vol. 49, n° 6, march 12, 2010 contents - cedigaz · vol. 49, n° 6, march 12, 2010 contents...

Vol. 49, n° 6, March 12, 2010

Contents

Liquefied Natural Gas p2- QATAR : LNG train 7 starts production at of Ras Laffan 3. - QATAR : Technip and Chiyoda awarded contract to ensure LNG production levels. - TRINIDAD AND TOBAGO : Centrica buys stake in LNG project. p3- CHINA: China LNG Shipping orders LNG carrier to GTT licensee’s Hudong Zhonghua. - PAPUA NEW GUINEA : MOL and ExxonMobil sign a long-term charter contracts. - INDONESIA: LNG Supply contracts may extended with Japanese buyers. - PAPUA NEW GUINEA : ExxonMobil and CPC finalize gas sales agreement. - SOUTH AFRICA : GDF Suez and PetroSA stops exclusive talks on LNG supply. p4- UNITED STATES: Expanded Elba Island LNG terminal reaches capacity of 1.75 bcfd. - UNITED STATES: Proposed bill could modify FERC authority to approve LNG projects.

Natural Gas p4- ALGERIA : Sonatrach reports gas discovery in the Berkine basin. - AUSTRALIA : PTTEP finds gas at Oliver field in the Timor Sea. p5- SAUDI ARABIA : Gas flows at Jalameed Well 3. - THAILAND : Yanchang Petroleum to explore for gas and oil in Khorat Basin. - AZERBAIJAN : Increased production of Shah Deniz field planned in 2010. - CANADA : Pouce Coupe gas plant output to be expanded by 80%. - NIGERIA: Chevron to invest in three projects aiming at cutting gas flaring. p6- PERU: CB&I to supply gas processing plant for Camisea expansion project. - QATAR : Qatargas and RasGas want to collect boiled off gas from LNG ships. - TURKMENISTAN : Minare field produces 1 million cubic meters par day. - UNITED KINGDOM: First gas from Kirkleatham field expected in winter 2010.

- BURMA : Hyundai to construct gas facilities for Shwe project. p7- RUSSIA: Imperial Energy selects Globotek for construction of associated gas processing plants. - SAUDI ARABIA : Juaymah and Hawiyah gas plants start production. - ALGERIA : Energy Minister inaugurates Transmed pipeline section in Tebessa province. - AUSTRALIA : Pipeline project studied between Mereenie field and Uluru resort. p8- CHINA: 3,170 km of pipelines to be laid in Guangdong province. - CROATIA : Government agree to join South Stream pipeline project. - EUROPE: GDF Suez enters into the Nord Stream project. - INDIA: Gas pipeline for Goa to be completed by March 2012. - NIGERIA: NNPC wants military protection. p9- RUSSIA: Sakhaneftegas and Kogas ink cooperation agreement on gas projects. - UNITED STATES: Cardinal Pipeline increases transportation capacity. - UZBEKISTAN : Second line section of Turkmenistan-China pipeline to be completed in September 2010. - VIETNAM: PetroVietnam plans a second gasline from the Nam Con Son basin. p10- ALGERIA : Sonatrach reports gas discovery in the Berkine basin. - AZERBAIJAN : BP plans to deliver 1.9 bcm of associated gas to Socar in 2010. - BOLIVIA : Argentina may sign soon contract amendment on gas supply. - EGYPT: Court allows gas exports to Israel. - CHINA: 12 bcm of UGS facilities planned by 2015. p11- UNITED STATES: Tricor Ten Section Hub receives FERC Scheduling Notice for Environmental Assessment. - UNITED STATES: Decision on Cadeville Gas Storage project expected in June 2010. - UNITED STATES: Petal Gas Storage wants to expand Mississippi facility. - INDIA: 25000 MW of gas fired plants planned over next years. p12- LITHUANIA : Lietuvos Elektrine receives EBRD loan to construct a CCGT power plant. - YEMEN: Government hopes to boost power generation capacity.

Cedigaz News Report - Vol. 49, n°6 March 12, 2010

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LNG

PROCESSING QATAR: LNG train 7 starts production at of Ras Laffan 3 – CNR/49/6/1 RasGas Company Limited Managing Director and CEO, Hamad Rashid Al Mohannadi announced recently that the Ras Laffan 3 liquefied natural gas train 7 started production at Ras Laffan Industrial City. Ras Laffan Liquefied Natural Gas Company Limited (3) (Ras Laffan 3) is a joint venture between is Qatar Petroleum (70 percent) and ExxonMobil (30 percent). With 7.8 million tonnes per year of LNG, the Ras Laffan 3 train 7 matches the capacity of Ras Laffan 3 train 6, one of the largest operating LNG production facilities in the world. RasGas train 7 will boost the overall LNG production capacity of all RasGas companies to approximately 36.3mta. Train 7 is one of a new generation of 'mega-trains', a big step up from the 4.7mta production capacity of RasGas trains 3, 4 and 5. Khalid Sultan Al Kuwari, Marketing Executive at RasGas said "Train 7 will feed into

our portfolio of customers. We will be targeting particularly US, Europe and Asian markets." Asked whether there are plans for long-term contracts in South America, he said "We did sell cargos to Chili on spot basis and we always look at opportunities to further develop that relationship". "Our contracts are based on long-term so all our capacity is committed to long-term. We have some flexibility under some contracts to go for spot markets when there is a need in the market and when there is an opportunity for us," he said. Speaking about the dynamics of the global LNG market, he said that even in the future the backbone of LNG will still remain the long-term agreements, but that there will also be more reliance on spots, short-term and medium-term contracts though the main bulk will still be the long-term contracts. (The Peninsula, February 25, 2010)

QATAR: Technip and Chiyoda awarded contract to ensu re LNG production levels – CNR/49/6/2 Qatargas recently signed an engineering, procurement and construction (EPC) contract with TCJV, a joint venture between Technip and Chiyoda, to ensure that Qatargas 1 production capacity is maintained well into the future. Qatargas 1 consists of three onshore LNG trains with a combined capacity of 10mn tons per annum. This project will enable Qatargas 1 to maintain its current production level. The EPC contract with TCJV covers the design and execution of the onshore processing facilities. Commenting on the contract, Qatargas CEO Faisal M al-Suwaidi said: “This agreement underscores our commitment towards achieving the target of 42mn tons of LNG production per annum from seven LNG trains by the end of 2010. Sheikh Ahmed bin Jassim bin Mohamed al-Thani, Qatargas chief operating officer (Engineering and Ventures) said: “In addition to the onshore component of the Plateau Maintenance Project, natural gas reservoir studies were completed to determine the scope of the drilling programme required to increase feed gas rates. A few modifications to the offshore processing facilities have already been carried out to support increase in production rates”. The project is expected to be complete in 2013. (Gulf Times, February 26, 2010) TRINIDAD AND TOBAGO: Centrica buys stake in LNG project – CNR/49/6/3 Centrica recently bought equity interests in Trinidadian gas blocks, giving to the company its first stake in a liquefied natural gas producing project. The deal to acquire Suncor Energy of Canada's portfolio of gas assets in Trinidad and Tobago will help Centrica feed its customers gas from the Caribbean country over the long term. "This is a significant move into one of the world's most established LNG areas providing us with access to both gas producing and development blocks," Centrica chief executive Sam Laidlaw said. The portfolio of gas assets comprises a 17.3 percent stake in the North Coast Marine Area

production area and equity interests in three blocks; Blocks 22, 1, for future development. The NCMA-1 block, which already supplies gas into the Atlantic LNG facility, holds remaining working gas interests of 266 billion cubic feet of proven and probable reserves attributable to Centrica`s 17.3 percent stake. Centrica said that should equate to 60-70 million standard cubic feet per day output in 2010. Gas produced from the block has been contracted to a third party until 2023. Block 22 and Blocks 1 comprise 90 and 80 percent operated interests, respectively, with recoverable resources attributable to Centrica's equity stakes estimated at 1.34 trillion cubic feet. (Reuters, February 25, 2010)


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TRANSPORTATION-DISTRIBUTION CHINA: China LNG Shipping orders LNG carrier to GTT licensee’s Hudong Zhonghua – CNR/49/6/4 Hudong Zhonghua, the Shanghai based GTT Licensee recently received an order for the construction of a 147210 m3 steam turbine LNG carrier from China LNG Shipping. This vessel is due to be delivered in October 2012. It will be classed by ABS which is also classing the 5 other LNG carriers already built by HZ. The vessel is due to service a 25 year trade between Malaysia and China’s Shanghai import terminal. (GTT press release, February 2, 2010) PAPUA NEW GUINEA: MOL and ExxonMobil sign a long-term charter contracts – CNR/49/6/5 Mitsui O.S.K. Lines, Ltd. (MOL) announced recently that it has been awarded two long-term charters by an ExxonMobil affiliate and its co-venture partners in its Papua New Guinea LNG Project. The charters are for MOL’s two existing 177,000 cubic meter capacity LNG carriers built in South Korea at Hyundai yards in 2010 and co-

owned by Itochu Corporation (MOL 70% and Itochu 30%). Simultaneously, MOL has entered into two heads of agreement, one with the PNG LNG Project and one with an ExxonMobil affiliated company in the Gorgon Project, with the intention for MOL to construct and long-term charter a total of four LNG vessels to the projects, all of which are planned to be built in the People's Republic of China. Deliveries will commence between 2014 and 2016. (MOL press release, March 3, 2010)

SUPPLIES - IMPORTS – EXPORTS INDONESIA: LNG Supply contracts may extended with J apanese buyers – CNR/49/6/6 The Indonesian and Japanese energy and mineral resources ministers may sign extension of contracts to export liquefied natural gas to Japan. The Bontang LNG plant in East Kalimantan has to prepare for the shipments to the six buyers in western Japan including Chubu EPC, Kansai EPC, Kyushu EPC, Nippon Steel Co. Ltd, Osaka Gas Co.Ltd and Toho Gas Co. Ltd., an official said. Contracts for the western buyers will expire in June 2010. Under the new contract, annual shipments of 3.2 million tons will begin 2011 until 2015 to be followed with the second phase with annual shipments of 2 million tons from 2016 to 2020. Budi Indianto, a deputy at the Upstream Oil and Gas Regulator (BP Migas) said talks on the contract extension including on volume and prices had reached the final phase. (Asia Pulse, March 1, 2010) PAPUA NEW GUINEA: ExxonMobil and CPC finalize gas sales agreement – CNR/49/6/7 ExxonMobil Corp. said recently it has finalized an agreement to sell gas from its liquefied natural gas project in Papua New Guinea to Taiwan's CPC Corp. The deal will see the PNG LNG project supply CPC with about 1.2 million metric tons of gas a year for 20 years. ExxonMobil Gas and

Power Marketing's vice president for LNG Ron Billings said all of the PNG LNG project's production capacity has now been committed on a long-term basis and the project partners are looking to finalize financing arrangements with lenders in the first quarter of 2010. (Dow Jones, March 1, 2010)

SOUTH AFRICA: GDF Suez and PetroSA stops exclusive talks on LNG supply – CNR/49/6/8 GDF Suez and PetroSA recently ended exclusive talks on the supply of liquefied natural gas for the company's Mossel Bay refinery. PetroSA said in 2009 that it entered into talks with an unnamed party to import 500 000 t of LNG a year to help extend the life of the plant until untapped domestic gas fields come onstream. Local gas supplies to the GTL plants, with a capacity of 45 000 barrels per day, are due to run out in 2011. PetroSA has previously said its offshore Jabulani field could be a source for the Mossel Bay refinery but production has been delayed until mid-2012. Production at the Ibhubhesi field off South Africa's west coast, in which PetroSa has a stake, is not expected to start until 2013. (Engineering News, March 2, 2010)

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STORAGE

UNITED STATES: Expanded Elba Island LNG terminal re aches capacity of 1.75 bcfd – CNR/49/6/9 El Paso Corporation announced recently that the expansion of the Elba Island liquefied natural gas terminal in Georgia has been recently completed and a new adjoining gas pipeline is now in service, The Elba Island LNG terminal now has a send-out capacity of 1.75 billion cubic feet of natural gas per day, up from 1.2 bcf/d previously, thanks to three new vaporizer units. The newly built Elba Express Pipeline, a 190-mile pipeline with a capacity to transport 945 million cubic feet per day, will transport additional gas from Elba Island to markets in the southeastern and eastern United States. In addition, one new 4.2 bcf storage tank at the terminal will be commissioned later. (Reuters, March 2, 2010) UNITED STATES: Proposed bill could modify FERC authority to approve LNG projects – CNR/49/6/10 Two U.S. senators from Maryland recently introduced federal legislation to change who gets to authorize the location of liquefied natural gas terminals. Benjamin L. Cardin and Barbara A. Mikulski, both Democrats, are co-sponsors of legislation that would repeal parts of the Energy Policy Act of 2005, which gave the Federal Energy Regulatory Commission the authority to determine if LNG terminals are needed and where they should be located. “FERC has totally disregarded the safety risks of locating a LNG facility in a densely populated, urban area or what the substantial upgrades to security would entail. I am strongly opposed to locating an LNG facility at

Sparrows Point and I am deeply concerned about security and environmental risks to the Port of Baltimore and Chesapeake Bay,” said Cardin, a member of the Senate Environment and Public Works Committee. “We need to restore the decision-making power to the state authorities who have a greater understanding of our local communities,” he added. A spokeswoman for Cardin said the bill will have to go through the Energy and Natural Resources Committee before it reaches the Senate floor, where it would compete for calendar time with major issues like jobs and health care that is tying up the Senate. But she said that having a number of senators as sponsors is an important part of moving it forward. (Mddailyrecord, March 2, 2010)

NATURAL GAS

EXPLORATION – DISCOVERY ALGERIA: Sonatrach reports gas discovery in the Ber kine basin – CNR/49/6/11 Sonatrach said recently it has discovered natural gas with a flow rate of 44.18 million cubic feet per day at a well it operates in the Berkine basin. It made the discovery at the El Kheit Tessekha extension-1 well in the Menzel Ledjmat contract area of the Berkine basin. Sonatrach is the sole operator of the permit where the discovery was made. (Reuters, February 28, 2010) AUSTRALIA: PTTEP finds gas at Oliver field in the Timor Sea – CNR/49/6/12 PTTEP recently found commercial viable amount of natural gas at its exploration well Oliver-2 in the Timor Sea. The well has good potential for production with the floating liquefied natural gas technique. Mr. Anon Sirisaengtaksin, CEO and President of PTT Exploration and Production Public Company Limited or PTTEP said that the company drilled Oliver-2 exploration well to the last depth of 3,233 metres and found a reservoir with a net gas thickness of 81 metres. The

company in October 2009 bought the rights for the Block AC/P33, also known as Oliver field. Oliver field is in the Timor Sea Northwest of Australia covering an area of 421 square kilometers. It is about 30 kilometres away from Jabiru and Challis fields and is close to Audacious and Tenacious fields as well as other fields. In 2010, PTTEP will continue to develop the Montara field and drill 2 to 3 exploration and appraisal wells in other fields. It will also conduct preliminary engineering studies on FLNG. (PTTEP press release, February 23, 2010)


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SAUDI ARABIA: Gas flows at Jalameed Well 3 – CNR/49/6/13 Saudi Aramco recently discovered gas in a northern area of the kingdom. The Jalameed Well 3 showed flowed at a rate of 12.1 million cubic

feet a day. It can produce larger quantities of gas under normal production conditions, and assessments will continue. (Bloomberg, February 24, 2010)

THAILAND: Yanchang Petroleum to explore for gas and oil in Khorat Basin – CNR/49/6/14 Yanchang Petroleum said recently it plans to explore for natural gas and oil in northeastern Thailand's Khorat Basin. An agreement has been signed between Thailand's energy minister, Wannarat Channukul, and Yanchang's chairman, Shen Hao. The pact will license Yanchang to drill for oil and natural gas in block N° L31/50 in the Khorat Basin, where two gas fields are already in production. (Business Week, February 24, 2010) THAILAND: First gas produced in the Malaysia-Thailand Joint Developing Area – CNR/49/6/15 The PTTEP and Petronas joint-operated MTJDA-B17 Project recently started producing natural gas, adding as much as 10% to the supplies of Thailand’s petroleum demand. It is expected to serve the country’s energy demands for at least 16 years. Mr. Anon Sirisaengtaksin, CEO and President of PTT Exploration and Production Public Company Limited or PTTEP said that MTJDA-B17, an offshore natural gas field in the Malaysia-Thailand Joint Developing Area, has started production from its Muda and Jengka

fields. The current delivery of natural gas to PTT Public Company Limited has met the gas quality and quantity as specified in the Gas Sales Agreement at 135 million standard cubic feet per day. The production rate of condensate is approximately 4,900 barrels per day. By the fourth quarter of 2010, the natural gas production is expected to reach 335 million standard cubic feet per day. MTJDA-B17 Project is situated in the southern part of the Gulf of Thailand, about 230 kilometres off Songkhla coast and about 150 kilometres from Kota Baru city, Kelantan State, Malaysia. (PTTEP press release, February 22, 2010)

PRODUCTION AZERBAIJAN: Increased production of Shah Deniz fiel d planned in 2010 – CNR/49/6/16 In 2010, it is expected to extract 7.6 billion cubic meters of gas and 2.01 million tons (16 million barrels) of condensate from Azerbaijani offshore gas condensate field Shah Deniz, BP said. In 2009, production of gas from Shah Deniz field was 6.2 billion cubic meters of gas (about 16.9 million cubic meters per day) and 1.7 million tons of condensate with forecast of 7.5 billion cubic meters of gas and 1, 9 million tons of condensate. About 35 million barrels of condensate have been delivered to the world markets since late 2006, the start of production at Shah Deniz field, until late 2009. Production will be increased as new wells drilled from the platform will operate in the next few years. It is expected that production from the field within the Phase 1 in the period of maximum production will be 8.6 meters of gas per year and approximately 45,000 barrels of condensate per day. Participants to the agreement are: BP (operator) - 25.5 percent, Statoil Hydro - 25.5 percent, NICO - 10 percent, Total - 10 percent, LukAgip - 10 percent, TPAO - 9 percent, SOCAR-10 percent. (February 28, 2010, in partnership with TREND News Agency, http://en.trend.az/) CANADA: Pouce Coupe gas plant output to be expanded by 80% – CNR/49/6/17 Birchcliff Energy Limited indicated that it plans to boost its production by about 80 per cent in 2010. The company is projecting 2010 exit production of between 17,000 and 19,000 barrels of oil equivalent per day, primarily due to development

drilling and the phased completion and expansion of its Pouce Coupe gas plant. The plant will take natural gas from the companies operations west of Grande Prairie. Birchcliff will need to build its own natural gas processing facilities. (Energetic City, February 22, 2010)

NIGERIA: Chevron to invest in three projects aiming at cutting gas flaring – CNR/49/6/18 Chevron Nigeria Limited said recently it is investing $3billion in three different gas projects aimed at helping it end routine flaring of gas from it oil fields in the country. Andrew Fawthrop, the company's Managing


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Director, said that the projects are scheduled for completion by 2012. He said plans for the commencement of work on the Escravos Gas-to-liquids project has reached advanced stage, while two other projects are being stalled by a combination of inadequate funding by the Joint Venture partners and the Niger Delta crisis. He reiterated Chevron's commitment to completing the projects and ending flaring in its fields in line with the federal government's policy. Mr. Fawthrope said Chevron is building a 750-megawatt Agura Power plant in Lagos, which will utilise the gas produced from its western operations to generate electricity. (234Next, February 25, 2010) PERU: CB&I to supply gas processing plant for Camis ea expansion project – CNR/49/6/19 CB&I has been recently awarded a contract to supply a cryogenic natural gas processing plant in Malvinas, Peru, as part of an expansion of the Camisea gas project. CB&I's contract is with Pluspetrol Peru Corporation S.A. as operator and contract administrator, acting on behalf of the licensees. CB&I will be responsible for the engineering, procurement and modular fabrication of a cryogenic unit designed to process 520 million standard cubic feet per day of gas. The unit, which is scheduled for completion later in 2010, will treat gas extracted from the Pagoreni field. (Business Wire, March 3, 2010) QATAR: Qatargas and RasGas want to collect boiled off gas from LNG ships – CNR/49/6/20 Qatargas and RasGas recently approved a project which would recover gas that was equivalent to around 600,000 tonnes of LNG. The gas is currently burnt at the LNG jetty where tankers

load in the industrial port of Ras Laffan. The project should be completed in late 2013 to early 2014. It would collect boiled off gas from LNG ships to be used as fuel, or for reprocessing at LNG plants. (Gulf Daily News, February 26, 2010)

TURKMENISTAN: Minare field produces 1 million cubic meters par day – CNR/49/6/21 The Minare field located near the country's largest Yolotan-Osman field opened recently and experts expect "a unique zone of petroleum accumulation in the Murgab basin". "Daily production rate from the Minare field, when using a 20-millimeter choke was more than 1 million cubic meters of gas. This exceeds flow rate of hydrocarbon beds developed in the existing fields," a source said. New work was conducted at the complex to determine the well's productivity and to prepare it for industrial exploitation. (February 28, 2010, in partnership with TREND News Agency, http://en.trend.az/) UNITED KINGDOM: First gas from Kirkleatham field expected in winter 2010 – CNR/49/6/22 Egdon Resources recently executed key commercial agreements in relation to the Kirkleatham gas field development in North Yorkshire and Teesside licence PEDL068. The PEDL068 Joint Venture partners and Sembcorp Utilities (UK) Limited have signed a series of agreements relating to the commercial terms of gas sales, the lease of a process site, the granting of way leave rights for pipelines and for the operation and maintenance of the facilities on the Wilton site. Under the terms of the Gas Sales Agreement all Kirkleatham gas will be sold to Sembcorp. Sembcorp has also been granted certain rights to participate in any future gas

storage project that may be developed at Kirkleatham. Planning consent was received for the Kirkleatham development in August 2009. The consent allowed for production from the existing Kirkleatham-4 well site and for the drilling, testing and production from up to two additional wells at the site. Gas will be transported from the well site via a six hundred metre long underground pipeline to the Wilton site boundary and then via an above ground pipeline to a processing site within Wilton. The gas will be delivered via an above ground pipeline to a Sembcorp-owned combined heat and power plant. The target for first gas is the start of the winter 2010 gas season. (Scandinavian Oil and Gas, February 23, 2010)

PROCESSING BURMA: Hyundai to construct gas facilities for Shwe project – CNR/49/6/23 Hyundai Heavy Industries (HHI) recently signed a contract for project to build gas facilities for Shwe project in Burma’s western coast. Under the contract, HHI would build offshore gas fields in the Bay of Bengal by March 2013, and will install a gas production and processing platform to produce gas, transport it to Ramree

KEY PANEL MEMBERSYves Louis Darricarrere, President, Exploration & Production, TOTALLyazzat Kiinov, Vice Minister, MINISTRY OF ENERGY AND MINERAL RESOURCES OF THE REPUBLIC OF KAZAKHSTANBoris Zilbermints, Deputy General Director, Exploration & Production, Deputy Chairman of the Management Board, GAZPROM NEFTYuri Komarov, Managing Director, SHTOKMAN DEVELOPMENT Didier Houssin, Director of the Office of Energy Markets and Security, INTERNATIONAL ENERGY AGENCYPierre Morel, Special Representative for Central Asia and for the Crisis in Georgia, COUNCIL OF THE EUROPEAN UNION Bengt Lie Hansen, President, STATOIL RussiaAidan Murphy, Vice President, New Business Development and Strategy, Russia and CIS, SHELL E & P

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Island through subsea pipelines and export the gas to China through an onshore gas terminal. The statement indicated “Hyundai Heavy will handle the entire project on a turnkey basis including engineering, procurement, construction, installation and commission. The company will build a 40,000-ton class offshore gas platform, a subsea production system, subsea pipelines, an onshore gas terminal, a jetty and a supply base. The project will be completed by March 2013”. In 2009, Burma agreed to supply gas from the A-1 and A-3 blocks of Shwe gas fields, which is being developed by a consortium led by South Korea’s Daewoo International, to China National Petroleum Corp for a period of three decades. The project will produce 500 million cubic feet of gas per day for 25 to 30 years, and all the gas will be delivered to China. The gas fields are estimated to hold between 4.5 trillion and 7.7 trillion cubic feet of gas. (Mizzima, February 25, 2010) RUSSIA: Imperial Energy selects Globotek for construction of associated gas processing plants – CNR/49/6/24 JSC Globotek announced recently that further to an extensive feasibility study, the company has signed a letter of intent with Imperial Energy to build and install two associated petroleum gas processing plants. According to the letter of intent, the company will build and install the two processing plants at Imperial Energy's oil fields in Tomsk, Russia. Globotek is the developer and

owner of a unique technology for the processing of associated petroleum gas that is carried out at the drilling field by a Modular Mobile Structure. Globotek's process involves the use of block-modular mobile complexes that each contains mini gas processing units. Globotek presently supplies only the Russian market. Russian legislation mandates that all oil fields in Russia must process associated gas to the international 95% standard by January 2012. (Marketwire, February 25, 2010)

SAUDI ARABIA: Juaymah and Hawiyah gas plants start production – CNR/49/6/25 Saudi Aramco recently brought online the expanded Juaymah and Hawiyah gas plants. Aramco aims to raise gas supplies 30 percent to 8 billion cubic feet per day in five years. It also sees its non associated gas processing capacity raising to 9 billion cubic feet per day by 2015, from 6.2 billion cfd, an Aramco executive said in 2009. Aramco is boosting capacity at Juaymah by around 50 percent to handle increased volumes of petrochemical feedstock ethane and natural gas liquids. The expansion at Juaymah will add 260,000 barrels per day of additional splitting capacity to the gas plant, taking capacity there to 815,000 bpd. The increased ethane and NGL output comes from the expansion of the Hawiyah and Khursaniyah gas plants. The plant at Hawiyah will process an additional 800 million cfd of non associated gas, raising the plant's capacity to 2.4 billion cfd. (Arabian Business, March 1, 2010)

TRANSPORTATION-DISTRIBUTION ALGERIA: Energy Minister inaugurates Transmed pipel ine section in Tebessa province – CNR/49/6/26 Energy Minister Chakib Khelil recently attended the official launch of Algeria's third Transmed gas pipeline segment in Bir El Ater, Tebessa province. The new 549-kilometre section is expected to increase transport capacity to some 7 billion cubic metres a year, Khelil said. (Magharebia, March 1, 2010° AUSTRALIA: Pipeline project studied between Mereenie field and Uluru resort – CNR/49/6/27 A surveying firm is looking into the possibility of building a natural gas line to Yulara, near Uluru. The route would take the pipeline up to 260 kilometres from the Mereenie Gas Field to the

Uluru resort. Business development manager for Fyfe, Tim Reynolds, said the line would guarantee power generation at the resort, but the project would be environmentally sensitive. (ABC Rural, March 1, 2010)


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CHINA: 3,170 km of pipelines to be laid in Guangdon g province – CNR/49/6/28 It has reported that the province of Guangdong has started building a natural gas pipeline grid to supply 60 billion cubic metres of gas by 2020. A total of 3,170 km of pipelines will be laid to link 21 cities in the province. Guangzhou Daily said, citing a plan by the provincial economic planner. The figure of 60 bcm of natural gas will make up nearly 22 percent of the total energy use in Guangdong. The first phase of the pipeline grid, spanning seven cities and 467 km, will be ready to take gas by July 2011. The project will be a joint investment of CNOOC, Sinopec Corp and provincial power firm Guangdong Yuedian Group. (Reuters, March 1, 2010) CROATIA: Government agree to join South Stream pipeline project – CNR/49/6/29 Croatia recently joined the South Stream gas pipeline, following talks between Prime Minister Vladimir Putin and his Croatian counterpart, Jadranka Kosor. Signed by Energy Minister Sergei Shmatko and Croatian Economy, Labor and Entrepreneurship Minister Djuro Popijac, the deal stipulates the construction of a spur to the Balkan nation from South Stream, work that will be done by a 50-50 Russian-Croatian company.

Croatia consumes 3.2 billion cubic meters of gas annually, producing 60 percent itself and importing the rest from Russia. Croatia's previous government declined Russia's proposal to join South Stream in 2007, instead pushing for an LNG project on the Krk Island. The Croatians also held talks about a new gas supply contract to replace the current agreement, which expires at the end of 2011, Kosor said. Croatia is hoping to increase its purchases from Gazprom, she said. (RIA-Novosti, March 3, 2010)

EUROPE: GDF Suez enters into the Nord Stream projec t – CNR/49/6/30 Gazprom Management Committee Chairman Alexey Miller and GDF Suez Chairman and Chief Executive Officer Gérard Mestrallet signed recently a Memorandum on additional supplies of Russian natural gas and on the entry of GDF Suez into the Nord Stream project. The document specifies that the parties have started discussions about supplying to GDF Suez up to 1.5 bcm of additional gas per year from 2015. The supplies will be fulfilled via Nord Stream. GDF Suez will become shareholder of Nord Stream AG with a share of 9 per cent in its capital before the start of the gas pipeline construction. The first Nord Stream line with a capacity of 27.5 bcm per year is projected to be commissioned in 2011. The construction of the second line of the gas pipeline will allow increasing gas capacity to 55 bcm. (GDF Suez press release, March 1, 2010) INDIA: Gas pipeline for Goa to be completed by March 2012 – CNR/49/6/31 Union Minister for Petroleum and Natural Gas Shri Murli Deora recently informed Mr Shantaram Naik M.P. in the Rajya Sabha, that work of laying gas pipe line to Goa is planned to be completed by March 2012. Minister informed Mr Naik that survey for laying the gas pipeline passing through

Belgaum to the state of Goa and compilation of field data for Right of Use notifications is under progress. Length of spurline to Goa is approximately 175 Km, which emanates from Gokak and terminates at Zuari Industries, Goa. Length of pipeline in State of Goa is approximately 36 Km. (Goa Blog, February 22, 2010)

NIGERIA: NNPC wants military protection – CNR/49/6/ 32 The Nigerian National Petroleum Corporation (NNPC) recently requested that the nation's defence forces assist in protecting oil and gas pipelines from vandalism. Damaged pipelines have resulted in the inability of Shell to transmit condensate produced together with gas from Utorogu, Ughelli, Oben and Sapele gas plants to Forcados export terminal. f the condensate is not evacuated, thermal plants especially Egbin, Omotosho, Geregu, Olorunsogo, Sapele and Delta would be starved of gas supply, worsening the power supply in the country. Group Managing Director of NNPC, Mohammed Barkindo, has, in a letter to the Minister of Defence, General Godwin Abbey (rtd), explained the urgency in securing pipelines in the Niger Delta in order to save Nigeria from complete blackout. In the letter, Barkindo said frequent damages to the Trans-Forcados pipeline had serious implications on both electricity supply and petroleum products export. (This Day, February 22, 2010)


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RUSSIA: Sakhaneftegas and Kogas ink cooperation agreement on gas projects – CNR/49/6/33 Kogas and the JSC Sakhaneftegas recently concluded an agreement on cooperation in the gas projects implementation within the Sakha Republic (Yakutia). In the framework of this agreement the South Korean gas company is going to develop the Otradninsk gas-condensate field in the near future. Besides, the partners

intend to set up the joint venture, invest into the Yakutia gas industry and develop the gas processing plants in the Sakha Republic. The joint venture also is going to participate in the erection of the gas-main pipeline Yakutsk– Sea of Okhotsk. The Kogas Corporation also expressed their wish to take part in the building of “Sakhalin- Khabarovsk-Vladivostok” gas branch lines in the Primorsky Territory and supplying the townships with gas. (Vladivostok Times, February 28, 2010)

UNITED STATES: Cardinal Pipeline increases transpor tation capacity – CNR/49/6/34 Cardinal Pipeline Company, LLC announced recently that it has executed precedent agreements to increase the pipeline's firm transportation capacity by 199,000 dekatherms per day. The pipeline will transport additional natural gas supplies to serve growing markets served by Piedmont Natural Gas Company, Inc. and Public Service Company of North Carolina from an interconnect with Williams Partners L.P.'s Transco pipeline. The Cardinal System Expansion project is scheduled to be placed into service in July 2012. Cardinal Pipeline is a 105-mile, 24-inch diameter pipeline that extends from Rockingham County, N.C., to a point southeast of Raleigh, N.C., with a design capacity of approximately 279,000 dekatherms per day. The pipeline is a North Carolina limited liability company whose members are wholly-owned subsidiaries of Williams Partners L.P., PSNC Energy and Piedmont. (PRNewswire, March 1, 2010) UZBEKISTAN: Second line section of Turkmenistan-China pipeline to be completed in September 2010 – CNR/49/6/35 Construction of the Turkmenistan-China gas pipeline's Uzbek section's second line is expected to be completed in September or early October, authorities reported. Uzbekistan and CNPC agreed to transport 10 billion cubic meters of gas a year. The pipeline's second line will be adjusted compared with the original scheme of the route. The pipeline will pass through the largest Uzbek Gazli underground gas storage. The companies planned to build a booster-compressor station on

the route of the second line in the area of the Gazli UGS. The pipeline's diameter is 1,067 mm and extension - 530 km. The capacity is 40 billion cubic meters of gas year. The pipeline will be laid in three regions - Bukhara, Kashkadarya and Navoi regions and it will be connected with Kazakhstan's gas transportation system. The Turkmenistan-China pipeline's first line was commissioned in December 2009. The second line of the pipeline will be completed by the end of 2011. (February 28, 2010, in partnership with TREND News Agency, http://en.trend.az/)

VIETNAM: PetroVietnam plans a second gasline from t he Nam Con Son basin – CNR/49/6/36 PetroVietnam plans to invest $1.3 billion in a proposed second natural gas pipeline from the Nam Con Son basin off southern Vietnam. The new line will carry gas from Blocks 05.1 and 0.52 in the Hai Thach and Moc Tinh projects in the Nam Con Son basin to feed electric power plants in Phu My district in the southern province of Ba Ria-Vung Tau. The 400-km line will be built in parallel with the current pipeline to transport as much as 6 bcm/year of gas from fields in the Nam Con Son basin. Stakeholders include PetroVietnam 51%, BP PLC 32.27%, and ConocoPhillips 16.33%. The first Nam Con Son line has a capacity of 7.3 bcm/year but normally averages 5.5 bcm/year. PetroVietnam affiliate PetroVietnam Gas Corp. said it carried 5.516 bcm via the Nam Con Son line in 2009. After the new line comes on stream, the country’s onshore gas supply will increase by 30-40% to 10-11 bcm/year, said Phung Dinh Thuc, PetroVietnam general director. Vietnam's power generation sector consumed 4.6 bcm of gas in 2008, and analysts forecasts this consumption to increase to 12.3 bcm by 2013 as gas-fired power reaches 45.2% of the country's total electricity generation. (Oil and Gas Journal, February 25, 2010)


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SUPPLIES - IMPORTS – EXPORTS

ALGERIA: Sonatrach reports gas discovery in the Berkine basin – CNR/49/6/37 Sonatrach said recently it has discovered natural gas with a flow rate of 44.18 million cubic feet per day at a well it operates in the Berkine basin. It

made the discovery at the El Kheit Tessekha extension-1 well in the Menzel Ledjmat contract area of the Berkine basin. Sonatrach is the sole operator of the permit where the discovery was made. (Reuters, February 28, 2010)

AZERBAIJAN: BP plans to deliver 1.9 bcm of associat ed gas to Socar in 2010 – CNR/49/6/38 BP, operator of the Azeri-Chirag-Guneshli block in the Azerbaijani sector of the Caspian Sea, plans to deliver .9 billion cubic meters of associated gas to the SOCAR in 2010, BP recently said. Associated gas within the development of the ACG is delivered to SOCAR free of charge. In 2009, SOCAR received about four billion cubic meters of gas compared to planned 1.45 billion cubic meters. In 2009, daily amount of the associated gas delivered to SOCAR amounted to 10.7 million cubic meters. Shareholders of the Azeri-Chirag-Guneshli development project are: BP (operator - 34.1 percent), Chevron (10.2 percent), SOCAR (10 percent), INPEX (10 percent), Statoil (8.6 percent), ExxonMobil (8 percent), TPAO (6.8 percent), Devon (5.6 percent), ITOCHU (3.9 percent), Hess (2.7 percent). (February 28, 2010, in partnership with TREND News Agency, http://en.trend.az/) BOLIVIA: Argentina may sign soon contract amendment on gas supply – CNR/49/6/39 Bolivia and Argentina are likely to sign a contract amendment that will extend the deadline to boost Bolivian natural gas exports to its neighbour, Bolivian Vice President Alvaro Garcia Linera said recently. Bolivia agreed in late 2006 to nearly quadruple exports of natural gas to Argentina from the current maximum of 7.7 million cubic meters a day but the two countries have been negotiating an amendment to the deal for some months. Garcia Linera said the new deal calls for a gradual

increase of Bolivian natural gas exports to Argentina to 16 million cubic meters in 2013 and to a maximum of 27 million cubic meters a day by 2017. The initial agreement called for Bolivia to send up to 27.7 million cubic meters to Argentina by 2014. Bolivia plans to boost exports to Argentina mainly by tapping its Margarita field, which is run by Repsol, Garcia Linera said. For that, the two countries need to build a cross-border pipeline of roughly 80 km, de Vido added. (Reuters, February 22, 2010)

EGYPT: Court allows gas exports to Israel – CNR/49/ 6/40 A Cairo court recently gave the Egyptian government legal clearance to allow natural gas exports to Israel, cancelling a lower court's verdict to stop exports. The Higher Administrative Court also ruled Egypt should create a mechanism to set the quantity and price of its gas exports, and undertake regular reviews to make sure local markets were well-supplied before it sold gas abroad,. Gas started flowing to Israel through a pipeline for the first time in May 2008 under an agreement signed in 2005 for the supply of 1.7 billion cubic meters a year over 20 years. (Reuters, February 27, 2010)

STORAGE CHINA: 12 bcm of UGS facilities planned by 2015 – CNR/49/6/41 The facilities will be located in regions which have rich gas sources and major consuming areas, including the Xinjiang Uygur autonomous region and northern China. The storage facility construction project is part of the government's 12th Five-Year Plan (2011-2015). CNPC

President Jiang Jiemin said that the company had decided to build 12 bcm of gas storage in its Changqing oil and gas field, which is located in Erdos in Inner Mongolia. In China, global volume of gas storage facilities accounts for around 10 percent of total gas consumption. (People’s Daily, February 26, 2010)


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UNITED STATES: Tricor Ten Section Hub receives FERC Scheduling Notice for Environmental Assessment – CNR/49/6/42 The Federal Energy Regulatory Commission recently issued a Notice of Schedule for its environmental review of Tricor Ten Section Hub, LLC's proposed natural gas storage project near Bakersfield, California. In its Notice of Schedule, the FERC indicated it will issue an Environmental Assessment (EA) of the project by May 26, 2010. The Ten Section Natural Gas Storage Project will

be centrally located near the backbone systems of major western US pipelines, and will have more than 4 billion cubic feet of interstate and intrastate pipeline capacity surrounding it. The Ten Section Hub facility is designed to hold 22.4 Bcf of working gas, with 10.1 Bcf of base gas, and will offer customers four-turn, high-speed deliverability. Ten Section Hub will offer 1 Bcf per day of withdrawal service and 0.8 Bcf per day of injection service. (PRNewswire, February 26, 2010)

UNITED STATES: Decision on Cadeville Gas Storage pr oject expected in June 2010 – CNR/49/6/43 FERC issued recently a notice indicating it expects to issue a decision in June 2010 on Cadeville Gas Storage LLC's proposal to convert a depleted natural gas reservoir in Ouachita Parish, La., to a storage facility with approximately 16.4 Bcf of working gas capacity. The commission said it would issue an environmental assessment on March 29 and a decision on June 27, 2010. The project would involve construction of three pipelines totalling approximately 10 miles; interconnections with three existing interstate pipeline systems, with a meter station at each of the proposed interconnections; and eight new natural gas injection/withdrawal wells. (SNL, February 17, 2010) UNITED STATES: Petal Gas Storage wants to expand Mississippi facility – CNR/49/6/44 Petal Gas Storage LLC announced recently it wants to convert an existing brine production cavern into a new salt dome gas storage cavern, boosting working capacity at its Mississippi facility by 5 Bcf. Currently used as part of its brine storage operations, Cavern 12A would have a total capacity of 8.2 Bcf, with 3.2 Bcf of base gas. The company hopes to begin construction in July 2010, aiming to meet expected requests for injections in fall 2011. Along with conversion of the cavern, plans call for construction of a 1,525-foot, 16-inch-diameter pipeline to connect the cavern with Petal's facilities. Petal affiliate

Enterprise Products Operating LLC initially constructed and equipped the cavern for salt-brine production to support Enterprise's natural gas liquids business. The cavern is owned and operated by Enterprise for that purpose. Petal told FERC that it is fully subscribed on a firm basis at its Cavern Nos. 3, 6, 7, 8 and 10. In January, the company conducted a preliminary, nonbinding open season to seek shipper support for up to 5 Bcf of firm natural gas storage capacity, projected to be available by September 1, 2011. Petal said initial indications are that the proposed capacity will be fully subscribed and the majority of the prospective customers will require an in-service date in fall 2011. (SNL, February 16, 2010)

USE FOR POWER GENERATION INDIA: 25000 MW of gas fired plants planned over ne xt years – CNR/49/6/45 The Power Ministry is working on plans to develop 25,000 MW of new generation capacity using gas as feedstock over the next 3 and 4 years. A Power Ministry source said that this confidence comes from expectations of more gas coming in from the Reliance operated Krishna Godavari Basin D6 block and additional LNG capacity of 50 million standard cubic meters per day at Dahej and Ratnagiri, which are expected to go on stream by 2011 to 2012. RIL block is producing 62 million standard cubic meters per day of gas, at present, which is likely to go up to 80 million standard cubic meters per day. The Government has already allocated 43.165 million standard cubic meters per day under its Gas Utilization Policy from the D6 block to the power sector. Besides assured gas supplies, the sector is also expecting a uniform price mechanism from various sources of gas, LNG, Krishna Godavari gas and gas sold at administered price. The Petroleum Ministry is currently examining the prospects of developing a uniform gas price, which would make natural gas for power generation and other national priorities available at an affordable price throughout the country. Currently, the administered price for the gas produced from Government-nominated fields has been set at about USD 2 per mBtu, except in the North-East, where it is USD 1 to USD 1.2 per mBtu. The price of gas from pre NELP fields was approved in accordance with the production sharing contract and range from USD 3.5 per mBtu to USD 5.73 per mBtu. (Steel Guru, February 20, 2010)


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LITHUANIA: Lietuvos Elektrine receives EBRD loan to construct a CCGT power plant – CNR/49/6/46 Lietuvos Elektrine will receive a EUR17m loan from EBRD for construction of a new combined cycle gas turbine plant in Lithuania. Lietuvos Elektrine operates the 1,800MW thermal Lithuanian power plant, which has eight generation units, currently fired with natural gas, heavy fuel and oil emulsion. The EBRD loan will finance the construction of the CCGT unit, with a capacity of 450MW. Upon completion in 2012, the facility will replace two of the outdated generation units with a combined capacity of 300MW. (Energy Business Review, February 22, 2010) YEMEN: Government hopes to boost power generation capacity – CNR/49/6/47 Yemen wants to invest $1.5 billion to boost power generation capacity by almost 1,400 megawatts to end constant outages across the country. In 2008, Yemen had an installed annual power capacity of 1,130 megawatts, according to a U.S. government website. Yemen wants to launch a tender in 2010 to add 350 megawatts to the main gas turbine Maarib power plant which now has a capacity of 340 megawatts, Salah al-Attar, head of the General Investment Authority. In a separate step, Yemen has started talks with firms to add another 400 megawatts to the plant within 20 months. This project would be done as public-private-partnership. Another 220 megawatts would be added to the Maarib power plant after awarding a

gas rental contract to overcome supply gaps in the short-term, he said. Production would start in January 2010. The government also plans to add 150 megawatts each in its two biggest port cities, Aden and Houdeida, with tenders expected in 2010, he said. Another 75 megawatts would be added to the distant port city of Mukalla. All three projects would be launched as independent power projects in cooperation with the International Finance Corporation, a member of the World Bank Group. The government is also mulling to set up a "gas city" in the Red sea port of Houeida to use gas for power generation and petrochemical production lines to be launched at some point, Attar said. (Reuters, February 26, 2010)

CEDIGAZ NEWS REPORT is a internal publication of CE DIGAZ, edited by Thierry Rouaud with collaboration of Catherine Charlier. 11 eett 44,, aavveennuuee ddee BBooiiss PPrrééaauu,, 9922885522 RRuueeiill--MMaallmmaaiissoonn CCeeddeexx,, FFrraannccee TTeell.. ++3333 11 4477 5522 6600 1122 -- FFaaxx ++3333 11 4477 5522 7700 1144 WWeebbssiittee :: hhttttpp::////wwwwww..cceeddiiggaazz..oorrgg CCoonnttaacctt :: iinnffoo@@cceeddiiggaazz..oorrgg

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