September 24, 2010
Russia Says ESPO Price Stays
Russia's Deputy PM Igor Sechin denies rumours that the China National Petroleum Corp. was asking for a lower price for deliveries of crude oil from the Eastern-Siberia Pacific Ocean or ESPO pipeline. The reasoning was that since the spur into China was only 67 kilometers from the terminus why pay the ESPO price set at Kozmino far away on Russia's Pacific coast? Sechin said the official Russian-Chinese deal begins 2011 but until that time Russia would deliver 15 million tons annually at the regualar ESPO price.
With the ESPO and new Turkmenistan via Uzbekistan pipelines already open and the Myanmar(Burma) to Kunming and eventually Chongqing underway as well as crude lines potentially running through Pakistan, China is securing oil and gas deliveries free of the Straits of Malacca and more importantly the prying eyes of the US Navy off China's long and vulnerable coastline....
Labels: energy security, oil, pipeline, russia
September 10, 2010
China to Add 3 Million Barrels/Day Oil Refining Capacity
China National Petroleum Corp., the parent of PetroChina (NYSE:PTR) aims to complete a 200,000 barrels per day capacity oil refinery in Kunming by 2013. The refinery will process crude delivered by the Burma (Myanmar) to Chongqing pipeline currently under construction. When complete it will give 400,000 barrels per day to feed the growing cities of Yunnan Province and in particular independent megalopolis Chongqing. A gas pipeline is also under construction through Burma to Yunnan with terminus in Guangxi Zhuang Autonomous Region that will deliver 12 billion cubic meters of gas. Completion dates for the pipelines are not known at this time but all told China plans to finish refining capacity for an additional 3 million barrels per day in the next 5 years....
Labels: asian energy security grid, energy security, gas, oil, peak oil
August 16, 2010
CHINA MAY ALREADY BE WORLD'S LARGEST ECONOMY
As regular readers know I believe a nation's energy use and production a much better gauge of an economy's size than Gross Domestic Product which is easily manipulated by central governments (Washington is as guilty as Beijing in that regard) and made meaningless by currency exchange. On a purchase power parity basis China has been the second largest economy for a very long time.
Earlier this summer China surpassed the USA as the world's number one energy user according to the International Energy Agency (Beijing rejects the designation). To me this says that China is already the largest economy in the world. That is a change of historic significance. Around a century ago the USA took that top energy spot and kept the position until now...
Labels: economy, energy security, gdp, global economy
April 12, 2010
China Wants Canada's Oil Sands
Reuters reports that Chinese oil major Sinopec will buy ConocoPhillips's stake in Syncrude Canada, the world's largest oil sands project located in Manitoba. The deal is worth just under $5 billion (US dollars) and would give Sinopec nearly 10% of the project that currently produces 350,000 barrels per day. Sinopec already owns a 10% stake in French major Total's Canadian oil sands venture Northern Lights....
Labels: energy security, foreign investment, oil, peak oil
March 25, 2010
China Backs Away from IPI Pipeline
According to a report originating at Upstream (an oil & gas industry publication out of Norway) an unnamed senior mandarin in Beijing told Iran that China would not invest in the IPI (India-Pakistan-India) pipeline project to bring gas from Iran's south Pars fields. The source said an extension to China through Pakistan and via roughly the Karakoram Highway was too difficult at present and wouldn't be considered for at least 5 years. China's preference is to buy gas direct from Iran most likely in LNG form....
Labels: energy security, gas, pipeline
March 22, 2010
Xi and Li at Home and Abroad
China's senior leaders are taking a back seat this week to allow the next generation a chance at the helm. Vice President Xi Jinping began a four-nation European state visit in Vladivostock with President Medvedev and PM Putin and other senior Russians there to greet him. Xi is traveling with a large entourage of important mandarins including Zhang Guobao, director of the National Energy Administration of China. They will travel the length of Russia to the Baltic and visit Finland and Sweden.
In Beijing, Vice Premier of the State Council Li Keqiang delivered the keynote speech at the China Development Forum 2010. The forum opened on Saturday and features a full range of heady topics and addresses by a who's who of global mulitnational corporations and NGOs from the IMF to OECD and from Morgan Stanley to Ford and Bombardier. The participation makes mockery recent mainstream media reports focusing solely on Google and false claims that foreign companies are "wary" of doing business in China or pulling out altogether.
Meanwhile a tourism forum on Hainan brought former US Secretary of State Condoleezza Rice to Beijing to meet with an old friend.
Xi Jinping and Li Keqiang are expected to be the next President and Prime Minister of China but I still believe either man could be President in 2013....
Labels: energy security, foreign relations, new world order, reshuffle
March 15, 2010
Chinese Firm Funds Botswana Energy Complex
The Mmamabula Energy Complex at the Mmamabula Coal Field in southeastern Botswana is an important independent power project for southern Africa. Development is led by CIC Energy Corp., a Toronto exchange listed company with headquarters in the Bahamas and operations in South Africa. Today it was announced that Golden Concord Holdings Ltd., a Chinese conglomerate, will take a 70% stake in the Mmamabula project and build and run a 300 MW power plant. Golden Concord Chairman Zhu Gong Shan said the investment was an excellent way to establish his company's opportunities in southern Africa. Zhu mentioned that the Botswana government was aware of the deal. A contract for the power plant was originally signed by CIC Energy last year with Shanghai Electric Group....
Labels: africa, energy security, foreign investment, foreign relations
March 08, 2010
China Reaches Peak Oil with Call for Bigger Strategic Reserves
Chinese oil production has essentially peaked and the country's strategic reserve is insufficient according to National People's Congress delegate Chen Geng. Geng is a former executive of state-owned China National Petroleum Corp. China is one of the top oil producers in the world at just under 4 million barrels per day. Data of the International Energy Agency shows production increasing around 3% a year over the medium term but long term forecasts show the share of imported oil increasing much faster. Chinese press reporting from the Congress session say there are calls to greatly increase the strategic oil reserves currently targeted at 170 million barrels. By contrast the USA has almost 700 million barrels stored in salt caverns around the country....
Labels: energy security, oil, peak oil, strategic
March 02, 2010
Iraq Oil Minister Says China Oil Contract Coming
Iraq's government will soon approve a contract with China National Offshore Oil Corporation (CNOOC) (NYSE:CEO) to develop the Maysan oil field in southern Iraq according to Oil Minister Hussain al-Shahristani. An estimated 2.5 billion barrels of oil await under the sands at Maysan....
Labels: energy security, foreign investment, foreign relations, oil, peak oil
China Bid for Azerbaijan Oil
Late last week the head of investment at the State Oil Company of Azerbaijan (SOCAR) Vagif Aliyev revealed that Devon Energy of Oklahoma was to sell its 5.6% stake in the big Azeri-Chirag-Gunashli offshore oilfield. The Azeri-Chirag-Gunashli field is controlled by a consortium of oil majors led by British Petroleum. Vagif Aliyev said negotiations were underway between Devon and Chinese oil companies - CNCP, CNOOC, and Sinopec have all been named as interested parties - and the other consortium members. If the consortium agrees not to buy Devon's share they could be joined by the Chinese.
The field lies offshore in the Caspian Sea in waters claimed as national by Azerbaijan. It is estimated to have 5.4 billion barrels of recoverable oil. Oil production is exported by the Baku-Tbilisi-Ceyhan (BTC) pipeline for delivery onto tankers plying the Mediterranean Sea. Over the weekend SOCAR said that Kazakhstan had stopped exporting oil through the BTC pipeline.
China was quick to recognize Azerbaijan as an independent nation in 1992. Chinese companies have been at work onshore since at least 2004. Devon Energy may be a takeover target according to some analysts. Rumours are Devon wants to focus on developing its domestic assets....
Labels: energy security, foreign investment, oil, peak oil
February 11, 2010
Major Gas Find in South China Sea
Husky Energy of Canada confirmed discovery of 4-6 trillion cubic feet of natural gas in an offshore block near Hong Kong. The block is jointly developed by China National Offshore Oil Corp. (CNOOC) (NYSE:CEO) in a production sharing agreement but Husky may spin off the operations into an independent Chinese company listed on the Hong Kong exchange. Production could reach 90 million cubic feet per day and begin as soon as 2013.
CNOOC is also still in talks with French oil major Total to develop oil fields in Lake Albert, Uganda....
Labels: energy security, gas, hong kong, oil, peak oil
February 08, 2010
Iran Says China Top Trade Partner
The Iran-China Chamber of Commerce says that China is Iran's top trading partner over the EU when factoring in transhipments from China via the UAE. Using that calculation Iran-China trade is valued at over $36 billion (US dollars). Officials in Tehran and Islamabad are openly seeking Chinese involvement in the delayed "IPI" gas pipeline project that would deliver Iranian gas from the South Pars fields to Islamabad, Pakistan, and on to New Delhi, India. India has backed off the deal and for nearly 2 years Pakistan's president Pervez Musharraf has said why not make it the "IPC" pipeline where the C stands for China. Islamabad is only 400 kilometers or so (less than 250 miles) from Pakistan-China border and it might be possible to link the pipeline with the Karakoram Highway transit corridor currently under expansion by Chinese investment....
Labels: energy security, foreign investment, foreign relations, gas, india, iran, pakistan
China Overseas Oil Production to Reach 1.2 Million Barrels Per Day
The overseas crude oil production of China's oil majors is expected to almost double by 2020 to 2 million barrels/day according to data from the energy consulting group Facts Global Energy. A new report on Chinese oil & gas investment shows Chinese investments around the world accounting for 25% of China's crude oil imports although their percentage of China's total oil consumption - 12.5% - is still relatively low. China National Petroleum Corp. and listed subsidiary PetroChina (NYSE:PTR) have several major new investments planned this year particularly in Iran and Iraq. Other Chinese oil majors such as CNOOC and Sinopec will pursue international oil deals as well as smaller firms such as Yanchang Petroleum owned by the government of Shaanxi Province.....
Labels: energy security, foreign trade, imports, oil, peak oil
December 30, 2009
PetroChina in Caribbean Oil Tank Farm Deal
Saudi Aramco will end its lease of 5 million barrels of oil storage capacity at the big Statia Terminals on the Caribbean island Saint Eustatius and word is Chinese oil major PetroChina will take over the lease. Neither PetroChina nor NuStar Energy the Texas based owner of the facility is saying much publicly.
Why PetroChina needs the storage capacity is a matter of speculation at this time but possibly reflects PetroChina's deal last week with Venezuela's national oil company (PDVSA) to buy 500,000 barrels of oil per day. Interestingly St. Eustatius is neighbor to St. Kitts and Nevis which maintains fruitful ties with Taiwan....
Labels: energy security, foreign relations, foreign trade, oil
December 08, 2009
China-Kazakhstan Gas Accord Finalized
China solidified its conquest of Pipelineistan energy resources on Monday when Kazakh President Nursultan Nazarbayev signed into law the 2007 agreement to jointly develop pipelines to bring gas into China from Kazakhstan and Turkmenistan. Around 50 million cubic meters of gas will move annually into the Chinese pipeline network also under construction. The estimated cost of the projects is $20 billion (US dollars). Work will be done in Kazakhstan by China National Petroleum Corp.'s subsidiary China Petroleum Pipeline Engineering and local firm KazStroyService. There are two "west-east" pipelines through China (see map) that bring Caspian Sea region resources through Xinjiang all the way to Shanghai and Guangdong Province. A third such pipeline is now in development.
Labels: asian energy security grid, energy security, foreign investment, foreign relations, gas
December 02, 2009
Pipelineistan: China Gets Gas While Stans Compete
The 2009 Turkmenistan Electric and Scientific Exhibition opens next week in the capital Ashgabat. Turkmen President Gurbanguly Berdimuhamedov was in Rome last week being wined and dined, taken to the racetrack, and signing deals with Italy's oil major ENI while PM Berlusconi promised to send a film crew to broadcast Turkmenistan's charms to Italian travelers.
Meanwhile US special envoy for Caspian Sea energy David Stein was in Baku, capital of Azerbaijan, where leaks say the government is coming close to a deal with Turkemenistan to divvy up the middle of the Caspian and allow a pipeline between the two nations to connect with the Nabucco pipeline project.
Years in planning, the Nabucco pipeline project is the hope of the EU, Germany in particular, to move away from dependence on Russian gas imports. Russia and Turkemenistan are in stalemate over a gas pipeline that is largely complete but not in use. Russian President Medvedev has just arrived in Italy on the heels of his Turkmen counterpart and will visit Turkmenistan later this month.
Turkmenistan may have the world's fifth largest recoverable reserves of natural gas. The country exports electricity to neighbors Iran and Afghanistan and also throughout central Asia via a Soviet era grid system. With American assistance neighboring Uzbekistan has built its own modern grid and announced this week it would soon withdraw from the legacy transmission system and potentially leave parts of the region at Uzbekistan's mercy just in time for Winter weather.
But while Europe, Russia, and all the "stans" compete, the Turkmenistan-China gas pipeline will begin delivering gas to China in mid December.....
Meanwhile US special envoy for Caspian Sea energy David Stein was in Baku, capital of Azerbaijan, where leaks say the government is coming close to a deal with Turkemenistan to divvy up the middle of the Caspian and allow a pipeline between the two nations to connect with the Nabucco pipeline project.
Years in planning, the Nabucco pipeline project is the hope of the EU, Germany in particular, to move away from dependence on Russian gas imports. Russia and Turkemenistan are in stalemate over a gas pipeline that is largely complete but not in use. Russian President Medvedev has just arrived in Italy on the heels of his Turkmen counterpart and will visit Turkmenistan later this month.
Turkmenistan may have the world's fifth largest recoverable reserves of natural gas. The country exports electricity to neighbors Iran and Afghanistan and also throughout central Asia via a Soviet era grid system. With American assistance neighboring Uzbekistan has built its own modern grid and announced this week it would soon withdraw from the legacy transmission system and potentially leave parts of the region at Uzbekistan's mercy just in time for Winter weather.
But while Europe, Russia, and all the "stans" compete, the Turkmenistan-China gas pipeline will begin delivering gas to China in mid December.....
Labels: energy security, gas, iran, russia
November 20, 2009
China-Iran Ties Grow Despite Politics
Referring to President Obama’s visit to China Grand Ayatollah of Iran Hamedani this week accused the Chinese of two-facedness and said Iran should not be deceived by their “strategic smiles”. But Iranians and Chinese continue to grow closer each day. Just this week it was announced that Tehran had approved a 2007 agreement by Sinopec to develop the Yadavaran oil field, one of the largest untapped fields in the world with 3.2 billion barrels of recoverable oil. Under a buy-back arrangement, Sinopec will get delivery of 110,000 barrels of oil initially and large amounts of natural gas.
Meanwhile today in Shanghai the Iran-China Joint Chamber of Commerce opened a trade center, Iran's first foreign commerce center. The center will focus on Chinese-Iranian small and medium size business ventures. Thanks to robust trade in oil and gas, Iran-China trade grew to $27 billion (US dollars) last year.
And an unnamed Chinese bank will develop a major freeway that will link the Iranian capital to the Caspian Sea. The Tehran-Shomal freeway has been dreamed of since the 1960s but was considered impossible because it must tunnel through the Alborz mountains that block Tehran from easy access to the Caspian. The Chinese project will build 30 twin tunnels and create a 4-lane separated freeway to the coast. The region has great potential for tourism development and may lay a foundation to exploit the resources of the southern Caspian Sea.....
Labels: asian energy security grid, energy security, foreign relations, foreign trade, iran
November 09, 2009
Sinopec - ExxonMobile LNG Deal
China's biggest refiner Sinopec (NYSE:SNP) is finalizing a deal with ExxonMobil to buy nearly a third of the production from a new Liqufied Natural Gas (LNG) works in Papua New Guinea. Sinopec would get 2 million tons per year of LNG and build a terminal in Qingdao, Shandong Province. Incidentally, Sinopec will offer this week 15 billion Yuan (over $2 billion US dollars) in 1-year corporate bonds. Gas use in China is expected to triple over the next 10 years and Sinopec's deal comes just as the head of China's National Energy Adminstration revealed the government wants to close the four remaining coal-fired power plants around Beijing. Beijing will be served by new gas pipelines from Shaanxi Province. It seems reasonable to speculate that Sinopec may bring gas from its new Qingdao terminal to the Chinese capital....
Labels: energy security, foreign investment, gas
November 03, 2009
While USA Talks, China Builds in Burma (Myanmar)
China's national oil company, the China National Petroleum Corporation (CNPC) (Hong Kong: 0135), is building a pipeline from the coast of Burma or Myanmar through the heart of the country into Yunnan Province at the border city Ruili. The time frame for the project is unknown but CNPC says it will carry up to 84 million barrels of oil per year.
Meanwhile the US State Department has sent envoy Kurt Campbell to talk shop with the military junta that controls Burma as well as celebrity dissident Suu Kyi....
Meanwhile the US State Department has sent envoy Kurt Campbell to talk shop with the military junta that controls Burma as well as celebrity dissident Suu Kyi....
Labels: asian energy security grid, energy security, oil, peak oil, pipeline
October 20, 2009
China Could Drill for Oil in the Gulf of Mexico
Norway's national oil major StatOilHydro is in talks with China National Offshore Oil Corp (CNOOC) on the sale of leases offshore the southern USA between Houston and New Orleans. Both companies are listed on the NYSE. The blocks are in deep water and include areas near where a consortium lead by BP recently found large oil deposits deep in the earth's mantle. No other details at this time....
Labels: energy security, foreign relations, free trade, oil, peak oil
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