(EnergyAsia, April 14, Monday) --- The ‘Middle East Petrochemicals 2008’ conference will be held at the Sheraton Bahrain Hotel from June 15 to 17.

More than 40% of the global petrochemical capacity will be built in the Middle East by 2011. This would make the region the petrochemicals hub of the world offering the industry many opportunities.

The conference will gather international experts and decision makers to discuss ideas and share latest intelligence. Speakers will focus on the challenges faced by the industry and the opportunities available.

Topics addressed include feedstock availability and pricing, the region’s competitive advantages, managing in an overheated contracting market and distribution strategies.

Speakers at the event include Jim White (Abu Dhabi Industries Corporation), Nicholas Thevenot (Arab Petroleum Investments Corporation), Aamir Aka, Director (Argon Consulting Middle East), Filippo Fantechi (CONTAX), Andy Allen (Foster Wheeler International), Zahoor Khan, (Gulf Investment Corporation), Darren Davis (MENA), Martijn Vogelzang (Lyondell Basell Industries), Anthony Elwine (Maersk Logistics),

Edmund O’Sullivan (MEED Events), Mohammad Hadi Rahbari  (National Petrochemical Company), Theodore Theodoropoulos (Qatar Petrochemicals), Amit Chaturvedi (Reliance Industries), Phil Parker (Shell Chemicals Middle East), Abdullatif Bhairi  and Kevin Hayes (SIPCHEM), Saleh Al Nazha (TASNEE), Terry Newendorp (Taylor Dejongh), Graeme Burnett (TOTAL Petrochemicals), Malcolm Weaver (Zamil Group Corporate Finance).

‘Middle East Petrochemicals 2008’ is organised by MEED Events. For more information, please contact This e-mail address is being protected from spam bots, you need JavaScript enabled to view it

(EnergyAsia, April 14, Monday) --- The McCloskey Group, a leading energy market news and information services company and the global leader in coal market news and price reporting, has launched a new publication entitled ‘McCloskey’s NuclearBusiness’.

As nuclear power is once again viewed as a likely leading provider of future global energy needs, there is growing demand for intelligence and reports to help meet the knowledge and information needs of the business community.

This monthly report aims to guide readers through this complicated and evolving market landscape.

Each issue includes industry news, insight and analysis, interviews, country and company profiles, plant developments and outages, share prices, uranium markets and prices and new build monitor.

For more information on ‘McCloskey’s NuclearBusiness’, please contact This e-mail address is being protected from spam bots, you need JavaScript enabled to view it

(EnergyAsia, April 11, Friday) --- Singapore Exchange Limited (SGX) said it is launching the world’s first clearing service for over-the-counter benzene swaps to serve growing demand for credit risk mitigation in the petrochemical market.

SGX AsiaClear will launch the service on May 5. Including this new product, SGX will have 13 energy contracts.

The size of each benzene FOB Korea Swaps contract is 500 metric tons. It will be cash settled based on the monthly average of Platts’ daily spot marker physical cargo assessments in the contract month.

Benjamin Foo, SGX Head of Clearing, Commodities and AsiaClear said:

“SGX has been working closely with OTC and petrochemical market participants to introduce benzene swaps to meet their trading and risk management needs. This product complements SGX’s suite of OTC oil contracts.”

Simon Chua, vice president for Summit Petrochemical Trading Inc, said: “Asia is an important pricing centre for aromatics. The launch of the SGX benzene swaps clearing facility is timely as there is a need for such a service in the petrochemical market. This service will help to create a more active benzene paper market for traders and producers to manage their price and counterparty risks.”

(EnergyAsia, April 10, Thursday) --- ExxonMobil Exploration and Production Malaysia Inc, a subsidiary of the US major, said it and Malaysia’s national oil company, Petronas, will be extending their work together under a new 25-year production sharing contract to ensure sustainable energy supplies for the country.

The contract includes commitments to implement significant enhanced oil recovery activities and for major investments to continue conventional oil development.

Exxon Mobil Corporation senior vice president Mark Albers said: “We are proud of our partnership and collaboration with Petronas. This allows us to develop and deliver energy supplies to satisfy the country’s energy needs.”

“This agreement allows our partnership to grow and provides us with an opportunity to efficiently develop the substantial petroleum resources offshore Peninsular Malaysia using our world-class technologies and project execution capabilities,” he added.

The ExxonMobil subsidiary which has invested more than US$15 billion in Malaysia is one of the nation’s major suppliers of crude oil and natural gas. The company operates 43 platforms in 17 fields with a gross daily production of 150,000 barrels of oil and 1.2 billion cubic feet of gas.

(EnergyAsia, April 8, Tuesday) --- Developing Asian economies will register solid growth in 2008 despite a coincident slowdown in major industrial economies, surging food and fuel prices and a simmering credit crisis in the US, said the Asian Development Bank (ADB) says in a new major report.

Its flagship annual publication, Asian Development Outlook 2008 (ADO), forecasts developing Asian economies to expand at 7.6% in 2008 and 7.8% in 2009. The region posted its highest growth in almost two decades in 2007 – averaging 8.7%.

“Asia will not be immune to the global slowdown, neither will it be hostage to it. It remains tied to global activity through traditional trade channels, and increasingly, through its closer integration in international financial markets,” said ADB chief economist Ifzal Ali.

He said favourable policy conditions and impressive productivity growth associated with Asia’s economic modernisation and structural transformation will continue to keep the region on a strong growth path.

The report warns that the risk of an inflation spiral in Asia is palpable and urges policymakers to keep a close watch on it. Despite a slew of administrative measures and subsidies that are reining in price rises, inflation is expected to spike in 2008 and could hit a decade-long regional high, the report said.

Inflation is expected to rise to 5.1% in 2008 and gradually slide to 4.6% in 2009. Price increases will be highest in Central Asia where it will remain in double digits. Inflation is running at an 11-year high in China, and is a threat to other countries like Vietnam.

The ADB urges policymakers to tackle the problem at its root. For some economies, this may mean a more flexible exchange rate, while in others it may need a scrutiny of fiscal spending and priorities and, in some cases, targeted measures may be warranted to ease supply pressures that are piling on to cost pressures.

Growth in the region’s main economic powerhouses, China and India, is expected to moderate as authorities tighten policies to rein in blistering demand and ease inflationary pressures.

China is expected to grow by a solid 10% in 2008 while India is forecast to expand by 8%. The slowdown in the economies of the US, European Union and Japan will have a more pronounced impact on PRC, which is more open to trade than India.

The ADB said growth in East Asia is expected to decelerate in 2008 to 8.1% from 9.3% in 2007.

Southeast Asia will slow to 5.7% in 2008, from 6.5% in 2007, as its export prospects are likely to be pinched by a slowdown in the global economy. In Southeast Asia, only Thailand is expected to post higher growth after a return to normalcy in politics. Vietnam’s economic expansion will moderate as it grapples to keep a lid on inflation.

South Asia is also expected to lose some steam in 2008 mainly on moderation of growth in India. Pakistan, Bangladesh and Sri Lanka will also be affected by economic deceleration in major markets as garment exports are expected to suffer.

Growth in Central Asia is expected to decelerate sharply to 7.5% in 2008 from double digit levels in recent years on the back of weaker expansion in the region’s largest economy, Kazakhstan. A sudden halt of capital flows to Kazakh banks has triggered a reduction in lending and downturn in non-oil economy.

Economic expansion in the Pacific Islands is expected to pick up in 2008 with the region’s biggest economy Papua New Guinea benefiting from high global commodity prices and Fiji Islands forecast to grow after contracting in 2007.

“Looking beyond the immediate bumps in the road, Asia’s long-term growth prospects will depend on how successfully countries tackle a range of structural constraints facing them,” said Mr Ali.

These include maintaining macroeconomic stability, integrating into the global economy, getting prices to send the right signals, creating a conducive business and investment climate and above all, ensuring that the benefits of growth are shared by all.

(EnergyAsia, April 7, Monday) --- Continental Airlines, Boeing and GE Aviation are planning to conduct a joint biofuels demonstration flight in the first half of 2009 to identify sustainable fuel solutions for the aviation industry.

Continental is the first major US carrier to announce plans to highlight technological advancements in sustainable biofuels that can help to further reduce carbon emissions.

“Exploring sustainable biofuels is a logical and exciting new step in our environmental commitment.  For more than a decade, we have been focused on reducing fuel consumption and carbon emissions, while providing industry-leading service to the places our customers want to go,” said Mark Moran, Continental Airlines executive vice president of operations.

“Boeing and GE Aviation have been frontrunners in pioneering technology that will benefit the aviation industry, customers, and the environment, and we are pleased to benefit from their expertise in this venture.”

Ray Conner, executive vice president, sales, Boeing Commercial Airplanes, said:

“Continental has been aggressively pursuing efforts to reduce carbon emissions for years, and continues to focus attention on providing innovative solutions. They clearly recognise the need for environmental improvement across the industry and have embraced that challenge through fleet modernisation and the economic and social benefits that sustainable environmental technologies can provide to their operations and to their passengers.”

Scott Donnelly, president and CEO of GE Aviation, said: “Continental is taking an important step in advancing the use of sustainable biofuels in aviation. Working with our jet engine team at CFM International, GE has considerable experience in evaluating biofuels in jet engines for aviation and in aeroderivative engines for marine and industrial applications. GE and CFM are eager to get started in supporting Continental’s exciting program.”

The biofuel flight will use a Boeing Next-Generation 737 equipped with CFM International CFM56-7B engines.

CFM is an equal joint venture company of General Electric Company and Snecma (SAFRAN Group).

In the months leading up to the flight, Continental, Boeing and GE will work together and with an undisclosed fuel provider to identify sustainable fuel sources that don’t impact food crops, water resources or contribute to deforestation, and which can be produced in sufficient quantities to support a pre-flight test schedule that includes laboratory and ground-based jet engine performance testing to ensure compliance with stringent aviation fuel performance and safety requirements.

As part of a broader industry effort, Boeing and other industry thought leaders, including airlines and engine manufacturers, are helping to guide the aviation sector toward sustainable biofuels produced through advanced biomass conversion technologies and processes that have the potential to reduce greenhouse gases throughout their lifecycle.

Sustainable biofuels for aviation incorporate second-generation methodologies relative to fuel source selection and processing, which are uniquely suited for aerospace use. These biofuels can then be blended with kerosene fuel (jet-A) to reduce dependency on fossil fuels.  Additional details, including the flight plan, will be announced closer to the demonstration flight date.

Continental’s participation in this project is part of a company-wide commitment to environmental responsibility. The airline said it has achieved a 35% reduction in greenhouse gas emissions and fuel consumption per mainline revenue passenger mile flown over the past 10 years.

This is due in large part to the efforts of its employees in streamlining operational procedures and to an investment of more than $12 billion to acquire 270 fuel-efficient aircraft and related equipment. Continental said it remains committed to investing in a fuel-efficient fleet and is a launch customer for the Boeing 787 Dreamliner, powered by GE engines.

In addition to providing passengers with a better flying experience, the 787 Dreamliner also will provide operators with a more environmentally efficient jetliner, including lower carbon emissions and quieter takeoffs and landings.

Continental said it has also reduced, by 75%, nitrogen oxide emissions from ground equipment at the carrier’s largest hub, in Houston, through switching to electric ground service equipment and other new technology. This technology is now being tested for use in cold climates.

By Sophie Nappert *

Background
(EnergyAsia, April 7, Monday) --- The policies adopted by the Russian Federation in dealing with its energy resources, notably in its gas pricing dispute with Ukraine and, more recently, its draft law on foreign investment in strategic industries , are the subject of worldwide publicity and comment. Russia has signed the Energy Charter Treaty (ECT), but to date has no intention of ratifying it. The advent of Dmitry Medvedev as President Putin’s successor later this year is not expected to herald a change in Russia’s stance on this matter.

The continued non-ratification of the ECT by one of its key signatories, in geopolitical terms, places Russia in a unique position. This position will no doubt be tested in the arbitration proceedings started against Russia by Yukos’ majority shareholders Group Menatep, Hulley Enterprises, Yukos Universal and Veteran Petroleum Trust, for the alleged expropriation of their investment in Yukos.

This article outlines some of the issues raised by the ‘provisional application’ of the ECT by Russia. Several questions remain unanswered, notably on what provisional application means where ratification is not anticipated in future, and whether, by law, there are limits in time placed on the provisional application of the ECT by Russia.

The Energy Charter Treaty
The ECT is the first multilateral instrument aimed at promoting and protecting investment, security of supply and transit in the energy sector. It advocates transparency and non-discrimination in the treatment of foreign investment, freedom of transit and a commitment to the progressive liberalisation of international trade in the energy sector.

Fifty-two states, including Ukraine and the EU as a unit, have signed the ECT and twenty more are observers. In addition to Russia, other signatory States which have not ratified the ECT are Australia, Belarus, Iceland and Norway.

The effect of signature without ratification, in public international law terms, is that Russia is “provisionally applying” the ECT. Having signed the treaty places Russia under an obligation at international law not to act in a manner contrary to the ECT’s aims and terms.

The ‘domestic exception’ clause in Article 45
A crucial aspect of Article 45 lies in its ‘domestic exception‘ clause, to the effect that provisional application must not be inconsistent with the signatory State’s constitution, laws or regulations.

 

Russian law acknowledges and accepts the notion of the provisional application of treaties.

 

The Constitution of the Russian Federation assigns to the President the right to negotiate and conclude international treaties pursuant to its Article 86(b), but leaves their ratification to the Federal Assembly (the State Duma and Council of the Federation: Articles 71, 105, 106(d)).

The concept of provisional application does not appear in Article 15(4) of the Constitution, whereby generally accepted principles and rules of international law and international treaties of the Russian Federation are made an integral part of the Russian legal system.

However, Article 23 of the 1995 Federal Law on International treaties of the Russian Federation specifically recognises the provisional application by Russia of international treaties to which it is a party, if so provided by the treaty or by agreement with the other signatories.

Time scope of provisional application: How provisional is ‘provisional’?
There is little precedent on how provisional application affects the other substantive provisions of a treaty. This may be because provisional application is usually followed by ratification in fairly short order.

As regards the ECT, a key issue is whether Article 45 affects the capacity of an investor to invoke the ECT’s dispute resolution provisions at Article 26 ECT against Russia. In other words, does provisional application shield Russia from investor-to-State arbitration pursuant to the ECT?

This is one of the central issues in the pending arbitration proceedings against Russia concerning Yukos. Whilst this issue remains to be decided in the case of Russia, another tribunal in the recent case of Kardassopoulos v Georgia, faced with similar arguments on the part of Georgia, made the following findings:

• Provisional application of the ECT is not aspirational in character; it is a matter of legal obligation.

• It is the ECT as a whole and in its entirety which is to be applied ‘pending its entry into force’.

• The language at Article 45(1) is to be interpreted as meaning that each signatory State is obliged, even before the ECT has formally entered into force in that State, to apply the whole ECT as if it had already done so.

Another central question to Russia’s current stance under the ECT is whether the period of provisional application is limited in time or indefinite.

No express limitation in time is stipulated in Article 45 ECT. According to Article 45, provisional application comes to an end either through express termination via written notification, or by the entry into force of the ECT.

As things presently stand, it would appear that the provisional application of the ECT may be maintained indefinitely.

*Sophie Nappert is a dual-qualified lawyer in the UK and in Canada, and a member of the International Centre for Dispute Resolution’s Energy Arbitrator’s List. She is an arbitrator in independent practice, based in London. Before becoming a full-time arbitrator, she was Head of International Arbitration at a global law firm. Sophie is trained and has practiced in both civil law and common law jurisdictions. In her capacity as counsel, she advised on issues of international arbitration, particularly in energy and infrastructure projects, and disputes involving state parties. In her capacity as arbitrator, she is sought for her trans-systemic and cross-cultural legal training and expertise. Sophie is ranked in Global Arbitration Review's Top 30 List of Female Arbitrators Worldwide.