API welcomes Senate letter from Democrats on Keystone

American Petroleum Institute President and CEO Jack Gerard has welcomed a Senate letter sent from nearly a dozen Democrats to President Obama urging him to swiftly approve the Keystone XL pipeline and put thousands of Americans to work while enhancing U.S. energy security.

“The voices of bipartisan support for KXL continue to grow louder with many of those voices coming from the president’s own party,” said Gerard. “President Obama should listen to these voices and that of the majority of Americans who are beyond tired of waiting for this project’s approval.

“Delaying the decision on the Keystone XL sends the wrong signal to the rest of the world. A nation that continues to be indecisive on a simple a matter of our own energy security will have a hard time convincing the rest of the world we can be decisive when it comes to their interests. We’ve got to get focused on Keystone approval. The world is watching. We need to send the signal: We’re serious about our domestic energy policy and our global energy policy. It’s time to approve the Keystone XL pipeline.”

Providing useful resources, articles and writings on crude oil, other petroleum products, energy and gas. By Blockline and Associate Ltd Nigeria Ltd, online.

Aker Solutions to supply subsea manifolds for Petrobras pre-salt fields

Aker Solutions won a contract worth more than $300 mn from Petrobras to supply eight manifolds that alternately inject water and gas to increase oil recovery from Brazil' s deepwater offshore fields.

The subsea manifolds, designed for water depths of 2,500 m, will be installed by Petrobras and its partners in deepwater pre-salt field developments.The units have a design life of 30 years and the first is scheduled to be delivered in 2016.
 
"We are pleased to work with Petrobras on its important and technically challenging pre-salt developments," said Oyvind Eriksen, executive chairman of Aker Solutions. "Brazil is a key market for our subsea technology and one of the fastest growing areas in the oil and gas industry."

The order will be executed by Aker Solutions' Brazilian subsea division. The unit last year began work to double its subsea equipment manufacturing capacity at a plant in Curitiba by 2015. About 70% of the contract with Petrobras will be procured and manufactured in Brazil.
 
"Aker Solutions is committed to delivering high local content in Brazil, where demand for complex subsea production equipment is growing," said Luis Araujo, president for Aker Solutions in Brazil.
 
The manifolds will play a key part in the crucial injection process that helps improve recovery from the fields.

Providing useful resources, articles and writings on crude oil, other petroleum products, energy and gas. By Blockline and Associate Ltd Nigeria Ltd, online.

API-PA: Over $224 million invested in Pennsylvania communities by energy producers this year

API-PA, a division of the American Petroleum Institute, approved of the Pennsylvania Public Utility Commission’s (PUC) statement that more than $224 mn will be distributed to local communities through the fees paid by natural gas producers under Act 13.

“Shale energy production is generating huge revenues for Pennsylvania in addition to driving job growth,” said Stephanie Catarino Wissman, Executive Director, API-PA.“Pennsylvania has collected more than $220 mn dollars from shale development fees for 2013 production. That translates into better roads, better housing, and better services for families and communities across the state.”

Under Act 13 of 2012, natural gas producers are required to pay a local impact fee which is deposited into the Unconventional Gas Well Fund. More than $630 mn has been collected from 2012-2014, according to the PUC. These revenues have supported housing initiatives, highway and bridge improvements, and environmental programs.

“Shale energy development, made possible by hydraulic fracturing, has transformed Pennsylvania’s economic future,” said Wissman. “The oil and natural gas industry is investing in communities, providing new revenue for the government and delivering a long-term path to new jobs for Pennsylvania workers. With the right policies moving forward, energy development will mean good news for the commonwealth for many years to come.”

Providing useful resources, articles and writings on crude oil, other petroleum products, energy and gas. By Blockline and Associate Ltd Nigeria Ltd, online.

CEPSA acquires a 30% stake in an exploratory block in Liberia

CEPSA has acquired a 30% stake in a hydrocarbon exploration block off the Liberian coast in West Africa. Block LB-10 is operated by Anadarko Liberia Block 10 Company, a wholly-owned subsidiary of Anadarko Petroleum headquartered in The Woodlands, Texas.

The farmout agreement provides, in part, that CEPSA will participate in the drilling of two exploratory wells before August 2016. The block is in a deepwater area, with depths of approximately between 1,000 and 2,000 m. Anadarko has extensive experience as an operator in this basin. Other companies with participation in the block are the London-based company Liberia Japan Petroleum and Spanish integrated Repsol.

This acquisition has enabled CEPSA to add to its offshore portfolio, which already includes two exploratory blocks in Brazil and one in Suriname and exploration and production blocks in Thailand and Malaysia.

The operation is part of CEPSA' s expansion strategy in exploration and production. It will also be an opportunity to increase our technical capacities in the high potential offshore area in West Africa.

Providing useful resources, articles and writings on crude oil, other petroleum products, energy and gas. By Blockline and Associate Ltd Nigeria Ltd, online.

Gazprom Neft selects contractor for Badra oil field

Gazprom Neft, operator of the Badra oilfield development project, has appointed a contractor to lay the pipeline connecting the field to the power station in Zubaidiah, Wasit Province. The tender was won by Pakistani company Techno Engineering Services (Pvt.) Ltd.

In line with the contract, Techno Engineering Services will produce the designs, supply the equipment and materials, and carry out construction of the pipeline. The pipeline - which will be nearly 100-km long and have a daily capacity of 4.4 million cubic meters (circa 1.6 Bcm per year) - is scheduled to begin operations in 2015.

Under Gazprom Neft’s contract with the Iraqi government for the development of the Badra oil field, investors are to be compensated for costs related to infrastructure construction.

Gas supply from the Badra oil field will enhance the Zubaidiah power station’s daily power output and provide a 24-hour power supply to the city of Kut, which currently has electricity supplied for only 16 hours per day. Some of the extracted gas will be used to provide electricity to the Badra oil fields themselves.

In March, Gazprom Neft completed testing on a second well at Badra. The laying and testing of the oil pipeline to the Gharraf oilfield was completed in February, connecting the section to Iraq’s main pipeline system. The construction of the first phase of a central gathering station point with a capacity of 60,000 bpd is nearing completion. Work has also started on a gas treatment plant with the capacity to process 1.5 Bcm per year.

Providing useful resources, articles and writings on crude oil, other petroleum products, energy and gas. By Blockline and Associate Ltd Nigeria Ltd, online.

Age of gas seen as sideshow as producers look to oil

The “golden age of gas” that the International Energy Agency foresees as a result of the U.S. energy boom is hardly the future being embraced by industry executives.

At least based on comments from company officials presenting at the Independent Petroleum Association of America’s conference in New York yesterday. For them, oil is still the prize. Gas is almost an afterthought.

Abraxas Petroleum Corp. CEO Bob Watson boasted about how much of his company’s proved reserves are oil and liquids rather than gas (74%). PDC Energy Inc. said it’s sitting on huge leases in gas fields that aren’t worth drilling. Whiting Petroleum Corp. Chairman and CEO James Volker explained why: oil sells for three times as much as the equivalent amount of natural gas.

That’s no knock against the producers for chasing oil - the commodity that makes the best return for their shareholders. Still, at a time when President Barack Obama is saying natural gas will be a bridge for the U.S. economy from fossil fuels to clean energy, the industry’s views put some realism into the discussion about what energy resources get unlocked by fracing shale rocks.

U.S. natural gas futures have plunged 72% from their 2005 peak to $4.476 as supply expanded to a record. Even after the coldest winter in decades drained stockpiles, the fuel costs about half as much as in Europe. Crude oil, by contrast, is stuck at around $100 a barrel. Even as the growth of U.S. oil supplies has brought the domestic price below the international benchmark, it’s still 7.6% higher than a year ago.

The U.S. is still very much addicted to oil. Consumption will inch up to 19 MMbbl a day this year, more than Europe and China combined, the IEA estimates. Even as expanding domestic supplies reduce imports, they haven’t curbed reliance on oil outright.

If natural gas is to be a bridge fuel, the transition can’t depend on supply alone.

Now that natural gas is so abundant, it needs more uses. While power plants are switching to gas, the U.S. still gets more electricity from coal.

Billionaire T. Boone Pickens wants trucks and buses to run on natural gas. The chemical industry is investing more than $100 bn in expansion projects spurred by cheap shale gas, according to the American Chemistry Council in Washington. And the Energy Department has approved seven projects to export about 9.3 Bcf a day of natural gas in liquid form.

In the time it takes for those new demand sources to develop, making natural gas more valuable in its own right, its role as a byproduct of oil drilling is contributing to more pollution. In North Dakota, drillers pumping oil in the Bakken shale formation are burning off about $1.4 million worth of natural gas every day.

While politicians and industry may pay lip service to natural gas as the clean fuel of the future, the companies out exploiting America’s oil fields leave no doubt that they’re interested in the same fuel as 100 years ago.

Providing useful resources, articles and writings on crude oil, other petroleum products, energy and gas. By Blockline and Associate Ltd Nigeria Ltd, online.

Magnolia LNG, SKEC Group sign technical services agreement

Liquefied Natural Gas Limited has reported that Magnolia LNG, LCC (MLNG), its wholly-owned subsidiary, has executed a technical services agreement (TS Agreement) with SK E&C USA, Inc., a wholly-owned subsidiary of SK Engineering and Construction Co. Ltd., of Korea (SKEC Group).

The TS Agreement relates to the ongoing engineering, procurement and construction (EPC) activities for MLNG’s planned 8 mtpa Magnolia LNG Project, in Lake Charles, Louisiana.

SKEC Group has already completed a satisfactory detailed review of Liquefied Natural Gas Limited’s OSMR process technology, which will be employed in the Magnolia LNG Project, and provided the company with an initial estimated EPC cost of $1.57 bn, which was consistent with the company’s budget estimate, including appropriate contingencies.

Liquefied Natural Gas Limited’s Managing Director, Maurice Brand, said that the EPC activities remained on schedule with the SKEC Group and will be managed going forward by the recently appointed COO, John Baguley, who will commence on May 1, 2014.

“We also remain on schedule to lodge our application for Filing with the Federal Energy Regulatory Commissions on the 30 April 2014,” Brand said.

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Petrobras starts third well at Santos basin’s Sapinhoá field

Petrobras has announced the start-up of well 7-SPH-04-SPS, at a water depth of 2,120 m, in Sapinhoá field, in the Santos basin pre-salt region. This well has an estimated production potential of 26,000 bpd and is interconnected to the FPSO Cidade de São Paulo through the platform connecting system known as BSR (Buoyancy Supported Risers).

This is the third production well of the Sapinhoá Pilot Project and the second to go in operation through the BSR gathering system, following the start-up of well SPS-77A, which has been producing approximately 36,000 bpd since February 18, 2014.

FPSO Cidade de São Paulo has the capacity to process up to 120,000 bpd and has been in operation since January 5, 2013, when it was directly interconnected to well SPS-55. The fourth production well of the project will be interconnected early in the second half of the year. With the start-up of this well, the platform will reach its full output capacity.

Besides the first buoy already installed in Sapinhoá field, three other similar systems have been commissioned for installation in Santos basin pre-salt fields. Of these three, one more will be destined for Sapinhoá field (Sapinhoá Pilot Project - FPSO Cidade de São Paulo) and the other two for Lula field (Lula Nordeste Pilot Project - FPSO Cidade de Paraty). FPSO Cidade de Paraty, with the capacity to process up to 120,000 bpd, went into operation on June 6, 2013, when it was directly interconnected to the output of well LL-11.

Installation of the second buoy, destined for Lula field, was completed in February in less than a third of the time it took to install the first one, due to improvements made to installation processes. Then, on March 9, installation of the rigid steel pipelines to gather the output from two NE Lula wells, through the buoy, was completed.

At this time, installation is underway of the flexible pipelines of well 7-LL-22D-RJS, the first production well to be connected to the Lula NE buoy. This well will go in operation this quarter. Then, two other wells will be interconnected and FPSO Cidade de Paraty will reach its full output capacity in the third quarter of this year.

Two other buoys will be installed in the first half of the year

Operations to interconnect the third buoy in Sapinhoá field are ahead of schedule. The buoy is already submerged and attached to its foundations. Installation work will be completed this quarter.

The fourth and last buoy, designed for Lula field, is already on site and is currently in the initial installation phase, according to schedule. Installation is also expected to be completed this quarter.

Sapinhoá field is operated by Petrobras (45%), in partnership with BG E&P Brasil Ltda (30%) and Repsol Sinopec Brasil S.A. (25%).

Lula field is operated by Petrobras (65%), in partnership with BG E&P Brasil Ltda (25%) and Petrogal Brasil S.A. (10%).

Providing useful resources, articles and writings on crude oil, other petroleum products, energy and gas. By Blockline and Associate Ltd Nigeria Ltd, online.