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DUBAI: Gates Corporation acquires engineering firm Hydrolink
Wednesday, 23 September 2009

(EnergyAsia, September 23, Wednesday) ---- Gates Corporation, the largest non-tire rubber manufacturer of automotive and industrial products, systems and components in North America, said it recently acquired Dubai-based Hydrolink, a provider of engineering, fabrication services for the oil and gas industry as well as service operations for fluid power products in the Persian Gulf region.

Gates Corp said the acquisition allows the company to penetrate the fluid power products market in the Middle East and CIS regions, which is estimated to be worth US$480 million per year.

Group president David Gau said: “As an established leader in this vibrant and growing oil and gas market, Hydrolink is uniquely positioned to serve the oil and gas industry needs, and is a natural addition to Gates engineering and services group.

“The acquisition creates new opportunities for Gates to expand our product and services offering at existing clients as well as extend some of our core competencies to Hydrolink.”

Hydrolink’s group managing director, Kevin Roberts, said: “The alignment with Gates will give us a great opportunity to accelerate growth in the region and other oil and gas hotspots and further enhance customer satisfaction.  I am delighted to be associated with an internationally respected company like Gates.”

Hydrolink began operating in 1988 and has since expanded to 20 locations in the Middle East and CIS regions.

Gates Corp is part of the Industrial and Automotive Group of UK’s Tomkins plc.

 
SINGAPORE: Neftech targets at least 10% fuel cost saving, lower emissions for shipping industry with
Tuesday, 22 September 2009

(EnergyAsia, September 22, Tuesday) --- Two Singapore companies, green energy R&D company Neftech Pte Ltd and container shipping operator APL, have agreed to work together to develop cleaner and more efficient fuel solutions for use in shipping fleets. They expect Neftech’s proprietary cavitation technology to deliver at least 10% in fuel cost saving for users in addition to reducing greenhouse gas emissions from ships.

Neftech has begun installing cavitation technology equipment on 20 ships owned and operated by APL, a wholly-owned subsidiary of global container shipping, terminals and logistics group Neptune Orient Lines Limited (NOL).

At a joint briefing last week, the companies said the technology, developed by Russian scientists, uses a fuel emulsification process that adds water to heavy fuel oil to produce a superior emulsified fuel for ships. HFO is the low-grade fuel used for powering the engines of ocean-going vessels.

They said that tests conducted on two APL container ships over a 12-month period showed “significant” fuel savings on generators and main engines, as well as substantial reductions in the ships’ carbon emissions.

Victor Levin, the Singapore-based Russian chairman of Neftech, said: “We believe we are the first in this industry to utilise this revolutionary Cavitation Technology for the fuel emulsification process.

“The cavitation effect (breaks) water clusters into smaller clusters or individual molecules, thereby achieving more complete fuel combustion. 

As such, there will be higher efficiency in fuel consumption as compared to the conventional HFO. In addition to substantial fuel cost savings for ship owners and operators, this application will also reduce the shipping industry’s continuing production of main greenhouse gases.”

Cheng Wai Keung, NOL chairman, said: “In today’s highly challenging business landscape, reducing costs, increasing efficiency and lessening the environmental impact of our operations are among the biggest challenges we face. Neftech offers a strong value proposition.”

Under the terms of the agreement, Neftech will bear the cost of installating its fuel-saving equipment on-board the 20 ships, with payment terms to be in the form of fuel savings and carbon credits to be shared with APL in an agreed ratio based on proven and documented cost savings. The installation programme is expected to be completed over the next 12 months.

Mr Levin said he expects Neftech, which has started marketing the technology to other shipping companies and the power industry, to make annual revenue of around US$1 billion.

Justifying this ambitious target, Lim How Teck, a Neftech shareholder and former NOL deputy CEO, said the company will make a strong case for fuel savings with the shipping industry which spends more than US$160 billion a year on fuel. This is based on their use of nearly 370 million tons of fuel a year at an average cost of US$450 per tonne.

Incorporated in Singapore in 2007, Neftech is a high tech company founded by Russian scientists with over 35 years of research and development expertise in the field of cavitation technology.

The company is 63%-owned by Russian interests with the remaining held by local shareholders including S.P. Quek, China Auto Corp chairman, former NOL director and deputy CEO Lim How Teck, GK Goh chairman Goh Geok Khim and former transport minister Yeo Cheow Tong.

APL is a global container shipping business offering more than 60 weekly services and more than 500 calls at more than 140 ports worldwide.

 
AUSTRALIA: Macquarie Generation selects SunGard’s Fuelworx to streamline, automate fuels management
Thursday, 17 September 2009
(EnergyAsia, September 17, Thursday) ---- Macquarie Generation, Australia’s largest electricity generator, said it has selected SunGard’s Fuelworx, an energy trading, transaction and risk management solution suite  to help it streamline and automate its fuels procurement processes, manage its contracts and maintain audit controls.

Macquarie Generation added that it would be using the software to help address the complex contracts and reporting needs of the corporation.  

Macquarie Generation consumes approximately 13 million tons of coal to produce more than 26,000 gigawatt hours (GWh) of electricity each year. With growing demand for Australia's coal exports, securing adequate supplies and managing the cost of these supplies remains a challenge for domestic coal users.

Fuelworx said it will help support Macquarie Generation’s sustained growth in the evolving Australian energy market by helping to automate its fuel management processes and facilitate its use of more complex pricing formulas.

Macquarie Generation fuel services manager Ray Durie said: “While the corporation generates the majority of its electricity using coal, we also co-fire biomass and have recently commissioned the world’s first solar thermal development integrated with a coal-fired power station.

“SunGard’s Fuelworx will help us better manage our entire fuel supply chain.  We chose SunGard because of its global experience in power markets and FuelWorx’s ability to automate our fuels processes, provide us with real-time insight into fuels costs, and support the complexity of our contracts.”

Matt Mandalinci, SunGard president of energy solution business unit, said: “Fuel is typically one of the largest operating expenses of a generation company and SunGard’s Fuelworx helps to control this expense through in-depth management of the fuels procurement process.  SunGard is pleased to work with Macquarie Generation to help optimise its energy business and support its growth.”

Macquarie Generation is a state owned corporation established in 1996, following reform of the New South Wales electricity system. The corporation’s core business is the production and wholesale of electricity to the national electricity market.

As Australia’s largest electricity generator, the company operates Bayswater and Liddell power stations producing 4640 megawatts (MW) of power to provide 40% of the electricity needed by the people of New South Wales.
 
COMPANY: Fuel tester Lintec named as Norwegian association’s supplier of the year
Thursday, 10 September 2009
(EnergyAsia, September 10, Thursday) --- Global fuel testing agency Lintec Testing Services has been named ‘Supplier of the Year 2009’ by Incentra, the Norwegian society of shipowners, ship managers and rig companies.

Owners of around 670 ships, vessels and rigs, members of the Oslo-based non-profit organisation rated UK-based Lintec highest among their suppliers of marine services and products.

Founded in 1967, Incentra requires the highest quality standards from its suppliers, with each provider undergoing a rigorous selection process of intensive market research and evaluation.

Geoff Jones, Lintec general manager, said: “We are very proud to have achieved the highest score in the Incentra supplier evaluation, and it is gratifying to see that the high level of service we offer is recognised by Incentra members. These, after all, are the people who really matter, who see at first hand how well our bunker fuel analysis service operates.”

A wholly owned subsidiary of ITS Testing Services (UK), Lintec provides shipowners and operators with an independent, quick-response fuel testing programme. It operates a global network with laboratories in the UK, Rotterdam, Singapore and Shanghai, providing a 24-hour global bunker fuel testing service.
 
SINGAPORE: SGX seeks public comments on proposed contract specifications of fuel oil futures contrac
Wednesday, 09 September 2009

(EnergyAsia, September 9, Wednesday) --- Singapore Exchange Limited (SGX) is inviting public comments on the proposed contract specifications of its proposed fuel oil 380-centistoke futures contract to be launched on its derivatives market.

The proposed FO 380 contract will be traded in units of 100 tonnes per lot and is physically deliverable at exchange-designated installations. At present, all these installations are located in Singapore.

The proposal includes consequential amendments to SGX futures trading rules and clearing rules.

The key features of the contract that relate to physical delivery are:

1. Delivery facilitated by the clearing house which will match buyers and sellers after taking into account the quantity, installations for delivery, delivery dates and methods of delivery to the extent reasonably possible. The minimum size for delivery will be 2,000 tonnes.

2. Performance Deposit and Security. To ensure that buyers and sellers fulfil their delivery obligations, buyers and sellers will post a performance deposit (PD) with the clearing house. Upon delivery by the seller, the clearing house will require a security from the seller for application in the event of any disputes arising from the fuel oil delivered.

3. Performance Guarantee. The buyer’s and seller’s respective clearing members will guarantee the performance of payment and delivery obligations in accordance with the SGX clearing rules and specifications.

4. Use of Letters of Credit. Letters of credit may be used for the posting of PD and payment. The consultation paper, which explains the rationale and proposed amendments in detail, will be available on SGX website at www.sgx.com from today.

Market participants and members of the public can forward their feedback and suggestions on the above proposed amendments until September 17.

 
AUSTRALIA: Arrow Energy reports 885% increase in full year profit
Wednesday, 02 September 2009

(EnergyAsia, September 2, Wednesday) --- Australia’s Arrow Energy said its profit for the year ended June 30 2009 surged by 885% to A$366 million compared with the previous year. (US$1=A$1.2).

The company said its full year earnings before interest, tax, depreciation and amortisation (EBITDA) was A$580.2 million, a 723% increase on the prior full year while underlying earnings (EBITDA) of A$59.6 million was 13% higher.

The company said its strong performance was underpinned by its transaction with Royal Dutch Shell, which paid A$565 million for a 30% stake of Arrow’s interest in all of its Australian upstream tenements and 10% interest in Arrow International.

Revenue from continuing operations increased to A$112.3 million despite the 30% production sale to Shell and a seven-week shut down of the Townsville power station. 

Arrow said its cash on hand at year end was A$399 million with a further A$49.5 million received from Shell during August on the completion of the Tipton West transaction with an additional A$49.5 million to be received once all documentation has been completed. The company said it expects to receive the retention money of approximately A$50 million from the initial Shell transaction of at the end of the first quarter.

Arrow CEO and managing director Nick Davies said: “The underlying business is performing extremely well which reflects the success of our margin enhancement strategy. Arrow’s continuing push into electricity generation combined with sustained low operational costs enabled the company to record a strong full year result despite some one-off operational restrictions at Townsville power station.

“Gas production has increased 173% over the last three years which gives us the confidence to forecast that by 2015 we may see a further ten-fold increase in production from today’s levels. Completion of the Braemar 2 power station is a significant milestone which will increase Arrow’s exposure to a buoyant electricity market and provide options for utilisation of LNG ramp up gas.” 

Arrow said it has a half share in the 450 MW project which brings the company’s total net generation capacity to 375 MW.

Reserves and production growth: 

Mr Davies said a continuing ramp up of the company’s Surat Basin fields over the past 12 months had offset the production fall at its Moranbah field due to the seven-week shut-in resulting from the Townsville power station maintenance and helped net gas production climb to 17.2 petajoules (PJ) for the year, up from 16.3 PJ in 2007. Electricity sales increased from 615,170 MWh to 825,794 MWh for the year.

According to Arrow, its gross 2P reserves have been upgraded by 1,845 PJ during the year. The company has a target to increase gross 2P reserves by 1,000 PJ each year. (1,000 PJ is equivalent to 165 million barrels of oil).
“Arrow has interests in more than 65,000 square km of coal seam gas tenements and less than 10% of this acreage has been appraised,” Mr Davies said. 

“A review based on coal seam data gathered from extensive coal exploration and appraisal activity shows that Arrow has an estimated gross coal seam gas resource in excess of 70,000 PJ.  Even if only half of this resource base can be economically developed then there is sufficient coal seam gas for LNG exports of over 20 million tonnes per annum.
“We are working hard on development plans to bring our vast reserves to a planned LNG export facility at Gladstone,” he said.

Arrow aims to be Asia’s number one coal seam gas player: 

“Strategic joint ventures with major industry players in China, India, Indonesia and Vietnam are providing Arrow with significant exposure to strong overseas energy markets, where gas pricing ranges from A$5 to A$15 per gigajoule (GJ) which compare favourably with domestic gas prices in eastern Australia.

“Most Asian countries that we’re targeting have the potential to be at least as large as our current Australian operation within the next seven years,” he added. 

Arrow has completed drilling in China, India and Vietnam and further work will be conducted upon the receipt of final test results. The company expects to start drilling in Indonesia later this year. 

“We have recently signed a production sharing contract (PSC) for Tanjung Enim in Indonesia and are progressing other project opportunities throughout Asia.” he said.

Outlook for the current financial year:

“2010 will be a pivotal year for Arrow with final investment decision (FID) due for the Fisherman’s Landing LNG project and more than $300m gross to be spent in the next 18 months on drilling and development in preparation for our LNG opportunities,” Mr Davies said. 

“The long-term demand for oil and hence the long-term price for oil will remain strong and we are well positioned to build on the firm base that we have created and the partnerships that we have forged. We have a world-class team, an Asia-Pacific wide alliance with Shell, substantial footholds and assets in four Asian countries and a healthy financial position. The best is yet to come.”

 
AUSTRALIA: Collapse of IPO market hits explorers and miners hardest
Monday, 24 August 2009

(EnergyAsia, August 24, Monday) --- New figures announced at a recent resource conference have highlighted the struggle facing Australian explorers to raise working capital for both new and on-going exploration and mining projects over the past two years

At the Paydirt 2009 Resources Victoria Conference in Melbourne, Patersons Securities Limited said there were 252 initial public offers (IPOs) in 2007, but that plunged to just 68 last year.

It’s been even more dismal this year, with just eight IPOs launched, said Patersons Securities’ corporate finance director, Neil Doyle.

He said: “Two years ago, the then IPOs raised A7,650 million, dropping to about a third of that last year and just $400 million this year of which one float accounted for A$300 million of that figure. The impact is no more evident than in the mining sector which crashed from 140 IPOs in 
2007 to 40 last year to just three this year.” (US$1=A$1.2).

He said the sentiment towards gold, a key contributor to Victoria’s resources profile, had taken a bit of a battering as negative investor sentiment would be long lasting towards the recent gold failures in the state.

“This negative sentiment is exacerbated by decisions such as Lihir Gold to take an impairment charge of between US$250 - $350 million on Ballarat Gold – a very strong wealth destruction message, along with the performance of other such Victorian-focused gold entities as Leviathan and Perserverance.

 
ABU DHABI: Crown Prince’s visit to China strengthened energy, economic, political and military ties
Wednesday, 19 August 2009

(EnergyAsia, August 19, Wednesday) --- A high-powered delegation from Abu Dhabi led by Crown Prince General Sheikh Mohamed bin Zayed Al Nahyan, was in China recently to strengthen energy, economic, political and military ties between the two countries.

General Sheikh Mohamed, who is also Deputy Supreme Commander of the UAE Armed Forces and chairman of the Abu Dhabi Executive Council, met President Hu Jintao and other senior Chinese leaders.

The visit also aimed at realising the goals of creating new trade frontiers and diversification of the emirate’s economic resources spelt out under “Plan Abu Dhabi 2030.”

General Sheikh Mohammed and his officials met with key business people as they ratified several contracts touching on economic, military and cultural ties, and specifically on the oil, petrochemical, renewable energy and tourism industries.

The UAE has expressed interest in establishing oil storage facilities in China, now the world’s second largest market. The facilities could also be used to serve the other Asian giant consumers, India and Japan.

Abu Dhabi, a member of the UAE, is rated the second most important trade partner with China in the Gulf region and the first market for Chinese products among the Arab countries.

Trade between the two countries, which could be traced back to the Silk Road era, rose 40.5% to US$28 billion in 2008.

The UAE has 200,000 Chinese expatriates and around 3,000 registered Chinese companies operating through both the Ministry of Economy and the free zones. The two countries have joint projects totalling US$12 billion.

According to the Chinese trade ministry, the UAE has invested US$220 million in China to date, most of it in the banking and financial sector.

 
SINGAPORE: Bumi Armada’s second FPSO headed for Nigeria operations
Thursday, 30 July 2009

(EnergyAsia, July 30, Thursday) --- Malaysia’s Bumi Armada Bhd, owner and operator of the country’s largest fleet of offshore vessels, said its second floating production, storage and offloading (FPSO) vessel, the Armada Perdana, has set sail to operate in offshore Nigeria. 

The company held a sail-away ceremony for the 1988-converted vessel at the Keppel Shipyard in Singapore on July 18. The FPSO has a 45,000-b/d processing capacity and a one-million-barrel storage capacity for processed oil, with topside water and gas injection capabilities.

The FPSO has been contracted to Nigeria Agip Exploration Ltd (NAE), a subsidiary of Italian oil major Eni SpA, to operate in Nigeria’s Oyo field. The vessel forms part of Bumi Armada’s contract for a five-plus-five-year fixed time charter for the leasing and operation of a one-million barrel storage capacity FPSO.

Hassan Basma, Bumi Armada’s CEO, said: “The completion of this FPSO through turbulent times underscores the trust our clients have in our competence in the execution of large and fast track projects. Our teams did an incredible job contending with a global shortage of materials and resources which was quickly followed by the global financial crisis.”

An international company serving clients in South-East Asia, India, Mexico, the Congo, Angola and Nigeria, Bumi Armada said the Armada Perdana will be manned by 70 Nigerians while the company’s first FPSO, Armada Perkasa, has 80 Nigerians among its crew.

Eni and NAE are partners with Allied Resources Nigeria and Houston-based CAMAC International to develop Offshore Mining Lease 120 (OML 120) located approximately 70-75 km offshore Nigeria in water depths ranging 200 to 500 meters.

Kase Lawal, CAMAC chairman and CEO, said: “This FPSO will enable Allied Energy to begin production on Oyo Field in OML 120 which was discovered in 1995 with proven oil reserves of 50,000,000 barrels.

“With first oil targeted for the fourth quarter of 2009, we are confident that this FPSO will enable Allied Energy to continue our pioneering leadership as an independent oil and gas company, a stakeholder and contributor to the Nigerian and world economies, and a worldwide supplier of energy resources.”

 
RUSSIA: OPK claims building world’s first floating nuclear power plant
Wednesday, 22 July 2009
(EnergyAsia, July 22, Wednesday) --- Russia’s United Industrial Corporation (OPK) said it has started work at its St. Petersburg shipyards to build the world’s first nuclear power plant.

OPK, one of Russia’s largest diversified corporations managing more than 300 billion roubles worth of assets, said it signed a contract with state-owned nuclear power company Concern Energoatom PLC on February 27 to construct, launch, rebuild and test the plant.

OPK began constructing the floating power-generating unit on February 27, and expects to complete the project due in the second quarter of 2012. The installation of the head floating power-generating unit with a KLT-40C type reactor would mark the project’s completion.

To be located in Kamchatka in the port of Viluchinsk, the 10-billion-rouble plant is scheduled to begin operating in the fourth quarter of 2012. (US$1=31 rouble).

OPK said the floating nuclear power plant is economical and efficient to operate, producing electricity at the same cost as a hydro-power station. It can be sited in industrial and remote developing regions, thus offering the flexibility of power supply to end users.

OPK said Russia is the first country to build a floating nuclear power plant, which could just as easily be used in the US, China, India, Japan, France and Iran. According to the IAEA, world demand for atomic energy will soar by 66% by 2030.
 
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