Refinery UPDATE
November 2009
McIlvaine Company
TABLE OF CONTENTS
NPRA says EPA Lacks Legal Authority to Raise GHG Threshold
OSHA Cites Safety Problems at Alon Texas Refinery
EPA's Proposed GHG Rule Targets Refineries, Large Plants
BP, Valero among Refiners Threatened by Carbon Regulatons
Invensys Signs Multi-year Deal with ConocoPhillips for Gasifier Tech
Sunoco May Contest OSHA Citations and $147,000 in Fines for Ohio Refinery Incidents
New GHG Rules Would Hit Up To 1,000 Texas Facilities
Feds Extend Final EIS Wait Period for Proposed ND Refinery
Sunoco Settles Storage, Recordkeeping Violations at its Marcus Hook Refinery with EPA
BP on Track with $3.8 Bln Whiting Project for 2012 Completion
CO2 Bill Hearings to Begin in Late October
EPA Objects to Air Permit for Whiting Expansion
ConocoPhillips may Sell some North American Properties
Flying J to Put 30,000 bpd Utah Refinery Up for Sale
Wescorp, Ellycrack Restructure JV Deal to Advance Heavy Oil Upgrading Tech
Tank Blasts Cause Major Blaze at Puerto Rico Refinery
PDVSA Plans November Work at Puerto La Cruz Refinery
Repsol’s YPF to Invest $396 Mln in Argentine Refinery
Brazilian Court Orders Work Stop on Two Petrobras Refineries
AUSTRALIA / UNITED ARAB EMIRATES
Petrofac Exits Australia Gas Project and Abu Dhabi Refinery Upgrade Bid
Lanzhou China to Build $512.6 Mln State Petroleum Base
Putin Discusses Possible Refinery, Pipeline Deals with China
RIL's New Refinery Overtakes Processing of Old Complex
Fuji Oil Boosts Asphalt-cracking Unit Capacity
Vietnam Seeks Foreign Oil Refinery Partners and Investment Capital
EU Could Pay Poor Member States to Cut Emissions
Statoil to Put Big Oil Service Contract to Tender in November
CB&I Wins $70 Mln Contract to Upgrade Refinery in Serbia
Uganda Pres Says Oil Cos Agree on Setting Up New Refinery
Charles T. Drevna, President of NPRA, the National Petrochemical & Refiners Association, commented on the Environmental Protection Agency's proposed rule to "require use of best technologies to reduce greenhouse gases from large facilities."
"This proposal incorrectly assumes that one industry's greenhouse gas emissions are worse than another's," Drevna said. "Greenhouse gas emissions are global in nature, and are not isolated to a few select industries. The Clean Air Act stipulates unequivocally that the threshold to permit major sources is 250 tons for criteria pollutants. EPA lacks the legal authority to categorically exempt sources that exceed the Clean Air Act's major source threshold from permitting requirements, and this creates a troubling precedent for any agency actions in the future.
"Today's proposal highlights the perils of forcing greenhouse gas regulations into the Clean Air Act."
NPRA members include more than 450 companies, including virtually all U.S. refiners and petrochemical manufacturers.
The U.S. Occupational Safety and Health Administration cited Alon USA Energy Inc's Big Spring, Texas, refinery for alleged safety violations following a lengthy inspection, the agency said on October 1.
OSHA said the refinery was found to have serious and repeat violations of federal workplace safety regulations that could result in fines totaling $237,500.
An Alon executive said the company was working to fix the problems.
"Process Safety Management (PSM) is our top priority in Alon USA," said Chief Operating Officer, Joseph Israel in a statement, "We are working already on a path forward, not only to address OSHA's concerns, but take PSM to the next level - from compliance to performance mode."
OSHA said the serious citation included 27 violations of process safety management and other rules. The repeat citation was issued for three violations of process safety management rules.
"Failure to effectively implement OSHA's process safety management regulations to protect workers from potential hazards at high risk facilities, such as petrochemical refineries, will not be tolerated," said Dean McDaniel, OSHA's regional administrator.
Alon has 15 days to appeal the citations.
The Alon inspection is part of a national emphasis program OSHA launched in 2007 after being criticized for lax regulation of BP Plc's (BP.L) Texas City, Texas, refinery, where a 2005 explosion killed 15 workers.
A propylene unit exploded at the Alon refinery in February 2008.
The US Environmental Protection Agency proposed regulations on Sept. 30 that would subject refineries and other large industrial operations to greenhouse gas (GHG) regulation under the Clean Air Act while exempting smaller businesses and farms.
Under the proposal, industrial facilities emitting at least 25,000 tons/year of greenhouse gases would have to obtain construction and operating permits covering those emissions. The permits would have to demonstrate use of best available control technologies and energy efficiency measures to minimize GHG emissions when plants are built or significantly modified, EPA said.
“This is a commonsense rule that is carefully tailored to apply to only the largest sources: those from sectors responsible for nearly 70% of US greenhouse gas emissions sources,” EPA Administrator Lisa P. Jackson said in a keynote address at the California Governor’s Global Climate Summit in Los Angeles.
“This rule allows us to do what the Clean Air Act does best: reduce emissions for better health, drive technology innovation for a better economy, and protect the environment for a better future, all without placing an undue burden on the businesses that make up the better part of our economy,” she said.
The American Petroleum Institute and the National Petrochemical & Refiners Association each criticized the proposal in statements given Sept. 30. The U.S. Chamber of Commerce applauded the plan’s exemption of smaller businesses and farms, but warned that it could create legal problems. Larger businesses, meanwhile, would be subjected to major new costs and delays, it warned.
EPA estimated that 400 new sources and modifications to existing sources would be subject to review each year for GHG emissions with the proposed thresholds. About 14,000 large sources, most of which are already subject to clean air permitting requirements, would need to obtain operating permits that include GHG emissions, it said.
Six GHGs would be addressed under what it termed a “proposed tailoring rule,” namely carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride.
EPA said it also is requesting public comment on its previous interpretation of when certain pollutants, including CO2 and other GHGs, would be covered under the CAA’s permitting provisions. A different interpretation could mean that large facilities would need to obtain permits prior to the finalization of a rule regulating GHG emissions, it said.
The proposed rules and more information are at posted online at www.epa.gov/nsr/actions.html. Comments will be accepted on the proposals for 60 days after their publication in the Federal Register, the agency said. API and NPRA responded immediately.
API said in a statement that it and several other groups do not believe that the CAA was designed to address GHG emissions. “We also question whether EPA has the legal authority to modify the threshold established by Congress in the act to regulate pollutants, such as GHG emissions,” it said.
‘The proposal illustrated the perils of forcing GHG regulations into the CAA, NPRA Pres. Charles T. Drevna observed in a separate statement. “This proposal incorrectly assumes that one industry’s greenhouse gas emissions are worse than another’s,” he said. “Greenhouse gas emissions are global in nature, and are not isolated to a few select industries.”
The CAA “stipulates unequivocally” that the major sources’ permitting threshold is 250 tons for criteria pollutants, Drevna noted. “EPA lacks the legal authority to categorically exempt sources that exceed the [CAA’s] major source threshold from permitting requirements, and this creates a troubling precedent for any agency actions in the future,” he said.
Referring to the proposed regulation’s exemption of smaller businesses and farms, “common sense prevailed at EPA and we are thankful,” said Bill Kovacs, senior vice-president of environment, technology, and regulatory affairs at the US Chamber of Commerce. “However, we fear this proposal rests on shaky legal ground,” he said, adding, “As a result, EPA may have only kicked the problem down the road, or into the courthouse, and may have to regulate all small businesses should some environmental groups prevail in likely lawsuits.”
In a statement, the Chamber said the proposal’s provision requiring plants emitting 25,000 tons or more of GHGs annually to get preconstruction permits which could cost hundreds of thousands of dollars and take from 8 months to more than a year to obtain. This would put major roadblocks in domestic efforts to build new major facilities and projects as the country tries to work its way out of the recession and provide affordable and reliable energy for the future, the business advocacy organization warned.
Chamber cited EPA data showing that a typical CAA Prevention of Significant Deterioration permit costs a regulated entity $125,000 and takes 866 hr to complete. The requirement to obtain these permits takes effect the second EPA makes the rule effective, the group added.
Covered facilities also would have to get Title V operating permits, which effectively would make them pay a $25-40 carbon tax for the first 4,000 tons of GHGs emitted, it said. Each regulated entity also could be subject to a lawsuit by any US citizen, according to the Chamber.
BP Plc and Valero Energy Corp. are among the U.S. oil refiners caught in the crosshairs of proposed new greenhouse gas regulations from the Environmental Protection Agency, an industry representative said.
“Any time you increase capacity, or if you want to upgrade your refinery to use a wider range of crude oils, you could trigger these new regulations,” Charles Drevna, president of the National Petrochemical and Refiners Association, said.
The EPA has announced that newly built industrial facilities, or existing ones that undergo “major modification,” must use “best available control technology” to reduce their emissions if they are responsible for more than 25,000 tons of greenhouse gases a year.
This requirement threatens to halt U.S. refinery upgrades and expansions, which could boost gasoline imports, Drevna said.
There were 150 operable refineries in the U.S. as of Jan. 1, 141 of which are operating, according to the Energy Information Administration. In 1999, 155 of 159 operable refineries were in service, according to EIA data.
BP, the largest natural gas producer in the U.S., has five U.S. refineries, with plants in California, Washington, Indiana, Ohio and Texas. BP’s Whiting, Indiana, refinery is undergoing a $3 billion upgrade to process heavy crude, said Tom Mueller, spokesman for BP America in Houston.
It’s unclear whether that work would count as a significant modification, Mueller said. “Clearly there’s potential for this to have a very large impact on our businesses,” he said.
Valero Energy Corp., the largest U.S. refiner, has capacity to process 3.3 million barrels a day of oil and other feedstocks at refineries in states including Texas, Louisiana, California, New Jersey and Delaware.
“It is too early to tell what impact it would have on our business,” said Bill Day, a company spokesman.
The EPA announced the regulations, which will undergo a period of public comment and further agency review before they are final, as Congress debates whether to create a “cap-and- trade” system of exchangeable pollution rights.
The regulations for industry should be ready by March to coincide with the planned enforcement of tougher fuel economy standards for new cars and trucks, according to the agency’s proposal.
The proposed regulation for industry doesn’t define “best available” control technology for refineries or other sources targeted by the EPA, such as power plants and factories.
Instead, a “case-by-case analysis” will be conducted for newly built and modified facilities because “the best available technology can change over time,” EPA Administrator Lisa Jackson said September 30.
Refiners already have to install best available control technology for other pollutants, such as “scrubbers” that remove the sulfur dioxide that causes acid rain, Drevna said.
There is no cost-effective technology to scrub carbon dioxide from refinery smokestacks, he said, and the rules may result in more gasoline being refined overseas where the environmental standards don’t apply.
“I don’t know of any technology to cut carbon dioxide emissions from an oil refinery other than cutting production,” Drevna said. “If you pass rules like this, we are going to be more dependent on foreign sources of oil and refined products than we have ever been before.”
The refinery industry’s fears are overblown, David Bookbinder, chief climate counsel of environmental group Sierra Club, said in a phone interview.
The EPA’s proposed regulations will probably only require refiners to “upgrade their systems to make them more efficient and burn less fossil fuel” when converting crude oil into gasoline and other petroleum products, Bookbinder said. The agency knows “there is no existing control system” that can capture and store carbon dioxide emissions on a commercial scale.
“They would not try to shoehorn something that’s not been commercially used into the definition of best available control technology,” Bookbinder said. “Politically, that’s suicide.”
In 2007, the Supreme Court ruled the EPA has the authority to regulate greenhouse gases under the existing Clean Air Act.
The Bush administration, which argued against the Supreme Court decision, declined to move ahead with any regulation because it said the Clean Air Act compels the EPA to take action against sources that produce as little as 250 tons of greenhouse gas a year, such as office buildings or hotels.
The EPA proposal says the agency can raise this threshold to limit regulation to large industrial sources to avoid “absurd results.” The EPA “lacks the legal authority” to raise the threshold for Clean Air Act regulation of greenhouse gases, Drevna said.
If there is a legal challenge to EPA’s proposed regulation, “the courts will uphold it,” Bookbinder said.
Invensys Operations Management announced that it has reached a multi-year agreement with ConocoPhillips, the third-largest integrated energy company in the United States, to provide dynamic simulation for the development of ConocoPhillips' proprietary E-Gas technology.
"We were very impressed with Invensys' professionalism and technical capabilities, particularly around gasification, and we look forward to working with them on this important development effort," said Cliff Keeler, E-Gas product manager, ConocoPhillips.
Under the terms of the contract, Invensys will supply its DYNSIM modeling and simulation software to help improve the design, start-up and operation of new coal gasification plants. In addition, Invensys will be a preferred supplier of dynamic simulation software to licensees of ConocoPhillips' E-Gas technology.
"With our extensive experience in gasification and our ability to deliver cutting-edge solutions that address important industrial issues, we believe we are uniquely positioned to help ConocoPhillips successfully develop its global E-Gas business," said Tobias Scheele, vice president of advanced applications, Invensys Operations Management. "Gasification is the cleanest, most efficient process for converting coal into a hydrogen-rich alternative fuel, and we are excited to help ConocoPhillips as they use their E-Gas technology to pursue efficient and environmentally responsible synthesis gas production projects."
ConocoPhillips planned to display the Invensys prototype of the E-Gas two-stage gasifier during the Gasification Technologies Conference at the Broadmoor Conference Center in Colorado Springs, Colo., October 4 through October 7, 2009. This large event brings together the gasification industry to share the latest information on trends, new developments and advances in this rapidly growing market.
Invensys Operations Management, a division of Invensys, is a leading provider of automation and information technology, systems, software solutions, services and consulting to the global manufacturing and infrastructure industries. Headquartered in Plano, Texas, its solutions are used by more than 40,000 clients around the world in more than 200,000 plants and facilities.
Sunoco Inc. has been fined $147,000 for faulty maintenance procedures at its oil refinery in East Toledo after an incident April 6 in which a contract worker suffered minor injuries.
It is the second time this year that the U.S. Occupational Safety and Health Administration has cited the firm for violating federal workplace safety laws.
"We're going to review the citations within the next 15 business days," said Olivia Summons, a spokesman for the refinery. "If we disagree with any of the citations, we will exercise our right to contest them." The firm is "committed to safe, reliable operations," she added.
OSHA announced the violations September 30. It cited the refinery for three violations, one classified as serious and two as willful, which is the second-most serious category of infraction.
Jule Hovi, area director at OSHA's Toledo office, said inspectors were sent to the plant after receiving a complaint about minor injuries suffered by an employee of an outside firm performing maintenance work at the refinery.
According to the citation, the worker was hit with gasoline that spurted out of a pipe.
OSHA alleged that the refinery failed to use properly engineered pipe clamps; to ensure pipe leaks were repaired properly; to repair or replace pipe valves; and to follow proper repair procedures.
"Injuries and fatalities from incidents at refineries are preventable," Ms. Hovi said in a written statement. "OSHA will not tolerate employers who ignore safety hazards that threaten the lives and well-being of their workers."
Sunoco continues to contest $25,000 in OSHA fines that were issued after an Oct. 2 cooling tower fire. Also unresolved are $330,000 in citations issued last year that involved improper record-keeping and failure to correct problems dating back as long as six years.
The latter fine was part of an OSHA crackdown on safety violations at refineries that followed a 2005 explosion at a BP LLC refinery in Texas City, Texas, that killed 15 people.
The federal safety agency fined BP's refinery in suburban Toledo $2.4 million in 2006 because of allegedly unsafe operations there. Last March, a refinery in Lima, Ohio, operated by Husky Energy Inc. was hit with $61,000 in fines.
The U.S. Environmental Protection Agency proposed rules September 30 that would control emissions of greenhouse gases from factories, power plants and refineries for the first time.
The new rules would apply to facilities emitting at least 25,000 tons a year of carbon dioxide and five other heat-trapping gases blamed for global warming.
EPA Administrator Lisa Jackson said the rules would affect as many as 14,000 industrial facilities nationwide.
"By using the power and authority of the Clean Air Act," Jackson said, "we can begin reducing emissions from the nation's largest greenhouse gas emitting facilities without placing an undue burden on the businesses that make up the vast majority of our economy."
The proposal likely will have a profound impact on Texas, which is America's power plant and gasoline pump and thus leads the nation, by far, in emissions of climate-altering gases.
Neil Carman, an air quality specialist for the Sierra Club's Lone Star chapter, estimated 600 to 1,000 plants in Texas would be affected.
The rules would require operators to show they are using the best available technology and efficiency measures to minimize greenhouse gas emissions when seeking permits to build or significantly modify facilities.
Jackson said most small businesses and farms would be exempt.
"The corner coffee shop is not a meaningful place to look for carbon reductions," the EPA chief said.
But industry groups questioned whether Jackson could regulate carbon dioxide under the Clean Air Act and alter the regulatory threshold.
Federal law states; that any facility emitting 250 tons a year of a controlled pollutant be considered a "major source" subject to greater permitting requirements.
Jeff Holmstead, a former EPA official who represents utilities and refineries for Bracewell & Giuliani, said the proposal "is a valiant effort by EPA to fit a square peg into a round hole" and could lead hospitals and dry cleaners, among others, to wait more than 18 months for permits as major emitters of carbon dioxide.
"Normally, it takes an act of Congress to change the words of a statute enacted by Congress, and many of us are very curious to see EPA's legal justification for today's proposal," Holmstead said.
Charles Drevna, president of the National Petrochemical & Refiners Association, said the proposal sets a bad precedent by exempting some sources.
"This proposal incorrectly assumes that one industry's greenhouse gas emissions are worse than another's," Drevna said. "Greenhouse gas emissions are global in nature, and are not isolated to a few select industries."
Jackson defended the rules as legally sound, saying they target sources responsible for nearly 70 percent of U.S. greenhouse gas emissions.
Her announcement came on the same day that Sens. John Kerry, D-Mass., and Barbara Boxer, D-Calif., introduced sweeping legislation to combat global warming.
Luke Metzger, director of Environment Texas, said the EPA proposal reflects the administration's willingness to move forward on global warming if Congress doesn't.
"Industry is concerned about EPA," Metzger said. "At least with Congress, they have a seat at the table. This is a shot across the bow."
The U.S. Environmental Protection Agency and the Department of Interior-Bureau of Indian Affairs have completed the final Environmental Impact Statement for the Mandan, Hidatsa and Arikara (MHA) Nation's Proposed Clean Fuels Refinery on Fort Berthold Indian Reservation near Makoti in North Dakota.
Publication of the final EIS on August 28 initiated a 30-day waiting period that would have ended September 28. In response to requests for additional time to review the final EIS, EPA and the Department of Interior have agreed to extend the wait period an additional 30 days or until October 28. Extension of the wait period was published in the Federal Register October 1.
The federal agencies planned to accept comments during the wait period until October 28, after which they can make their decisions on the proposed federal actions.
The EIS evaluates, analyzes and discloses to the public potential environmental impacts of the MHA Nation's proposal to build a petroleum refinery and to produce buffalo forage on the Fort Berthold Indian Reservation near Makoti, North Dakota. The MHA Nation has requested that BIA accept 468.39 acres of fee land into trust and that EPA issue a Clean Water Act National Pollutant Discharge Elimination System (NPDES) permit for the process water discharges associated with operation of the proposed refinery.
Sunoco, Inc. has agreed to pay a $148,315 civil penalty to settle alleged violations of hazardous waste regulations at its Marcus Hook, Pa. refinery, located at 100 Green Street, the U.S. Environmental Protection Agency announced in October.
EPA cited Sunoco for violating the Resource Conservation and Recovery Act (RCRA), the federal law governing the treatment, storage, and disposal of hazardous waste. RCRA is designed to protect public health and the environment, and avoid costly cleanups, by requiring the safe, environmentally sound storage and disposal of hazardous waste.
Following an August 2008 inspection by EPA, and followup investigations, EPA cited Sunoco for RCRA violations involving a variety of hazardous waste stored at the facility, including mixed refinery wastes, lab wastes, and used lamps.
The alleged violations included: (1) operating unpermitted areas at a hazardous waste storage facility without a permit or interim status, (2) failure to keep containers closed except when adding or removing hazardous waste, (3) failure to clearly mark containers in permitted areas with the contents of container, (4) failure to clearly mark containers in permitted areas with dates that containers began accumulating waste, (5) failure to operate the facility in a manner that prevents or minimizes releases, (6) failure to operate the permitted storage area free of cracks or gaps, (7) failure to store containers of hazardous waste in a proper configuration with aisle spacing to allow for safe management, inspections and emergency response, (8) failure to keep universal waste lamps in closed containers, (9) failure to clearly label or mark containers of universal waste lamps, (10) failure to submit an exception report, (11) failure to make a hazardous waste determination, and (12) failure to list the proper waste code on the manifest.
The alleged violations involve storage and recordkeeping, and not discharges of hazardous waste. The settlement penalty reflects the company's compliance efforts, and its cooperation with EPA.
As part of the settlement, Sunoco has neither admitted nor denied liability for the alleged violations, but has certified its compliance with applicable RCRA requirements.
It has not been smooth for BP since engineering and construction work began in May 2008 on its Whiting Refinery's $3.8 billion modernization project -- touted as the largest single private investment in state history. There have been economic and fuel-price collapses; environmentalists and municipal officials challenged the project's impact on the region's air quality; and U.S. Immigration and Customs Enforcement agents led a December raid leading to contract workers being arrested.
Despite those challenges, BP spokesman Brad Etlin said the company is pleased with the progress of construction, equipment purchases and engineering -- which is now about one-third complete. He said the project is on track to be completed in early 2012.
"It's such a tough economy, and it's a huge sign and commitment to stay here for the long term," Etlin said.
The century-old refinery is being retrofitted with new and upgraded equipment that will enable the location to accept more heavy crude oil from Canada. Etlin said the refinery could produce 1.7 million gallons more motor fuel per day after the expansion project, while the amount of raw crude being processed remains near current levels. Peak output is about 7.5 million gallons of gasoline and 3 million gallons of ultra-low-sulfur diesel daily.
Etlin said the project will give the company flexibility in the type of raw crude it can produce. BP buys and refines more than two dozen types of crude oil including a small quantity of heavy Canadian crude.
"This means a much more secure and stable supply of the gasoline that we need today to fuel our cars and businesses," Etlin said.
Call it the BP ripple effect. Residents and local officials often worry about whether the company, considered one of business's big dogs in Northwest Indiana, can keep the facility thriving so it can maintain employment and bolster tax coffers.
Etlin said the Whiting Refinery, the largest in the Midwest, employs about 1,700 people, and Etlin said the modernization project will help keep that number of employees working in Northwest Indiana for the long term.
Randy Palmateer, business manager for the Northwest Indiana Building Trades Council, said that outside of day-to-day plant operations, 2,200 of its members, including pipefitters and ironworkers, are working on the project. Despite delays in the construction timeline, he said at peak construction, about 5,000 union contract workers could be on the job.
Palmateer said this project is deeply needed in the region because the troubled economy has limited construction work.
Cooperation between cities and businesses has helped move along "critical aspects of the project," Etlin said. BP received some tax abatement incentives from East Chicago; Whiting helped BP rebuild Standard Avenue; and the Indiana Economic Development Corp., a state agency, provided a $1 million infrastructure grant. ArcelorMittal leased land to BP to store equipment, and Praxair -- already a BP supplier -- agreed to sell the company more hydrogen and then used the purchase agreement to help fund its own capital development project.
Whiting Mayor Joe Stahura said the London-based company has shown a significant commitment to the city with the expansion project, calling it "the light at the end of the tunnel for city government."
"Everything we're doing locally in the city is making sure the project comes in on time and on budget," said Stahura, who retired from BP earlier this decade after working more than 20 years at the refinery. "We've dedicated whatever resources we have; we would drop anything we can to make sure the project gets first attention."
Once the project begins paying its share of taxes from the increased valuation, it will help lessen the blow of property tax caps to the city budget, Stahura said. He also hopes the expansion will be a catalyst for other developments, such as a hotel.
Michael Wieser, director of finance for the Lake County auditor's office, said if the company completes all the announced improvements and future property valuations reflect them, the company could be the county's largest taxpayer. Wieser said the state-assessed value of BP's land and improvements is more than $103 million, and the company lists the worth of its personal property at more than $310 million.
While construction continues in Whiting, so do legal battles in Hammond and Indianapolis on the project's potential impact on the environment.
In July, a Hammond federal judge dismissed part of the lawsuit the Natural Resources Defense Council filed requesting a halt to the expansion. One of the arguments Judge Philip Simon still will consider, however, is whether construction work started before the state granted BP a permit to do so, according to Josh Mogerman, NRDC spokesman.
Five cases remain open in a state administrative court regarding the issuance of an air permit to the BP Whiting Refinery, according to Judge Catherine Gibbs of the Indiana Office of Environmental Adjudication. Mogerman said the NRDC -- which serves as legal counsel in two cases involving local environmental groups -- said the lawsuits claim problems with BP's pollution calculation methods, and the Indiana Department of Environmental Management's approval of a less stringent air permit for the refinery.
BP, IDEM and environmental groups will square off early next month in the two cases set for oral argument on motions for summary judgment and dismissal. A final hearing on the matter is set for April. The Office of Environmental Adjudication will render a binding decision for IDEM, but any party could file an appeal in a trial court.
Mogerman, who works out of the council's Chicago office, said NRDC researchers and industry contacts contend certain pollution controls and infrastructure should be added to the facility but aren't currently planned. As a result, more pollution is going to be added to an already "toxic soup" of emissions present in the region.
Bessie Dent, program coordinator for the Hammond-based Calumet Project, said she's concerned that most residents have bought into the notion that you can't have both good-paying jobs and a cleaner environment. Dent hoped the administrative court would force IDEM to pull the current permit and grant a more stringent one.
BP's Etlin said he couldn't comment on pending legal matters but said from 2001 through 2006, the refinery decreased regulated emissions -- which include carbon monoxide, mercury and benzene -- by 68 percent. Etlin said $1.4 billion of the project's value is for environmental improvements and meeting regulatory requirements.
"As part of the modernization, the refinery is removing older, less-efficient equipment and installing emission controls on upgraded and other units in order to reduce our environmental footprint," Etlin said via e-mail. "These proactive, voluntary measures will help us reduce regulated emissions by another 7 percent by the time the modernization is complete."
Management change: After 23 years with BP and Amoco, Dan Sajkowski, Whiting Refinery business unit leader and vice president of BP Products North America, said he will leave the company in March. Nick Spencer, a former refinery manager for ConocoPhillips, has been named his successor.
The U.S. Senate environment panel will begin hearings on a major climate bill in the last week of October with an eye to voting on the legislation in November, Sen. Barbara Boxer, D-Calif., said October 14.
Boxer, chairman of the Senate Environment and Public Works Committee, said in a press briefing the legislation's allocation of emission credits to affected industries and consumers would largely resemble the House version. The so-called allowances structure was one of the most hotly negotiated provisions in the House and also poses to be a point of contention in the Senate.
"We have some tweaks which we think are good ... but by and large" the Senate bill mirrors the House allocation distribution, Boxer said.
Hearings would begin on Tuesday, October 27, and continue through Wednesday and Thursday. The Senator said the committee aimed to mark up the bill within the first two weeks of November.
Energy Secretary Steven Chu, Environmental Protection Agency Administrator Lisa Jackson, Interior Secretary Ken Salazar and Transportation Secretary Ray LaHood would be among those testifying before the committee in late October.
Boxer's announcement follows an editorial by Sen. John Kerry, D-Mass., and Sen. Lindsey Graham, R-S.C., that charted a possible compromise to win greater Republican support by including stronger incentives for nuclear power and new oil and gas exploration.
"Momentum, I think, is growing every day," Boxer said.
Although the environment committee's legislation will represent a major portion of the final product to be brought to the floor, other panels will also contribute substantially.
The Agriculture Committee will write key cost-containment provision on so called "offset credits," many of which will come from emission-reduction projects in the agriculture industry. Also, Sen. Max Baucus, D-Mont., chairman of the Finance Committee, has said his panel will be drafting and marking up his own version of the emission allowance structure. Energy and Natural Resources has already reported out a bill that would expand drilling on the Outer Continental Shelf and mandate federal renewable energy and efficiency standards.
Ultimately, "Senator (Harry Reid, D-Nev.) will pull together the best ideas from all the committees," Boxer said.
Even if Boxer is able to vote the legislation out of her committee by mid-November, many Capitol Hill pundits said consideration of a climate bill on the Senate floor before the end of the year is highly unlikely.
Besides the fact that several other committees with jurisdiction still have yet to focus their attention on climate, health-care legislation is expected to continue to steal most of lawmakers' attention through December. Reid last month indicated floor consideration of a climate bill may be pushed into the new year.
The U.S. Environmental Protection Agency has objected to an air permit application for BP PLC's (BP) Whiting, Ind., refinery expansion, agency officials said October 19.
The agency's objection is the latest in a string of setbacks for BP's several-billion-dollar planned expansion.
An EPA official said it expected BP, through the Indiana Department of Environmental Management, to submit a revised permit application.
The EPA objected because the agency didn't believe the permit adequately accounted for all the emissions that would come from the expansion, the official said.
BP's Whiting refinery is its largest facility in the U.S. with the capacity to process 405,000 barrels of crude oil a day.
ConocoPhillips said it is considering selling oil and gas properties in North America and in the North Sea, as well as pipelines and terminals in the U.S. and its 9 percent stake in Syncrude Canada, as part of a sweeping plan announced earlier this month to reduce company debts and improve shareholder returns, CEO Jim Mulva said October 28.
Under the plan, the company aims to sell $10 billion worth of company assets in 2010 and 2011 and slash its capital spending budget by 12 percent to $11 billion in 2010.
The company has no current plans to sell oil refineries as part of the $10 billion program, partly because valuations are so low at the moment, Mulva said. But by 2012 or 2013, if the market improves, it may consider unloading less-sophisticated and less competitive refineries, he said.
ConocoPhillips also intends to retain a “strategic relationship” with Russia's Lukoil, and has no plans to sell its 20 percent stake in the firm as part of the $10 billion program, officials said.
Instead, ConocoPhillips is targeting its bottom 10 percent of oil and gas properties in Canada and the lower 48 states and natural gas properties in the North Sea's Southern basin.
“Some will say what we're doing essentially is that we're shrinking to grow,” Mulva said. “That would be a fair assessment.”
He said the program represents a change in strategy from recent years, to a focus on greater shareholder value over growth. The change is necessary given the dramatic drop in energy demand with the global recession and growing difficulty accessing new reserves, he said.
The company will provide more details of the asset-sale program early next year, Mulva said.
Utah's Flying J Inc. has put its crude-oil refinery in North Salt Lake City up for sale -- a step that it hopes will generate additional cash to help hasten the privately held company's emergence from Chapter 11 bankruptcy.
The Utah refinery, however, is one of approximately 10 such facilities that now are on the market nationwide, said Ann Kohler, an analyst who covers the nation's oil refining industry for Caris & Co. in New York.
"Only time will tell if they can find a buyer," she said.
The nation's oil-refining industry is suffering from some of the poorest market conditions since the 1990s with demand for gasoline and diesel fuel slumping due to the nation's continuing recession.
"If they [Flying J] want to sell, it may have to be at a discount from the price they would have gotten when the market was a lot stronger a few years ago," Kohler added.
Ogden-based Flying J filed for reorganization under Chapter 11 provisions of the U.S. Bankruptcy Code on last Dec. 22.
Since then it has sold its Longhorn pipeline in Texas, put its oil refinery in Bakersfield, Calif., up for sale, and announced that it intended to merge its truck stops with Pilot Travel Centers.
"Listing our North Salt Lake refinery for sale is one of many avenues we are pursuing in an effort to emerge from bankruptcy," Virginia Parker, Flying J's director of marketing said in an e-mail.
Parker said the process of selling the Utah refinery is still in its infancy, and it may be several months before a transaction is completed. She added the sale of the Bakersfield refinery is progressing, and Flying J is optimistic that a "resolution" is close at hand.
Utah Petroleum Association President Lee Peacock said he doubts Flying J will have much of a problem with finding a buyer.
"There is a need for the products that refinery produces," he said. "And with demand [for gasoline] growing in the [Salt Lake] valley and the state, in all likelihood someone will continue to operate it."
The refinery, which is capable of refining approximately 30,000 barrels of crude oil each day, is one of five refineries operating in Utah. The others are operated by Holly Corp., Tesoro, Chevron and Silver Eagle.
Wescorp Energy Inc. and Ellycrack AS have restructured the terms of their joint agreement to develop and commercialize patented on-site heavy oil upgrading technology.
The new agreement benefits both companies by aiding Ellycrack to secure the required funding, which, when obtained, will rapidly advance extensive testing, development and refinement of a commercialized facility. The Ellycrack technology, called the VISCOSITOR, reportedly uses a low temperature and low pressure thermo-mechanical process to increase the viscosity of heavy oil, thus increasing its value per barrel by US$25 to $30 in a single operation at a cost of approximately US$5 per barrel. The VISCOSITOR technology offers substantial economic and environmental benefits to clients engaged in the production of heavy oil, including the reduction of carbon dioxide emissions by up to 60%, the companies claim.
Under the terms of the new agreement, Ellycrack will have full legal ownership of the VISCOSITOR technology, including its designs, work projects and the 50 barrel-per-day VISCOSITOR test unit that is currently located in western Canada.
In return, Ellycrack AS will deliver 725,000 shares of Ellycrack to Wescorp for nominal consideration and Ellycrack will credit Wescorp as having satisfied its obligation to Ellycrack of approximately $160,000. Wescorp will become the largest single shareholder of Ellycrack with ownership of 23.72% on a fully diluted basis. Wescorp also has been granted the option to participate in all future Ellycrack share issuances thus allowing Wescorp to maintain its ownership percentage in Ellycrack AS.
"Wescorp is very pleased with the new arrangement with Ellycrack regarding the VISCOSITOR," commented Doug Biles, President and CEO of Wescorp Energy. "It is our understanding that the Ellycrack team will quickly begin the continued extensive testing and development of the VISCOSITOR technology. This arrangement also will allow our Wescorp team to become completely focused on the water and solid remediation business opportunities in North America."
"This new agreement is beneficial to both companies," stated Olav Ellingsen, CEO of Ellycrack AS. "Ellycrack's legal ownership and control of the test unit allows us to finance the company so further development and commercialization can occur at a much faster rate. We look forward to having Wescorp as a value-added shareholder as we prove the commercial viability and large scale economic value of the VISCOSITOR."
Wescorp Energy Inc. is an oil and gas operations solutions company focused on commercializing technologies that overcome tough operational challenges facing oil and gas operators today.
Ellycrack AS is a private company based in Norway. Ellycrack's VISCOSITOR is a patented on-site heavy oil upgrading technology. The VISCOSITOR uses unique dry, low-temperature and low-pressure thermo-mechanical process using pre-heated particles as catalysts.
Twelve storage tanks at Caribbean Petroleum Corporation's refinery on San Juan Bay were ablaze October 23 following a series of explosions, prompting Puerto Rican authorities to warn of a potentially serious environmental disaster on the island.
Police superintendent Jose Figueroa Sancha said that 12 of the 40 tanks at the oil facility had exploded and that it has been confirmed that no plane caused the accident, even though a route for aircraft descending into the nearby Carolina airport passes close to the oil facility.
Take-off and landing routes for planes flying out of the Luis Muñoz Marin airport in Carolina, a city just east of San Juan, have been changed so that the towering columns of smoke do not affect pilots' visibility.
"I can't remember a fire of this magnitude at a refinery," Figueroa Sancha said, adding that because of the size of the blaze it would likely take several days to put it out and that it was still too early to determine the cause of the explosions.
For his part, Puerto Rico Gov. Luis Fortuño, who said one person was being treated for injuries, guaranteed the supply of fuel on the island despite the accident.
The governor said the U.S. commonwealth has a week's supply of gasoline.
The president of the Environmental Quality Board, Pedro Nieves, said the fire could cause the worst environmental disaster in almost 20 years, when a barge ran aground in San Juan Bay and caused a major oil spill.
Guaynabo Mayor Hector O'Neill said the fire could cause a serious environmental disaster due to the amount of fuel stored at the refinery's tanks.
Most of the Electrical Energy Authority's gasoline reserves are kept at the storage tanks of the Caribbean Petroleum Corporation's refinery and all information indicates that the tanks that exploded were filled with fuel.
Venezuela's state-run oil company, PDVSA, will shut two processing units at its 187,000-barrel-per-day (bpd) Puerto La Cruz refinery for 15 days of planned maintenance in November, union sources said October 23.
The refinery will shut its gasoline-making fluid catalytic cracker and alkylation units. The refinery will also shut the No. 2 boiler for a 25-day maintenance.
The Puerto La Cruz maintenance had been planned for May, but was delayed due to work at other refineries, the source said.
The most important part of the planned maintenance at Puerto La Cruz will be to change the catalysts in the alkylation unit in preparation for a larger turnaround at the refinery in April and May 2010, one of the sources said.
That turnaround is part of a larger project which is expected to boost gasoline output 63 percent and will require a $6.5 billion investment by PDVSA and will be completed in 2013.
The majority of planned outages at PDVSA last much longer than expected, which has forced the South American nation to import gasoline to meet domestic demand.
Separately, another union source said that Venezuela's El Palito refinery, which had been shut for planned work since March is producing gasoline from its 60,000 bpd fluid catalytic cracker, after numerous delays following an initial restart attempt in September.
"(The FCC) has restarted. There were many restart problems, including leaks," a plant employee told Reuters, adding that the unit has now been in operation for about ten days.
The Argentine unit of Spanish energy group Repsol YPF said it plans to invest $396 million in its refinery in the western province of Mendoza.
The investment will go to improving the quality of the gasoline and diesel produced at the Lujan de Cuyo refinery, as well as optimizing the use of energy and increasing the plant's electricity capacity, YPF said in a statement.
"The investment plan will be distributed out over the next three years, allowing us to increase our workforce steadily with priority given to local hirings," the oil company said, adding that 350 people will be employed per month, "reaching a peak of 800 workers in months of highest demand."
YPF's executive vice president, Sebastian Eskenazi said the company's nationwide oil exploration plan is in the pipeline and will be unveiled in December.
"YPF will finance all the necessary studies so we know once and for all what energy resources Argentina has," the executive said.
The company posted net income of 1.05 billion pesos ($271.9 million) in the first half of this year, down 53.5 percent from the same period of 2008.
Argentina's leading oil producer ended last year with net income of 3.64 billion pesos ($945 million), 10.9 percent less than in 2007.
The company is partly owned by Argentina's Grupo Petersen (15.4 percent) and controlled by Repsol YPF (84 percent), which has said it intends to sell part of its stake in the Argentine firm.
A Brazilian court has ordered the suspension of work on two refineries belonging to state-owned oil giant Petrobras and 11 other projects due to "serious irregularities" in their budgets, officials said.
The order affects the Abreu e Lima Refinery, which Petrobras is building in the northeastern state of Pernambuco and Venezuela's PDVSA plans to take a stake in, and the overhaul of the Getulio Vargas Refinery in the southern state of Parana.
Petrobras denied in a statement that budgets had risen in an unusual manner or that "any other irregularity" had occurred in its projects.
The state-owned company said it submitted all the required documentation, adding that the court's criteria were "insufficient" for the projects, which are "of great complexity" and have special characteristics in terms of logistics, contractual guarantees, labor and geographic location.
The court also found irregularities in 11 other public works projects included in the Growth Acceleration Program, known by the Portuguese acronym PAC, President Luiz Inacio Lula da Silva's main infrastructure development plan.
The court's report, which will be submitted to the Congress, covers 219 public works projects with budgets totaling $20 billion.
Petrofac Ltd., a U.K. oil-services provider, said its exit from a natural-gas project off northern Australia was a result of “huge” exploration costs.
Gas from the development is “not going to be monetized any time soon,” Petrofac Chief Executive Officer Ayman Asfari said October 20 in London. “You have to find a lot more gas and it requires a huge amount of investment.”
Petrofac withdrew its 10 percent interest in MEO Australia Ltd.’s NT/P68 project, the Australian company said in a statement. MEO will regain 100 percent of the license, it said.
Separately, Petrofac is dropping a bid to upgrade the Ruwais oil refinery in Abu Dhabi. “We just don’t see that we will be competitive enough,” Asfari said.
Abu Dhabi Oil Refinery Co., the state-run company known as Takreer, plans to double output at the refinery from the current 400,000 barrels a day. It’s set to award contracts for the expansion by the end of the year, the company said in March.
Petrofac is bidding for a contract for work on Saudi Arabia’s Jubail oil refinery and plans to bid for a project at the Mina al-Ahmadi refinery in Kuwait, Asfari said.
Lanzhou, the capital city of China’s Gansu province, will invest US$512.6 million (3.5 billion yuan) in the construction of a state petroleum reserve (SPR) base, reported a local newspaper.
The Lanzhou Morning Daily reported that the SPR base will have a storage capacity of three million cubic meters and that the city will build a commercial petroleum base with capacity sized at one million cubic meters.
The report said that the Lanzhou SPR will be put into operation before 2011, and mainly feed on the oil from China's Tarim basin, the Changqing oilfield and the Kazakhstan crude oil.
Until now, China's government had only unveiled Dushanzi in Xinjiang as one of its second batches of SPR, a project covering four bases with a total storage capacity of 26.8 million cubic meters.
The other three bases have never been officially disclosed.
It was previously revealed that Lanzhou may be a possible candidate for the second SPR batch.
By the end of 2008, China had already put into operation the first phase of four strategic oil bases, which bear a total capacity of 16.4-million cu m, and plans to build the second and third phases each with a designed capacity of 26.8 million cubic meters of crude.
China plans to build up oil reserves amounting to the equivalent of 100 days of imports by 2020, after filling the second and third phases of strategic oil reserve bases.
Russian Prime Minister Putin said in Beijing on October 13 that Russia and China are working on a huge oil and gas cooperation project.
In an exclusive interview with Xinhua, Putin said the two countries have signed a 20-year oil supply agreement and laid more than 2,000 kilometers of crude oil pipelines for this.
China is also laying on its side the corresponding pipeline, he said, adding the two counties are studying the feasibility of building a refinery in China.
Putin said as the world's nuclear power, Russia keeps an open mind towards cooperation in this field.
"Russia and China are very active in the nuclear energy cooperation, "Putin said, citing the Tianwan Nuclear Power Plant as a good example.
Tianwan Nuclear Power Plant, located in the Lianyungang city in eastern China's Jiangsu Province, is so far the largest nuclear power cooperative program between China and Russia.
Putin said Russia is willing to supply coal to China and the supply is increasing rapidly, noting China has good equipment and technology on coal processing.
As for natural gas cooperation, Putin said negotiations are underway and would certainly yield satisfactory results.
On the specific ways of gas supply and the pricing, he said those issues should be resolved at the enterprise level.
"The most important thing is that Russia and China have the need and capacity to enhance cooperation and the two economies are complementary to each other," Putin said, adding such cooperation would last for decades.
With regard to the problems and frictions in the bilateral trade, Putin said those small problems would not impact the general strategic cooperation between the two countries.
He took the "gray custom clearance" as an example. It was the name given to the illegal practice of getting items across the border without official customs approval.
The illegal practice would make the government unable to supervise domestic industries and lead to bankruptcies and unemployment, which might cause more troubles to the society against the backdrop of the financial crisis, he said.
Putin called upon the two countries to establish a set of unified rules, which would be obeyed by both sides, so as to achieve a just, sound and civilized mechanism of cooperation.
Reliance Industries' (RIL) new 580,000 barrels per day refinery at Jamnagar in Gujarat is performing better-than-expected and has overtaken the company's adjacent old refinery in processing crude oil.
RIL last month commissioned all units of the new only-for-exports refinery that turned Jamnagar into the world's largest refining complex, with a combined crude processing capacity of 1.24 million bpd.
The 29 million tonnes a year new unit, that sits next to the old 6,60,000 bpd (or 33 million tonnes a year) refinery, is operating at 114 per cent of its rated capacity and is processing more crude oil than even the older, bigger unit, industry sources said.
A company spokesperson did not immediately offer any comments.
The old plant in August operated at 106.6 per cent of its rated capacity to turn 2.988 million tonnes of crude oil into fuel, the data available from the Petroleum Ministry here said. During April-August, it operated at 98.3 per cent of the capacity, turning 13.595 million tonnes of crude into petroleum products.
RIL had in August started an 85,000 bpd alkylation unit, the only remaining facility to be started at the new refinery, to begin producing petrol meeting the stringent US and European standards.
It had in December 2009 commissioned the new refinery and has progressively started all of the units at the giant facility and has since then shifted focus of its fuel exports from Asia to Gulf and Europe, sources said, adding the company was also directly selling auto fuel into the US when it shipped 184,000 tonnes of petrol.
The company imported about 1.224 million bpc of crude in August, up from about 1.078 milion bpd the month before and around 549,000 bpd a year ago.
Japan's Fuji Oil Ltd planned to boost capacity of its Eureka thermal cracking unit by 6,000 barrels per day to 30,000 bpd by late June 2009 during planned maintenance, officials with parent AOC Holdings Inc said.
The unit processes asphalt to gasoline and middle distillate.
The move, which is aimed at lowering crude oil purchase cost, is expected to have a positive impact on refining margins as the company expects the differential of Saudi Arabia's Arab Light and Arab Heavy grades to widen to $4 a barrel on average in the business year ending next March from $1.70 in May.
The refiner will also raise the capacity of its vacuum distillation unit by 5,000 barrels per day (bpd) to 60,000 bpd at the company's sole Sodegaura refinery, east of Tokyo, AOC President Fumio Sekiya said.
The refinery's first hydrogen-making facility with capacity to produce 15,000 cubic metres of hydrogen per hour is also being set up to avoid a hydrogen shortage during the refinery's maintenance that should last until around June 20.
Fuji Oil has planned to operate its 140,000 bpd crude distillation unit (CDU) at 97 percent of capacity on average in the business year that started in April, up from 93.9 percent a year earlier, a company spokesman said.
The refiner also plans to boost the jet fuel loading capacity for export to 1,500 kiloliteres per hour from 800 kl/h around autumn, the spokesman added.
AOC, the holding company for oil producer Arabian Oil, also announced it would invest $581 million (55.5 billion yen) in the five years ending March 2014.
The National Oil and Gas Group is negotiating with foreign partners about setting up a joint venture later this year to operate Long Son oil refinery in southern Ba Ria-Vung Tau Province.
PetroVietnam Director General Phung Dinh Thuc said at a recent conference in Hanoi that interested parties came from Middle East, Malaysia and Singapore.
Long Son refinery, the third to be built in Vietnam, needs an investment capital of more than US$8 billion.
The first oil refinery was Dung Quat in central Quang Ngai Province, which cost US$3 billion. The second was Nghi Son in the central Thanh Hoa Province, which cost US$6.2 billion.
It is expected that Long Son refinery will become operational by 2014. It will be able to refine 10 million tonnes of crude oil per year and produce liquefied petroleum gas, non-leaded petrol products, diesel, kerosene and sulfur.
At the conference, the group said its total revenue in the first nine months of this year was US$10.5 billion (VND186.1 trillion), a year-on-year decrease of 17 per cent, mainly owing to the lower price of crude oil in the world market.
Of that sum, more than US$5.67 billion came from crude oil exports, which amounted to nearly 11.7 million tonnes.
The group expects to pay VND66.5 trillion to the State Budget for the first nine months of the year.
The group's deputy director general, Le Minh Hong, attributed the poor figures to the fact that the average price of crude oil in the world remained about US$59 per barrel in the first three quarters this year, about US$57 lower than last years average price.
In addition, Petro-Vietnam supplied about 5.8 billion cu.m of gas to the local market, up 10.3 per cent against the same period last year.
It also provided 6.2 billion kWh to the national power grid.
The group churned out 550,000 tonnes of fertilizer, roughly equivalent to the same period last year.
The group this year discovered eight new oil fields, including five in Vietnam and three abroad.
Also at the conference, Phan Thi Hoa, a member of PetroVietnam's management board, affirmed that the group would focus on its core business, rather than expand into real estate, tourism and services.
"The group recently decided to close an energy investment fund and is in the process of restructuring its subsidiaries and affiliates as well as reducing its stake in its member companies," she said.
She said PetroVietnam would transfer its stake in the company specializing in buying and leasing airplanes to its affiliate the PetroVietnam Finance Corporation (PVFC). It also plans to merge the PetroVietnam labor union and investment joint stock company with the PVFC.
The group also plans to merge PV Media Co and PetroVietnam Securities Co with PetroVietnam Insurance Corporation.
"PetroVietnam plans to list the PVFC on the Singaporean stock market next year, but the exact time has yet to be worked out because procedures to list there are rather complicated and our accounting and auditing systems could not match international practices," she said.
The group has privatized most of its member companies, with the exception of PetroVietnam Power Corp, PetroVietnam Oil Corp and PetroVietnam Exploration and Production Corp.
PetroVietnam is expecting to notch up a revenue of VND260 trillion by the end of the year, of which US$7.2 billion will come from crude oil exports.
It expects to pay VND88 trillion to the State Budget for the whole year.
The European Union could offer poorer member states such as Poland millions of euros to help them cut their greenhouse-gas emissions, if they in turn agree to help even poorer countries outside Europe, diplomats in Brussels said October 13.
The proposal comes as the EU is struggling to get member states to approve a common strategy on funding the global fight against climate change, so that it can seize the initiative in international talks.
"The EU may provide support for less prosperous, relatively emission-intensive member states to help reduce their emissions," a draft agreement drawn up for a meeting of EU finance ministers on October 20 says.
But at the same time, all EU member states are "ready to contribute their fair share of public financing" to help developing countries reduce their own emissions, the draft, seen by the German Press Agency dpa, says.
In particular, the EU will pay its "fair share" of fast-track funding totaling 5-7 billion euros (7.3-10.3 billion dollars) over the next three years to kick-start developing countries' fight against climate change, it says.
The draft must now be discussed by EU diplomats ahead of next week's meeting.
The EU sees itself as a leader in international talks on fighting climate change because it is the only major economy to have already passed legislation aimed at cutting its greenhouse-gas emissions.
The talks are set to come to a head in Copenhagen in December.
But the bloc has been criticized for failing to put hard numbers on the table explaining how much funding it will give poor countries and how it will split the bill between its member states.
The EU's executive, the European Commission, puts the global funding need at about 100 billion euros a year by 2020.
Member states have not yet endorsed that figure. The draft declaration says only that it is a "useful estimate" which is nonetheless uncertain and aggregate.
Richer member states in Western Europe say that all EU members should accept a common formula for calculating their share of the overall EU bill, based on a combination of greenhouse-gas emissions and national wealth.
But poorer states with highly-polluting industries, such as Poland, argue that that would make them pay an unfair amount because their emissions are above average and their income below average.
EU finance and environment ministers werer set to discuss the issue at separate meetings in Luxembourg the week of October 18. EU leaders were expected to take up the issue at a summit in Brussels on October 29-30.
Norway's largest oil company StatoilHydro ASA said October 26 it will place a big maintenance and modification contract for its Norwegian fields and plants on to the market next month.
The company is upbeat about the fall in rates and prices within some segments of the oil services sector.
"The decrease in both oil prices and economic growth give grounds for supplier reductions, and if lower prices are achieved, this may gradually lead to a decline in investment costs per barrel, thereby reducing break-even prices," StatoilHydro spokesman Ola Anders Skauby told Dow Jones Newswires. "As a result, a greater number of projects will be attractive, even on today's planning assumptions."
The company is preparing a five to seven-year package to support operations at most of its offshore oil and gas installations. Onshore installations, including the Kaarstoe gas processing plant and the Mongstad refinery, will also be included.
Skauby said StatoilHydro is in the final stages of prequalification and partner approval, and the tender is expected to be issued during November, with planned contract awards next summer.
The size of the contract--closely watched by the market after a lull in new tenders in the sector as oil companies scale back capital expenditure amid lower oil prices and tough credit conditions--is difficult to estimate, he said.
"It will depend on the activity level and approved budgets per license," Skauby said.
The company's existing maintenance and modification contract is valued at about $902.9 million (five billion Norwegian kroner) a year.
There will however be some changes to the new portfolio, with insulation, scaffolding and surface protection work taken out for tender in a separate process, while around NOK150 million of multidiscipline modification work will be newly included, making it hard to draw a direct price comparison.
"A typical maintenance and modification portfolio will consist of many small and medium size call offs, and a few larger call offs," Skauby said.
StatoilHydro, the product of a 2007 deal which saw Statoil buy Norsk Hydro's oil and gas assets, is set to change its name back to Statoil from Nov. 1.
CB&I has been awarded a contract valued in excess of US$70 million by NAFTNA INDUSTRIJA SRBIJE (NIS Petroleum Industry of Serbia) to upgrade its Pancevo Oil Refinery in Serbia.
The scope of work awarded to CB&I includes detailed engineering, procurement services, construction management and commissioning for the hydrocracker/hydrotreater unit (licensed by Chevron Lummus Global) and the associated support units, auxiliary and offsites systems.
CB&I, which has extensive engineering, procurement and construction management experience in Eastern Europe, is currently constructing a similar hydrocracker/hydrotreater unit in Croatia, and recently completed a diesel desulfurization plant for a major refinery expansion project in Poland.
Oil exploration companies operating in Uganda have agreed to the decision to set up an oil refinery in the Albertine Rift so that Ugandan crude can be refined when the country finally starts oil production, Uganda's President Yoweri Museveni said October 9.
"All the companies we have talked to are OK with the refinery," Museveni said in a national address to mark the country's 47th anniversary of independence. Uganda will now concentrate on improving infrastructure, such as roads, railways and power supply, to facilitate oil exploitation, he added.
Oil exploration companies have discovered up to 2 billion barrels of oil on the Ugandan side of the Albertine Rift. Efforts to start oil production are under way, but President Museveni has made it clear he doesn't want to export unrefined crude oil.
A feasibility study, funded by the Norwegian government, on the setting up of a $2 billion refinery is under way and is expected to be completed in April next year.
UK-based Tullow Oil PLC, which has discovered around 800 million bbl, is looking for partners to help it start oil production in Uganda because it has limited experience in refining and pipeline projects.
The Ugandan oil region is around 1,300 kilometers away from the nearest port, Mombasa in Kenya, so oil production would require a pipeline to reach the Kenyan coast.
McIlvaine Company,
Northfield, IL 60093-2743
Tel: 847-784-0012; Fax: 847-784-0061;
E-mail: editor@mcilvainecompany.com