[Top News] from [REUTERS]
[Green Business]
BEIJING
Mon Jan 4, 2010 11:30am EST
China eyes LNG import deals, private oil stockpiles
BEIJING (Reuters) - China hopes to clinch more deals on liquefied natural gas (LNG) imports and speed up construction of LNG receiving terminals, gas pipeline and storage facilities this year, the country's energy head said.
The country will take advantage of excess supply in the international LNG market now to speed up negotiations of overseas gas purchases, Zhang Guobao said in remarks published on Monday in the China Energy News, a newspaper run by the official People's Daily.
Zhang, head of the National Energy Administration, said construction of LNG receiving terminals including Zhuhai, Shenzhen and Shandong will be pushed forward this year.
China will further develop major gas fields in central and western China as well as offshore gas resources to maintain fast increases in domestic gas output, Zhang said in a national energy conference last week.
China will approve a third gas pipeline linking Shaanxi and Beijing and a new pipe connecting Qinghuangdao city in Hebei province to Shenyang, capital of northeastern Liaoning province, he said.
Zhang also said China would expand oil reserves by developing private storage capacity, in addition to the second phase of state oil stockpiles.
China will push ahead with planned joint oil refining projects including the 400,000 barrel-per-day (bpd) Jieyang refinery between China and Venezuela, the 300,000-bpd Guangdong refinery between China and Kuwait and the 200,000-bpd Tianjin refinery between China and Russia, he said.
Zhang said one of the government's major tasks this year were to work on an energy development plan for the five years through 2015 and on scientific forecasts for energy demand by 2020.
To realize the goal of boosting non-fossil fuels to 15 percent of energy consumption by 2020, China needs to have more than 300 gigawatts of hydropower generating capacity, 70 GW of nuclear power capacity, and output from renewable sources including wind and solar power topping 150 million tonnes of coal equivalent by then.
"The development of hydropower, nuclear power, wind power and solar energy have to be increased further if energy demand grows too fast, or the goal will not be achieved."
Zhang said China will not allow coal production and consumption to grow without any restraints as it will result in serious environmental pollution and coal mine accidents.
"Fast increases in coal output and demand also pose intense pressure and difficulty to cope with climate change."
He also said his administration would insist on a cautious approach in approving coal-to-gas and coal-to-oil projects.
The approval of the coal to gas project in Inner Mongolia by Huineng Group and the Fuxin project in Liaoning by Datang should be considered only after the successful start-up of Datang's coal-to-gas project in Inner Mongolia.
"It is time to summarize the experience of the direct coal-to-oil project by Shenhua Group and indirect coal-to-oil projects by Yitai and Lu'an to perfect coal to oil technologies," he said.
[Green Business]
Marcel Michelson and Tom Bergin
Mon Jan 4, 2010 3:40pm EST
Total in $2 billion shale gas tie-up with Chesapeake
PARIS/LONDON (Reuters) - France's Total signed a $2.25 billion tie-up with Chesapeake Energy, becoming the latest international oil company to take advantage of low gas prices to snap up shale gas assets.
Total said it would take a 25 percent stake in Chesapeake's Barnett Shale gas fields in north Texas, paying $800 million in cash and providing $1.45 billion toward the fields' development over up to six years.
Analysts said the deal made strategic sense for France's largest company by market value and that the price was in line with recent transactions.
"The deal highlights a disciplined approach to capital allocation and that M&A focus at Total remains more toward smaller 'bolt-on' asset acquisitions, as opposed to larger corporate deals," Morgan Stanley said in a research note.
Chesapeake shares were up $1.94 or 7.5 percent at $27.82 on the New York Stock Exchange on Monday. Total's shares closed 1.8 percent higher at 45.795 euros.
The deal follows similar investments by U.S. and European rivals in North American shale gas, which is harder and more expensive to extract than gas from traditional reservoirs.
The drilling techniques needed to produce natural gas from shale were pioneered in the Barnett Shale in the early 1980s.
The Barnett Shale is the largest producing field in North America, but because of its development and age, some believe it is nearing peak production. This contrasts with newer formations like the Marcellus Shale in the Eastern United States, which is still in the early stages of development.
Chesapeake has made similar tie-ups with BP and Statoil in the past 18 months, while in December, the United States' largest oil and gas company, Exxon Mobil, agreed to buy shale gas producer XTO Energy Inc for about $30 billion.
The investments are spurred by confidence that growing demand for energy will boost gas prices from their current depressed levels, ensuring fat margins.
While U.S. natural gas prices have recovered somewhat from 7-1/2 year lows, heavy supplies and weak demand are still a burden. In 2009, the average price for gas at the benchmark Henry Hub delivery point tumbled 55 percent to $3.99 per million British thermal units.
Western companies are also looking closer to home for investments, as barriers to investment in resource-rich countries such as Russia, Saudi Arabia limit their options.
The latest deal also puts Chesapeake -- which has suffered liquidity issues in the past -- on firmer financial footing, allowing the Oklahoma City, Oklahoma, company to lower its net debt to capital ratio and capital commitments, analysts said.
NEW RESERVES
The deal will give Total additional production of 30,000 barrels of oil equivalent per day of gas, and reserves of 130 million barrels of oil equivalent, with the possibility that additional drilling could prove up reserves twice this size.
Total is paying about $3 per thousand cubic feet equivalent (Mcfe) for proved reserves in its deal with Chesapeake, up from the $2.84 per Mcfe that Exxon paid for proved reserves in its deal to buy XTO, according to data from energy research firm Simmons & Co International.
Total said entry into the shale gas business would help Total develop expertise, which could be used in developing unconventional gas reserves internationally and help it expand its position more broadly in the U.S. natural gas market.
However, shale gas production is facing growing scrutiny from regulators and tougher opposition from environmentalists, who say the fluids used to crack open gas-rich rocks can contaminate ground water.
Last week, the U.S. Environmental Protection Agency said it had "serious reservations" about allowing gas drilling in New York City's watershed, warning of a threat to drinking water.
About 60 environmentalists and elected officials rallied on the steps of New York's City Hall on Monday, demanding the state withdraw its plan to allow shale drilling in the city's watershed until more studies are completed.
Total said it was conscious of the environmental risks but that it had confidence in Chesapeake's capacity to manage these.
Under the terms of the deal, Total will fund 60 percent of Chesapeake's share of drilling and completion expenditures until the end of 2012, Chesapeake said in a statement.
In a conference call, Chesapeake Chief Executive Officer Aubrey McClendon said he may strike a similar deal with Total in the Eagle Ford Shale in south Texas, but he cautioned that play is still in the early stages of development.
(Reporting by Marcel Michelson, with additional reporting by Anna Driver in Houston and Dan Trotta in New York; Editing by James Regan, John Stonestreet and Matthew Lewis)
[Green Business]
NAIROBI
Mon Jan 4, 2010 11:57pm EST
Kenya plans to put up 10 MW wind energy project
NAIROBI (Reuters) - Kenya invited on Tuesday tenders for the construction of a 10 megawatt wind power project on the outskirts of the capital, after receiving a 20-million-euro ($28.60 million) loan from Spain.
"The Kenya Electricity Generating Company (KenGen) invites sealed tenders from eligible candidates for the design, manufacture, supply, delivery, erection, testing and commissioning of 10 MW Ngong II Wind Power Project," an advertisement in the local Daily Nation said.
Kenya's energy ministry delegated the responsibility of picking a contractor to KenGen.
The company, which generates some 77 percent of Kenya's electricity output, commissioned a 5.1 MW wind-sourced project in 2009. ($1=.6992 Euro)
(Reporting by Helen Nyambura-Mwaura; Editing by Clarence Fernandez)
[Green Business]
BEIJING
Mon Jan 4, 2010 11:30am EST
China eyes LNG import deals, private oil stockpiles
BEIJING (Reuters) - China hopes to clinch more deals on liquefied natural gas (LNG) imports and speed up construction of LNG receiving terminals, gas pipeline and storage facilities this year, the country's energy head said.
The country will take advantage of excess supply in the international LNG market now to speed up negotiations of overseas gas purchases, Zhang Guobao said in remarks published on Monday in the China Energy News, a newspaper run by the official People's Daily.
Zhang, head of the National Energy Administration, said construction of LNG receiving terminals including Zhuhai, Shenzhen and Shandong will be pushed forward this year.
China will further develop major gas fields in central and western China as well as offshore gas resources to maintain fast increases in domestic gas output, Zhang said in a national energy conference last week.
China will approve a third gas pipeline linking Shaanxi and Beijing and a new pipe connecting Qinghuangdao city in Hebei province to Shenyang, capital of northeastern Liaoning province, he said.
Zhang also said China would expand oil reserves by developing private storage capacity, in addition to the second phase of state oil stockpiles.
China will push ahead with planned joint oil refining projects including the 400,000 barrel-per-day (bpd) Jieyang refinery between China and Venezuela, the 300,000-bpd Guangdong refinery between China and Kuwait and the 200,000-bpd Tianjin refinery between China and Russia, he said.
Zhang said one of the government's major tasks this year were to work on an energy development plan for the five years through 2015 and on scientific forecasts for energy demand by 2020.
To realize the goal of boosting non-fossil fuels to 15 percent of energy consumption by 2020, China needs to have more than 300 gigawatts of hydropower generating capacity, 70 GW of nuclear power capacity, and output from renewable sources including wind and solar power topping 150 million tonnes of coal equivalent by then.
"The development of hydropower, nuclear power, wind power and solar energy have to be increased further if energy demand grows too fast, or the goal will not be achieved."
Zhang said China will not allow coal production and consumption to grow without any restraints as it will result in serious environmental pollution and coal mine accidents.
"Fast increases in coal output and demand also pose intense pressure and difficulty to cope with climate change."
He also said his administration would insist on a cautious approach in approving coal-to-gas and coal-to-oil projects.
The approval of the coal to gas project in Inner Mongolia by Huineng Group and the Fuxin project in Liaoning by Datang should be considered only after the successful start-up of Datang's coal-to-gas project in Inner Mongolia.
"It is time to summarize the experience of the direct coal-to-oil project by Shenhua Group and indirect coal-to-oil projects by Yitai and Lu'an to perfect coal to oil technologies," he said.
[Green Business]
Marcel Michelson and Tom Bergin
Mon Jan 4, 2010 3:40pm EST
Total in $2 billion shale gas tie-up with Chesapeake
PARIS/LONDON (Reuters) - France's Total signed a $2.25 billion tie-up with Chesapeake Energy, becoming the latest international oil company to take advantage of low gas prices to snap up shale gas assets.
Total said it would take a 25 percent stake in Chesapeake's Barnett Shale gas fields in north Texas, paying $800 million in cash and providing $1.45 billion toward the fields' development over up to six years.
Analysts said the deal made strategic sense for France's largest company by market value and that the price was in line with recent transactions.
"The deal highlights a disciplined approach to capital allocation and that M&A focus at Total remains more toward smaller 'bolt-on' asset acquisitions, as opposed to larger corporate deals," Morgan Stanley said in a research note.
Chesapeake shares were up $1.94 or 7.5 percent at $27.82 on the New York Stock Exchange on Monday. Total's shares closed 1.8 percent higher at 45.795 euros.
The deal follows similar investments by U.S. and European rivals in North American shale gas, which is harder and more expensive to extract than gas from traditional reservoirs.
The drilling techniques needed to produce natural gas from shale were pioneered in the Barnett Shale in the early 1980s.
The Barnett Shale is the largest producing field in North America, but because of its development and age, some believe it is nearing peak production. This contrasts with newer formations like the Marcellus Shale in the Eastern United States, which is still in the early stages of development.
Chesapeake has made similar tie-ups with BP and Statoil in the past 18 months, while in December, the United States' largest oil and gas company, Exxon Mobil, agreed to buy shale gas producer XTO Energy Inc for about $30 billion.
The investments are spurred by confidence that growing demand for energy will boost gas prices from their current depressed levels, ensuring fat margins.
While U.S. natural gas prices have recovered somewhat from 7-1/2 year lows, heavy supplies and weak demand are still a burden. In 2009, the average price for gas at the benchmark Henry Hub delivery point tumbled 55 percent to $3.99 per million British thermal units.
Western companies are also looking closer to home for investments, as barriers to investment in resource-rich countries such as Russia, Saudi Arabia limit their options.
The latest deal also puts Chesapeake -- which has suffered liquidity issues in the past -- on firmer financial footing, allowing the Oklahoma City, Oklahoma, company to lower its net debt to capital ratio and capital commitments, analysts said.
NEW RESERVES
The deal will give Total additional production of 30,000 barrels of oil equivalent per day of gas, and reserves of 130 million barrels of oil equivalent, with the possibility that additional drilling could prove up reserves twice this size.
Total is paying about $3 per thousand cubic feet equivalent (Mcfe) for proved reserves in its deal with Chesapeake, up from the $2.84 per Mcfe that Exxon paid for proved reserves in its deal to buy XTO, according to data from energy research firm Simmons & Co International.
Total said entry into the shale gas business would help Total develop expertise, which could be used in developing unconventional gas reserves internationally and help it expand its position more broadly in the U.S. natural gas market.
However, shale gas production is facing growing scrutiny from regulators and tougher opposition from environmentalists, who say the fluids used to crack open gas-rich rocks can contaminate ground water.
Last week, the U.S. Environmental Protection Agency said it had "serious reservations" about allowing gas drilling in New York City's watershed, warning of a threat to drinking water.
About 60 environmentalists and elected officials rallied on the steps of New York's City Hall on Monday, demanding the state withdraw its plan to allow shale drilling in the city's watershed until more studies are completed.
Total said it was conscious of the environmental risks but that it had confidence in Chesapeake's capacity to manage these.
Under the terms of the deal, Total will fund 60 percent of Chesapeake's share of drilling and completion expenditures until the end of 2012, Chesapeake said in a statement.
In a conference call, Chesapeake Chief Executive Officer Aubrey McClendon said he may strike a similar deal with Total in the Eagle Ford Shale in south Texas, but he cautioned that play is still in the early stages of development.
(Reporting by Marcel Michelson, with additional reporting by Anna Driver in Houston and Dan Trotta in New York; Editing by James Regan, John Stonestreet and Matthew Lewis)
[Green Business]
NAIROBI
Mon Jan 4, 2010 11:57pm EST
Kenya plans to put up 10 MW wind energy project
NAIROBI (Reuters) - Kenya invited on Tuesday tenders for the construction of a 10 megawatt wind power project on the outskirts of the capital, after receiving a 20-million-euro ($28.60 million) loan from Spain.
"The Kenya Electricity Generating Company (KenGen) invites sealed tenders from eligible candidates for the design, manufacture, supply, delivery, erection, testing and commissioning of 10 MW Ngong II Wind Power Project," an advertisement in the local Daily Nation said.
Kenya's energy ministry delegated the responsibility of picking a contractor to KenGen.
The company, which generates some 77 percent of Kenya's electricity output, commissioned a 5.1 MW wind-sourced project in 2009. ($1=.6992 Euro)
(Reporting by Helen Nyambura-Mwaura; Editing by Clarence Fernandez)
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