• Home
  • 2013
  • September

Kuwait Oil and Gas News Sept 2013

• Kuwait awards Golar LNG $213m contract – US-based company to supply a floating storage and regasification unit for liquefied natural gas.
• Kuwait launches major water injection deal – Kuwait Oil Company plans to boost crude production in northern Kuwait.
• Kuwait Energy increases revenue and production in Q2 – Kuwait Energy saw second quarter revenues rise 51.8 per cent to US$77.6 million compared to $51.1 million in the same period last year due to new contributions from producing fields in Egypt and a 15 per cent interest in a Yemeni field.
• Kuwait’s crude oil exports to Japan rose to 20.5 per cent in June from a year earlier to 7.58 million barrels, or 253,000 bpd, Kuwait’s government said Wednesday. Kuwait remained Japan’s fourth-biggest oil supplier in June, providing 7.7 per cent of the country’s total crude imports, compared with 6.5 per cent in the same month of last year, Japan’s Natural Resources and Energy Agency said in a preliminary report.

Saudi Arabia Oil and Gas News Sept 2013

• Sabic affiliate awards Linde CO2 contract – German company to construct Saudi Arabia’s first CO2 utilisation plant.
• Saudi Arabia’s housing minister signs $1.06bn contracts for homes – Projects will see 40,000 new homes delivered across the country.
• Saudi Arabia pushes forward with airport projects – Bids for Abha and Jeddah airport contracts due in September.
• Unique Hydra, a Unique Maritime Group company providing subsea and offshore solutions recently delivered the largest single order for air dive systems to Subtech Offshore Services in Saudi Arabia.
• Rotary wins EPC work in Jubail- Rotary Engineering Limited, an integrated engineering, procurement, construction (EPC) and maintenance services provider in the oil and gas and petrochemical industry, today announced that it has been awarded S$200 million (US$157 million) worth of EPC contracts in Singapore and Saudi Arabia.

Oil and Gas News United Arab Emirates

• Hydrasun announces Middle East expansion – Hydrasun, a leading specialist provider of integrated fluid transfer, power and control solutions to the global energy industry, has announced the launch of a new company and associated office and workshop facilities in the Middle East.
• Hydrasun FZE, based in Dubai, UAE, has been formed to support the company’s growing number of customers in the Middle East. The new 1000m2 facility will establish a permanent presence in the region supplying Hydrasun’s complete range of products and added value services as well as facilitating the pursuit of new business opportunities.
• Opec reports record high in petroleum exports – Export revenues reached $1.26 trillion in 2012, but likely to fall this year on lower crude prices.
• Tourism body TDIC floats tender for Guggenheim Abu Dhabi – .Tourism body TDIC floats tender for Guggenheim Abu Dhabi – Contractors invited to prequalify for Guggenheim main construction contract
• RasGas Company Limited (RasGas) has safely and successfully completed offshore drilling for 30 development wells for the $10.3 billion Barzan Gas Project, paving the way for subsequent phases of the project to proceed with connecting the wells to subsea pipelines that will take gas to shore.
• DNO updates on Middle East production plans – First production expected from Iraqi Kurdistan, UAE and Yemen licences.
• Abu Dhabi Municipality to issue tender for beach club.
• Abu Dhabi tenders for Al-Ain airport upgrade – Al-Ain airport tender covers design consultancy services.
• Dewa tenders advisory contract for first IPP – Hassyan private power plant to be coal-fired.

• Base Oil Group II prices in Middle East is oscillating in the narrow range.
• Abu Dhabi based Specialized Oilfield Products has introduced a unique digital sensor monitoring system, which can extend the life of wireline through continuous surveillance and create significant cost savings.

• Lukoil to move overseas office to Dubai – Russia’s Lukoil is to relocate its oversees arm to Dubai in order to support regional operations, namely in the giant oil fields of Iraq, according to Abu Dhabi’s The National newspaper.

• Soaring MENA energy demand to increase solar drive – Over US$1.1 trillion worth of commercial and residential construction projects in the next decade across the Middle East and North Africa will further increase energy demand in the region, according to industry experts.

Fujairah Storage Doubling up

Fujairah, one of the seven emirates that make up the United Arab Emirates (UAE), is looking to double third-party oil storage capacity to 10mn cm by the end of 2015, writes David Hayes.
• Fujairah’s role as a major global oil storage and trading hub is poised to grow over the next few years as ambitious plans to build new third-party oil terminals and expand existing storage terminals are implemented. New tank farm facilities planned for completion this year will raise the emirate’s oil storage terminal capacity by an extra 1.6mn cm. This will boost total oil terminal capacity to 7mn cm by the end of 2013, a 30% increase compared with the estimated 5.4mn cm of storage capacity in operation at the end of 2012.
• Furthermore, this figure is expected to rise to 10mn cm by the end of 2015. Until recently almost all storage terminal capacity in Fujairah was built for bunkering use. However, this pattern is changing, and much of the current storage terminal construction boom is in response to rising oil production in the Middle East to meet growing international demand, especially from India, China and south-east Asia. Middle East domestic demand for oil is also growing, with a number of new refineries planned for construction by Arabian Gulf states, including one in Fujairah itself.

• At present, 12 companies already operate or are planning to construct oil terminal facilities in Fujairah. Almost all of these offer third-party storage facilities. Storage overcapacity is not expected to be a problem as the various terminal operators are often targeting different customers. Indeed, many of the bulk storage companies have planned their facilities with specific major clients in mind – Socar Aurora Fujairah Terminal (SAFT) has teamed up with Socar of Azerbaijan, for example, while Concord Energy Group is working directly with Sinochem.
• Gulf Petrochem recently became the latest company to open an oil terminal in Fujairah, commissioning the 412,000 cm
Phase 1 of a planned 1.2mn cm bulk storage facility early this year. Around 75% of Gulf Petrochem’s storage capacity is expected to be rented out for third-party use in the long run, while the remaining storage capacity will be used for in-house trading activities by project partner Glencore. However, the actual use of storage capacity will depend on market demand, with more than half of the Phase 1 storage capacity expected to be used for bunkering initially.
• Much of the oil products expected to fill the new terminal’s capacity will come from Indian refineries, the Middle East and south-east Asia for eventual supply to worldwide markets. Meanwhile, apart from Gulf Petrochem’s new terminal, elsewhere in Fujairah Port Aegean Oil’s new 465,000 cm capacity storage terminal is also due to be commissioned in 2013. Further storage capacity will be added later in 2013 when Phase 1 of the IL&FS Prime Terminal consisting of 15 storage tanks providing 330,000 cm of storage capacity enters service.
• Strategic choice
The choice of Fujairah by international terminal operators and trading companies to build new storage terminals is due to the emirate’s strategic location near major oil producing countries and just outside the Strait of Hormuz. The Fujairah Offshore Anchorage Area offers safe, deepwater anchorage in UAE territorial waters. In addition, oil tankers can moor in Fujairah while waiting to collect cargoes inside the Arabian Gulf without having to pay war risk premiums to insurance companies that are levied once ships enter the Strait of Hormuz.
• Fujairah is already the world’s second largest bunkering centre due to ship owners taking advantage of waiting time for bunkering. Located on a busy international shipping route, almost 40,000 vessels are estimated to pass the emirate on their way into and out of the Arabian Gulf each year. ‘Fujairah is most strategically located for oil and it’s fast growing like Singapore, Rotterdam and Houston. It will be a major oil port, ‘If you look at it in totality, it is a very suitable and strategic location for oil storage. The port facilities and the port expansion are being done by the government of Fujairah. They want a complete oil hub.’The government’s decision to construct modern port terminal infrastructure with high capacity liquid cargo discharge and loading facilities is playing an important role in attracting international storage terminal operators to invest in the emirate.

• Facilities in the Port of Fujairah currently include seven berths with a combined length of around 2,000 metres able to accommodate six large vessels or 13 small tankers. Some 52 marine loading arms are installed in the port, while the central matrix manifold is designed to connect all storage terminals to all the berths and to interconnect all storage terminals with each other as well. The Fujairah Port Master Plan calls eventually for 21 berths to operate in the oil port basin and adjacent breakwater. These will include berths with a 23- to 25-metres draft designed to accommodate VLCC (very large crude carrier) tankers. Separately, Vopak operates six independent berths and has one single point mooring (SPM) for loading and discharge from its recently expanded storage Gulf Petrochem’s Fujairah storage terminal Source: Gulf Petrochem terminal.

Latest OPEC oil production figures

• Crude oil output from OPEC fell to 30.45mn b/d in June 2013, down from 30.57mn b/d in May, as lower volumes from Libya and Iraq more than offset an increase from top producer Saudi Arabia.

• ‘What’s notable about this month’s figures is not the Libyan decline, because that was known since the start of June, but the way the Saudis stepped right in to fill that gap.

• ‘The Saudi role as swing producer becomes more significant every month, as the kingdom puts oil into the market when it’s needed, and takes it out when it’s not. It has been particularly aggressive in this role in recent months.’

• Libyan production, which had recovered to around 1.4mn b/d in May, plunged by 200,000 b/d in June amid continuing political unrest that has included protests at key oil fields across the country. Libyan oil output had fallen below 1mn b/d because of the protests and other technical issues.

• In mid-June, there had been a ‘massive’ decline in production at some of Libya’s major fields, among them Elephant, Sharara, Sarir and Messla. Security personnel have been protesting since 2 June at the Elephant field, which is operated by a joint venture between NOC and Italy’s Eni, demanding improved pay and conditions.

• Reduced exports took Iraqi output down by around 100,000 b/d to 3mn b/d. The northern pipeline system, which carries crude to Ceyhan on the Turkish Mediterranean, has been subject to repeated attacks by insurgents.
• Exports from Ceyhan were suspended in mid-June. Other smaller dips in output came from Algeria, Angola and Nigeria. The 1.88mn b/d estimate for Nigeria was the lowest since September 2009, when production was pegged at 1.85mn b/d. Nigeria is subject to frequent sabotage of oil installations and pipelines and is also seeing the US export market shrink dramatically.

• Usan normally produces between 90,000 b/d and 110,000 b/d. OPEC kingpin Saudi Arabia boosted output by 250,000 b/d to 9.65mn b/d, the highest volume since November 2012 when output was estimated at 9.82mn b/d. Saudi output typically climbs in summer to meet increased demand from domestic power stations for direct-burning crude. Saudi output was estimated at an average 10mn b/d during May, June, July and August 2012.

• There were smaller increases of 10,000 b/d each from Kuwait and the United Arab Emirates.
The latest survey indicates OPEC is overproducing its official 30mn b/d ceiling, which has been in place since January 2012, by 450,000 b/d. Adherence to the ceiling, however, is informal as OPEC has not set individual country quotas. This effectively leaves the management of the market to Saudi Arabia, the only country with the ability to make significant adjustments to output.

• Meanwhile, according to OPEC’s latest monthly oil market report, the oil cartel expects demand for its crude to decline again, to 29.61mn b/d, in 2014, as rising oil supply from independent producers outpaces the predicted increase in global oil consumption.

• This represents a year-on-year drop of around 250,000 b/d after an anticipated fall of 420,000 b/d this year. The forecast call on OPEC crude for next year is well below current production, which OPEC states averaged 30.379mn b/d in June.