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ay
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2007
Oil & Gas
News
Russia explores an OPEC-like gas cartel
with Qatar
In January, the supreme leader of Iran, Ayatollah Ali Khamenei,
suggested that his country and Russia team up to form a gas cartel.
Russian President Vladimir Putin addressed the concept at his
wide-ranging annual news conference on February 1.
“We will think about it,”
Mr Putin said. And he did – very promptly, it
seems.
In the Middle East a scant two weeks later, President Putin
discussed the possibility of an OPEC-like natural gas cartel with
leaders in Qatar, which commands the world’s third-largest natural
gas reserves and is global leader in the production of liquefied
natural gas (LNG). Apparently encouraged by what he heard, Mr
Putin lost little time in turning an idea into something more. On his
return to Moscow he said he would dispatch a team of experts to
the Qatari capital, Doha, in April to explore a gas alliance.
Such a prospect is bracing to contemplate. Russia has the world’s
largest reserves of natural gas, with an estimated 1,680 trillion
cubic feet of gas buried deep beneath the vast tundra and taiga of
Siberia. It is also feasible, at least in concept. LNG lends itself well
to a gas cartel because it can be shipped and traded in much the
same way as oil.
What a Russian-Qatari cartel might mean for European nations
reliant on Russian gas is uncertain. In January, European leaders
reacted warily after executives from Russia’s state-owned gas
monopoly, Gazprom, met with Algerian leaders to discuss joint
strategies for marketing gas to Europe and the possible formation
of an alliance of gas exporters. Algeria supplies Europe with 10 per
cent of its natural gas.
In the
Chicago Tribune
,
foreign correspondent Alex
Rodriguez reflected on what
might spring to the minds of
American energy officials.
He wrote,
“Right now, such
a cartel would not affect
the United States, which
relies on domestic sources and on imports from Canada and the
Caribbean for its natural gas. However, natural gas consumption in
the US is projected to jump by nearly half in 20 years, and the US
is expected to look to LNG to fill the gap.”
(
‘Russia Pursues Gas
Cartel,’
March 9).
Inter Pipeline partnership set to become
largest oil sands shipper in Canada
The Inter Pipeline Fund has agreed to buy the Corridor pipeline
system in Alberta from energy shipping giant Kinder Morgan Inc
(Houston, Texas) for US$233 million, to become the largest gatherer
of bitumen from the province’s oil sands. The Corridor system
transports bitumen, a tar-like heavy oil, in dilute form from the
Athabasca oil sands project near Fort McMurray to a Shell Canada
Ltd processing plant near Edmonton. Athabasca is a joint venture of
Shell, Western Oil Sands Inc (also Canadian), and Chevron, USA.
According to
Canadian Press
(March 6), Corridor currently
transports about 280,000 barrels of oil equivalent (boe) per day
and is set to expand that to 465,000 boe by 2012. The company,
which began commercial operations in May 2003, commands about
1,000km of pipeline and more than two million barrels of storage.
Calgary-based Inter Pipeline – which ships oil, stores liquid gas,
and operates natural gas processing businesses – has energy
infrastructure assets in Western Canada, the UK, Germany, and
Ireland. The fund is also operator and 85 per cent owner of the Cold
Lake oil sands pipeline system in east-central Alberta, which ships
330,000 boe under long-term contracts with Canadian customers
Imperial Oil, EnCana, and Canadian Natural Resources Ltd.
Corridor’s seller, Kinder Morgan (Houston, Texas), is one of the
largest energy companies in North America, with approximately
43,000 miles of pipelines that transport primarily natural gas, crude
oil and petroleum products; plus some 150 terminals for storage
and handling. In Canada, the company is constructing its first major
merchant terminal in Edmonton and has in hand several other
pipeline and terminal projects.
Angola’s Sonangol sees an
investment bonanza just ahead
Angola is expecting US$50 billion in investments in its oil industry
over the next six years, according to the head of the state-owned oil
company Sonangol. Chairman Manuel Vicente made this prediction
on March 7 despite the collapse of two major international energy
deals and the possibility of renewed political tension in the country.
Sonangol has ended talks with China’s Sinopec on plans for a US$3
billion Chinese investment in an oil refinery in Angola. Chinese
companies have played a major role in the oil-driven reconstruction
boom that Angola has enjoyed since it emerged from a 27-year civil
war in 2002. It has since become China’s biggest supplier of crude.
Mr Vicente asserted that Angolan companies would be encouraged
to take advantage of growth in the industry, which is fueling an
economic boom in sub-Saharan Africa’s second largest oil producer
after Nigeria. Now a member of the Organization of the Petroleum
Exporting Countries (OPEC), Angola is pumping more than one
million barrels per day (bpd), and production is projected to reach at
least two million bpd by 2008 as new fields come onstream.
But in another blow to the Angolan vision of substantial oil
investment, US oil major Exxon Mobil Corp has transferred its
minority stake in a planned multibillion-dollar liquefied natural gas
(LNG) plant to Sonangol.
Tyco Thermal Controls
Natural gas
consumption in the
US is projected to
jump by nearly half
in 20 years
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