.

"Our annual production capacity is between 450,000 metric tonnes and 500,000 metric tonnes of crude oil, depending on availability of feedstock," he added.

Indeni was shut on September 1 but re-started preliminary production on October 14 with normal operations due to be resumed on October 15 officials said, following the pumping of crude oil from Dar-Es-Salaam by another state-owned firm, Tazama Pipeline.

"We have started pumping crude oil and even the refinery has started (preliminary) production. We pump an average of 2,000 tonnes of crude oil to Indeni per day," Tazama's managing director Largeman Muzelenga said. Tazama is set to supply Indeni with 60,000 tonnes of crude.

A senior ministry of energy official said that Zambia was still importing refined fuel from South Africa, Mozambique and Tanzania to cushion the shortages following the closure of Indeni.

"The imports of fuel will continue until Indeni stabilizes its operations," the official said.

The government announced in 2006 that it would jointly spend $65 million with French oil major Total, with whom it owns an equal 50 percent shares in Indeni to upgrade its infrastructure and enhance its production capacity.

 

   RUSSIA

 

LUKOIL Launches New Units at Perm Refinery

Russian oil major LUKOIL launched a new unit at its Perm refinery in the Urals region and hopes the development will help it increase output of high quality fuels, LUKOIL said on October 29.

Separately, the firm said it has launched a railway facility to load liquefied petroleum gas at its nearby gas refining plant.

LUKOIL said it had commissioned an isomerisation unit with a hydrotreating section, which produces a high-octane component for high-quality gasoline, at its 240,000 barrels per day Perm refinery. The unit's capacity is 470 million tonnes per year.

"The unit will allow the Perm refinery to cut purchases of high-octane additives as well as increase output of high-octane motor fuels and start production of Euro 3 gasoline," LUKOIL said in a statement.

It also said the new railway loading facility at its Perm gas processing plant was capable of loading up to 120 rail cars per day, which will allow LUKOIL to accept additional 500,000 tonnes of the fuel per year for further processing at the plant.

"The launch of new technological units at the Perm's enterprises...will allow the company to fully switch to producing motor fuels meeting the highest European standards and increase output of deeply refined and value added products," said LUKOIL's Vice-President Ravil Maganov.

 

   KAZAKSTAN

 

Kazakhstan’s KazMunaiGas Seeks $3 Billion Loan to Purchase Refinery

KazMunaiGas, Kazakhstan's national oil and gas company, will borrow $3 billion on the international markets to a fund a refinery purchase, banking sources said October 24.

ABN Amro, Credit Suisse and Calyon will organize the loans, which will finance the acquisition of Romania's Rompetrol, they said.

The Kazakh company bought 75 percent of the Romanian firm in August in a deal estimated to be worth $2.7 billion, confirming its resolve to move into the lucrative European downstream market.

A source later told Reuters that KazMunaiGas was considering the acquisition of the other 25 percent of the company.

Dutch-based Rompetrol, which focuses on refining, marketing and trading, is valued at $3.6 billion, according to its auditors.

It has a refining capacity of 4 million tonnes and distribution capability of 7 million tonnes annually.

KazMunaiGas had previously tried to gain control of Lithuania's Mazeikiu Nafta refinery but was outbid by Polish firm PKN Orlen last year.

 

   TARTARSTAN

 

Fluor Selected For Refinery Project in Tatarstan

Fluor Corporation announced recently that it has signed a Heads of Agreement to provide project management consulting services for a refinery complex in Tatarstan, Russia, for Tatneft, one of the largest companies in Russia's oil and gas sector. Fluor will also provide engineering, procurement and construction management services for selected scopes of work focused on the utilities, off-sites and infrastructure (UOI) for the complex. The definitive contract, which will establish the value of Fluor’s scope and key project milestones, is scheduled to be finalized in late 2007 or early 2008.

 

“We are pleased that Tatneft has selected Fluor for this important project. This is a great opportunity to leverage our significant global refinery and petrochemical experience,” said David Seaton, Fluor Energy & Chemicals group president.

 

When complete, the new complex is expected to have the capacity to refine up to 7 million metric tons of crude oil per year. Future phases of the facility will include a deep conversion refining plant with an annual throughput of 3.5 million tons and a petrochemical plant for the production of products derived from aromatic hydrocarbons, and are not part of Fluor’s scope at this time.

 

   TURKMENISTAN

 

Turkmenistan’s Maryisk Oil Refinery Signs Modernization Agreement with Shell

Turkmenistan’s Maryisk Oil Refinery and Shell signed an agreement on plant modernization and organization of oil product production according to Evro-5 standards. Under the agreement, Shell Global Solutions International B.V. by September 2008 is to develop project documentation and provide the plant with licenses for three technological units - atmospheric column, vacuum column and hydro cracking.

 

   IRAN

 

Iran to Apply Latest European Standards for 7 New Refineries

Iran will make an 11.7 billion euro investment to build seven refineries and refining plants in four corners of the land according to the latest European standards.

The Persian Gulf Star Gas Condensates Refinery in the southern region of Assaluyeh is among the future projects that aim to refine 360 thousand barrels of gas condensates per day and to produce gasoline, jet fuel, and other valuable products.

Gas condensates are used for production of gasoline, jet fuel, propylene, and other valuable products.

The refinery will be constructed through investing some 1.7 billion euros in 36 months.

Homuz Oil Refinery in Bandar Abbas, as another important project, will refine 300 thousand barrels of heavy and super-heavy oil per day and is to produce gasoline according to the highest European standards.

The project will be carried out in 42 months with about a three billion euro investment.

Bandar Abbas, a port in southern Iran, will turn into the largest oil refining region in the Middle East when an investment plan and 20 refining and stockpiling projects are implemented.

Out of the 20 projects, some aim to construct new refineries, to develop the existing refineries, and to transfer and store products that will help update the industry and lift gasoline output from 16 to 36 percent.

The projects also help the southern port refine one million barrels of crude oil per day.

The great objective is achieved through building five giant refineries and carrying out six projects on development, improvement, and optimization of existing refineries and increasing their capacities.

 

   QATAR

 

Qatar Petroleum Plans 250,000 bpd Grassroots Refinery

State-owned Qatar Petroleum (QP) plans to build a grassroots refinery with 250,000b/d capacity and other associated facilities in Messaieed, Qatar.

 

QP has let a lump sum front-end engineering design contract to Technip for the work. The US$60 million contract covers the Al Shaheen facility and an oil pipeline that will extend from Al Shaheen oil and gas field 90km offshore to Messaieed 110km onshore, as well as other import-export facilities.

 

Technip's operations and engineering centers in Paris and Abu Dhabi will carry out the contract work.

 

The refinery, which will produce mainly gasoline, diesel, and jet fuel, will incorporate some of the most technologically advanced conversion units for upgrading bottom of the barrel products. The facilities are scheduled to be operational by year-end 2011.

 

   SAUDI ARABIA / JAPAN

 

Revolutionary Refinery Design Initiative Moves Forward

Engineering for a revolutionary new refinery design moved forward recently when members of an international research consortium approved plans that will put a 3,000-bpd semi-commercial facility online in 2010.

The step is the latest in an initiative by Saudi Aramco, Nippon Oil Co, and Saudi and Japanese researchers to create the world’s first high-severity fluid catalytic cracking (HS-FCC) refinery, which converts low-value, heavy gas-oils into high yields of higher value feedstock suitable to supply petrochemical processes.

The configuration enhances production of light hydrocarbons, which are used as building blocks for plastic manufacturing, compared to traditional reactor designs. 

This higher yield design makes this process potentially more valuable for developing integrated refinery and petrochemical complexes.

Saudi Aramco was represented at the 'design basis review' kick-off meeting for the first semi-commercial plant by Oil to Chemicals Research and Development Project team members Christopher Dean, Allan Fox and Mohammed Al-Tayyar.

The meetings were held at the Houston offices of Shaw Stone and Webster, which is preparing the front-end engineering package for the HS-FCC process.

Also present were representatives of Nippon Oil, Axens and Chiyoda, which will build the plant. This first plant will be constructed in a Nippon refinery and be in operation by 2010.

The HS-FCC project is a partnership in technology innovation with Saudi Aramco, King Fahd University of Petroleum and Minerals (KFUPM), Nippon and the Japan Petroleum Energy Center.

The project is part of Saudi Aramco’s Downstream and Strategic Research Program under the Research and Development Center.

More than 12 years in development, the project was designed in three phases. The first two were a small, lab-scale testing facility at KFUPM and an extended operation of a 30 bpd demonstration plant at Ras Tanura Refinery.

The third and current phase is the design, construction and operation of the 3,000 bpd semi-commercial unit in Japan. A commercial-size 40,000 bpd design is also being developed at the same time.

 

McIlvaine Company,

Northfield, IL 60093-2743

Tel:  847-784-0012; Fax:  847-784-0061;

E-mail:  editor@mcilvainecompany.com;

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