Petrobras Announces Third LNG Terminal

by OGJ editors, OGJ, Mar 2, 2011
Petroleo Brasileiro SA (Petrobras) reported it will install a third offshore LNG terminal.

The Bahia regasification terminal (TRBA), with capacity to regasify 14 million cu m/day (cmd), will supply natural gas to the state of Bahia, the heaviest consumer of gas among the northeastern Brazilian states.

TRBA will be installed in the Bay of All Saints and interconnect with a pipeline network at two sites: one in the Bahia network, at Candeias, and the other at kilometer 910 on the Cacimbas-Catu pipeline, a section of the Southeast-Northeast Gas Pipeline started up in March 2010.

As part of Brazil’s Growth Acceleration Program, Petrobras said, work will begin in March 2012 with completion scheduled for August 2013 under an investment of nearly $425 million.

Currently, Brazil has LNG terminals at Pecem (State of Ceara) with a regasification capacity of 7 million cmd, and in the Guanabara Bay (State of Rio de Janeiro) with capacity of 14 million cmd. When the TRBA terminal comes online in September 2013, Brazil’s total regasification capacity will reach 35 million cmd, overtaking the gas imports via pipeline from Bolivia (31 million cmd).

At the Pecem and Guanabara Bay terminals, tankers moor at a two-berth pier and LNG is transferred over cryogenic arms from supply vessel to regasification vessel. At the TRBA terminal, LNG will be transferred directly between vessels using side-by-side docking, which means that the regasification vessel will dock at a single-berth, island-type pier, said the company.

With direct connection to the supply vessel, LNG will be transferred over short hoses or loading arms to the regasification vessel, which will convert LNG back into a vapor [i.e., gaseous state].

Gas will then be injected into the pipeline network through a 28-in. pipeline that is 49 km long including a 15-km subsea section.

Petrobras noted that currently only two [sic] other LNG terminals in the world use this configuration [i.e., side-by-side -- D.R.]: Bahia Blanca in Argentina and the UAE’s Dubai terminal. [Full story]

(Brazil imported 298 Bcf of natural gas in 2009, a 24 percent drop from 2008. The decline in Brazilian overall natural gas demand, coupled with policy choices aimed at reducing imports, led to this decline. The country currently receives imports by pipeline from Bolivia and liquefied natural gas (LNG) imports from Trinidad and Tobago and Nigeria. Import growth in the future is expected to be met more with LNG than with conventional pipeline imports. Brazil imports natural gas from Bolivia via the Gasbol pipeline, which links Santa Cruz, Bolivia to Porto Alegre, Brazil, via Sao Paulo. The 2,000-mile Gasbol has a maximum capacity of 1.1 Bcf per day (Bcf/d). In early 2009, Brazil announced that it would reduce imports from Bolivia from 1.1 Bcf/d to 0.7 Bcf/d. According to ANP, Brazilian imports of Bolivian gas have since declined by 27 percent. However, Bolivia still accounted for 96 percent of Brazil’s total natural gas imports. The Pecem---please see image below---received its first LNG cargo from Trinidad and Tobago in July 2008, while the Guanabara Bay terminal came online in May 2009. According to ANP, Brazil received 15 Bcf of natural gas in the form of LNG in 2009, mostly from Trinidad and Tobago---please see U.S. EIA, Brazil Country Analysis Brief, Jan 2011, here. For the Petrobras's standing in the company rankings---PIW's and others---please see my blog stand-alone page "Companies" > Petrobras, here. -- D.R.)

Source: LNGpedia.com here Description: The Floating Storage and Regasification Unit---FSRU---vessel, the Golar Spirit, is reportedly the world's first methane vessel to have been converted to perform LNG regasification on board. The regasification capacity of the Golar Spirit is seven million cubic meters (cbm) per day, and its storage capacity is 129,000 cbm of LNG, equivalent to 77 million cbm of natural gas.

Fitch: Long Production Cut Biggest MENA Threat

By OGJ editors, OGJ, Mar 3, 2011
Long interruption of production represents the largest threat from political turmoil to the financial stability of oil and gas companies with operations in the Middle East and North Africa (MENA) but remains unlikely, an international credit-reporting agency says.

A secondary risk, nationalization of assets by successor regimes in countries now experiencing unrest, is a “remote scenario,” although contract renegotiations by successor regimes remains possible, according to Fitch Ratings, New York and London.

A recent Fitch report covering North American companies with operations in the MENA region said credit pressures from unrest in Egypt, Libya, and other countries of concern are manageable.

Credit ratings are most sensitive to “widespread and long-lasting production” upsets, which Fitch doesn’t expect “due to the importance of oil revenues to the region’s economies.”

Most North American producers in the MENA region are large, integrated companies for which production in countries experiencing unrest is small in relation to total. Oil price increases mitigate the elevated risks of production losses and contract renegotiation.

Company exposures

Apache Corp. has the highest exposure among North American producers to any single country experiencing turmoil, Fitch said. Apache’s 163,300 boe/d of output in Egypt is 24% of Fitch’s assessment of the company’s recent total production.

Exposure levels in Libya include Marathon, 12% of total production; Suncor Energy Inc., 8%; Hess Corp., 5%; ConocoPhillips, 3%, and Occidental Petroleum Corp., 1%.

Fitch called Algeria “the other North African country that could present the largest concerns for North American-based upstream companies.” There, sizable exposure levels include Anadarko Petroleum Corp., 7% of total production, and Hess, 3%. ConocoPhillips produced 14,000 boe/d in Algeria in the third quarter last year, less than 1% of total production, according to Fitch estimates.

North American companies with production in restive Yemen include Nexen Inc., 11% of estimated total production, and Oxy, 6%.

Among European oil and gas companies tracked by Fitch, four have production in Libya or Egypt, the firm said in a separate report.

Eni, OMV, and Repsol have production exposure of 9-14% in Libya, “with Eni as the most exposed,” Fitch said. About one fourth of BG Energy Holdings Ltd.’s total oil and gas output is in Egypt.

“There could be a more pronounced impact on European oil and gas companies’ operations and financials if the political unrest spreads across Africa and/or the Middle East,” Fitch said, adding it “does not currently view this scenario as very likely.” [Full story]

BOEMRE Approves First Deepwater Drilling Permit since Accident

by Nick Snow, OGJ, Feb 28, 2011
The US Bureau of Ocean Energy Management, Regulation, and Enforcement [the former Minerals Management Service] approved the first deepwater drilling permit on Feb. 28 since the Macondo well accident and crude oil spill. BOEMRE said Noble Energy Inc.’s application for a permit to bypass was for Well No. 2 in Mississippi Canyon Block 519 about 70 miles southeast of Venice, La.

The permit represents a significant milestone for both the US Department of the Interior agency and the oil and gas industry since Interior Sec. Ken Salazar placed a moratorium on new deepwater drilling following the [BP's Macondo] well blowout and explosion which took 11 lives [please see my post here -- D.R.], BOEMRE Director Michael R. Bromwich said. [The moratorium was subsequently lifted in October 2010, but the department/agency has yet to approve any new deepwater exploration drilling permits. -- D.R.]

“This permit was issued for one simple reason: The operator successfully demonstrated that it can drill its deepwater well safely and that it is capable of containing a subsea blowout if it were to occur,” Bromwich told reporters during a teleconference. “We expect further deepwater permits to be approved in coming weeks and months based on the same process that led to the approval of this permit.”

In Houston, Noble Energy said it received permission to resume drilling its Santiago prospect in the deepwater Gulf of Mexico, which it described as a middle Miocene amplitude prospect in 6,500 ft of water where the independent producer is operator and holds a 23.25% working interest. The well was drilled to a 13,585 ft depth when operations were suspended on June 12, and Noble Energy said it expects to resume work in late March to a 19,000 ft targeted drilling depth, with results anticipated by the end of May.

David L. Stover, the company’s chief executive, said Noble Energy worked over several months with other operators and service providers to make deepwater drilling operations safer, including implementing third-party certification of well designs and blowout preventer testing.

Coordinated with BOEMRE

“Our partnership with others in the Helix Well Containment Group has increased the deepwater Gulf subsea control and containment capabilities,” he said. “The industry has improved its ability to respond to surface spills as well. Our teams have done an outstanding job of coordinating with the BOEMRE on these matters…. Noble Energy is proud to help lead the industry back to drilling in the deepwater gulf.”

Bromwich emphasized that no politics were involved in approving Noble Energy’s application, which he said had been working its way toward approval for several weeks. He noted that Helix Group has said that its system works to depths of 5,600 ft, but added that Noble Energy complemented that with additions which BOEMRE determined would effectively contain a blowout from 6,500 ft. The agency also has held several meetings with the Marine Well Containment Co., the group formed by four multinational oil companies operating in the gulf, and will approve that system if a producer demonstrates that it will work, he said.

“We are taking these applications to drill as they come in. Right now, a very small number are pending,” Bromwich said. “I expect industry has been waiting for a signal that deepwater drilling would be allowed to resume, and this could be the signal. I have no way of knowing how long it will take to approve the next one. It involves careful analysis of each application. Given the rigorous safety requirements, the public can be confident that the approved wells will be safe.”

Oil and gas industry trade associations welcomed the news. “The actual issuance of a permit for new deepwater drilling is long awaited and an important step forward in the wise development of energy off our shores,” said National Ocean Industries Association Pres. Randall B. Luthi. “With all the world-complicating factors, including rising oil prices, political turmoil in the Middle East, and the loss of jobs in the Gulf of Mexico, this decision offers hope that the United States is getting back in the energy and jobs market.”

He said taking DOI at its word that approval of Noble Energy’s application is not simply a token gesture, the action “sends a calming signal to operators, producers and service companies that the long drought is just about over,” adding, “It is also a compliment to Director Bromwich and a testament to the efforts of many within industry that the containment and safety issues can be resolved when industry and BOEMRE work together.” [Full story]

(For information on Noble Energy, in general, and its operations offshore Israel, specifically, please see my post here. Also, please read my post "National Commission Releases Final Report on Deepwater Horizon Oil Spill and the Future of Offshore Drilling," here. -- D.R.)

Gazprom Ups Italian Gas Supplies 30% Due to Libya Unrest: Source

Platts, Moscow, Feb 28, 2011
Gazprom has increased its daily Russian gas deliveries to Italy by around 30% after unrest in Libya led to the shutdown of the 11 billion cubic meter/year Greenstream pipeline [please see map below -- D.R.] last week, a source close to Gazprom said Monday.

The source told Platts it was unclear how long the gas supplies would remain at an elevated level.

Gazprom's deliveries reached 81.1 million cu m/day on Thursday, up from a daily average of 63 million-65 million cu m on weekdays and 54 million-55 million cu m at weekends, Russian news agency Interfax reported Friday, citing Italy's gas grid operator Snam Rete Gas.

Snam Rete Gas was not available for comment.

Last Tuesday Eni, Italy's main gas supplier and the parent of Snam Rete Gas, announced it had shut down Greenstream.

Greenstream, which is a joint venture between Eni and the National Oil Corporation of Libya, exported around 9.4 billion cu m of gas to Italy in 2010.

It runs from Mellitah in Libya to Gela in Sicily, Italy.

According to the European Commission, 30% of Italy's gas supplies come from Russia, with Libya typically supplying around 11%. Thirty-three percent of the country's gas imports come from Algeria and 9% from Norway.

The increase in Russian supplies to Italy is likely to be temporary, according to a research note by investment company Alfa Bank.

"There could be other positive implications for Russia, as the incident is likely to underscore the country's reputation as a reliable gas supplier and could ease concern over Russia's large share of European gas markets," the note said.

Within Europe, Libya only delivers gas to Italy and Spain [to Spain in the form of LNG -- D.R.]. Libyan gas represents 1.5% of Spanish [gas] imports. [Full story]

(The c. 520-kilometer---323-mile---Greenstream submarine pipeline came online in 2004. For information on Libya's oil and gas profile, please see my post here.)

                                                                       Source: ENI, here

ATP Oil & Gas Moves into Offshore Israel

Houston Business Journal, Feb 24, 2011

ATP Oil & Gas Corp. said Thursday [Feb 24] it is expanding into offshore Israel.

Houston-based ATP Oil (NASDAQ: ATPG) said it has signed agreements to acquire five licenses, of which two are pending, in approximately 4,000 feet [1,219 meters] of water in the Levantine Basin [, subject to approval by the Ministry of National Infrastructures -- D.R.].

“The recently announced discoveries in offshore Israel totaling approximately 25 trillion cubic feet of natural gas [i.e., Tamar + Leviathan -- D.R.] have demonstrated a significant catalyst for the offshore hydrocarbons sector,” T. Paul Bulmahn, ATP chairman and CEO, said in a statement.

ATP will operate all its licenses with working interests ranging from 40 percent to 50 percent. The license awards are expected by the end of March. [Full story]

(Similar stories appear in Oil & Gas Journal, here and Scandinavian Oil-Gas Magazine, here. For information on Tamar and Leviathan, please see my post here. ATP Oil & Gas Corporation is engaged in the acquisition, development and production of natural gas and oil properties in the Gulf of Mexico and the North Sea. ATP acquires and develops properties, many of which have proved undeveloped reserves (“PUD’s”) at the time of acquisition that are economically attractive to ATP, but not strategic to exploration-oriented oil and gas companies. Such strategy provides ATP with the assets to develop and produce without the risk, cost and time involved in traditional exploration. Since its inception in 1991, the company has had an exceptionally strong development success record of 98% of taking projects to production that were previously undeveloped and non-producing. ATP is headquartered in Houston, Texas, with additional offices in Guildford, Surrey (U.K.) and IJmuiden (Netherlands)---please see ATP website, here. -- D.R.)

China: Taking Oil Home

by Song Yen Ling and Jason Fargo, Energy Compass, Feb 11, 2011
As China pushes deeper into the global upstream industry, it's widely assumed that the expanding portfolio is being used to funnel oil supplies back home -- feeding the country's insatiable appetite for energy. Yet the reality is not so simple: The strategy of energy security is more complex, faces competing pressures from other policy goals, and can bump into infrastructural and commercial constraints, Energy Compass analysis shows.

What's not in doubt is that Chinese companies have spent tens of billions of dollars acquiring large volumes of production overseas. Foreign equity oil and gas output averaged 1.4 million barrels of oil equivalent per day in 2010, an increase of 40% on the previous year, according to a new report by state China National Petroleum Corp. (CNPC). Oil accounted for the lion's share, at 1.2 million barrels per day.

Energy security was the original driver of overseas expansion, with Beijing instructing companies to amass sources of supply. But in recent years this has become intertwined with a parallel objective of turning state oil giants into global, commercially driven entities capable of competing with Western oil companies. Beijing has also become preoccupied with its rising energy import bill, as oil prices and Chinese demand growth feed off each other. The government now sees overseas investments as important in bolstering global oil production to meet the growing needs of its economy, while acting as a hedge against higher prices.

CNOOC [China National Offshore Oil Corp.] Chairman Fu Chengyu recently spelt out these overlapping goals, telling local media that his company's overseas drive was designed to increase world oil supply and fulfill the needs of the host market, rather than to ship crude oil back to China. "Our expansion strategy overseas is based on grabbing good opportunities. But more importantly, commercial value must be realized," he said. The strategy not only helps China's economy, Fu said, but also contributes to the global economy.

The government increasingly recognizes that China's large upstream footprint does not necessarily translate into supply security, says one Chinese oil insider. Chinese companies tend to operate in politically unstable parts of the world, increasing the risk of nationalization or domestic controls, and may be limited by fiscal regimes.

Cash-for-oil deals -- where Beijing extends huge loans to oil-producing governments in exchange for a fixed volume of oil supply -- are viewed as a stronger bet in this regard, and have been embraced in the past couple of years. Such deals are now in place with Venezuela, Brazil, Kazakhstan, Russia [please see remarks below -- D.R.] and Ecuador, and account for some 1.1 million b/d, according to Energy Intelligence calculations (EC Jul.9,p5). With equity oil and domestic production, China now effectively controls some 6.4 million b/d of global oil production.

Tacit Understanding

Industry sources say there still is an understanding that, in a crisis, national interests will trump all commercial or other objectives. In the event that Mideast crude supply to China is interrupted, for example, state companies would be expected to send as much oil home as possible. This has already played out in other markets: Beijing put pressure on CNPC to increase natural gas supply this winter, which the company did at a loss. Similarly, refiners were compelled to suspend diesel exports during recent domestic shortages (EC Dec.3,p7).

In a global oil crisis, China's new strategic stockpile would be the first line of defense; this already has capacity of almost 250 million bbl and is due to hit 500 million-600 million bbl by 2020. There would also be limits on how much crude could easily be shipped back to China. Older refineries were built to run local [relatively] light, sweet grades Daqing [...], and only 30% of the country's [...] capacity can process sour grades. And companies may be constrained by contractual obligations to existing customers or the politics of the situation, Chatham House's John Mitchell wrote in a recent report (EC Jan.14,p10). Indeed, if the host country is involved in the crisis, equity oil investments could become "hostages" that limit the importer's foreign policy options "in exactly the way that energy security policy is supposed to avoid," Mitchell wrote.

Sudan, for one, provides large volumes of equity oil for the Chinese market, but also offers some of the highest risks of disruption, especially after the south's vote for independence (EC Jan.21,p6). CNPC has equity stakes of 40%-95% in the country's three largest production ventures, equivalent to about 205,000 b/d of Sudan's 475,000 b/d production. With marketing options limited by crude quality and US sanctions, some 253,000 b/d of Sudan's oil was exported to China last year. CNPC has built a special 200,000 b/d refinery at Qinzhou to process Dar and Nile Blend crudes.

At the other end of the spectrum is Ecuador, where China has again built a dominant position in export trade -- but takes hardly any oil back home. Andes Petroleum and PetroOriental, both partnerships of CNPC and Sinopec, produce a total of about 50,000 b/d. In addition, China is entitled to lift 96,000 b/d of state Petroecuador's crude under a two-year, $1 billion loan signed in mid-2009 (EC Aug.21'09,p5). Yet Chinese crude imports from Ecuador averaged just 16,300 barrels per day in 2010, down 55% on the previous year. Transportation costs are high, and Chinese refineries are not optimized for Ecuadorean grades.

Instead, the value of China's Ecuador presence has lain elsewhere, in providing a springboard for expansion in Latin America's oil industry and an avenue for PetroChina to develop an active global trading role, as the CNPC affiliate recreates itself as an international integrated company (EC Jan.14,p3). Virtually all of China's crude entitlement from Ecuador is sold on the open market, mainly to refineries in California, with PetroChina now the country's main lifter. PetroChina also swaps some supplies for crude more suited to China's refineries -- a twist demonstrating the increasing complexity and sophistication of China's energy security strategy.

Other overseas equity oil that doesn't make its way to China includes CNOOC's interests in Argentina and offshore Nigeria. [Read full]

(China agreed to loan Russian companies, Rosneft and Transneft $25 billlion to finance the East Siberia Pacific Ocean---ESPO---oil pipeline in exchange for 300,000 bbl/d of oil shipments---please see my post here. China is the world's second-largest consumer of oil behind the United States, and for the first time the second-largest net importer of oil in 2009---please see my post, including remarks, here.  -- D.R.)

Saudi Arabia's Longest Well Drilled in Manifa

OffshoreEnergyToday.com Feb 23, 2011
The Manifa Drilling Team set a new record in December when it finished drilling the longest well in Saudi Arabia to a total depth of 32,136 ft (± 9.8 km) and completed a horizontal power water injector across the Lower Ratawi reservoir.

A [Canada's] Precision Drilling rig did the work on the Manifa well, [...]. The same drilling team set an earlier record while working on the 30,850 ft (+9.4 km) Manifa well.

Discovered in 1957, Manifa field is in shallow waters southeast of Tanajib, about 200 km northwest of Dhahran [please see map of oil and gas fields in Saudi Arabia, here -- D.R].

The [Saudi Aramco's] development strategy of Manifa is based on optimum use of onshore drilling. Instead of developing Manifa completely from offshore platforms, it is developed from 27 drilling islands connected by a 47-km long causeway, in addition to 16 onshore drill sites and 13 [offfshore] platforms. [Please see image below -- D.R.]

                                          Source: OffshoreEnergyToday.com

Extended-reach wells, such as the two mentioned above are required for optimum field coverage. Read more

(During the May 2010 Offshore Technology Conference, Zuhair Al-Hussain, Aramco vice-president, drilling and workovers, said production from Manifa will start in mid-2013 but will not ramp up quickly to the original target of 900,000 b/d of Arab heavy oil (OGJ, May 10, 2010, p. 19). Also, please see my updated post on Manifa -- "Manifa to Yield 500,000 b/d by 2013 and 900,000 b/d by 2014 -- Aramco," here. Houston-based Parker Drilling, operator of the Yastreb Rig for Exxon Neftegas Limited, set world record for extended-reach drilling: Sakhalin's Odoptu OP-11 well reached a total measured depth of 40,502 feet (12,345 meters or 7.67 miles)---please see my post here. -- D.R.)

BP and Reliance Industries Announce Transformational Partnership in India

BP website, Feb 21, 2011
BP to take a 30 per cent stake in 23 oil and gas blocks.

Reliance Industries Limited and BP today announced a historic partnership between the two companies. Mr. Mukesh Ambani, Chairman and Managing Director of Reliance Industries Limited, and Mr. Robert Dudley, BP Group Chief Executive, signed the relationship framework and transactional agreements in London.

The partnership across the full value chain comprises BP taking a 30 per cent stake in 23 oil and gas production sharing contracts that Reliance operates in India, including the producing KG D6 block [see map below -- D.R.], and the formation of a 50:50 joint venture between the two companies for the sourcing and marketing of gas in India. The joint venture will also endeavor to accelerate the creation of infrastructure for receiving, transporting and marketing of natural gas in India.


            Map of BP and Reliance Industries Deal Interests

                                                        Source: BP

The partnership will combine BP’s world-class deepwater exploration and development capabilities with Reliance’s project management and operations expertise.

Mukesh Ambani said: “We are delighted to partner with BP, one of the largest energy majors and one of the finest deep water exploration companies in the world. This partnership combines the skills of both companies and will be focused on finding more hydrocarbons in the deep water blocks of India and significantly contribute to India’s energy security.”

For BP, Reliance is a natural partner in India, given its strong position in the Indian market.

“This partnership meets BP’s strategy of forming alliances with strong national partners, taking material positions in significant hydrocarbon basins and increasing our exposure to growing energy markets,” said Mr. Carl-Henric Svanberg, Chairman of BP.

BP will pay Reliance Industries Limited an aggregate consideration of US$7.2 billion, and completion adjustments, for the interests to be acquired in the 23 production sharing contracts. Future performance payments of up to US$1.8 billion could be paid based on exploration success that results in development of commercial discoveries. These payments and combined investment could amount to US$20 billion.

BP’s confidence in India is evident from the fact that the transaction constitutes one of the largest foreign direct investments into India.

The 23 oil and gas blocks together cover approximately 270,000 square kilometers. This will make the partnership India’s largest private sector holder of exploration acreage.

So that the joint venture can capitalize on Reliance’s outstanding project management track record and operations expertise, Reliance will continue to be the operator under the production sharing contracts, whose blocks lie in water depths ranging from 400 to over 3,000 meters. These currently produce about 1.8 billion cubic feet of gas per day (bcf/d), over 30 per cent of India’s total consumption, and over 40 per cent of India’s total production.

“India is one of the fastest growing economies in the world. By allying ourselves with Reliance, we will access the most prolific gas basin in India and secure a place in the fast growing Indian gas markets, creating a genuinely distinctive BP position,” said Bob Dudley. “BP looks forward to a long and successful working partnership with Reliance.”

Completion of the transactions is subject to Indian regulatory approvals and other customary conditions. [Full story]

(BP has been working with Reliance since December 2008 on the D-17 deepwater block in the Krishna Godavari (KG) basin on the east coast of India---see map above. BP, with a 50 per cent interest, operates the block and Reliance holds the remaining interest. BP has a strong presence in India in addition to its interest in block D-17. Castrol India Limited is a market leader in the retail automotive lubricant business, including car engine oils, premium 4-stroke motorcycle oils and multi-grade diesel engine oils. Castrol India also operates in the industrial and marine lubricants markets. Tata BP Solar, a joint venture between BP Solar and the Tata Group, has been operating in India since 1989. It is a leader in the Indian solar energy market, manufacturing solar cells, solar PV modules and systems. Reliance Industries Limited (RIL) is India’s largest private sector company on all major financial parameters. RIL runs the world's largest refining complex at Jamnagar with two plants of combined capacity of 1.24 million barrels per day---please see my post "World's Largest Refineries," including notes, here. It has also been buying up shale gas assets in the United States and has interests in petrochemicals and retail, and is now looking at diversifying. According to BP’s Energy Outlook 2030, energy consumption in India has grown by 190% over the past 20 years and is likely to grow by 115% over the next 20 years, a rate of over 4% per annum. Gas is expected to be the fastest growing fossil fuel, with demand growing at a rate of nearly 5% a year between 2010 and 2030. India’s gas consumption was 5.0 bcf/d in 2009 and is estimated to have been 6.1 bcf/d in 2010 (comprising 4.9 bcf/d production plus 1.2 bcf/d LNG imports). Total Indian gas consumption is projected to grow to 12.5 bcf/d in 2025, and exceed 15 bcf/d in 2030. The Indian deal marks the second major deal under BP's new chief executive Bob Dudley. Last month, on January 14, BP and Rosneft announced a major strategic partnership that would include a share swap and the joint exploration of three blocks in the Russian Arctic---please see my post here. -- D.R.)

World's Top 21 Largest Oil Refineries -- OGJ

by Aaron and David Rachovich

World's Largest Refineries (minimum capacity of 400,000 b/cd) 

Rank	Company	Location	Crude Capacity, barrels per calendar day (b/cd)
1.	Paraguana Refining Center*	Cardon/Judibana, Falcon, Venezuela	940,000
2.	SK Corp.	Ulsan, South Korea	817,000
3.	GS Caltex Corp.	Yeosu, South Korea	750,000
4.	Reliance Petroleum Ltd. [merged with RIL since 2009]	Jamnagar, India	660,000
5.	ExxonMobil Refining & Supply Co.	Jurong/Pulau Ayer Chawan, Singapore	605,000
6.	Reliance Industries Ltd. [RIL]	Jamnagar, India	580,000
7.	S-Oil Corp.	Onsan, South Korea	565,000
8.	ExxonMobil Refining & Supply Co.	Baytown,** Texas, USA	560,500
9.	Saudi Arabian Oil Co. (Saudi Aramco)	Ras Tanura, Saudi Arabia	550,000
10.	Formosa Petrochemical Co.	Mailiao, Taiwan	540,000
11.	ExxonMobil Refining & Supply Co.	Baton Rouge, Louisiana, USA	503,500
12.	Hovensa LLC	St. Croix, Virgin Islands, USA	500,000
13.	Kuwait National Petroleum Co.	Mina Al-Ahmadi, Kuwait	466,000
14.	Shell Eastern Petroleum (Pte) Ltd.	Pulau, Bukom, Singapore	462,000
15.	BP PLC	Texas City, Texas, USA	451,250
16.	Citgo Petroleum Corp.	Lake Charles, Louisiana, USA	440,000
17.	Marathon Petroleum Co. LLC	Garyville, Louisiana, USA	436,000
18.	Shell Nederland Raffinaderij B.V.	Pernis, Netherlands	404,000
19.	Sinopec	Zhenhai, China	403,000
20.	Saudi Arabian Oil Co. (Saudi Aramco)	Rabigh, Saudi Arabia	400,000
21.	Saudi Aramco-Mobil	Yanbu, Saudi Arabia	400,000

Notes: RIL's new refinery in the Special Economic Zone at Jamnagar is the world's sixth largest and has a Nelson Complexity Index of 14.0, making it one of the most complex refineries globally. The refinery has a capacity of processing 580,000 barrels of crude oil per stream day. With the commissioning of the new refinery in its SEZ, Jamnagar has now become the petroleum hub of the world. With 1.24 million barrels per day of nominal crude processing capacity (i.e., No. 6 Jamnagar + No. 4 Jamnagar, above), it is the single largest refining complex in the world. This is equivalent to 1.6% [sic] of global capacity or one third of India’s capacity, and places RIL amongst the top ten private refiners globally. Please read RIL's website, here. For 2010, OGJ's survey shows total capacity at more than 88.2 million b/cd in 662 refineries, an increase of 1 million b/cd over the figure for 2009 of 87.2 million b/cd for 661 refineries. OGJ's refinery survey for 2008 listed a global capacity of 85.6 million b/cd in 655 refineries. – Please read Warren R. True and Leena Koottungal, "Global Capacity Growth Slows, But Asian Refineries Bustle," OGJ, Dec 6, 2010. South Korea is home to three of the ten largest crude oil refineries in the world – SK Energy's Ulsan (No. 2), GS Caltex's Yeosu (No. 3) and S-Oil's Onsan (No. 7), according to OGJ data above.

*The Paraguana Refining Center (Centro Refinacion Paraguana/CRP) or Complex is the result of the merger in 1997 of three refineries: the Amuay refinery, the Cardon refinery and the Bajo Grande refinery, and currently considered the world's second largest refinery complex, after the Jamnagar complex (No. 4 Jamnagar + No. 6 Jamnagar, above) in India---please see notes above. The Paraguana Refining Center has a Nelson Complexity Index of 7.1. It has the nominal capacity to refine 955,000 barrels of crude oil per day. -- D.R.

**Update 1: Royal Dutch Shell Plc and Saudi Aramco became co-owners of the largest U.S. refinery when a new crude distillation unit at their joint-venture Motiva Enterprises Port Arthur, Texas, plant received oil for the first time. The 325,000 barrel-per-day (bpd) atmospheric crude distillation unit that started processing combines with existing crude units to give Motiva's Port Arthur, Texas, refinery a total crude oil refining capacity of 600,000 bpd, said Shell Chief Financial Officer Simon Henry during the company's first quarter earnings call. With the startup of the new Port Arthur crude unit, Exxon Mobil Corp's Baytown, Texas, refinery becomes the second-largest refinery in the United States---please see "Motiva Port Arthur refinery becomes U.S. largest - Shell," Reuters, Apr 26, 2012. Update 2: But by far the biggest refining story in North America in 2012 centered on the massive expansion at Motiva Enterprise LLC's Port Arthur, Tex., refinery. The 325,000 bpd, $10 billion expansion, largest at a US refinery in nearly 40 years and designed for feedstock flexibility, was dedicated on May 31, raising capacity to 600,000 bpd and making it the largest US refinery. On June 9, 2012, however, the new crude distillation unit sprung leaks traced to massive corrosion; a fire ensued and the expansion was shut down. Motiva has since traced the problem to faulty design. The unit will not restart before the end of first-quarter 2013, if then---please see Warren R. True and Leena Koottungal, "Asia, Middle East lead modest recovery in global refining," OGJ, Dec 3, 2012 -- D.R.
 

Source: Oil & Gas Journal, Dec 6, 2010.

(Also, please see my post "Top 10 Largest Refining Companies in Asia, the USA and Western Europe -- OGJ," here. And my post "World's Top 25 Largest Refining Companies, Jan 1, 2011 -- OGJ," here. Furthermore, please see Aaron and David Rachovich, "Top 28 Largest Refineries in the U.S. as of Jan 1, 2011 -- EIA," and David Rachovich, "Top 20 Largest Refining Companies/Refiners in the U.S. as of Jan 1, 2011." Update -- please see my post "World's Top 21 Largest Oil Refineries -- OGJ," Feb 7, 2012 . Breaking News: On August 25, 2012, a massive blast at Venezuela's largest oil refinery, the 645,000 b/d Amuay refinery (part of the Paraguana Refinery Complex, please see table and notes above), on Paraguana peninsula, has left at least 39 people dead and dozens others injured. A gas leak is being blamed for the blast. Update 2: "World's Top 21 Largest Oil Refineries -- OGJ," OGJ, Jan 6, 2013 -- D.R.)