sept 07 update

Holly Corporation said August 3 that it experienced an operational malfunction related to its fluid catalytic cracker ("FCC") processing unit at the Navajo Refinery in Artesia, NM. An electrical ground fault initially caused the FCC to shutdown during a heavy lightning and thunderstorm. The malfunction occurred during the attempt to restart the FCC unit following the shutdown.

It is anticipated it will take ten to fourteen days for this unit to be repaired and placed back in service. While this repair was being made, the Navajo Refinery is expected to reduce crude charge rate by approximately 30,000 barrels per day ("BPD").

Interline Resources Closes Financing for Wyoming NorthCut Refinery

Interline Resources Corporation has closed on its financing for its Wyoming NorthCut refinery and announced that major construction will begin immediately. PCG Midstream LLC of Utah will provide funding for the refinery.

Preliminary construction has already begun at the site with a scheduled completion and plant start-up in mid-December.

The refinery will be a 4,000 BBL per day topping plant producing off-road diesel and gasoline as a component for ethanol blending. This culminates 4 years of planning, permitting and engineering for this refinery.

Interline was granted its EPA small refinery status in June of this year.

This will be the first new refinery built in Wyoming in the past 25 years. The facility will provide a local processing point for Powder River Basin oil producers as well as local consumers. Interline believes this to be a significant addition to Wyoming's future fuel requirements.

Blaze at Valero Refinery

On August 5 the Valero Port Arthur Refinery reported a fire near its coker unit.

There were no injuries and no danger to the community associated with this incident.

An investigation was begun into the cause of the fire, and a damage assessment was also under way.

Sunoco Says no more '07 Planned Refinery Maintenance

Independent northeast U.S. refiner Sunoco Inc. said on August 2 it had no major maintenance outages planned for the remainder of the year.

"No major turnaround activity is scheduled in the second half of 2007," a note on the company's Web site said concurrently with a conference call with analysts to discuss second-quarter financial results.

During the call, company officials said an expanded fluid catalytic cracker at Sunoco's Philadelphia refinery was restarted in mid-April.

Tie-in work on a crude unit debottleneck project at the Toledo refinery in Ohio occurred in May and June and the unit was restarted early last month, the officials said.

Meanwhile, Sunoco's refinery in Tulsa, Oklahoma, returned to full operation in early July, after maintenance work during the previous month, they added.

Arizona Refinery Case May Redefine “Sacred Land”

A legal fight begun by a small Native American tribe over a construction project in Yuma, Ariz., could potentially redefine the concept of sacred land.

While current federal law protects tribes' religious or burial sites, a lawsuit introduced by a Quechan Indian leader is seeking to include potential tribal sites to that protected list as well, The New York Times said August 12.

Mike Jackson, whose tribe has about 3,300 members, is attempting to stop the creation of a $4 billion oil refinery by alleging tribal artifacts may exist on its construction site.

In his suit, Jackson demands a lengthy and costly archaeological investigation be launched at the site to determine if his claim has merit. The demand comes despite claims by officials at Arizona Clean Fuels, the company behind the refinery, that no tribal artifacts have been found near the site.

The Times said if Jackson is successful in his efforts, his case could redefine what is considered sacred tribal land and open the door for additional lawsuits from other U.S. tribes.

Fire Shuts Crude Unit at Chevron's Pascagoula Refinery

A fire struck one of two crude units at Chevron's 325,000 barrels per day Pascagoula, Mississippi, refinery on August 16, injuring no one but helping send gasoline prices nearly 2 per cent higher.

A "major portion" of the plant, Chevron's biggest in the United States, continues to operate, company officials told the media.

The blaze was noticed at 2:15 pm Central Time and contained a couple of hours later, but still was burning at 8:30 pm CDT. They were unable to say what caused the fire, how much damage it had caused or when full operations would be restored.

"There were no injuries," said Steve Renfroe, the refinery public affairs official. Renfroe said that the fire was at the No 2 crude unit at Pascagoula, and that the No 1 crude unit at the refinery was operating. A crude unit is at the core of the refining process, breaking down crude for processing into refined fuels.

Pascagoula is one of the 10 largest refineries in the United States and fears that the fire would reduce fuel supplies lifted futures prices, with September gasoline up 1.75 percent to $2.0130 per gallon in after hours trading.

Those gains and a 60-cent rise in the benchmark crude contract helped markets recover their poise following much deeper losses on August 16, when the energy complex suffered another wave of selling linked to global credit market turmoil.

Gasoline, diesel fuel, jet fuel, and heating oil produced at Pascagoula flow into the Colonial Pipeline, the biggest US pipeline, which runs from Texas up to the New York area. Another Chevron spokesman said crews for the Thursday night shift reported as usual and that Friday morning's crews were being told to report for work.

The plant has suffered extended outages twice in the past decade, most recently in 2005, after Hurricanes Rita and Katrina forced it to shut down for six weeks. It was also closed for three months in 1998 when heavy rains and a storm surge from Hurricane Georges flooded the plant.

Unlike 1998, when world oil markets were awash in crude and US oil cost a sixth of its current price, traders are on high alert for any supply disruption that could erode gasoline stocks, which have only recently recovered to normal levels, or curtail heating fuel supplies ahead of the winter.

Oil traders are also anxious about the possibility that seasonal hurricanes could deal another blow to Gulf Coast refineries, which account for nearly half total US capacity. The season's first big storm, Hurricane Dean, is expected to strengthen into a Category 4 storm over the next few days, although recent forecasts show it crossing the Yucatan peninsula and entering the southern Gulf, possibly sparing coastal plants.

Valero Agrees to $232 Million in CAA Controls at Former Premcor Sites

The Department of Justice and the U.S. Environmental Protection Agency have reached an agreement with Valero Energy Corp. that provides for a $4.25 million penalty and $232 million in new and upgraded pollution controls at refineries in Tennessee, Ohio and Texas that were formerly owned by Premcor Inc. The states of Ohio and Memphis-Shelby County, TN. have also joined in the August 17 consent decree and will receive a portion of the civil penalty.

The agreement requires new pollution controls to be installed at refineries in Port Arthur, Texas; Memphis, Tenn.; and Lima, Ohio, that, when fully implemented, will reduce annual emissions of nitrogen oxide by more than 1,870 tons per year and sulfur dioxide by more than 1,810 tons per year. The new controls will also result in additional reductions of carbon monoxide, volatile organic compounds and particulate matter from each of the refineries. These pollutants can cause serious respiratory problems and exacerbate cases of childhood asthma.

"This Consent Decree continues the commitment of the Department of Justice to assure that all refineries in the United States are in compliance with the Clean Air Act," said John C. Cruden, Deputy Assistant Attorney General for the Justice Department's Environment and Natural Resources Division. "This settlement, which was done in conjunction with state and local governments, requires new pollution abatement equipment, reduces air pollutants by a significant amount, obtains a meaningful penalty, and secures important environmental projects for the impacted communities."

"Valero committed to spend more than $200 million on upgrades, which will reduce emissions of harmful air pollutants by several thousand tons per year," said Granta Nakayama, assistant administrator for EPA's Office of Enforcement and Compliance Assurance. "Today's settlement is good news for people living near these refineries; local residents will be able to breathe easier knowing that the air in their communities will be cleaner."

The settlement requires an additional $1.6 million to be spent on the following projects serving the Port Arthur, Texas community:

$1 million to support a local health center serving under and un-insured residents of the Port Arthur area, for the diagnosis and treatment of asthma and other respiratory illnesses that may be caused or exacerbated by air pollution.
A mobile air monitoring van for the Local Emergency Response Commission.
"Shelter-in-place" air control systems at the Booker T. Washington Elementary and Memorial 9th Grade Center schools to detect, isolate and filter air pollution that may result from emissions in the Port Arthur area.
A project to replace existing high-emitting water heaters with new low-emission water heaters in low-income residences in the Port Arthur area.
Additional supplemental projects will be performed in the communities near the Lima and Memphis refineries, such as the installation of equipment on municipal diesel trucks and buses to reduce particulate and ozone-forming emissions, and the installation of new equipment to control wastewater treatment plant odors. Projects to further reduce "fugitive" and unregulated emissions from refinery equipment are also being undertaken at each of the three refineries covered by the agreement.

This settlement is part of the EPA's national effort to reduce air emissions from refineries. Through such federal settlements, approximately 84 percent of domestic refining capacity is now operating under pollution reduction agreements. Including the settlement with Valero, 89 refineries located in 26 states across the nation are now under agreements to address environmental problems and to invest over $4.7 billion in new pollution control technologies.

The three refineries covered by the August 16 settlement produce more than 650,000 barrels of oil per day, representing nearly four percent of domestic refining capacity in the United States.

The refineries were previously owned by Premcor and purchased by Valero in late 2005. In June 2005, before Valero acquired Premcor, a similar settlement was reached with Valero that addressed the refineries it owned at that time. Under that agreement, Valero committed to spend at least $700 million at 14 refineries nationwide.

The agreement was lodged in the U.S. District Court for the Western District of Texas and is subject to a 30-day public comment period and final court approval.

Coffeyville Resources Restarts Flooded Kansas Refinery

Coffeyville Resources Refining & Marketing, LLC said August 17 that it has restarted most of the operating units at its oil refinery, which had been shut down since a record flood of the Verdigris River swept over the facility June 30-July 1.

Process operations which have been restarted include both crude units, both vacuum units, the naphtha hydrotreater, the catalytic reformer, two distillate hydrotreaters, the fluid catalytic cracking unit, the alkylation unit, the isomerization unit, the delayed coking unit and sulfur recovery facilities. Remaining units are in varying stages of startup.

Coffeyville Resources said it will significantly beat earlier projections that the refinery would be fully restored by mid-September.

The refinery is operating at a stable but reduced throughput while recovery efforts continue. It has operated at rates up to 98,000 barrels per day post startup, but overall crude charge rates will vary during the next few weeks. Before the flood, the refinery had been processing approximately 108,000 barrels per day of crude oil.

"Coffeyville Resources is moving much faster than anyone thought possible to restore refinery operations," said Jack Lipinski, chief executive officer. "Our success has been made possible by the focus, drive and sustained high productivity of our employees and contractors, the exceptional response to our critical parts and equipment needs from vendors and suppliers, and the support of our shareholders."

The company cautioned that mechanical challenges created by the flooding that reached depths of over six feet will require the company to carefully monitor all equipment as it increases throughput. Safety will continue to be the primary focus.

"We are cautiously optimistic that all units will operate normally as we complete our repair program and bring the refinery back to full production," Lipinski said. "However, restoring a severely flooded refinery is a difficult task, and operational issues may arise that could delay our return to maximum rates or require units to be shut down."

Product from pre-flood inventory and restored operations has been shipped by pipeline as it became available.

The first refinery unit returned to service was the catalytic reformer, which came on line at reduced capacity August 6. Other major units followed shortly thereafter.

BP, Indiana to Reconsider Whiting Permit

Responding to a groundswell of protests from politicians and the public, BP and Indiana regulators agreed August 15 to reconsider a permit that allows the Midwest's largest oil refinery to significantly increase the amount of ammonia and suspended solids released into Lake Michigan.

Neither the oil company nor the state would commit to a specific solution. But for the first time they softened their defense of a permit that critics say counters decades of efforts to clean up the lake, a magnet for sport fishing and the source of drinking water for Chicago and scores of other communities.

At a wide-ranging meeting at the U.S. Environmental Protection Agency's Chicago office, a top BP executive pledged to review suggestions from Mayor Richard Daley, the EPA and environmental groups about technologies that could reduce pollution from the company's Whiting, Ind., refinery.

BP, which aggressively markets itself as an environmentally friendly corporation, sought to dump more ammonia and suspended solids into Lake Michigan as part of a $3.8 billion expansion that will enable the refinery to process more, heavy Canadian crude oil. Officials justified the increase in part by noting that the project will create 80 permanent jobs and 2,000 construction jobs.

Federal and state regulators contend they have no legal authority at this point to rescind the permit. But a growing chorus of complaints prompted another look.

"This isn't a trivial controversy," Stephen Elbert, vice chairman of BP America, told a panel of politicians, regulators and advocates. "People want this fixed yesterday. We've got 5,000 BP employees that are concerned, not only about the contamination but about this smack on the company."

When BP secured a new water permit earlier this year, federal and state regulators agreed there isn't enough room at the 1,400-acre site to upgrade the refinery's water treatment plant to keep more pollution out of Lake Michigan.

The permit allows BP to dump an average of 1,584 pounds of ammonia and 4,925 pounds of suspended solids into the lake every day. The additional solids, tiny sludge particles that escape water treatment filters, are the maximum allowed under federal guidelines.

Indiana regulators also exempted the company from meeting tough limits on mercury pollution for the next five years.

Elbert said the refinery wouldn't begin releasing more pollution into the lake until the expansion project is finished in 2011. Based on past performance, he said, the amount probably would be far less that the permitted limits.

But critics argue the permit sets a bad precedent, noting the maximum amount of ammonia dumped into the lake would increase by 54 percent and the amount of solids would increase by 35 percent.

"There will be a day when water is more important than gasoline," said David Ullrich, a former top EPA official who directs the Great Lakes and St. Lawrence Cities Initiative, an advocacy group formed by the region's mayors. "Even if everything is legal here, the question is whether it's the right thing to do."

Few in the meeting voiced support for an EPA proposal to offset the additional BP pollution with other projects that would help clean up Lake Michigan. The focus remained on the oil company and what it can do to meet the long-standing goal of eliminating pollution in the Great Lakes, the world's largest source of fresh surface water.

Chicago officials said they've found several technologies in use at other refineries that dramatically reduce ammonia and suspended solids. They pressed Elbert to explain how more water treatment equipment couldn't fit on a site as large as the Whiting refinery, a question the executive said he could not answer.

"The environment is a prominent part of BP's advertising," said Sadhu Johnston, Daley's deputy chief of staff for environmental initiatives. "We're sure they can make it a prominent part of their actions, too."

Thomas Easterly, director of the Indiana Department of Environmental Management, said relatively few complained about the BP permit when it was under consideration earlier this year, something the state's critics countered could be attributed to a lack of public outreach.

Pressure continued to mount on the company and regulators to do something. U.S. Sen. Barack Obama (D-Ill.) and Rep. Rahm Emanuel (D-Ill.) called for congressional hearings into the BP permit and how it squares with provisions in the Clean Water Act.

Meanwhile, an environmental group, the Alliance for the Great Lakes, filed a formal appeal in Indiana asking a state environmental judge to block the permit from taking effect.

Although Elbert said it would be impossible for BP to completely eliminate pollution from the Whiting refinery, he said the company will continue to look for ways to reduce the amount of toxic chemicals released into the environment.

Frontier Oil Corporation and CB&I Execute $45.0 Million Fixed Price Agreement for El Dorado Coker

Frontier Oil Corporation announced that it has entered into an approximately $45.0 million fixed-price construction contract with an affiliate of CB&I to engineer, construct and install two new coke drums and related equipment at Frontier's El Dorado, Kansas refinery. This contract, plus expected add-ons, is projected to cover approximately 85% of the $58 million project scope. Completion is anticipated in April 2008.

Autumn Refinery Maintenance Work Centered on Midwest

Midwest oil refineries are planning a heavy load of maintenance this autumn that could keep fuel supplies in the heartland tight through the rest of the year, according to a Reuters survey released August 30.

Other regions of the United States, however, could see a lighter-then-normal fall maintenance season after many plants completed their overhauls earlier in the year — taking some of the pressure off thin fuel stocks in the world's biggest energy consumer.

U.S. gasoline supplies are running about 8 percent below last year's levels due to the persistent refinery outages, with Midwest stocks 9 percent below a year ago, according to the most recent government data.

Experts said the focus of refinery maintenance in the Midwest region comes after plants in the area kept running to take advantage of sterling profit margins while other refineries continued a prolonged recovery from coastal hurricanes in 2005.

"The Midwest has hung on for so long after Katrina that there is a lot there that never went down," said Mark Routt, an analyst with consultancy group ESAI in Massachusetts.

September is expected to be the heaviest month for Midwest refinery maintenance, with 351,000 barrels per day of the region's 8.27 million bpd of crude distillation capacity scheduled to shut.

Supplies of gasoline and diesel in the northern tier of the Magellan Pipeline, which runs from Houston to Minnesota are expected to be extremely constrained as two of top refineries are seen going out concurrently.

California Orders Cleanup at Bakersfield Refinery

State regulators will force a polluted refinery's owners to clean up decades worth of contaminated soil and groundwater lying beneath the facility.

The Big West Oil of California refinery in Bakersfield was partially shut down in June after releasing more than 1,000 barrels of oil from an underground pipeline.

In August , the California Regional Water Quality Control Board issued a formal order requiring the refinery's current and past owners to clean up the toxic mess, some of which dates to the mid-1980s.

That's in addition to the water board's June order demanding that the current owner, Big West, address recent pollution stemming from the oil leak.

Environmentalists said the new requirements would force polluters to clean up the site and would be more effective than previous policies allowing refinery operators to remove contaminants voluntarily.

City officials said recently some of the pollution could contaminate public drinking water supplies, including a Bakersfield well and the Kern River.

On August 27, state Sen. Dean Florez, D-Shafter, asked Attorney General Jerry Brown to take legal action against Shell Oil Co., the company responsible for past leakages. A spokesman for Brown said he had yet to decide whether to pursue a case against Shell.

BP Reassesses Choices for its Indiana Refinery Renovation Plans

BP has backed away from a refinery renovation plan that would have led to increased discharges into Lake Michigan of ammonia and various bits of effluent, including mercury.

BP's refinery goals are important: increasing efficiency and adding flexibility to handle Canadian tar sands. Everyone in the Midwest would benefit from more gasoline being available. So it's crucial that the company get lots of support in figuring out how to make its plant on the Indiana shoreline meet those goals without dumping more toxins into the lake.

A similar plan for expansion and flexibility at the Marathon refinery in Detroit must be held to high environmental standards, too.

Marathon May Spend $1 Billion on Detroit Refinery

Marathon Oil Corp., the biggest refiner in the U.S. Midwest, may spend $1 billion upgrading its Detroit refinery to handle heavy Canadian crude oil.

A decision on the expansion is expected in the fourth quarter, Linda Casey, spokeswoman for Houston-based Marathon, said in a telephone interview. The project, which would create 135 jobs and require about 800 construction contractors, could begin ``the end of this year or the first of next,'' with completion in 2010, she said.

The refiner is considering increasing the plant's daily capacity to 115,000 barrels from 100,000 barrels. Marathon agreed on July 31 to purchase Canada's Western Oil Sands Inc. for $5.46 billion to gain access to crude deposits that may be the largest outside Saudi Arabia.

ConocoPhillips, also based in Houston, and BP Plc of London are also proposing Midwest refinery expansions that have been met with opposition based on environmental concerns. BP said it may scrap a $3.8 billion project in Whiting, Indiana, because of public resistance.

BRAZIL

Cost of Petrobras- PDVSA 200,000 bpd Refinery in Brazil Soars

The cost of the refinery that state-owned Petrobras and Venezuela's PDVSA are building in northeastern in Brazil will be some $4.5 billion, or nearly double the initial price tag, executives of the Brazilian oil company said.

The Abreu Lima refinery near Recife, the capital of Pernambuco, is a bi-national project that has been on the drawing board for years and now finally appears close to breaking ground.

Petrobras Logistics Chief Paulo Roberto Costa said August 14 that the refinery's projected cost has soared from $2.5 billion to $4.5 billion due to rising prices for oil industry services and equipment.

In June, environmental regulators in Pernambuco approved the project, opening the way for construction to begin.

Costa and other Petrobras executives joined CEO Jose Sergio Gabrielli at a press conference to discuss the energy company's 2008-2012 investment plan.

Petrobras plans to invest $112.4 billion in its operations over the next five years, with $29.6 billion going into refining, transportation and marketing.

The planned refinery in Pernambuco will have the capacity to process 200,000 barrels per day (bpd) of heavy crude, including 100,000 bpd from Petrobras's Venezuelan fields.

Costa said Brazilian President Luiz Inacio Lula da Silva would take part in the groundbreaking ceremony for the refinery, which is expected to start operations in 2010 even though PDVSA has not met some of the requirements set by Petrobras for moving ahead with the jointly owned company that will run the project.

Petrobras will own a 60 percent stake in the refinery, while PDVSA will own the remaining 40 percent.

It is not yet known whether President Hugo Chavez will attend the groundbreaking ceremony, but Lula said several months ago that he had invited his Venezuelan counterpart to participate in the event next June.

Another project that has moved ahead slowly is Chavez's proposal for a 12,515-kilometer (7,776-mile) conduit to transport Venezuela's abundant natural gas to Brazil, Argentina, Uruguay and Paraguay at an estimated cost of $22 billion.

Brazilian domestic demand for natural gas is expected to reach 121 million cubic meters per day in 2011, substantially above the current level of 45.5 million cubic meters per day, according to Petrobras estimates.

Brazil currently imports 26 million cubic meters per day from Bolivia, or a bit more than half of its needs, but this high level of dependence on one supplier has even been questioned by Lula, especially since La Paz increased prices.

Regarding future supply, up to 30 million cubic meters per day will be imported from Bolivia and 71 million cubic meters per day will be produced by Petrobras in Brazil, requiring 20 million cubic meters per day from other sources to meet demand in the market.

Venezuela, the world's No. 5 oil exporter, has the eighth-largest gas reserves in the world and the largest in South America at 150 trillion cubic feet. Recent studies, in fact, have shown that the country's reserves could be even more extensive.

The South American country may have another 196 trillion cubic feet of gas that, if confirmed, would give it the world's third-largest reserves, trailing only Russia and Iran, according to estimates.

Chavez recently said the pipeline project was at a standstill.

"We're studying it, we have until December to complete the initial studies," Petrobras CEO Gabrielli said.

COLOMBIA

Colombia Uncovers Fuel Theft at State-run Refineries

Colombian authorities have uncovered continuous fuel theft at oil refineries of state-owned Ecopetrol, police said August 20.

In a joint operation, the attorney general's office and the investigative police arrested one of those implicated, seized four tanker trucks and recovered 159,600 gallons (more than 590,000 liters) of liquefied petroleum gas (LPG).

Police said in a communique that the raid took place August 19 in Yumbo, an industrial town near the southwestern city of Cali and site of the Ecopetrol refinery from which the fuel was stolen.

Implicated in the theft were officials of the state corporation and an LPG wholesaler, the communique said, adding that the theft had been going on for five years.

The officials manipulated and disconnected the fuel-gauging and delivery systems, including the cable that transmits information on the flow of fuel through the pipeline.

Police said that the information is transmitted by satellite to Ecopetrol's control center in Bogota.

The cable was disconnected for periods of 10-15 minutes, enough time to steal from 100 to 150 barrels of fuel, police said.

ASIA

CHINA

Saudi Deal in Question as Sinopec Delays $1.2 Billion Refinery Startup

Sinopec Group will delay the startup of a $1.2bn refinery in east China by at least nine months, adding uncertainties to a joint-venture and oil supply deal with Saudi Arabia, industry sources told Reuters.

Sinopec, parent of Asia’s top refiner Sinopec Corp, aimed to start the 200,000 bpd refinery in the coastal city of Qingdao around September 2008 or later, they said, versus the firm’s original target of the end of this year.

A Sinopec Corp official at the secretariat for the Board of Directors said on August 2 the refinery would be delayed slightly, but declined to elaborate.

The Chinese energy giant has yet to finalize a deal for state-run Saudi Aramco to take a stake in the project, or how much crude the world’s top oil exporter will sell to the plant.

A delay means Aramco will have to readjust its supply plans into Asia, with China its main buyer in the region.

Riyadh was expected to take a 25% stake in the Qingdao plant, its second China refinery deal, and supply up to 80% of the plant’s crude requirement.

“It’s not certain now – the deal with the Saudis,” said one source familiar with the situation.

Officials at Saudi Aramco’s Beijing office were not immediately available for comment.

The deferment is expected to put a damper on China’s hefty crude oil imports – growing at 11.2% in the first half of 2007 from a year ago – as the world’s second-largest oil user plans to raise its refining capacity by some 10% in 2008.

One reason for the delay, the source said, was that Sinopec’s new chairman, Su Shulin, wants to ensure the project meets tighter environmental standards as it is situated near the sailing site for the Olympics next August.

A second source, that put the delay to end-2008, linked the move to the sudden resignation in June of former chairman Chen Tonghai, an industry veteran Chinese media said was under investigation for alleged graft.

By September 2008, it would mean a stretch of more than 39 months since construction began at Qingdao, in Shandong province, in June 2005. The current stage of construction was not immediately known.

It took the Chinese firm only 22 months to complete a similar-sized refinery in the southern island of Hainan.

China is set to add about 710,000 bpd of crude refining capacity next year, some 10% of the country’s total fuel consumption, which will boost crude imports to fresh highs and help cut back refined fuels imports. China now imports nearly half its crude requirements.

The Qingdao plant would be Saudi Aramco’s second refinery venture in China, after taking a 25% stake in the 240,000-bpd Fujian plant in southern China in partnership with ExxonMobil Corp.

PetroChina to Build Refinery in Guangdong

An insider with PetroChina told China Oil, Gas and Petrochemicals (OGP) that PetroChina has plans to build a greenfield refinery with a production capacity of more than 10 million tons a year in Zhuhai, a coastal city in south China's Guangdong province.

At present, Guangdong is home to several operating refineries, such as Maoming Petrochemical and Guangzhou Petrochemical, with others under planning and construction, such as CNOOC's Huizhou refining project, Sinopec's Nansha refining project and PetroChina's Zhuhai refining project.

Whether the Zhuhai project will be developed into a refining and ethylene project remains unknown. But according to the insider, there will be no problem gaining state approval for the Zhuhai project.

Though Guangdong seems crowded in terms of refining capacity, fuel shortages frequently take place there. PetroChina transports a large amount of oil products from China's northeast refineries. To ease the tight oil supply, the Guangdong provincial government is glad to invite more oil companies to invest in the area.

According to the insider, another refinery in Guangdong would not undermine the state's principle of developing refineries across the country.

Almost a decade has passed since the reform of China's petroleum industry, and the country so far has not yet formed a rational refinery layout plan. Major oil-consuming centers such as the Yangtze River Delta, the Pearl River Delta and the Bohai Rim area still lack refining capacity.

The insider explained, "Besides the local government, PetroChina should be the major investor and operator of the Zhuhai refining project, because the company has enough capital in its hand and abundant share crude oil overseas. Even if the Zhuhai project does not process the share crude oil, PetroChina will directly import crude oil to feed the would-be refinery."

The neighboring areas will be the major oil market, but the possibility of exploring overseas markets such as East Asia will not be phased out. At present, both Sinopec and PetroChina are thinking over the possibility of building export-oriented refineries at home or overseas, with the Zhuhai refining project probably to be an export-oriented one.

Though now the state sets strict controls over the export of resource-related products, it is believed such policies are temporary. With long term considerations, trade in oil will be a major channel for Chinese oil companies to become a major member of the international oil market.

INDIA

Punj Lloyd Bags Bina Refinery Sulfur Block Contract

Punj Lloyd, a global EPC services provider in energy and infrastructure domains, has got a Rs 590 crore contract for building a sulfur block at Bina Refinery of Bharat Oman Refineries at Bina, Madhya Pradesh.

According to an official release, the lump-sum turnkey contract entails engineering, procurement, construction and commissioning assistance (EPCC) services.

The scope of work includes a 360 TPD Sulfur Recovery Unit, 470 TPH Amine Recovery Unit, 360 TPD Tail Gas Treatment Unit and 125 TPH & 49 TPH Sour Water Stripping Units. The project is scheduled to be completed within 25 months. This will be the largest process unit in a grass root refinery for the company, which has executed 6 other sulfur recovery units in the country, the release said.

With this, the order backlog (anticipated revenues from the uncompleted portion of existing contracts as on June 30, 2007 and contracts obtained thereafter) for the group stands at Rs 16,480 crore.

Building Rajasthan Refinery no Deterrent for $750 Million Cairn Pipeline Plan

Cairn and ONGC will not “go slow” on the construction of the pre-heated pipeline to carry the “waxy” crude oil from the Barmer field despite the Rajasthan government saying it will build a refinery to process the same oil, a move that will make the $750-million pipeline redundant.

“The pipeline is the most feasible option and is likely to come up before the start of the crude oil production,” said a senior official of Oil and Natural Gas Corporation (ONGC), Cairn’s 30 per cent partner in the oil field.

Building a refinery with a capacity of around 7.5 million tonnes per annum takes around 40 months. The work on the pipeline is expected to take 18 months.

“About 83 per cent of engineering design work has been and tenders for laying the pipeline will be opened soon,” said a Cairn executive.

Cairn India’s oil discovery in Rajasthan is the largest in the country since ONGC found oil in Bombay High in 1972. The field will produce 150,000 barrels per day during the four-year peak production period.

The Cairn executive said a refinery in Rajasthan would mean another buyer for their crude oil. “However, we know the economics of the refinery is dubious at best,” he said.

Another senior ONGC official agreed. “It is not just the issue of processing crude oil. There is no assured market in Rajasthan as the state consumes only 5 million tonnes of oil products per year. Moreover, with new refineries coming up in Bina in Madhya Pradesh and Bathinda in Punjab, there will be no market for the Rajasthan refinery,” he said.

“There is not enough crude oil in the field to justify a new refinery,” he added.

Pricing is another issue that will have to be resolved before oil from the field starts flowing.

With the oil being of poor quality, Cairn says the price it will get will be around 10 per cent lower than the Brent crude price, the global benchmark. Refiners have, however, set their eyes on a discount of more than 20 per cent on the benchmark.

“The contract allows pricing to follow the international prices of similar oil. If we and the buyers do not agree on the price, we have the option of seeking an expert opinion,” said the Cairn executive.

The pricing will determine how cost-effective the pre-heated pipeline will be. The cost of operating the pipeline, with its heating stations, will be higher than normal pipelines. If Cairn does not get a good price, the gains may not justify the cost of the pipeline.

The buyer is also yet to be finalized. “We are in talks with almost all refineries. The Bathinda and Bina refineries are keen on taking our crude oil as well,” said the Cairn executive.

Not surprisingly, therefore, Cairn is unwilling to fix a date for the start of production. It earlier said the production would begin in early 2009. ONGC says it is “hopeful” the production will begin in the “end of 2009, though there remains a lot of work to be done”.

“There are many things to be done. Design work has to be completed, land has to be acquired, heating stations have to built and more wells are be drilled. All of this has to synchronise with the start of production. Production may be delayed by some time,” said the ONGC executive.

HPCL to Shut Mumbai Refinery in Jan-Feb

Hindustan Petroleum Corp. Ltd. has delayed shutting its Mumbai refinery to integrate new clean fuel units as equipment has not been delivered, and now hopes to begin work in January, a company source said August 6.

The firm had planned to shut the 110,000 bpd refinery for 35 days in October-November 2007.

"The shutdown has been deferred to January-February as our contractors BHPV (Bharat Heavy Plates and Vessels) delayed in providing heaters and boilers," the official, who did not want to be named, told Reuters.

"Our revised shutdown plan for our two refineries is subject to BHPV delivering the heaters and boilers as per desired schedule. They promised us some dates when our chairman met them recently," he said.

The firm hopes to complete a similar program at its 150,000 bpd Vizag refinery in southern India by December 2007, and aims to commission the new units sequentially by March without ever shutting the plant fully.

Both projects will integrate new clean fuel producing units with existing ones, and as a result raise capacity at Mumbai to 120,000 bpd and at Vizag to 166,600 bpd.

The units -- designed to meet tighter fuel standards -- were to have been completed in 2006, but have been repeatedly delayed.

HPCL will also shut a 12,000 bpd fluidized catalytic cracker (FCC) unit at Vizag for 120 days for a revamp from early 2008.

The firm has decided to build a new 29,000 bpd FCC at the Mumbai refinery by the end of 2009, rather than upgrading the existing facility.

"The new FCC unit will increase the production of petrol and liquefied petroleum gas," the official said.

INDONESIA

Indonesian, Japanese Firms to Build $2 Billion Sulawesi Refinery

Indonesian oil and gas companies Pertamina and PT Medco Energi Internasional and Mitsubishi Corp of Japan will begin the construction of a liquefied natural gas refinery, estimated to cost US$2.01 billion in the eastern Sulawesi Island next year, the companies said on August 20

The Donggi-Senoro refinery will have the capacity to refine two million tons of LNG a year and is expected to start commercial operations in 2010, the Energy and Mineral Resource Ministry said in a statement.

The project will use gas reserves from the Senoro field operated by Medco's unit, PT Medco E&P, and from other fields in the Matindok Block, run by PT Pertamina E&P.

LNG from the refinery will be shipped to Mitsubishi Corp in Japan. Mitsubishi holds a 60 percent stake in the project while Medco and Pertamina each have 20 percent interest.

The refinery project was among the US$4 billion worth of energy projects that were inaugurated by President Susilo Bambang Yudhoyono and visiting Japanese Prime Minister Shinzo Abe.

PANAMA

Occidental $7 Billion Panama Refinery Verdict unlikely this Year

A final assessment of Occidental Petroleum Corp's proposed $7 billion oil refining project in Panama is unlikely to be completed before the end of this year, the company said on August 2.

A $20 million feasibility study into building a refinery capable of processing 350,000 barrels of crude oil a day will not be finished for "several months" and is unlikely to be ready this year, Occidental spokesman Richard Klein told Reuters.

In May this year, Occidental along with Qatar Petroleum and the Panamanian government signed an agreement to develop the project that which would produce oil for the Panamanian, regional and U.S. markets.

If completed, the project will help address the shortfall in U.S. refining capacity, a problem highlighted by Hurricane Katrina in 2005, but which continues to underpin oil prices.

The proposed refinery is expected to be located at Puerto Armuelles, on Panama's Pacific coast and close to the border with Costa Rica.

Panama's deputy minister for trade, Manuel Jose Paredes, said he was sure the project would go ahead.

He said this and other projects under consideration could help Panama "play an important role as an energy center for the region."

He confirmed a consortium led by Spain's Tecnicas Reunidas S.A. had put forward proposals to build a multibillion dollar pipeline that would traverse the isthmus from Panama City to the Atlantic port of Colon, although he said the project was in the early stages.

THAILAND

Thailand’s PTT to Restructure Refinery Units

PTT Plc, Thailand's largest oil and energy conglomerate, is embarking on a five-year plan to restructure its refinery business to improve its competitiveness by merging the group's refinery affiliates.

According to senior vice-president Anon Sirisaengtaksin, massive additional capacity coming onstream in the next two years could lead to a surplus of oil refinery capacity across the world.

In an attempt to mitigate the affects of a cyclical downturn, PTT would pursue an Oil Integration Management (OIM) program to help share backup resources and facilities among the group, he said.

"The integration among [the refineries] will help create a supply chain inside our group, particularly in oil refining production for vehicles and for petrochemicals, which will be adjustable in coping with market demand instead of [functioning separately]," he said.

"They will be allowed to share facilities to maximize benefits from resource usage."

The three areas of co-operation under the OIM scheme include crude co-purchases in order to strengthen bargaining power; joint investments to upgrade product quality in bids to meet Euro-4 regulations effective over the next two years; and exporting excess products overseas.

The OIM scheme will involve only minimal expenses, mainly for improving information technology systems, but cooperation among the affiliates will be essential if all parties and PTT are to reap the full benefits.

PTT is considering setting up a new entity to manage all of its refinery affiliates, in hopes of achieving full synergy among them, Mr Anon said.

Merging the refineries under a single unit is aimed at maximizing operational and management efficiency to compete with strong refiners in other countries.

The oil refineries under the PTT group have a total capacity of 340,000 barrels per day, accounting for 34 percent of the country's refining output of one million barrels per day.

The economies of scale of the PTT group are less than the 500,000 barrels per day of capacity due to start operating in India in 2009.

PTT has set aside a five-year investment budget of 80 billion baht for its oil refinery business, mainly to improve production efficiency. The sum includes 28 billion baht for Thai Oil; 22 billion for Star Petroleum; 10 billion for IRPC Plc, and 12 billion for Bangchak Petroleum Plc. IT also includes 17 billion baht for the new company that PTT will control once it completes the merger of Rayong Refinery and The Aromatics (Thailand) Plc.

VIETNAM

Vietnam Shinpetrol to Start Small Refinery in September

LPG trader Shinpetrol will start operating a small oil refinery with an initial capacity of 2,000 barrels per day in southern Vietnam next month, local media reported on August 30.

The refinery in the Mekong Delta city of Can Tho was expected to have an internal rate of return of 23.46 percent, the Dau Tu Chung Khoan (Stock Investment) magazine quoted Chief Executive Nguyen Duy Hung as saying.

The plant, which has a small terminal for 1,000-DWT vessels, will produce oil products including fuel oil, diesel, LPG and gasoline, Hung said.

He also said the firm planned to upgrade the terminal to receive bigger tankers of about 10,000 DWT.

Shinpetrol, a subsidiary of Vietnam's largest state-owned shipbuilder Vinashin, has set a target to achieve revenue of 752 billion dong ($47 million) this year.

Vietnam is Southeast Asia's third-largest crude oil producer but still relies on oil product imports as it lacks major oil refineries.

Its first large-scale oil refinery, Dung Quat, will have a capacity of 130,000 barrels per day when it begins operations by February 2009.

EUROPE / AFRICA / MIDDLE EAST

ITALY

Foster Wheeler Awarded a Contract by Italiana Energia e Servizi SpA for Mantua Refinery Modernization

Foster Wheeler Ltd has announced that its Milan-based subsidiary Foster Wheeler Italiana SpA, part of its Global Engineering and Construction Group, has been awarded a contract by Italiana Energia e Servizi SpA (IES) for the EPC supervision services for a modernization project at IES' Mantua refinery in northern Italy.

The refinery modernization aims to produce automotive diesel complying with EU ultra-low-sulfur specifications and reduce refinery emissions to the environment. The project has been awarded to Foster Wheeler under the terms of a three-year general framework agreement for engineering, procurement and construction management services signed with IES in 2006. The contract includes new gasoil hydrodesulfurization, sulfur recovery and amine washing units, a new flare system and utilities and offsites. Foster Wheeler will also upgrade the existing mild hydrocracking and gasoil hydrodesulfurization units, steam and electrical systems.

Foster Wheeler Ltd has also announced that C.GEN N.V. has awarded its Milan-based subsidiary Foster Wheeler Italiana SpA, for a 400MWe (gross megawatt electric) coal-fired integrated gasification combined-cycle (IGCC) plant to be built in northern Europe.

FRANCE

Shell to Sell Berre l'Etang Refinery for $700 Million

Royal Dutch Shell said on August 2 it had agreed to sell its Berre-l'Etang refinery in France to Basell for $700 million and expects any deal would close in early 2008.

Shell "has received an offer for the sale of its Berre-l'Etang refinery site complex and associated infrastructure and businesses to Basell," Shell said in a statement. "A purchase price of $700 million has been agreed."

SPAIN

Foster Wheeler Awarded Contract by CEPSA for Fired Heaters in Spanish Refinery

Foster Wheeler Ltd. announced that its Spanish subsidiary, Foster Wheeler Iberia, S.A.U., part of its Global Engineering and Construction Group, has been awarded a contract by Compañía Española de Petróleos, S.A. (CEPSA), one of the main Spanish refining companies, for the design, material supply, construction, and erection of a new crude heater, a new vacuum heater and a combustion air preheater system for La Rábida Refinery in Huelva, Spain. The new heaters form part of a project CEPSA is undertaking to increase the refinery’s production of middle distillates.

The Foster Wheeler contract value was not disclosed. The project was included in the company’s second-quarter 2007 bookings.

This latest award follows the award to Foster Wheeler Iberia in the first quarter of 2007 of a contract for the detailed engineering of new crude, vacuum, and gas recovery units at the same refinery, which in turn had followed the company’s successful completion of the front-end engineering design for these units. Mechanical completion of the two vertical cylindrical-type heaters and preheater system is scheduled for June 2009.

Subsidiary of Foster Wheeler’s Global Power Awarded Contract by BP Refinery in Castellon, Spain

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.

TURKEY

Third Refinery Approved for Ceyhan, Turkey

Turkey is moving forward with plans to turn the port city of Ceyhan into a major hydrocarbons hub, approving the construction of a third refinery.

The Energy Market Regulatory Authority has approved a joint venture between Turkey's Turcas and Azerbaijan's Socar to build an oil refinery and petrochemical center in Ceyhan, a Mediterranean port.

Asian News International reports the plant will cost $4.5 billion and have the capacity to refine more than 73 million barrels of crude annually.

The Turkish regulator has already approved two similar facilities, one to be built by Calik Energy of Turkey and the Indian Oil Corp., the other by Turkey's Petrol Ofisi and Austria's OMV.

Ceyhan is already a major hub in Turkey, a top transit country for the world's oil and gas. The Baku-Tbilisi-Ceyhan pipeline ends there, as does a major pipeline from Iraq's northern oil fields, though sabotage in Iraq has rendered that useless.

UNITED KINGDOM

Contract Renewal at the UK’s Pembroke Refinery

An agreement between Tyco Valves and Controls and Chevron Texaco to manage the performance of pressure relief valves at the ChevronTexaco Pembrokeshire oil refinery in the UK has improved valve reliability on site, increased the intervals between valve servicing by two-thirds, and produced cost savings on plant availability and production. The joint project has also achieved 100% valve compliancy with health and safety regulations and the Tyco contract has been now renewed for a further three years.

Tyco was selected by Chevron Texaco in 1998 to instigate a root based inspection program to ensure the reliability of pressure relief valves on site, as well as providing full time on-site coordination and spares for all 2729 pressure safety relief valves at the plant.

By implementing the Tyco performance history database software the partnership has had success in collating performance history data on each valve, and scheduling an accurate valve servicing program.

The program covers complete disassembly of each valve and inspection to OEM standards. The partnership also instigated a root cause failure analysis program to identify the cause of valve non-conformity. This has enabled plant engineers to identify and remove problem valves, and has highlighted areas for improved installation practices in order to prevent recurrence.

In addition to the valve asset management services that have been implemented, Tyco Valves and Control has provided ChevronTexaco staff with detailed guidance on safety codes and practices, and comprehensive training on pressure relief valve repair.

WALES

Murphy Oil to Buy Total's Stake in Wales Refinery for $250 Million

Murphy Oil Corp. on August 30 said its subsidiary, Murco Petroleum Ltd., has agreed to buy Total S.A.'s 70% interest in the Milford Haven, Wales, refinery for $250 million.

Prior to the transaction, Murphy owned an effective 30% interest in the 108, 000 barrel per day refinery located in Pembrokeshire in Southwest Wales.

The deal is expected to be completed in the fourth quarter of this year and includes the land, refinery complex, jetty, and pipeline connection to the Mainline Pipeline.

Refined products will continue to be marketed through the company's existing network of both company and dealer operated gasoline stations in England and Wales, Murphy said.

EGYPT

$2 Billion Egypt Refinery Order Won by South Korea’s GS Engineering & Construction

South Korea's GS Engineering & Construction said August 29 it signed a $1.8 billion contract to build secondary processing units as part of a new refinery being built by Egyptian Refining Company. GS will build the units in the refinery in Mostorod, north of the Egyptian capital Cairo, by September 2011, the company said.

The complex units include an 80,000 barrels per day (bpd) vacuum distillation unit (VDU), and a 40,000-bpd hydrocracker that can transform low-quality products into middle distillates which are in higher demand.

GS Engineering said it will be responsible for building the upgrade units, while the Egyptian refiner will build refining facilities such as crude distillation units (CDUs).

The capacity of the CDUs was not immediately known.

Earlier, Citadel Capital, an Egyptian private equity firm with investments in energy and cement, said it would start building a $2.4 billion refinery with an annual capacity of 5 million tonnes (about 100,000 bpd) of refined products, which it planned to complete in four years.

Its chairman said the firm had formed a company called the Egyptian Refining Company. State-run refiner Egyptian General Petroleum Corporation owns 15pc of the company.

The move to build and expand refiner facilities comes as Egypt is drawing interest from international firms keen to tap the country's oil and gas reserves.

Egyptian Oil Minister Sameh Fahmy had said the country aimed to increase oil output by 100,000bpd to 800,000bpd next year by developing recent discoveries in the Gulf of Suez and the Western Sahara.

KENYA

Kenya’s Mombassa Refinery to Build Sh250 Million Water Recycling Plant

Kenya Petroleum Refineries Limited (KPRL) in Mombasa will put up a multi-million shilling water recycling plant, the management announced August 31.

The plant to be built by a South African firm, will have major impact in water consumption at the refinery. KPRL has already signed the agreement with Improchem Water and Energy Solutions for the project estimated to cost Sh250 million.

In a press statement issued jointly by KPRL general manager, John Mruttu and Improchem Water and Energy Solutions operations director Johan Kuhn, the project at the refinery is expected to be completed and commissioned within the next six months.

Currently, the refinery utilizes two million liters of water per day, and the partnership between the KPRL and Improchem will see the construction a modern plant to collect and recycle waste water. "The plant will collect and recycle the 700,000 liters per day of the waste water that is released by the refinery as effluent into the municipality's drainage system. During the rainy season, the plant will process up to 1.4 million liters per day. It will enable KPRL to comply with National Environmental Authority (NEMA) requirements as relating to the specification of effluent discharged to the municipal drainage system," the statement said. Improchem will build and operate the plant for five years, before transferring it to KPRL.

MOZAMBIQUE

Mozambique to Build 100,000-bpd Refinery

Mozambique is positive on the construction of a new oil refinery in the coastal district on Nacala in the northern province of Nampula, the official media AIM (Mozambique News Agency) reported on August 11.

The project, budgeted at US$1.3 billion, could create 450 jobs and generate extra tax revenues for the Mozambican government, said the report.

The provincial government, however, demands from the proponents of the project an environmental assessment study, taking into account the risks posed to the environment from the spills of oil into the sea.

Dubbed "Ayr Logistics Limited-Nacala," the project is spearheaded by Ayr Logistics Limited, Inc., a privately owned U.S. company, in partnership with three South African investors and one Mozambican.

The project envisages the construction of an oil refinery with an installed capacity of 100,000 barrels of oil a day for export to the hinterland countries such as Malawi, Zimbabwe and Zambia, the news agency said.

The project also includes the construction of several infrastructures that will support the main activity of the project, which will be implemented over an area of 838 hectares.

The consortium that will implement the project has the responsibility to ensure the distribution of refined products to the Mozambican market equals to 15 percent of its production capacity, in compliance with the regime of the Industrial Free Zone under which this project falls.

The project of the new refinery will soon be submitted to the Council of Ministers for consideration.

Both the Environment Ministry and the Ministry of Industry have given the green light for the start of the project.

SENEGAL

Iran to Expand Senegal Refinery

Iran's national oil company will take a stake in Senegal's state-owned refinery and sell the West African country a year's supply of crude oil on preferential credit terms, Senegal's energy ministry said.

The announcement, in a communique received by Reuters August 28, follows a visit by Senegalese Energy Minister Samuel Sarr to Tehran in mid-August to discuss oil projects which the ministry said included increasing the capacity of Senegal's state refiner to 3 million tonnes a year from 1.2 million.

Under a deal signed in Tehran, the National Iranian Oil, Refining and Distribution Company (NIORDC) would acquire an unspecified shareholding in Senegal's state oil refiner Societe Africaine de Raffinage (SAR), the ministry said.

"The same draft agreement also covers one year's supply by the Iranian party of crude oil to SAR, with a beneficial three-month delay on payment," it said.

Senegal's government said in early August that Iran would build an oil refinery and petrochemicals plant in the West African country.

The former French colony has increasingly courted Islamic and Middle Eastern infrastructure investment as it prepares to host a summit of the Organisation of the Islamic Conference next year.

SOUTH AFRICA

Shell, BP to Shut South Africa’s Sapref Refinery for Maintenance

Sapref, South Africa's largest refinery, said on August 29 it would shut down for scheduled maintenance from September 8 to the end of that month.

The refinery, a 50-50 joint venture between Shell and BP, refines 180,000 barrels per day of crude oil.

"From September 8, 2007, normal planned maintenance will take place at the Sapref refinery. This will include annual catalyst regeneration of the platformer and a cleanout of the alkylation plant," a statement from the refinery said.

Sapref had earlier this month shut down due to a crippling strike by workers demanding higher wages in the sector, but later resumed operations after a wage deal was agreed upon.

IRAN

Iran to Build Senegal Oil Refinery

Iran will build an oil refinery and petrochemicals plant in Senegal and speed up plans to construct a car factory there, the West African country's government said in a statement published on August 3.

The statement followed a cabinet meeting in which Senegalese President Abdoulaye Wade briefed ministers on talks the previous week with visiting Iranian officials.

"The head of state, on this occasion, highly appreciated the decision taken by the Iranian authorities to implement the agreements signed with our country which are, among others, speeding up the building of a car assembly plant -- Iran Khodro -- (and) the construction of a petrochemicals factory and refinery in Senegal," the statement said.

It gave no further details of the plans.

Senegal, a former French colony on the westernmost tip of Africa, has increasingly courted Islamic and Middle Eastern infrastructure investment as it prepares to host a summit of the Organisation of the Islamic Conference next year.

Senegal has no known oil reserves, but has a state-owned refinery and its reputation as one of the most stable countries in volatile West Africa has helped it become a hub for foreign investment in the region.

Iran’s Lavan Refinery Capacity to Increase to 60,000 bpd

Iran plans to repair 12 refineries.

Managing Director of NIORDC, Mohammad Reza Nematzadeh, says Iran is to develop the Lavan Island oil refinery in the Persian Gulf.

By repairing the Lavan refinery, the National Iranian Oil Refining and Distribution Company plans to increase its capacity from 30,000 barrels a day to 60,000 barrels a day, Nematzadeh said.

According to the official, following the successful privatization of the refineries in Isfahan and Tabriz, the Lavan refinery is also on the list to be privatized.

Lavan, an Iranian island in the Persian Gulf, is one of the four major terminals for export of the country's crude oil.

ISRAEL

Israel Based Oil Refineries Ltd. Board Okays $50 Million Upgrade

Haifa, Israel-based Oil Refineries Ltd. said that its board has approved a US$50 million investment in upgrading its largest crude refining unit, in order to broaden the variety of crude oils the unit will be able to refine. This process is expected to be completed during the first six months of 2009.

Following completion of the project, the company will be able to refine heavier types of crude oils, when the margins of these increase. In addition, it will be able to refine low- and medium-density crude oils--when the refining margins of the latter rise--while maintaining smooth transition from one crude oil type to another, without unit shut-downs or loss of operation days. This increased flexibility will improve the unit's utilization level.

KUWAIT

AMEC Wins Five-year Services Contract for Kuwait Refineries

AMEC, the international project management and services company, has been awarded a five-year consultancy and engineering services contract by the Kuwait National Petroleum Co., covering upgrades, refurbishment and modifications on Kuwait's three existing refineries. The contract is worth over 23.3 million Kuwait Dinars (approximately £41.9 million at current exchange rate).

Starting immediately, the work covers provision of services management, engineering services, including concept/basic design, process and general engineering covering the complete refineries activities. Work also involves project and construction management services, and technical assistance both inside and outside Kuwait. This contract will be serviced from AMEC's engineering offices in London and also significant support will be provided by AMEC's in-country Kuwait Engineering Services group (KES).

QATAR

Qatar Petroleum Awards Technip FEED Contract for New Refinery Technip

Technip has been awarded by Qatar Petroleum a lumpsum front-end engineering design (FEED) contract, worth approximately US$ 60 million, for the Al Shaheen refinery to be built in Messaieed, Qatar.

Technip's operations and engineering centers in Paris, France and Abu Dhabi, UAE execute the contract.

The contract covers:

a grassroots refinery with a nominal capacity of 250,000 barrels per day of crude oil, producing high quality products (mainly gasoline, diesel oil and jet fuel), and
a crude oil pipeline from the Al Shaheen field to Messaieed (90 km offshore and 110 km onshore), as well as other required import/export facilities.

The refinery 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 the end of 2011.

Technip has extensive experience in Qatar, learned, among others, from an important FEED performed for the same client for the Ras Laffan condensate refinery and from major ongoing projects (such as Qatargas II, Qatar 3 and 4, RasGas (3) and AKG-2).

SAUDI ARABIA

Saudi Aramco Invites $8 Billion Refinery Bids

Saudi Arabian Oil Co. has invited engineering firms to bid for a contract to help it build an estimated $8-billion refinery in eastern Saudi Arabia, people familiar with the plans said August 20.

Saudi Aramco, the world's largest national oil company, has invited international engineering companies to bid by Sept. 15 for the contract to carry out early engineering for and manage the construction of the new refinery, the sources said.

The plant, known as East Coast refinery, is the fourth new facility planned in the kingdom and will boost total domestic crude oil refining capacity to above 3.5 million barrels a day by 2012, more than double the U.K.'s.

The refinery, due for completion around late 2011, will process 400,000 barrels a day of Saudi crude and will be at Ras Tanura on the Persian Gulf, already home to the country's largest refinery with a capacity of 550,000 barrels a day, the sources said.

It was reported, Aramco will meet selected contractors August 20 for a project briefing in Bahrain.

Companies including KBR Inc. (KBR), Foster Wheeler Ltd. (FWLT), and WorleyParsons Ltd. (WOR.AU) have bid for similar contracts in the kingdom.

The new project is aimed at meeting fast-growing demand for refined products from the local power and industrial sectors.

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