Science Applications International Corp. on September 7 announced its wholly owned subsidiary, Benham Constructors, LLC has been awarded two new contracts by a subsidiary of Holly Corp, to provide engineering, procurement and construction services. The contracts have a combined value of approximately $27 million. Work will be performed in Oklahoma City and Tulsa,OK.

Holly produces gasoline, diesel and jet fuel as well as specialty lubricants, oil and waxes at its Tulsa refining facility. The first contract will support Holly's Interconnecting Piping Project and is valued at $14 million. Under the contract, Benham will help integrate piping interconnections at Holly's east and west refining facilities by performing tasks such as site preparation; utility relocation; foundation design and installations; and piping and structural steel design, fabrication and installation.

Under the second contract, valued at $13 million, Benham will support Holly's Diesel Hydrotreater Revamp project by developing a front-end process design package, and providing detail engineering, procurement and construction for the modified facilities.

"We look forward to supporting Holly with quality engineering and construction services as they work to enhance the interoperability and efficiency of their refining facilities and operations in Tulsa, and satisfy ultra low sulfur diesel requirements," said J.T. Grumski, SAIC Senior Vice President and business unit General Manager.

SAIC is a Fortune 500 scientific, engineering and technology applications company that uses its deep domain knowledge to solve problems of vital importance to the nation and the world, in national security, energy and the environment, critical infrastructure, and health. The company's approximately 45,000 employees serve customers in the U.S. Department of Defense, the intelligence community, the U.S. Department of Homeland Security, other U.S. Government civil agencies and selected commercial markets. Headquartered in McLean, Va., SAIC had annual revenues of $10.8 billion for its fiscal year ended January 31, 2010.

Ohio’s Heartland Refinery Gets One More Chance to Correct Pollutant Discharges

Less than two weeks after threatening to close an East Side oil refinery if its odors continued to sicken neighbors, a Franklin County, Ohio, judge gave the plant another chance August 31

"I want to try one last-ditch effort before I shut it down," Environmental Judge Harland H. Hale said after a hearing on the most-recent smelly emissions from the Heartland Petroleum Refinery.

The Ohio attorney general's office, representing the state Environmental Protection Agency, renewed its request to the judge to close the plant after workers in neighboring buildings complained about odors that caused headaches, nausea and eye and throat irritation.

Instead, Hale ordered attorneys for the state and Heartland to choose an objective expert to conduct a "comprehensive maintenance review" of the plant and develop a plan to correct the problem. The state wanted the judge to close the plant, which recycles used motor oil, until the plan is developed.

"I'm well aware of my order (threatening to close the plant), and I meant what I said," he told attorneys for both sides. But he said he was concerned about putting the plant's 80-some employees out of work.

Hale announced his decision after hearing testimony from six people who work nearby -- three employees of NCO Financial and three employees of the Ohio Department of Job and Family Services.

Robert Ferguson, chief inspector for Job and Family Services, said employees filed 51 incident reports about the smell, the most for a single day since the plant opened in February 2009.

Heartland representative Michael Kopf testified that the most-recent odor was caused by a malfunctioning switch that caused an overflow in a hot-oil heater. The earlier odor was blamed on a waste-water tank that releases vapors through an emergency vent.

The chemicals generating most of the complaints are hydrogen sulfide and sulfur dioxide, according to the attorney general's office.

The state filed a complaint against Heartland on June 15, saying the plant discharges air pollutants and outlining corrective action that it wants the judge to order. Hale is considering the state's request for a preliminary injunction that would require the plant to begin making changes immediately.

Enbridge Says `Drain-Up' Completed, Most Oil Recovered After Illinois Leak

Enbridge Energy Partners LP drained most of the oil from a damaged pipeline in Illinois that has disrupted crude transports from Canada to the refineries in the U.S. Midwest and helped push prices higher.

The Line 6A pipe, in Romeoville, 30 miles (48 kilometers) southwest of Chicago, remains shut and there’s no estimate for when it may start, the Houston-based company said today in a statement. “Enbridge’s schedulers are working with shippers to divert crude oil volumes to other available pipelines and storage facilities,” the company said September 13.

Crude oil for October delivery rose 77 cents, or 1 percent, to $77.22 a barrel in electronic trading on the New York Mercantile Exchange as supply disruption coincided with optimism about recovery in the U.S. and growing oil demand in China.

Enbridge said it finished the “drain up” of the remaining oil and that it collected about 6,050 barrels out of the 6,100 leaked. The 670,000-barrel-a-day pipe, which can supply more than one-third of the oil imported from Canada by Midwestern refiners, was shut September 9 after leaking oil.

“The health and safety of the public and of the people working on the clean-up remain Enbridge’s top priority,” President Terrance McGill said in a statement.

Citgo Petroleum Corp. said on September 10 that it’s seeking other supplies for its 170,500-barrel-a-day Lemont refinery that gets crude through the pipeline. ConocoPhillips’ Wood River plant and Exxon Mobil Corp.’s Joliet refinery in Illinois, along with BP Plc’s Whiting plant in Indiana, are also located in the vicinity of the pipeline.

The 34-inch line runs 466 miles from Superior, Wisconsin, to Griffith, Indiana, according to an Enbridge website. It carries light, medium and sour crudes.

Canada is the largest exporter of crude to the U.S., sending 2.2 million barrels a day in June, according to the Energy Department. More than a quarter of that arrives by pipeline into the Chicago area.

The U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration is investigating the incident, Patricia Klinger, an agency spokeswoman, said in an e- mail. The National Transportation Safety Board also has an investigator at the site, she said.

Wyoming Refining Co to Improve Odor, Pollution Levels with $32 Mln in Renovations

For 24 days beginning October 11, the Wyoming Refining Co. will shut down operations to hook up the last of the new pollution and odor control measures that were mandated by a 2009 consent decree between the Environmental Protection Agency and Wyoming Refining. That decree requires the Newcastle refinery to meet the EPA’s Petroleum Refinery Initiative standards.

When the final pieces of $32 million in improvements are operational in November, odor issues in Newcastle are expected to improve dramatically, said Pat Havener, president of Wyoming Refining.

A wet gas scrubber is designed to reduce air pollution from the plant by more than 100 tons per year, as it washes particles, sulfur dioxide and nitrogen oxide from plant emissions with water and a caustic material — basically, a baking-soda-like substance. After it is installed, Newcastle will have the smallest refinery in the nation with a wet gas scrubber.

But it is a new sour water stripper that Newcastle residents likely will appreciate even more, Havener said.

That system is designed to remove more than 400 tons of hydrogen sulfide along with 200 tons of ammonia from the plant’s wastewater output annually. It will transform more than 37 million gallons of waste water into about 36.6 million gallons of “clean” water each year.

When the refinery is operational again in November, it will include:

A Dynawave Wet Gas Scrubber, making Wyoming Refining the smallest refinery in the nation to have one. In 2009, Wyoming Refining’s sulfur dioxide emissions totaled 675 tons, according to the air quality division of the Wyoming Department of Environmental Quality. By comparison, the average size coal-powered electric plant emits between 5,000 and 10,000 tons of sulfur dioxide each year. The wet scrubber is expected to decrease those emissions by 35.5 tons. It will also remove 49 tons of particulate and 21.5 tons of nitrous oxide from the air each year.
A Sour Water Stripper, which is expected to significantly improve wastewater odor problems at WRC.
An Amine Fuel Gas Treater will remove 1,800 tons of hydrogen sulfide from Wyoming Refining fuel gas streams annually.
A Sour Water
Ammonia to Ammonium Thiosulfate Unit, or SWAATS, which combines waste byproducts from the sour water stripper and the Amine fuel gas treater to create a new product, an agricultural fertilizer.
A new flare tower that will rise 170 feet into the air will replace the current 50-foot-tall flare. Flaring devices allow refineries to burn excess product when necessary to prevent explosions.
Wyoming Refinery is also complying with Occupational Safety and Health Administration regulations that require it to move administrative offices, warehouses, laboratories and other monitoring personnel further away from processing areas.

Conoco Begins L.A. Refinery FCCU Overhaul

ConocoPhillips was starting a planned overhaul of the gasoline-producing fluidic catalytic cracking unit at its 139,000 barrel per day (bpd) Los Angeles-area refinery in September, according to sources familiar with refinery operations.

An alkylation unit at the refinery will also be included in the overhaul.

Conoco warned California pollution regulators of planned flaring through the end of the month.

Marathon to Accelerate $2.2 Bln Detroit Expansion in 2011

After a lengthy delay, Marathon Oil plans to significantly ramp up work next summer that will expand its oil refinery in southwest Detroit, creating more than a thousand construction jobs.

The Houston-based oil company is on track to complete the $2.2-billion refinery expansion by the end of 2012, said Gary Heminger, Marathon's executive vice president of downstream operations.

Currently, 650 contractors are working on the project but that is to rise to 1,800 to 2,000 by next summer when most of the construction is to occur.

The company has also started the process of hiring 135 new employees for the refinery, half of whom will be contract workers. Engineering work on the project is expected to be finished by year's end.

The expansion of Michigan's only oil refinery was supposed to be completed in this year's fourth quarter. But in October 2008, Marathon delayed the project because of the downturn in the economy. The refinery supplies 20% of Michigan's gasoline.

Marathon employs 400 workers at the refinery.

When construction is complete, the Detroit refinery will be able to process 120,000 barrels of oil a day, up from 106,000 barrels. But in a major change, most of the oil will be heavier crude from Canada's oil sands rather than light crude from the Gulf of Mexico, Oklahoma and other areas.

Clarence Cazalot Jr., Marathon's CEO and president, toured the construction site in mid-September and then spoke to the Detroit Economic Club, saying the oil industry is taking steps to prevent disasters like the BP oil spill.

EPA Probes BP’s Texas City Chemical Release

Federal regulators launched a probe September 16 into the release of half a million pounds of toxic chemicals into the air from BP's Texas City refinery.

The Environmental Protection Agency has asked the oil giant for information about the breakdown of a piece of equipment that led to the release of the chemicals, including the carcinogen benzene, over 40 days during April and May.

BP has 30 days to provide the information. The company contends that air monitors around the plant and in the area did not show a spike in air pollution during the release.

Texas Attorney General Greg Abbott also has sued BP, seeking fines of $600,000. And many Texas City residents have signed up to join a $10 billion class-action suit against BP.

Citgo Starts Up ULSD Unit at its Lemont Illinois Refinery

Citgo Petroleum Corp. announced that it has completed the construction and start-up of a major processing unit to produce Ultra-Low Sulfur Diesel (ULSD) at its Lemont, Illinois refinery. In compliance with Environmental Protection Agency (EPA) standards, the unit is equipped with the latest technology designed to reduce, by 98 percent, the sulfur content of diesel transportation fuel produced at the refinery.

"Projects such as our innovative ULSD facilities underline our commitment to the environment and communities we serve. I am proud to join with employees and community leaders to launch this innovative facility," said Citgo President and CEO Alejandro Granado. "These efforts are in alignment with the principles endorsed by our shareholder, Petroleos de Venezuela, S.A. (PDVSA), the national oil company of the Bolivarian Republic of Venezuela and come at an exciting time in CITGO's history as we recently celebrated our 100th anniversary."

The new unit has a production capacity of 42,500 barrels per day (BPD) of ULSD, which constitutes the majority of Lemont's overall distillate production of 55,000 BPD refined from heavy crude. The steps involved in producing ULSD include adding hydrogen to remove the sulfur from the diesel and then recovering and converting those sulfur compounds into elemental sulfur. This is then sold into the fertilizer market, an additional step in the company's commitment to the environment.

The CITGO Lemont Refinery will now be able to produce 100 percent ULSD, in addition to other high-quality refinery products such as gasoline, jet fuel and other specialty middle distillate products. The multi-year, multi-million dollar capital investment behind the innovative ULSD facility, which helped create 800 contractor jobs for the local community, also included upgrades to manufacturing units for all refined products.

In addition to Lemont, the CIitgo Corpus Christi, Texas refinery will soon introduce their own upgraded ULSD facility that will be able to produce 100% ULSD. The Citgo Lake Charles Manufacturing Complex in Louisiana has been producing ULSD since 2006.

The new ULSD unit at the Citgo Lemont Refinery is a key addition to the company's state-of-the-art refining operations.

NPRA Chief Says Defeat of California Prop. 23 Could Mean Life or Death for the Oil Industry

The head of an oil industry trade group described California's landmark climate change law as "political correctness gone mad" and said Gov. Arnold Schwarzenegger appears "hell bent on becoming a real life Terminator" to the refining industry.

In an e-mail letter sent September 14 to members of the National Petrochemical and Refiners Association, Charles Drevna, the group's president, said passage of Proposition 23, the ballot initiative that aims to roll back the state's greenhouse gas reduction law, is key to stopping climate change laws in other states and would mean "the difference of life and death" for the oil industry.

"Unfortunately, Proposition 23 is not just a California issue. A defeat of Proposition 23 in California could energize environmental fanatics around the country and in Washington to match California's destructive policies," Drevna said.

"At that point, our industry might find itself in the position of the Titanic facing the iceberg -- headed for disaster without time to alter course."

Proposition 23 aims to suspend the state's climate change law (AB 32) until the jobless rate hits 5.5 percent for four quarters in a row.

Proponents of the initiative say AB 32 will kill jobs and lead to higher energy prices.

The climate change law, signed in 2006 by Schwarzenegger, aims to cut carbon emissions statewide to 1990 levels by the year 2020.

In his e-mail, Drevna said oil refiners have raised about $6 million so far, and he cited contributions from members of the National Petrochemical and Refiners Association.

They include Valero Energy Corp., which has raised more than $4 million; Koch Industries, which gave $1 million; and Tesoro Corp., which contributed $1.5 million.

Drevna urged the industry to raise even more money for the battle.

The National Petrochemical and Refiners Association is a trade group that includes more than 400 refiners, petrochemical manufacturers, contractors and refinery suppliers in the United States.

Proposition 23's opponents said Drevna's e-mail shows how deceptive the oil industry has been about its role in backing the initiative.

Until now, backers of the measure had described their effort as grass-roots, said Steve Maviglio, spokesman for the “No on 23” committee.

"This is Exhibit A that Prop. 23 is exclusively for the self interest of out-of-state oil companies," he said.

Laura Dixon, a spokeswoman for Schwarzenegger's ballot initiatives committee, called the e-mail a "desperate" bid by a group clinging to old-school energy policies that will hurt the environment and California's growing clean-tech economy.

"If AB 32 is repealed, it will be detrimental to California's economy," Dixon said.

Earlier this year, Schwarzenegger described Proposition 23's main financial backers -- Valero and Tesoro -- as "greedy Texas oil companies."

In his e-mail, Drevna upped the political rhetoric, saying the governor is leading the fight for "environmental zealots."

He also criticized the California Air Resources Board, which will oversee implementation of AB 32, as having powers "any dictator would envy."

"For all practical purposes, AB 32 would have the effect of outlawing petroleum-based fuels in California in the second half of this century," Drevna said.

Valero to Sell Paulsboro N.J. Refinery to PBF Holding

A subsidiary of Valero Energy Corp. announced September 27 it has signed an agreement to sell the ownership of its 185,000 bpd Paulsboro, N.J., refinery to PBF Holding Company LLC, a wholly owned subsidiary of PBF Energy Company LLC.

The net sale price is approximately $360 million plus the value of net working capital and inventories, currently estimated to be $275 million. Consideration for the $360 million sale price consists of $180 million in cash at closing and a note in the amount $180 million with a term not to exceed 18 months. The transaction is expected to close in the fourth quarter and is contingent upon regulatory and other customary approvals.

Valero decided to explore its strategic options for the Paulsboro refinery in the third quarter of 2009 as part of its ongoing evaluation of its portfolio of assets. Earlier this year, a PBF subsidiary purchased the terminaling operations and idle refining assets at Valero's shutdown Delaware City refinery.

"The sale brings Valero a fair value for the operation and will allow us to achieve our stated strategic goal to exit refining in the U.S. East Coast and focus on other opportunities," said Valero Chairman and CEO Bill Klesse.

Murphy Oil Announces Consent Decree Deal with EPA for Meraux, Superior Refineries

Murphy Oil Corp. announced September 27 that its wholly owned subsidiary, Murphy Oil USA, Inc. has reached an agreement on a Consent Decree with the Environmental Protection Agency that will cover Murphy's two U.S. refineries in Meraux, Louisiana, and Superior, Wisconsin.

Tom McKinlay, Sr. Vice President, U.S. Manufacturing Murphy Oil USA, Inc. commented:

"After several years of negotiation with the EPA and the states of Louisiana and Wisconsin, we are pleased to reach an agreement on a Consent Decree. The terms of the agreement are similar in nature to those of Consent Decrees that currently cover 90% of U.S. refining capacity." McKinlay added, "With additional financial commitments of up to $142 million spread over the next nine years, this underscores our efforts to improve operations and reduce emissions. We look forward to working with the EPA and the states as we implement these improvements."

Refinery Status: Unplanned and Planned Production Outages at U.S. Refineries

The following table lists unplanned and planned production outages at U.S. refineries as reported by Dow Jones Newswires. The information is compiled from both official and unofficial refining sources and doesn't purport to be a comprehensive list.

Spot West Coast gasoline soared September 30 on the back of a 70,000 barrel-a-day fluid catalytic cracking unit taken off line for next seven days at it's 160,000 barrel-a-day Golden Eagle refinery in Martinez, Calif., and broad Nymex complex increases. Tesoro did not return calls seeking comment.

Tesoro Corp. planned to begin restarting at its Anacortes, Wash., refinery October 1 and expects the plant to be fully operational by October 15, spokesman confirmed September 30.

Low sulfur crude leaked from a pipeline at BP PLC's (BP) Texas City refinery September 30 after a heavy piece of equipment hit the line, the company said. Separately, the company also agreed to pay $15 million to resolve violations for the Clean Air Act at the refinery.

ConocoPhillips reported September 29 that planned flaring activity will take place at its Wilmington, Calif., refinery for the entire month of October, according to a filing with state environmental regulators.

BP PLC's (BP) refinery in Carson, Calif., reported September 29 that planned flaring activity would take place on September 29 -October 4.

For more detailed information, search Dow Jones Newswires using the code N/REF.

Operator Refinery Capacity Description Restart

(in 000s

bbl/day)

UNPLANNED

CANADA

EAST COAST 2

United Warren, PA 70.0 Crude throughput reduced by n/a

35% owning to Enbridge pipe-

line leak/closure on July 26.

Sunoco Philadelphia 335.0 Hydrodesulfirization unit had

PA been shut early Sept. 25 after

releasing a mist of diesel that

settled on 100-150 cars in an

adjacent neighborhood, Co. said

Sept. 27.

CARIBBEAN

GULF COAST

Motiva Port Arthur 275.0 An unidentified unit was shut

TX after a flash fire Sept. 12 at

a process heater, Shell said

Sept. 13. No injuries or impact

to community.

Chevron Pascagoula 330.0 Isomax Unit No. 2 shut Sept.

MS 23 due to small, brief fire.

No other units affected; no

restart timing, the incident

is under investigation.

BP Texas 455.8 Low sulfur crude leaked from a

City, TX pipeline at the plant Sept. 30

after a heavy piece of equipment

hit the line.

Citgo Corpus 163.0 FCCU shut Sept 19 owing to mal- n/a

Christi, TX function at associated gas com-

pressor. The unit will be re-

started as soon as repairs are

complete.

Crude unit shut Sept. 16

on leak at a heater. The

leak had sparked a fire

that was isolated, local

reports indicated.

Conoco Belle Chasse 247.0 Part of a sulfur recovery n/a

LA unit was shut for repairs

on Sept. 6. No restart esti-

mate.

Murphy Meraux, LA 125.0 Transformer was repaired and

operations returned to normal,

Co. said Sept. 29. A unit

failure caused an electrical

outage late Sept. 28.

Pasadena Pasadena, TX 100.0 FCCU shut due to failed gas n/a

Refining compressor. No restart esti-

mate.

Shell Deer Park 340.0 Unidentified unit taken out of n/a

TX service after a fire on July 20.

Refinery operations were "stab-

ilizing" following the fire, the

co. said.

Valero Port Arthur 325.0 Coker unit No. 843 operating at

TX normal rates, Co. said Sept. 27,

after an unexpected coker wet

gas compressor snag resulted in

about 45 minutes of visible

flaring on Sept. 25.

Valero Corpus 315.0 Naphtha hydrotreater was shut at

Christi, TX Complex 7 of the East Plant Aug.

17 to repair heat exchanger leak,

Co. said Aug. 18. No material

impact on production is expected.

MIDWEST

BP Whiting, IN 405.0 White Oak pipeline transporting

finished product to 2 Illinois

terminals was ahead of an

excavation that began Aug. 17 to

find a leak., Co. said Aug. 18.

BP/Husky Toledo, OH 160.0 Crude oil throughput reduced n/a

by unspecified amount owing

to Enbridge's crude oil pipeline

leak/closure on July 26.

Exxon Joliet, IL 239.0 Refinery operations back to nor-

mal the co. said on Sept. 24 fol-

lowing the restart on Sept. 17

of Enbridge's crude oil delivery

pipeline 6A. Rates were cut when

the line was shut when a leak

was discovered the previous week.

Marathon St. Paul, MN 74.0 On-site emergency crew extin- Sep 1

guishes fire on Sept. 1. No

injuries or off-site impact.

Impact on operations unclear.

Frontier El Dorado 130.0 Three sulfur-recovery units

KS restarted shortly after going

offline because of a storm

Sept. 15, Co. said Sept. 16.

ROCKIES

WEST COAST

Shell Martinez 156.4 Wet gas compressor shut Sept 9 n/a

CA due to mechanical failure; flar-

ing and emissions were reported

to environmental regulators.

Conoco Ferndale, 100.0 An alkylation unit and butamer n/a

WA shut following a pump fire early

June 15, an environmental agency

said. The refinery continues to

operate, co. said June 15.

Conoco Rodeo, CA 120.2 Equipment malfuntion on Sept. n/a

24 results in vapor release;

impact on production unclear.

Tesoro Anacortes 120.0 Company expects to begin unit Oct. 15

WA startups Oct. 4 and the plant

is to be fully operational by

Oct. 15, Co. confirmed Sept. 30.

Plant was shut after deadly April

2 blast.

Valero Benicia, CA 170.0 Early-day equipment failure & n/a

fire on Sept. 24 results in a

release of pitch. It took place

at a coker's compressor but did

not have a material impact on

production, Co. said Sept. 29.

Exxon Torrance, CA 149.5 Unplanned flaring activity

Sept. 28 lasted two hours. No

units shut and there was no

impact to production, Co. said,

Sept. 29.

PLANNED

CANADA

Shell Montreal 130.0 The refinery will be converted into

Quebec terminal.

CARIBBEAN

Valero Aruba 235.0 Idled refinery to resume opera-

tions after completing turnaround

maintenance in Sept. if it is

profitable to do so, the co. said

on July 27.

EAST COAST

Sunoco Westville 145.0 Idling all Eagle Point refin- n/a

NJ ing operations indefinitely due

to poor economics, co. said

Oct. 6.

Valero Delaware 210.0 PBF Energy has closed Apr 2011

deal to buy plant. Petroplus

said May 5 the plant would be

restarted in 2Q of 2011.

Valero Paulsboro, NJ 185.0 Agreed to sell refinery for

$360 million to PBF Energy,

Co. said Sept. 27. Deal is

expected to close in Q4.

Western Yorktown 64.5 The refinery will close in Sept

VA September 2010 for economic

reasons. Terminal operations

will continue.

Maintenance had been planned

for 3Q 2010.

GULF COAST

BP Texas 455.8 Ultraformer No.4 restarted on

City, TX Sept. 24 following maintenance

and repairs; it is unclear when

the unit was taken out of ser-

vice.

Work on FCCU No. 1's electrostatic

precipitator stack began

Sept. 28. Up to 3 of the 10 cells

will be removed.

Conoco Borger, TX 146.0 Two upsets at Unit 40, FCCU re-

sult in brief emissions and

opacity on Aug. 4. Status of

unit unclear.

Maintenance activity continues,

the co. said on Aug 3. The work

has been underway since June 5.

Maintenance on Unit 50 Coker

on Sept. 16-18, Co.

Chevron Pascagoula 330.0 Pre-commercial heavy oil 2010

Miss. conversion project delayed

from 2008 to 2010 due to

economic factors.

Expansion project including

the replacement of two 30-year-

old reformers and construction

of a 55,000 b/d continuous

catalytic reformer platformer

unit to be completed by late

summer, Industrial Info

Resources said July 6. A

premium base-oil facility

was also being planned, co.

said in late Feb.

Conoco Sweeny, TX 247.0 Unit 27 FCCU being put on

circulation for four days to

repair leak starting Sept. 13.

The fractionation section, wet

gas compressor and flare gas

recovery system will continue

to operate.

Exxon Baytown, TX 560.6 Extended period of scheduled Est.

maintenance at crude unit, End Oct

several hydrofiners and other

units starts week of Aug 22.

Return to normal operations

unclear, sources say work will

take two months to complete.

Exxon Joliet, IL 239.0 Production impacted by outage of

Enbridge Line 6A pipeline that

was shut to repair a leak last

week, Co. said Sept 16. Plant

continues to operate on other

crude supplies; no supply

disruption to branded stations.

Exxon Chalmette 120.0 Crude throughput will be re- N/A

LA duced to 90,000-b/d as redun-

dant units and about 70 jobs

are taken out of service and

cut for economic reason. These

have begun to take place, the

co. said Aug 26.

Flint Corpus 290.0 FCCU No. 2, Sulfur Recovery Sep 24

Hills Christi, TX No. 1 to shut for maintenance

on Sept. 10.

$250 mln project for new Spring 2010

diesel desulfurization,

sulfur recovery unit to begin

in Fall 2008. Construction

to last 18 months.

Motiva Port Arthur 285.0 Expansion project to increase 1Q

throughput capacity by 325,000 2012

b/d, to 610,000-b/d, slowed.

Completion now seen 1Q

2012, from 2010.

Valero Corpus 340.0 West Plant 50,000-b/d FCCU at

Christi, TX reduced rates since mid-Dec for

economic reasons.

Valero Norco, LA 250.0 Hydrocracker project will pro- 2013

ceed and be completed in late

2013, the co. said on July 27.

FCCU will be revamped during 2Q

2Q of 2011, the co. said on 2011

July 27.

Upgrade project to build 2012

a new diesel hydrotreater

unit moved from 2010 to

4Q 2012.

Valero Port Arthur 325.0 Hydrocracker project will pro- 2012

TX ceed and be completed in late

2012, the co. said on July 27.

Six coke drums will be re- 2011

placed in 2011.

77,000-b/d FCCU at reduced n/a

rates since mid-Dec for

economic reasons.

Valero Sunray, TX 170.0 55,000-b/d FCCU at reduced n/a

rates since mid-Dec for

economic reasons.

Expanded crude gather system 4Q

will increase available crude 2010

supplies to refinery by 4Q.

Murphy Meraux, LA 125.0 Plant operations returned to

normal after catalyst change

that lasted a couple of weeks,

Co. said Aug. 24. Production

is at about 120,000 b/d.

Alon Big Spring 67.0 Maintenance activity related to

No. 2 SCOT unit Sept. 16. Co. reported Sept. 16.

MIDWEST

BP Toledo, OH 155.0 $400 million upgrade 2012

to start 2010.

Citgo Lemont, IL 167.0 New ultralow-sulfur diesel Sep 7

unit start up announced on

Sept. 7.

CVR Coffeyville 115.0 New ultra low sulfur gasoline

KS unit will be brought online

in 2Q, co. said May 3.

Previous target was to have

unit up by end of 2010.

Husky Lima, OH 160.0 Scheduled fall turnaround main- Dec

tenance on track to begin in

Oct for 40 days, the co. said

on Aug 26.

Valero Ardmore, OK 90.0 Plant-wide turnaround planned; 2011

work will impact 1Q 2011

results.

ROCKY MOUNTAIN

Suncor Commerce 93.0 Planned work at reformer unit Fall

City, CO deferred to Fall 2010 from Feb 2010

28 start date.

WEST COAST

BP Carson, CA 265.0 Three days of planned flaring Oct 4

expected starting Sept 28. On

Sept. 30, Co. reported more

flaring on Sept. 30-Oct. 4.

Conoco Wilmington 139.0 Planned flaring expected Oct. Oct. 31

CA 1-31. The event is not due to

equipment breakdown. Co.

previosuly reported planned

flaring for Sept. 10-30.

Valero Benicia 170.0 Scrubber installation continues; 2010

CA work seen concluding by year-end,

the co. said on July 27.

Tesoro Golden Eagle 166.0 Major turnaround maintenance 2011

Martinez, CA deferred to 2011 from late

2009, the co. said Feb. 3.

FCCU, 70k b/d, taken offline Oct. 7

for next seven days, a source

familiar with the plant's

operations said Sept. 30.

Tesoro Wilmington 97.0 Flaring will start on Sept 7 Sept 11

CA for four days; the event is

not due to equipment breakdown.

CANADA

Quebec Court Rules in Favor of Shell’s Montreal Refinery Conversion

Quebec's Superior Court ruled in favor of Shell September 17 on an application made by the Union representing some of Shell's refinery workers to obtain a permanent injunction seeking to prevent Shell from proceeding with work at its Montreal-East refinery. Shell has been complying with an interim injunction since July 7th that has prevented the company from conducting its planned conversion activities at the refinery.

The judge's ruling states that Shell may proceed with the conversion work in the manner in which it had originally planned. The judge also clearly and specifically stated that Shell is entirely free to cease its operations and cannot be legally forced to continue operating the refinery.

"As Shell has always maintained, the Court's decision confirms that Shell did not undertake, and prior to the interim injunction was not proposing to undertake, any unauthorized work. It is now also very important for the Ministry of Sustainable Development, Environment and Parks to act on our other long-standing permit application that we require to begin the construction that will increase our capacity to import fuels to our terminal." said Lorraine Mitchelmore, President of Shell Canada.

Shell has always acknowledged that it requires an authorization under section 15 of the Petroleum Products Act to conduct the permanent demolition work that it will ultimately need to complete. Shell believes that this permit, which it applied for over 5 months ago, should now be issued without further delay.

MEXICO

Defective Compressor Causes Fatal Pemex Refinery Blast

An explosion shook the Cadeyreta oil refinery in northern Mexico September 7, killing one worker and injuring ten others, including some seriously, the state-owned oil giant Petroleos Mexicanos (Pemex) said.

The cause was apparently a defective compressor, media reports said.

There was no resulting fire, according to the director of local rescue efforts, Guillermo de Leon.

The area near the explosion was evacuated and quickly brought under control, de Leon said.

The Cadeyreta refinery--one of Pemex's most important facilities--is about 35 kilometers from Monterrey, Mexico's main industrial center.

ECUADOR

Ecuador Seeks Investors for $12.5 Bln Refinery

Ecuador is seeking strategic investors to buy a stake in a proposed $12.5 billion joint oil refinery project with Venezuela, Ecuador's Strategic Sectors Minister Jorge Glas said September 10.

"We're inviting many enterprises to be part of our project, to be shareholders of the project," Glas told Dow Jones Newswires.

"We're trying to select one, two or three strategic partners. That's a very important project for us," he said.

Companies in South Korea and China have shown interest in taking equity in the project, Glas said. He declined to identify them.

Asked to specify how large a stake any single company could take in the project, Glas said: "We have to decide that within the conversation with strategic partners."

In March, Ecuador signed a contract with South Korea's SK Engineering and Construction Co. for basic engineering of the $12.5 billion oil refinery project, known as Refineria del Pacifico, or Pacific Refinery.

The new refinery--scheduled to come online in 2013 with a capacity of 300,000 barrels a day--would help reduce Ecuador's reliance on imports of oil products such as gasoline.

Refineria del Pacifico will be owned 51% by Ecuador's state-run Petroecuador and 49% by Venezuela's state-run Petroleos de Venezuela, or PDVSA.

Glas said Ecuador is also in talks with several banks about financing the Pacific Refinery project.

"We're talking with exim (export-import) banks from Korea, China and a lot of countries. We're having conversations with everybody, exim banks and private banks. There's some high-level interest from European banks," he said.

The Ecuadorian government hopes to secure financial support from third parties to the tune of 70% of the facility's slated cost. Petroecuador and PDVSA will finance the other 30% of the project.

The Refineria del Pacifico will be built in Ecuador's coastal Manabi province.

Glas said Korean companies such as Samsung, SK, GS and Hyundai have shown interest in other Ecuadorian projects, including electricity and resources development.

In addition, on September 9, Korea National Oil Corp. signed a letter of intent with the Ecuadorian government, under which the Korean company can study the feasibility of exploring for oil and natural gas in the Andean country.

ASIA

CHINA

PetroChina to Double Capacity at Huabei Facility

China's National Development and Reform Commission has approved a feasibility study by PetroChina Co. (PTR) unit PetroChina Huabei Petrochemical Co. to double its refining capacity to more than 10 million metric tons and upgrade its oil-product quality, parent company China National Petroleum Corp. said September 3.

The project is planned to be mostly completed by October 2012, and start operations in December 2012, CNPC said in its in-house newsletter.

When completed, it will be China's 14th-largest refinery and will be able to supply 8 million tons of good-quality oil and petrochemical products a year to Beijing, Tianjin, and northern China, it said.

PetroChina Huabei Petrochemical Co. is also planning a petrochemical project with annual production capacity of 1 million tons of ethylene, it said.

China Gives Approval to $8.7 Bln Sinopec-Kuwait Refinery

The Chinese government has granted environmental approval to the $8.7 billion refinery and petrochemical joint venture between Sinopec and Kuwait.

The government also gave clearance to CNOOC's $7.6 billion plan to expand its refinery and petrochemical plant in southern Huizhou city, according to statements posted on the website of the Ministry of Environmental Protection.

Formosa Petrochemical to Restart Mailiao Refinery Processing Unit

Formosa Petrochemical Corp., Taiwan’s only publicly traded oil refiner, plans to restart within two days a residue processing unit that was shut September 2 at its Mailiao refining complex.

A suspected flaw in piping design at the No. 1 residue desulfurization unit is being corrected, spokesman Lin Keh-yen said in Taipei September 9. The company halted its No. 2 residue desulfurization unit after a fire on July 25. Each of the plants can process 80,500 barrels a day.

Separately, the company plans to stop its No. 2 ethylene plant early October for maintenance, he said.

Residue desulfurization units remove sulfur from residual fuel. Formosa Petrochemical’s Mailiao refinery has three crude distillation units, each able to process 180,000 barrels a day. Formosa Petrochemical shut the 540,000 barrel-a-day refinery for safety reasons after an oil leak triggered a blaze at the No. 2 residue desulfurization unit.

The company was using about one-third of its crude refining capacity, with one crude unit still shut and the other two running at half capacity, Lin said on September 3.

Formosa Petrochemical has three naphtha-processing plants with a combined annual capacity of 2.935 million metric tons of ethylene, a raw material for plastics, chemicals and synthetic fibers. The No. 2 plant, able to produce 1.035 million tons of ethylene a year, was scheduled to halt production for 40 to 45 days, Lin said in June.

The company won’t buy any naphtha for delivery in the first half of October because of the planned stoppage at the No. 2 ethylene plant, Lin said.

CNPC Starts Building China Part of Myanmar Pipelines, Yunnan Oil Refinery

China National Petroleum Corp., the nation’s largest oil company, started building the Chinese section of oil and gas pipelines linking the world’s largest energy consumer to Myanmar.

The oil pipeline is designed to receive 22 million metric tons of crude a year and the gas link will be able to pump 12 billion cubic meters annually, the state-controlled company said in a statement on its website September 13.

The company has also begun building an oil refinery in Yunnan province, north of Myanmar, according to the statement, which didn’t give the refinery’s capacity. The Chinese side of the project, including the pipelines and the refinery, will be completed in 2013, it said.

Myanmar produced 11.5 billion cubic meters of gas last year, making it Southeast Asia’s fourth-largest producer, according to BP Plc’s Statistical Review of World Energy.

China’s CNPC and Russia’s Rosneft Agree to Invest $5 Bln in a Tianjin 260,000 bpd Joint Refinery

China and Russia on September 21 agreed to invest around $5 billion in a joint oil refinery in the Chinese city of Tianjin, further strengthening energy ties between the two countries.

The refinery--a joint venture between China National Petroleum Corp., or CNPC, and Russia's OAO Rosneft will have a capacity of 260,000 barrels a day, said a spokesman for Russia's Deputy Prime Minister Igor Sechin. The refinery is expected to process crude from Russia and the Middle East.

The deal was reached at a meeting between Sechin and the Chinese Vice Premier Wang Qishan in the coastal city of Tianjin and confirms details previously reported by Dow Jones Newswires.

The refinery will purchase 183,000 barrels of crude oil a day at spot-market prices from Russian companies, the spokesman said. Those deliveries come on top of the 15 million tons of crude that Russia agreed to supply China annually for 20 years under an oil-for-loans agreement finalized between CNPC and Rosneft in April 2009. The rest of the crude feedstock for the Tianjin refinery will be bought from the Middle East.

CNPC has 51% interest, while Rosneft has 49% interest.

Rosneft's Chief Executive Eduard Khudainatov called the deal a "milestone" and said it "is another step in developing cooperation between the largest oil companies of our countries."

State-controlled Rosneft said the refinery will be completed in 2015 and have a light products yield of more than 80%. The refinery will produce motor fuels and liquefied gas, as well as petrochemicals such as aromatics and polypropylene.

In addition to the refinery, the joint venture plans to develop a network of retail filling stations.

Rosneft and CNPC reached an initial agreement in 2007 to build a refinery in Tianjin. The parties had originally planned a refinery for 200,000 barrels a day, but decided to increase capacity due to rising petroleum demand in China.

Wang and Sechin on September 21 attended a foundation laying ceremony for the joint refinery. The front-end engineering design for the refinery will be completed in the next six months.

Dow Jones Newswires previously cited a senior Chinese official as saying the two parties would finalize the CNPC-Rosneft refinery agreement during the planned energy talks in Tianjin.

INDIA

HPCL to Set Up Greenfield Refinery at Ratnagiri

India's Hindustan Petroleum Corporation Ltd (HPCL) has zeroed in on the Lote Parshuram area in coastal Ratnagiri district of the state of Maharashtra for setting up a 9 to 15 million metric ton per annum (mmtpa) refinery, a top company official said on September 17.

The refinery is being set up in Maharashtra to cater to the increasing demand emanating from west India, he said.

"In order to meet the growing demand in western India and to secure and strengthen our position in this market, we felt it necessary to pursue the option of setting up a new greenfield refinery on the west coast of Maharashtra," HPCL Chairman and Managing Director Subir Roy Choudhury said in Mumbai.

Feasibility studies are being carried out and land is being identified for the proposed facility. Environment clearance will be needed for the refinery which is expected to be ready in about 3-4 years, Choudhury said.

He did not disclose the investment in the project.

The HPCL chief said about 1,500 acres would be needed for the refinery. The company's Mumbai refinery is very old and its cost of modernization would be prohibitive and hence a greenfield refinery is being set up, he said.

HPCL has a capex plan of Rs 4,000 crore (US$872.8 million) in the current fiscal year of which it plans to spend Rs 900 crore for retail expansion (500-600 outlets in rural areas), he said.

INDONESIA

Indonesia's Pertamina May Scrap $3 Bln Refinery Project

Indonesian state oil and gas company PT Pertamina said it is reviewing plans to build a refinery in Bojanegara, Banten, saying the US$3 billion project may not be economically feasible.

"A study suggests the project is not economically feasible. But we are not saying we will drop the project as we still need to discuss this with our partners," said Pertamina spokesman Mochammad Harun on September 1.

Pertamina has established a joint venture with Iran's Oil Refining Industries Development Company (ORIDC) and Malaysia's Petrofield to construct the refinery with a processing capacity of up to 150,000 barrels of crude oil per day (bopd).

Pertamina and ORIDC have a 40 percent stake each in the joint venture with the remaining 20 percent going to the Malaysian partner, the newspaper The Jakarta Post said.

Pertamina said the ORIDC had committed to supply 150,000 bopd of crude oil to the refinery.

Harun said Pertamina is studying the most feasible option between building new refineries and expanding the capacity of ones it already has.

Pertamina refineries director Edi Setianto said the project would not be feasible unless it is integrated with a petrochemical complex.

Setianto said tax incentives from the Indonesian government would not make the project feasible, referring to Pertamina's request for tax incentives to attract investors.

Pertamina has repeatedly asked the government for more incentives, saying it had found difficulties attracting investors since refinery projects offer only a small profit margin.

In March, Japan's Mitsui & Co. Ltd. pulled out of a joint venture with Pertamina to upgrade a fuel refinery in Cilacap.

Pertamina has been expected to build more oil refineries to reduce the country growing dependence on import for refined oil products.

PHILIPPINES

Philippines Fears Oil Refiner Pullout amidst Cheaper Imports

The Philippines' Department of Energy (DOE) on September 6 warned that one of two oil refiners may "pull out" of the country amidst cheaper imports. "It's very possible one of the two refineries will pull out," DOE Secretary Jose Rene Almendras told reporters following a House Committee on Energy briefing.

He refused to name the oil refiner, but Pilipinas Shell Petroleum Corp. had been hinting of a possible exit from domestic oil refining.

After Caltex Philippines shut down its refinery, the country was left with Shell and Petron Corp.

The bigger of the two, Petron, has a 180,000 barrel-a-day refinery in Batangas. Shell's refinery can produce 110,000 barrels per day.

Almendras said an oil refiner recently raised the matter of cheap imports.

"I'm saying that it's possible that one may give up . . . [because] of the economic difficulties. If the economic sense says that it's cheaper [to import], then it's going to be a business decision," the DOE chief said.

"I'm not saying that Shell's going to shutdown," when asked whether the second largest oil refiner will close down its Philippine operations, Almendras said.

In a text message to reporters, Ramon Ang, chairman of Petron said, "It's not Petron."

Representatives of Shell were unavailable for comments as of press time.

Earlier, Shell warned that it will shut down its operations if the Bureau of Customs proceeds with its threat to seize the company's raw materials and product imports to answer for its alleged tax deficiencies.

Shell has a pending P7-billion tax case at the Court of Appeals.

The company also postponed its refinery expansion in the wake of the tax case.

The oil refiner services around 959 retail stations with about 34.5 percent of the market. These stations employ nearly 17,000 workers.

The company also supplies 33 percent of the demand of power plants, including state-owned National Power Corp.

Shell also corners around 17.2 percent of the aviation fuels market, 24.6 percent of the marine transport market, and 70.2 percent of the demand for bitumen by contractors engaged in road works.

EUROPE / AFRICA / MIDDLE EAST

GERMANY

Rosneft Holds Talks with Venezuela on Buying German Refineries

OAO Rosneft is continuing talks with Petroleos de Venezuela SA about buying its stake in Germany’s Ruhr Oel GmbH to gain access to European refineries.

Rosneft hasn’t made a final decision on PDVSA’s stake and hasn’t held talks with BP Plc its half of Ruhr Oel, Peter O’Brien, the Russian oil producer’s vice president for strategy, said at a conference in Moscow.

Russian oil producers are seeking access to refining assets in Europe and Asia to boost the value of their crude supplies. Rosneft would follow OAO Lukoil, which bought almost half of ERG SpA’s Sicilian refinery in 2008, and OAO Surgutneftegaz, which acquired 21.2 percent of Hungary’s Mol Nyrt. last year.

Ruhr Oel owns Gelsenkirchen and stakes in the Bayernoil, Miro and Schwedt plants, as well as the Mulheim chemical plant, according to Bloomberg data and the BP website.

BP doesn’t plan to sell its stake in Ruhr Oel, Jeremy Huck, the company’s president for Russia, said. In July, BP increased the amount it plans to raise from asset sales to as much as $30 billion over 18 months as it seeks fund to pay for cleanup costs and liabilities from the Gulf of Mexico oil spill, the worst in U.S. history.

Rosneft, Russia’s largest oil producer and refiner, is looking to expand overseas as part of the Consorcio Ruso venture with Russia’s other four largest crude producers to develop heavy oil deposits in Venezuela. It also has a venture with Crescent Petroleum Co. to drill for gas in the sheikhdom of Sharjah in the United Arab Emirates.

PDVSA, Venezuela’s state oil company, held talks about six years ago on selling its stake in Ruhr Oel to Russia’s Alfa Group, one of BP’s partners in the TNK-BP venture, the British company said at the time.

GEORGIA

Swedish Companies Eye Refineries in Georgia

Several Swedish companies are interested in preparing a feasibility study to construct refineries in Georgia. Engineers India Limited, Granherne, Purvin and Gertz, FLUOR, SK Engineering and Construction, PDC and OTC Capital have already stated their interest, and took part in a recent tender to draw up the study, the Georgian Oil and Gas Corporation told Trend September 1.

Under the tender's terms, the consultant must prepare a technical and economic feasibility on building a refinery complex in Georgia. The company must also conduct a market analysis of supply sources and production volume, and evaluate the project's usefulness and cost. It must also analyze alternative solutions, risks and develop a business plan and financial model.

The feasibility study must fully reflect potential environment impacts, and legal restrictions and regulations. Georgia does not yet have an oil refinery and the country is completely dependent on oil imports. A refinery would increase the country's energy security.

TURKMENISTAN

Japanese Firms Reconstruct $600 Mln Worth at Turkmenbashi Refinery

Japanese companies have built structures worth roughly $600 million at the Turkmenbashi Refinery, the Neytralniy Turkmenistan newspaper wrote in mid-September.

Japan has contributed to constructing new, cutting-edge technological equipment, introducing and high-tech, energy-saving technologies. In particular, the Japanese Chieda and Nichimen built a catalytic reforming unit with continuous catalyst regeneration. The plant has a capacity of 750,000 tons per year and is the latest version of advanced platforming technology.

The unit produces a highly active component of A-92 and A-95 modern automotive gasoline. The enterprise also produces unleaded gasoline meeting contemporary environmental standards.

A consortium of Japanese companies also built a plant to produce polypropylene with a capacity of 90,000 tons per year to rationally use the locally produced gas. The plant was built by JGC, Itochu, Nisho Iwai and Marubeni.

JGC built an energy supply complex and off-site facilities to maintain the newly built processing plants. The companies commissioned two high-voltage substations and desalination plants, boilers for steam generation, an automatic telephone system, cable racks, and many-kilometer networks of pipelines, as well as power water recycling, sewage and other infrastructure.

Based on an intergovernmental agreement, JGC and Itochu are also developing proposals on heavy oil residue processing and increasing polypropylene production to 150,000 tons per year.

AFRICA

Report Predicts 60% Demand Growth for Oil Products in Africa

New data published September 23 by downstream African oil specialists CITAC paints a dramatic picture of the future of the continent's energy demand in coming years. And it sounds a warning about the rising risk of the local African refineries failing to meet that demand in the face of rising competition from new Asian refineries in a world already suffering from global overcapacity.

The consulting group's "2010 Annual Review" provides precise demand, import, export, and refinery output data for Sub-Saharan Africa. From this base CITAC presents convincing forecasts which show demand for oil products rising by a massive 60% over the next decade, from 1.54 mn b/d in 2009 to 2.52 mn b/d in 2020.

Accurate data on Africa's frequently opaque oil industry is hard to come by, leading most analysts to plug approximations into their models. CITAC's 2009 data, however, breaks out the continent at the country and regional level. It forecasts annual growth of 4.9% for West and Central Africa and 4.4% for East and Southern Africa. For Sub-Saharan Africa as a whole, the growth rate comes out at 4.6% per year—compared with an overall global growth rate of around 1% per year.

In common with much of the world's refining industry, Sub-Saharan Africa had a difficult year in 2009, CITAC says. A combination of financial and technical problems caused the region's refinery production to fall to an average of 801,000 b/d in 2009, down from 962,000 b/d in 2008. Sub-Saharan Africa's refineries have a combined nameplate capacity of 1.45mn b/d.

But if 2009 was a tough year, things are only likely to get tougher, CITAC says.

Indeed, CITAC's refining experts sound a challenging warning for the future of the continent's ageing refineries. For despite many announcements of new refinery projects across Africa, CITAC recently pointed out in a privileged client paper that this is often all they are: announcements. Since 2000 there have been over 60 announcements of new grass-roots refineries but in Sub-Saharan Africa only one has built: the Khartoum refinery in Sudan. The reasons for this are examined in detail in CITAC's recent Quarterly Report.

CITAC Africa LLP–The downstream African energy specialists. CITAC, a UK-based, independent consultancy company founded in 1998, has knowledge of refining, trading and petroleum products marketing in Anglo and Francophone countries in Africa. CITAC provides consultancy services, reports, database and training courses to national oil and power companies, multinational companies, refineries, government departments, trading companies and private firms.

ALGERIA

Sonatrach Selects Technip for $920 Mln Algiers Refinery Rehab

Algerian state-oil company Sonatrach has said it has awarded a $920 million refinery deal to Technip SA, its first major deal this year as it emerges from paralysis following a corruption probe.

In a statement posted on its website September 23, Sonatrach, Africa's largest oil company and a key natural gas exporter to Europe, said it had selected the French oil-services company to rehabilitate the Algiers refinery for $920 million (67.88 billion Algerian dinars).

Negotiations for most new oil and gas contracts had stalled at Sonatrach after a corruption probe into its deals led to the replacement of its management in January and later of the country's oil minister Chakib Khelil.

But talks have restarted following the arrival of a permanent chief executive Nordine Cherouati and of a new oil minister Youcef Yousfi in May.

Sonatrach has awarded a smaller contract at the Hassi Messaoud oil center to Italian oil services company Saipem SpA (SPM.MI).

UGANDA / KENYA

Uganda Considering Refinery/Pipeline JV with Kenya

Uganda and Kenya are considering forming a joint venture to build and operate a petroleum refinery, as well as an oil pipeline connecting landlocked Uganda to the Kenyan port of Mombasa, the Ugandan presidency said September 6.

A presidential spokesman said in a statement that President Yoweri Museveni held talks with a Kenya government delegation led by Kenya's Minister of Foreign Affairs, Moses Wetangula and Prashant Ruia, the chief executive of India-based Essar Group, which operates Kenya's Mombasa refinery.

The talks centered on proposals to form a joint venture to build a refinery and the extension of the Mombasa-Eldoret oil pipe line to Uganda's oil region in the Lake Albert basin.

Kenya's Energy Minister, Kiraito Murungi who also attended the meeting was quoted as saying that there was no need for Kenya to import oil from the Middle East when Uganda has the capacity to supply them.

Uganda has discovered at least a billion barrels of oil in its Lake Albert basin and plans are underway to commence oil production.

Last month, Swiss-based Foster Wheeler completed a feasibility study on the building of a 150,000 barrels-a-day oil refinery in Uganda and government is now finalizing arrangements to come up with a financing and shareholding structure in the refinery, according to Kalisa Kabagame, Uganda's permanent secretary at the Ministry of Energy and Minerals Development.

Uganda and Kenya have also been in talks for the extension and upgrades on the Mombasa-Eldoret oil pipeline to Uganda. Currently, Uganda relies on the pipeline to import refined fuel products.

The Ugandan government wants the pipeline upgraded and equipped with a reverse flow to enable it to transport refined fuel products in future for export from Uganda to the port of Mombasa.

According to U.K.'s Tullow Oil PLC (TLW.LN), which operates block 2 in the Lake Albert basin, Uganda can produce up to 350,000 barrels of oil-a-day by 2018 if the right development plan is adopted.

KUWAIT

Kuwait Plans Partial Shutdowns at Two Refineries in November

Kuwait is planning a partial shutdown at the Mina al Ahmadi refinery, its largest oil processing plant, for about one month starting in November to conduct work on a crude distillation unit, an official said.

Maintenance will be done on one of three crude plants and associated units at the 460,000 barrel-a-day facility, Mohammed Al-Ajmi, spokesman for the state-run refinery operator Kuwait National Petroleum Co., said by telephone September 8 from Mina al Ahmadi, south of the capital Kuwait City.

The company is also planning an overhaul of an older crude unit at the Mina Abdulla refinery for 25 days in November and a full closure of the Shuaiba complex for 45 days in March, Al- Ajmi said. Shuaiba is the oldest and smallest of Kuwait’s three plants with a 200,000 barrel-a-day processing capacity.

SAUDI ARABIA

Punj Lloyd Wins Yanbu Refinery Pipeline Project from Saudi Aramco

Dayim Punj Lloyd, a Group Company of Punj Lloyd, located in the Kingdom of Saudi Arabia, has won an engineering, procurement, and construction (EPC) contract for offsite pipelines for Saudi Aramco's Yanbu' Export Refinery Project (now named Red Sea Refining Company) being set up on the Western coast of the Kingdom of Saudi Arabia along the Red sea.

Adnan Abduljawad, CEO of Dayim Punj Lloyd, said: "We are honored to have received this prestigious contract from Saudi Aramco. This is our first major pipeline project in the Kingdom of Saudi Arabia and will be a foundation stone for exploring more opportunities in the sector and strengthening our footprint in the market. This contract win is a clear recognition of our expertise and strength in delivering quality projects to the client's satisfaction."

The scope of work includes the EPC of steel pipelines, with sizes ranging between 36 inches diameter and 6 inches diameter for crude oil, refined products (gasoline, diesel, iso butane, butane, benzene, etc.); utility services (industrial water, potable water, process water, sanitary sewers, fuel gas supply); as well as very large, 3400mm/2900mm diameter reinforced thermosetting plastic pipelines for sea water supply and return pipelines. The scope also includes associated custody metering systems, electrical, instrumentation, and control systems. The order will be executed over a period of 36 months.

The Red Sea Refinery once operational, will process 400,000 bpd of Arabian heavy crude and produce 90,000 bpd of gasoline, 263,000 bpd of ultra low sulfur diesel, 6300 MTPD of coke and 1200 MTPD of sulfur.

The Punj Lloyd Group is a diversified international conglomerate offering EPC services in Energy and Infrastructure along with engineering and manufacturing capabilities in the Defense sector.

Air Liquide to Spend $450 Mln to Build Hydrogen Units at Yanbu

Saudi Aramco has announced its decision to construct a grassroots refinery in Yanbu' Industrial City, on the west coast of the Kingdom of Saudi Arabia. Yanbu' is one of the three main industrial areas of Saudi Arabia and already hosts many oil processing, petrochemical and other industrial plants. The newly incorporated Red Sea Refining Company will process 400,000 barrels of heavy crude per day when it is completed in 2014.

Saudi Aramco and Air Liquide Arabia announced September 13 that they had signed a long-term hydrogen supply agreement for this new refinery.

Under the terms of this hydrogen supply agreement, Air Liquide Arabia will invest US$450 million (more than EUR350 million) in two global-scale hydrogen production units with total production capacity of 300,000 Nm³ per hour (262 million standard cubic feet per day). This will be Air Liquide's largest single industrial investment and its most significant "over the fence" hydrogen contract ever.

This new complex will be designed and built by Lurgi, a division of Air Liquide Engineering. The project will be commissioned in 2014.

Pierre Dufour, Senior Executive Vice-President of the Air Liquide Group supervising the Middle East Zone, said: "With this new global scale project in Saudi Arabia, Air Liquide demonstrates its capacity to meet the growing needs of its long-term customers, particularly in the main industrial hubs. The outsourcing of the hydrogen needs of such a big refinery is a first in the Middle East and representative of a long term trend in this zone.

"This project also reinforces our strategic and growing presence in the Middle East, where we continue to develop our industrial gas infrastructure in support of the evolving energy sector, a growth driver for Air Liquide."

McIlvaine Company,

Northfield, IL 60093-2743

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

E-mail: editor@mcilvainecompany.com